Outlook for the week

New bond issues may begin tapping the SGD market after a lull in June.

Key economic releases for the week

• Mon, 5 Jul: SG: Markit Singapore PMI (8:30AM), SG: Retail Sales YoY (1:00PM)
• Tue, 6 Jul: US: Markit US Services PMI (9:45PM)
• Wed, 7 Jul: SG: Foreign Reserves (5:00PM), SG: GDP YoY (7th – 14th)
• Thu, 8 Jul: US: FOMC Meeting Minutes (2:00AM)
• Fri, 9 Jul: CH: CPI YoY (9:30AM)

Last Week Summary

Asia primary bond market kept pace last week with sovereigns active. Both Republic of Philippines and the Government of Mongolia priced jumbo deals last week. Investor momentum was strong pushing average initial price guidance tightening up by 10.5bps to hit 36.9bps. The 10 year US treasury yield inched down to 1.464%. US$9.395bn of bonds was issued from 20 deals. Breakdown: Investment Grade: US$6.825bn, High Yield: US$2.2bn, Non-Rated: US$370mn

• Oxley Holdings has priced S$70mn of 6.9% notes due 2024, issued under its US$1bn guaranteed euro medium-term note programme. The property developer said net proceeds will be used for general corporate purposes including the refinancing of borrowings, as well as working capital and capital expenditure requirements of the group. On Wednesday 30 June, Oxley also entered into an agreement to sell a piece of its land overseas for around S$100mn. The group did not specify which property it was selling, nor the buyer.
• Six Chinese local government financing vehicle issuers priced US$1.22bn in new bonds. Chinese LGFV issuers clocked in US$14.995bn of issuance across 74 deals in the first half year, up 48% compared to last year’s H1. BBB-rated Chongqing Nan’an Urban Construction & Development came back to the market for a second offshore bond this month. The new US$150mn 3 year note was priced at 4.2%. Similarly, Wuhan Urban Construction priced a US$500m 3 year bond deal at 2.25%. Both investment grade bonds priced 50bps tighter from initial price guidance level.
• 3 outstanding mandates remain from last two weeks.