SG Bonds Weekly – Week 45 November 2, 2020 88

Outlook for the week

Key economic releases for the week

  • Mon, 2 Nov: LIPPO MALLS INDO RETAIL TRUST – Aft Mkt, SG: Foreign Reserves
  • Tue, 3 Nov: US elections, FRASERS CENTREPOINT TRUST – Bef Mkt, SG: Purchasing Managers Index (9:00PM)
  • Wed, 4 Nov: UNITED OVERSEAS BANK – Bef Mkt, SG: Markit Singapore PMI (8:30AM)
  • Thu, 5 Nov: DBS GROUP – Bef Mkt, OVERSEA-CHINESE BANKING CORP – Bef Mkt, SG: Retail Sales YoY (1:00PM)
  • Fri, 6 Nov: SINGAPORE POST – Bef Mkt, SINGAPORE AIRLINES – Aft Mkt, US: Federal Open Market Committee Rate Decision (03:00AM)

 

Last week summary

Activity in the Asia primary debt market tapered down mid-week as market volatility spiked. The sharp equity markets sell-off on Wednesday claimed casualties in the primary bond market in Asia G3, as Zhongyuan Yuzi’s 5yr deal got postponed after reaching FPG of

2.6%. Market appetite for new issues was significantly weaker this week with average number of accounts participating in new issues falling almost half from 118.8 to 64.8. Real money participation was notably weaker as well. This week, Banks took majority of new issue allocations (52.7%) while Asset Managers took 32.5%.

  • Lenovo Group, the largest Chinese personal computer and tablet maker, made a comeback in the dollar bond market to bag USD 1bn in its first investment grade rated 10yr bond offering priced in the 144A/REGS format. The BBB-/Baa3 rated bond was priced at T+265bps to yield 3.421%, 45bps inside IPG. Significant US investor demand for the deal resulted in a 3.9x covered orderbook and US investors took 39% of final allocations. Lenovo Group tapped the dollar market early this year in April for a 5yr USD 650mm Reg S-only bond priced at 5.875%.
  • New issue pipeline winds down leading up to US elections with 1 new mandate outstanding from the ones announced over the fortnight.

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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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