Outlook for the week

We view high yield bonds as more favourable given historically cheap valuations and higher buffers against rising interest rates.

Key economic releases for the week

• Mon 12 Apr: SG: Retail Sales YoY (1:00PM), Purchasing Managers Index (9:00PM)
• Tue, 13 Apr: CH: Exports YoY
• Wed, 14 Apr: SG: GDP YoY (8:00AM), Singapore MAS April 2021 Monetary Policy Statement (8:00AM)
• Thu, 15 Apr: US: U.S. Federal Reserve Releases Beige Book (2:00AM), Industrial Production MoM (9:15PM)
• Fri, 16 Apr: SG: Non-oil Domestic Exports YoY (8:30AM), CH: GDP YoY (10:00AM)

Last Week Summary

Overall issuance in Asia for volume was up YoY for 1Q21, with total issuance in Q1 at US$120.4bn (Up 24.6% from US$96.57bn in 1Q20). January 2021 saw the highest volume ever printed in a single month(US$69.1bn) in Asia G3 primary bond markets. As yields begin to climb in Q1, issuers shifted new issue focus to the 5-10 years part of the curve which saw a significant increase in new bonds. Perpetual and FRN issuances saw steep declines. 229 new deals and 274 bonds were issued, compared to 171 deals and 200 bonds in 1Q20. In the ESG Space, issuance volume has seen a tremendous growth of around 6.03x from around US$2.8bn in 1Q20 to US$17.06bn in 1Q21.

• Singtel’s wholly-owned subsidiary Singtel Group Treasury priced S$1bn subordinated perpetual securities on April 7. Net proceeds from the issue will be applied by SGT to fund its ordinary course of business. Its order book closed after receiving interest of about S$2.1bn, resulting in an oversubscription.
• UOB priced a dual tranche of senior notes at 1.25% and Tier 2 subordinated notes at 2% per annum. The bank raised US$1.5bn, with a final orderbook of US$2.75bn. The USD issuance is the first sustainability bond offering from Singapore and the first dual tranche senior and Tier 2 instrument in sustainability format globally from a bank issuer.