Genting Singapore perpetual subordinated capital securities 5.125%

[Wood4]

$1.016-1.017 now .

 

[chensing]

Traded above par value lei the bonds now about $1.019 got22 lots out of 30lots applied..get interest twice in Oct and april every year??? some one can comfirm

 

[skymusic72]

Yap, confirmed.

Comparing with past issue like DBS 4.7% and Hyflux 6%, Genting 5.125% will reach 1.05 within 6 months. Good buy.

 

[Mecisteus]

Accumulate genting common shares for maximun gain. They are likely to initiate a new venture in the next 2 years. The earliest should be after the completion of the westbank.

When the westbank at sentosa is fully opened, their FCF will boom.

 

[Wood4]

Then this Perpectual should be very safe too .

 

[chopra]

my prediction was for it to open above par. and i think it will slowly creep upwards.

Will only drop when interest rate goes up. Till then...

 

[skymusic72]

Singapore relationship with neighboring countries is good too. Now exploring. MRT.
Very much expected to do very well.

 

[Mecisteus]

Will only drop when interest rate goes up. Till then...

seriously there is no added value to your statement. the world knows that interest rates and bond prices go opposite.

maybe you want to provide a forecast as to when the rise will happen?

so until the interest rate starts to rise, the price will creep up slowly.

 

[Wood4]

Only high interest rate hike .....
stock , bond & property price then drop ?

 

[Mecisteus]

Only high interest rate hike .....
stock , bond & property price then drop ?

in theory yes. but in the real life, other factors may influence.

a very good example was between 2002 to 2007. US interest rates were rising but still stocks and gold prices soar higher. if learning theories can translate into profitable investments, then all finance graduates wont lose money.

 

[chopra]

seriously there is no added value to your statement. the world knows that interest rates and bond prices go opposite.

maybe you want to provide a forecast as to when the rise will happen?

so until the interest rate starts to rise, the price will creep up slowly.

1. I'm sure it has value add to some who think bond prices will always be above par. As I've stressed earlier, many of us are young and have not been through the 70s and 80s high i/r era.

2. On forecast. I/R increase/drop lies in the hand of central bank policies. It's already forecasted - late 2014. Noticed many have already warned the danger of prolonged low i/r.

Like market swings, I/R has to swing. Plateauing for a long time might create hyperinflationary danger.

3. I/R (reference from 10year US treasury & our SORA) is already near its bottom now. You commented that "so until the interest rate starts to rise, the price will creep up slowly.". Erm no. As you have properly explained the inverse r/s between bonds and i/r...would one think that the bond price will creep up further when i/r is already near its bottom?

 

[Mecisteus]

1. I'm sure it has value add to some who think bond prices will always be above par. As I've stressed earlier, many of us are young and have not been through the 70s and 80s high i/r era.
Neither have i mentioned that bond prices will always stay above par nor did i say that interest rates are going to stay low forever.

by the way just for your information, interest rate risks do not affect those who plan to hold till maturity or redemption. why? because for a plain vanilla bond, the yields that bondholders get are already implied at the point of purchase IF and only IF they plan to hold till maturity. only traders worry about interest rate risks.

2. On forecast. I/R increase/drop lies in the hand of central bank policies. It's already forecasted - late 2014. Noticed many have already warned the danger of prolonged low i/r.

Like market swings, I/R has to swing. Plateauing for a long time might create hyperinflationary danger.
I got no comments on the policies and impacts as im not an economist. But what i can say is the interest rates are going to stay low for the foreseeable future and my prediction for genting perps was to open above par. this had happened. moving on, i expect the price of the genting perp to slowly rise until further news on interest rates.

see my reply in red.

 

[chopra]

Mike.
1. Never say point one is for you. Have explicitly stated its for those who arent familiar with historical rates.
2. If one day, bank i/r goes to 10%, would the genting bondholders cry though they can hold till maturity (in this case perpetual)? Interest rate risk is a factor for both investors and traders. On e other hand, genting has the arbitrage advantage by not returning money to bondholders and instead invest in e bank.

 

[tkwei123]

interest rate will always fluctuate
and that's why i build a "bond ladder" for the fixed-income part of my portfolio... and allocate accordingly...

ps: and i understand that this perp is not exactly a bond

 

[Vincent_G]

Will only drop when interest rate goes up. Till then...

US Fed has mentioned that interest rate will be kept low till 2014.. And, quite the same as the rest of the world..

 

[vinciee88]

Mike.
1. Never say point one is for you. Have explicitly stated its for those who arent familiar with historical rates.
2. If one day, bank i/r goes to 10%, would the genting bondholders cry though they can hold till maturity (in this case perpetual)? Interest rate risk is a factor for both investors and traders. On e other hand, genting has the arbitrage advantage by not returning money to bondholders and instead invest in e bank.

QFT. to genting, doesnt matter whether i/r is up or down, they will do what is best for THEM, not the investors in the bonds.

that being said, a well diversified portfolio should definitely have a certain weightage in bonds, though i strongly discourage perpetuals.

 

[skymusic72]

As long as tourists and gamblers are coming in, and Genting continues to do well. It's bond will rise amidst very slowly. As long as overnight inter-rate stays below 2.5%, I will see no reason for it to reach $1.05 by year end.

Vested with 22 lots. Regretted selling Hyflux bonds too early.

 

[Wood4]

Fear of every word in the prospectus / worry of future make someone takes little action to invest.
Think putting $ under pillow / saving / fixed a/c safe ?
No inflation?

Just don't put all the eggs in one basket.

I have made 2% gain from this & may reduce some if it
goes up more.
It is just a small portion of my portfolio .

More cash standby .

 

[Mecisteus]

no company in the world would raise funds via debt/equity and then park in the bank to earn higher interests. that will just bring down the ROE of the company. so the interest rate arbitrage idea is mooted actually.

 

[chopra]

That can fall under current asset (cash). Why not.