Singapore Savings Bonds May 2017 – Up to 3.19%pa

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

  • Bond ID: GX17060T
  • Tranche size: S$150 million
  • Issue date: 1 Jun 2017
  • Maturity date: 1 Jun 2027
  • Interest payment dates: 1 Jun, 1 Dec

Application Timeline

Investors can start applying for the SSBs through POSB/DBS, OCBC, UOB ATMs and internet banking platforms from 2 May 2017. To learn more about bond application, do head to my post Singapore Savings Bonds: Everything You Need to Know. Readers are strongly encouraged read this before application!

  • Deadline for application: 26 May 2017 9pm
  • Allotment results: 29 May 2017 after 3pm

Coupons Table

The coupons for Singapore Savings Bonds May 2017 have generally decreased over last month’s issue (figures in bold). The table below summarises coupon yields in %pa of the various SSB issues for the last 6 months.

Issue DateMaturity DateYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10
1-Jun-171-Jun-271.021.441.711.952.172.372.542.722.933.19
May-17May-271.001.511.721.872.122.482.783.103.423.73
Apr-17Apr-271.021.441.691.892.152.452.723.003.293.59
Mar-17Mar-271.041.411.832.262.562.702.832.983.193.50
Feb-17Feb-271.051.521.932.322.602.762.903.053.253.57
Jan-17Jan-270.911.121.541.992.302.462.642.843.083.40

The average returns have also generally decreased over last month’s issue. Yields are similar over the first 5 years compared to previous bond issue but has significantly reduced coupons for the last 5 years. The best bond since the start of the year is still the 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 DateMaturity DateYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10
1-Jun-171-Jun-271.021.231.391.521.651.761.871.972.062.16
May-17May-271.001.251.411.521.641.771.912.042.182.32
Apr-17Apr-271.021.231.381.501.631.761.892.022.142.27
Mar-17Mar-271.041.221.421.631.811.952.062.172.272.38
Feb-17Feb-271.051.281.501.701.872.012.132.232.332.44
Jan-17Jan-270.911.011.191.381.561.701.831.952.062.18

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

Commentary

Risk-free Rates in Apr 2017

Yields have fallen in Apr 2017 even as US Fed increased benchmark interest rates. There is increasing street expectation that the Fed will be more dovish about raising interest rates this year. In Mar, the Fed had already suggested 2 instead of 4 rate hikes for the rest of the year. The market thinks this may be further reduced with new global market risks such as North Korea, unfolding Brexit and French presidential elections. The 3-month SIBOR was 0.99875  on 28 Apr 2017 (compared to 0.99958% on 4 Apr 2017. source: Association of Banks in Singapore). MAS reiterated that they will maintain the S$NEER policy band at 0% during the semi-annual monetary policy briefing on 12 Apr 2017.

Corporate Bonds Interest Rates in Apr 2017

The safest two Singapore dollar-denominated corporate bonds listed on SGX are CapitaMall Trust and Frasers Centrepoint. They provide 2.28% and 3.32% yield respectively for 3.79 years and 5.04 years to maturity as of 5 May 2017. In contrast, Singapore Savings Bonds May 2017 offers average 4-year and 5-year returns of 1.52% and 1.65% respectively.

NamePrice (S$)Yield (% pa)Coupon (% pa)Maturity DateTime to Maturity (Years)
CapitaMall Trust1.02902.283.0820-Feb-213.79
Frasers Centrepoint1.01503.323.6522-May-225.04

Fixed Deposit Rates in Apr 2017

  • UOB: up to 1.1%pa for 13-month deposit (2 May to 31 May 2017)
  • Maybank: up to 1.10%pa for 12-month deposit, up to 1.55% pa for 24-month deposit (from 10 Apr 2017)
  • CIMB: up to 1.3%pa for 12-month deposit (until 31 May 2017)
  • Hong Leong: up to 1.2% for 12-month deposit, up to 1.3% for 24-month deposit

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