MAS has announced information for the Singapore Savings Bonds Apr 2017 to be issued on 1 May 2017. Details are summarised below.

  • Bond ID: GX17050F
  • Tranche size: S$150 million
  • Issue date: 1 May 2017
  • Maturity date: 1 May 2027
  • Interest payment dates: 1 May, 1 Nov

Application Timeline

Investors can start applying for the SSBs through POSB/DBS, OCBC, UOB ATMs and internet banking platforms from 3 Apr 2017. More information on bond application can be found in my post on All about Singapore Savings Bonds. Readers are strongly encouraged to learn more about the bonds before application.

  • Deadline for application: 25 Apr 2017 9pm
  • Allotment results: 26 Apr 2017 after 3pm

Coupons Table

The coupons for Singapore Savings Bonds Apr 2017 have generally increased over last month’s issue. The table below summarises coupon yields in %pa of the various SSB issues since start of the year.

Issue Date Maturity Date Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
May-17 May-27 1.00 1.51 1.72 1.87 2.12 2.48 2.78 3.10 3.42 3.73
Apr-17 Apr-27 1.02 1.44 1.69 1.89 2.15 2.45 2.72 3.00 3.29 3.59
Mar-17 Mar-27 1.04 1.41 1.83 2.26 2.56 2.70 2.83 2.98 3.19 3.50
Feb-17 Feb-27 1.05 1.52 1.93 2.32 2.60 2.76 2.90 3.05 3.25 3.57
Jan-17 Jan-27 0.91 1.12 1.54 1.99 2.30 2.46 2.64 2.84 3.08 3.40

 

The average returns have also generally improved over last month’s issue. However, the best bond since the start of the year is Feb 2017’s issue, with 2.44% 10-year average return. The table below provides a summary of the average yearly returns in %pa of the various SSB issues since Jan 2017.

Issue Date Maturity Date Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
May-17 May-27 1.00 1.25 1.41 1.52 1.64 1.77 1.91 2.04 2.18 2.32
Apr-17 Apr-27 1.02 1.23 1.38 1.50 1.63 1.76 1.89 2.02 2.14 2.27
Mar-17 Mar-27 1.04 1.22 1.42 1.63 1.81 1.95 2.06 2.17 2.27 2.38
Feb-17 Feb-27 1.05 1.28 1.50 1.70 1.87 2.01 2.13 2.23 2.33 2.44
Jan-17 Jan-27 0.91 1.01 1.19 1.38 1.56 1.70 1.83 1.95 2.06 2.18

Head here for a historical table of all the coupons since the starting issue of the SSBs.

Commentary

Risk-free Rates in Mar 2017

Yields have hardly changed in Mar 2017 even though US Fed increased benchmark interest rates. Expectations of faster raises to interest rates have been well priced into the market. The 3-month SIBOR was 0.99958%  on 4 Apr 2017 (source: Association of Banks in Singapore). MAS last announced in Oct 2016 that they will maintain the S$NEER policy band at 0%. Given recent news of strengthening economy in Singapore, there might be a chance MAS may readjust their policy. MAS is scheduled to release their semi-annual monetary policy on 14 Apr 2017.

Despite an uneventful month for interest rates, coupons have increased over last month’s issue. Bond handover of the SGS 5Y and 10Y benchmarks had accounted for the increase in yield. Therefore, this bond issue provides optimised rates for the current interest rate environment. Check out Singapore Savings Bonds Coupons for more explanation on this handover yield optimisation effect.

Corporate Bonds Interest Rates in Mar 2017

The safest two Singapore dollar-denominated corporate bonds listed on SGX are CapitaMall Trust and Frasers Centrepoint. They provide 2.27% and 3.16% yield respectively for 3.86 years and 5,11 years to maturity as of 2 Apr 2017. In contrast, Singapore Savings Bonds Apr 2017 offers average 4-year and 5-year returns of 1.52% and 1.64% respectively.

Name Price (S$) Yield (% pa) Coupon (% pa) Maturity Date Time to Maturity (Years)
CapitaMall Trust 1.0300 2.27 3.08 20-Feb-21 3.86
Frasers Centrepoint 1.0230 3.16 3.65 22-May-22 5.11

Fixed Deposit Rates in Mar 2017

  • UOB: up to 1.2%pa for 13-month deposit
  • CIMB: up to 1.3%pa for 12-month deposit
  • Hong Leong: up to 1.2% for 12-month deposit, up to 1.3% for 24-month deposit

 

Read more:
All about Singapore Savings Bonds
Singapore Bonds Interest Rates