SG Bonds Weekly – Week 35 August 24, 2020 269

Outlook for the week

  • Asia bond markets retreated slightly last week with USD investment grade bond index spreads widening 2.1bps or 1.29% WoW. This week, markets are awaiting the Kansas Fed Annual Policy Symposium at Jackson Hole on 27-28 August as Fed Chairman Jerome Powell will speak on the Fed’s policy framework review.


Key economic releases for the week

  • Monday, 24 August 2020: SG CPI YoY (13:00PM)
  • Wednesday, 26 August 2020: SG Industrial Production (13:00PM)
  • Thursday-Friday, 27-28 August 2020: Kansas Fed Annual Policy Symposium


Past week: Key events

  • A new bond issue by Hysan Development in China drew strong investor demand for its fixed-for-life perpetual bond non-call 3 years, with a comparatively shorter call date and higher coupon. Final order books were nearly 10x oversubscribed, allowing the deal to price 45bps tighter from IPG. Bonds continued to perform on the secondary market, trading more than 2 points above reoffer. Fixed-for-life perpetual bonds could help ease current investor adversity to perpetual bond non-call risk.
  • FOMC minutes from the July meeting affirmed that the Fed was not considering yield curve control. US 10Y treasury yields rose, in response, to 0.68% from 0.64%.
  • Olam Internaltion Ltd successfully issued a 5.5 year senior unsecured bond at 4% on monday. Final issue size was S$400mn while orderbook was over S$900mn.


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About the author

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Timothy Ang
Research Analyst
Phillip Securities Research

Timothy covers credit analysis of local and foreign bonds. Previously an equity dealer, he handled equity trade execution and portfolio management. He has presented seminars for organisations such as SIAS, SPH and IRAS, commentated live market updates for 93.8FM, and authored investment articles for the Business Times newspaper. He graduated with a Bachelor of Commerce in Accounting & Finance from the University of Western Australia.

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