Chart of the Day: SGS Swap Rate Curve

OCBC says the 30-year swap rate traded 4bps lower for the past month, defying the rest of swap curve.

OCBC said:

With a recent plethora of SGD corporate bond issues, investors are currently somewhat spoilt for choice, especially with the attraction of a yield pick-up and for usually shorter tenors.

While insurance houses still need their asset-liability matching, which coupled with some long-term institutional funds, should ensure reasonable support for this longest-dated SGS paper, nevertheless, we could also see a relatively long tail for the maiden 30-year SGS bond auction on Wednesday.

Retail and private bank interest is expected to be very limited for such a long tenor, given a likely yield of 3% or less. A good gauge could be the two past 20-year benchmark SGS bond auctions of $2.5 billion and $2 billion in March 2007 and September 2010 which saw relatively long tails of 10-11bps.

Moreover, we tip fair value for the new 30-year bond yield at the 2.8-2.9% range, which is below the cut-off yields fetched by the earlier 20-year SGS bond auctions in 2009-2010.

Also Read

COTD: APAC deal volume falls 6.8% amidst economic uncertainties and tensions

Securitisation seen as key for Singapore developers to enhance returns

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit