Singapore Savings Bonds

steven168z

Master Member
Joined
Oct 16, 2013
Messages
3,302
Reaction score
133
Govt to offer Singapore Savings Bonds for local investors

Govt to offer Singapore Savings Bonds for local investors
26 Mar 2015
12:33 PM

http://www.businesstimes.com.sg/gov...r-singapore-savings-bonds-for-local-investors

THE government will introduce the new Singapore Savings Bonds (SSB), a type of Singapore Government Securities (SGS) for local individual investors, announced Josephine Teo, Senior Minister of State for Finance and Transport, at the annual conference of the Investment Management Association of Singapore (IMAS) on Thursday.

Like SGS, the Singapore Savings Bonds are safe investments, principal-guaranteed by the government, Mrs Teo said. Holders of the SSB can also get their money back in any given month, with no penalty, and can earn interest that is linked to long-term SGS rates. Also, unlike bonds that pay the same coupons each year, the SSB pays coupons that increase over time.

The government and the Monetary Authority of Singapore (MAS) are still working on the details of the SSB programme, and will release more information later.

To improve the availability of corporate bonds to Singapore retail investors, MAS and the Singapore Exchange (SGX) will also ease the financial and administrative costs for issuers seeking to tap the retail market, Mrs Teo said.

Two new frameworks as well as a tax deduction have been proposed, and MAS and SGX are targeting to implement the proposals in the second quarter of 2015.

"We hope that corporate issuers with strong financials will utilise the new frameworks and tax concession to issue retail bonds, which will enhance the investment choices for Singaporean investors," Mrs Teo said.
 

felixleong

Banned
Joined
Aug 7, 2008
Messages
5,046
Reaction score
0
SINGAPORE: The Government and Monetary Authority of Singapore (MAS) are planning to introduce a new type of bonds to help individual investors get a better return on their savings, Senior Minister of State for Finance Josephine Teo said on Thursday (Mar 26).

Speaking at the annual conference of the Investment Management Association of Singapore (IMAS), Ms Teo said the planned Singapore Savings Bonds will be safe investments with principal guaranteed by the Government.

These bonds will have two features to make them more attractive for individual investors: The ability to get his or her money back in any given month with no penalty, and interest rates that are linked to long-term Singapore Government Securities rates.

Unlike bonds that pay the same coupon each year, the Singapore Savings Bonds will pay coupons that “step-up” or increase over time, providing investors with a higher return the longer they hold the bonds, she added.

"In short, the Singapore Savings Bonds will offer the higher returns of a long-term bond and give what investors call a term premium, while retaining the flexibility of a shorter-term deposit, and the safety of an instrument guaranteed by the Government," she said.

Ms Teo said the Government and MAS are still working on the details and will release more information later.
 

Sinkie

Greater Supremacy Member
Deluxe Member
Joined
Jan 20, 2009
Messages
86,078
Reaction score
21
not sure is this the bond that temasek is planning to sell to individual investor in singapore?
 

martin

Senior Member
Joined
Sep 8, 2008
Messages
1,895
Reaction score
56
I'm positive about this one. Take my money too. I am certain it will be better than fixed deposit rate. Thats why banks have been aggressively upping the ante on FD. They know they have a competition coming up.
 

felixleong

Banned
Joined
Aug 7, 2008
Messages
5,046
Reaction score
0
2 years back i sold off all my bonds
Genting 5.125%
CMA 3.8%
CMT 3%

Had been pure equities for 2 years plus le, been itching like made to buy bonds again

With rates going up, bonds are finally feeling more attractive again!
 

focus1974

Great Supremacy Member
Joined
May 12, 2007
Messages
74,349
Reaction score
20,507
huh? ability to get back money without penalty?
means no capital loss?

wa.. like that i will leverage max max
 

lzydata

Supremacy Member
Joined
Oct 16, 2010
Messages
5,978
Reaction score
2,225
These bonds will have two features to make them more attractive for individual investors: The ability to get his or her money back in any given month with no penalty, and interest rates that are linked to long-term Singapore Government Securities rates.

Unlike bonds that pay the same coupon each year, the Singapore Savings Bonds will pay coupons that “step-up” or increase over time, providing investors with a higher return the longer they hold the bonds, she added.

"In short, the Singapore Savings Bonds will offer the higher returns of a long-term bond and give what investors call a term premium, while retaining the flexibility of a shorter-term deposit, and the safety of an instrument guaranteed by the Government," she said.

- New savings bonds for individual investors to be introduced

I have been in favour of some kind of government-issued bond that is easily accessible to citizens for short-to-medium-term savings needs, like the US's I-bonds or EE-bonds. But this out-of-the-blue, best-of-both-worlds proposal, both flexibility and higher than market interest rates, sounds more like sorcery. :eek:

I am extremely interested in the details to come.
 

SpinFire

Arch-Supremacy Member
Joined
Apr 9, 2001
Messages
24,190
Reaction score
1
Deal sounds too good to be true, can back out at anytime without penalty lol.
 

linxiaobei

Supremacy Member
Joined
Dec 24, 2009
Messages
6,074
Reaction score
2
Deal sounds too good to be true, can back out at anytime without penalty lol.
But indirectly, you are penalised if you take out the money earlier since the longer you place it in, the more interest you gain.

Don't know whether will the interest be calculated as daily rate, monthly rate or yearly rate. Or will it be tiered interest rate where you put for 3 mths, you can get 0.5%, if you put for 1 year, you get 1.5% etc.

Reading from the report, seems like you can only withdraw your money during certain periods in the month and not as liquid as what we want it to be.

Sent from The Sun using GAGT
 

kazejin

Member
Joined
Sep 22, 2011
Messages
181
Reaction score
0
this can potentially mop up significant funds away from the banks...
 
Last edited:

felixleong

Banned
Joined
Aug 7, 2008
Messages
5,046
Reaction score
0
i think they are just doing this to please the older folks and win votes for 2016

the uncles and aunties had been complaining about the low interest rates at banks and CPF

so now garmen give ang pow lor... sell risk-free bonds

my guess is they getting blue chips on board, which previously were very reluctant to sell retail bonds due to the high costs involved

so for example a company like Singtel, which normally has to pay 4% to sell long term bond

can now sell it for 3% in the SSB, this results in cost savings which the company is happy for

however the real cost is bear by the government, because in the case of a default (which is rare, never had our blue chips defaulted before) the garmen pays the investors in full

anyway garmen the reserves so big... throw out some ang pow money to us.. die die must kio la

SSB come out, i will buy aggressively for sure if the yield is decent (3% up)

will probably take some profits for the rally, might put 10% or 20% in to SSB if it works out to be attractive
 
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ. Forum members and moderators are responsible for their own posts.

Please refer to our Community Guidelines and Standards, Terms of Service and Member T&Cs for more information.
Top