Official Shiny Things thread—Part III

[newjersey]

hi ST,

so your networth is in the 8 figure usd zone, i suppose?

kindly correct me if it's in the wrong currency.

 

[w1rbelw1nd]

If Nikko AM MBH fund manager dumped Singapore Airlines bonds when the index still holds such bonds, would that be active management? The MBH ETF is supposed to be passively managed - the fund manager does not have mandate to do bond picking, right?

So where would you park cash? Because MBH is for (long-term) investment and not for parking cash, right?

The Singapore bond market is terrible - you should look at the investment strategy of MBH - the fund manager has the leeway of investing up to 20% into non- indexed securities.

 

[BBCWatcher]

The Singapore bond market is terrible - you should look at the investment strategy of MBH - the fund manager has the leeway of investing up to 20% into non- indexed securities.

That’s fine as long as the fund manager is honest in its labeling. “Investment Grade” it ain’t.

 

[hwckhs]

The Singapore bond market is terrible - you should look at the investment strategy of MBH - the fund manager has the leeway of investing up to 20% into non- indexed securities.

Even then, the fund's mandate is to track the index, and the manager needs to keep tracking error small. Not too worried with the 20% leeway.

I think the issue is with the index provider (iBoxx) rather than the fund manager (Nikko AM), particularly with implied rating where a credit rating is not available. I'm quite certain that in the event of a default (or near default), the bad bonds will drop out of the index, but until then I guess they operate in a grey area.

 

[BBCWatcher]

I think the issue is with the index provider (iBoxx) rather than the fund manager (Nikko AM), particularly with implied rating where a credit rating is not available. I'm quite certain that in the event of a default (or near default), the bad bonds will drop out of the index, but until then I guess they operate in a grey area.

That could be a problem, but then Nikko AM must not call their fund “Investment Grade.” They could call it “Mostly Investment Grade” or “80% Investment Grade” I suppose.

What does it take for iBoxx to kick a bond issuer out of the “implied rating” portion of its index? An airline amidst a global pandemic that needs a government sovereign wealth fund’s purchase backstop even to issue 6+% promised yield debt is not kicked to the curb? That’s insane, I hope we can all agree.

 

[hwckhs]

What does it take for iBoxx to kick a bond issuer out of the “implied rating” portion of its index? An airline amidst a global pandemic that needs a government sovereign wealth fund’s purchase backstop even to issue 6+% promised yield debt is not kicked to the curb? That’s insane, I hope we can all agree.

Thanks. That got me thinking.

Anyway, according to iBoxx SGD Non-Sovereigns Large Cap Investment Grade index, there is an exposure limit for each issuer:

1. The maximum weight of an individual issuer is:
– 5% for unrated issuers, or
– 10% for rated issuers (excluding Singapore Statutory Boards), or
– 20% for rated Singapore Statutory Boards
2. The maximum aggregate weight of unrated issuers which are not incorporated in Singapore* or are not Singapore Statutory Boards is 5%
3. The maximum weight from all affiliated entities of a group is capped at 20%

and:

Weighting: Market capitalization (Unrated bonds are included at 50% of their notional outstanding)

Based on MBH's indicative holdings, SIA accounts for 4.22% at this time.

Do you see any other non-investment-grade issuers in MBH?

 

[tjieming]

https://www.businesstimes.com.sg/ba...ingapore-office-offers-access-to-local-stocks

IBKR opens SG office!

Would this be the recommended broker now?

 

[crystalnox]

https://www.businesstimes.com.sg/ba...ingapore-office-offers-access-to-local-stocks

IBKR opens SG office!

Would this be the recommended broker now?

TIGR still has a slight edge with fees, as long as you trust them.

 

[highsulphur]

https://www.businesstimes.com.sg/ban...o-local-stocks

IBKR opens SG office!

Would this be the recommended broker now?

Interesting to see what's the commission structure for sgx stocks and whether its cdp linked

 

[zoneguard]

Interesting to see what's the commission structure for sgx stocks and whether its cdp linked

https://www.interactivebrokers.com.sg/en/index.php?f=1590&p=stocks2

$2.5 min, 0.08% for SGD denominated counters.

 

[viventa]

My two questions are, why is it a credit? Is this just the way it is reflected but actually a debit?

Yes. You're selling at a negative price so you're paying a debit to the other side of the trade.

Second is, if I am unable to close out the position, should I exercise the option then sell the stock?

-7.00 to -3.90 is a very large bid-ask spread; a mid-price order is unlikely to be filled. If you want to get rid of the spread before expiry, you'll just have to accept a less favorable price.

Next time, trade more liquid options instead. Although it might be better for you simply to avoid trading assets that you're obviously unfamiliar with (ie, options).

Also, I'm not sure we're talking about the same GSX. GSX closed at around US$69 yesterday, and you're currently holding onto a 25/30 call credit spread..?

 

[highsulphur]

https://www.interactivebrokers.com.s...1590&p=stocks2

$2.5 min, 0.08% for SGD denominated counters.

FSMOne still makes sense for me for larger trades with its fixed fees

 

[swan02]

I tried to call them on the number listed in MAS. No one is picking up the phone.

Has anyone already tried buying any Sg stocks yet ?

Can finally get rid of SCB

https://www.businesstimes.com.sg/ba...ingapore-office-offers-access-to-local-stocks

IBKR opens SG office!

Would this be the recommended broker now?

 

[highsulphur]

I tried to call them on the number listed in MAS. No one is picking up the phone.

Has anyone already tried buying any Sg stocks yet ?

Can finally get rid of SCB

I'm using dbs vickers sometimes for the Multiplier interest but with the drop in interest....

 

[hwckhs]

I'm eager to know what happens to existing IBKR accounts of Singaporeans held at Interactive Brokers LLC (the US entity). Do they transfer existing accounts to Singapore? I have not received any notification from IBKR on this (am an existing client).

I think the holding entity is important, as there are implications. Estate tax, and to some people, SIPC.

 

[believeinyourself]

Anyone knows what will happen to our SIPC coverage?

 

[swan02]

I'm using dbs vickers sometimes for the Multiplier interest but with the drop in interest....

Wouldn’t having SSB also accomplish the same criteria where the coupons r paid into your multiplier ? Just do that 500 bucks deposit Each month over 6 months to make that happen.

DBS is just too expensive unless u r like
Cdp so much

 

[CWL84]

Still need to wait.

Spoke to their helpdesk on the live chat, they say still cannot trade, still need to wait for IBSG release later "this year", no timeline right now

 

[bobobob]

Thanks. That got me thinking.

Anyway, according to iBoxx SGD Non-Sovereigns Large Cap Investment Grade index, there is an exposure limit for each issuer:



and:



Based on MBH's indicative holdings, SIA accounts for 4.22% at this time.

Do you see any other non-investment-grade issuers in MBH?

It also says: Unrated bonds are eligible for the index if their implied credit quality is deemed
to be investment grade, subject to exposure limits.

What I'm wonder is: what is the implied rating rating of the SIA bonds currently held by MBH, according to their prices. The prices should still imply at least BBB- (very bottom of investment grade) to still qualify to be in the index.

 

[hwckhs]

What I'm wonder is: what is the implied rating rating of the SIA bonds currently held by MBH, according to their prices. The prices should still imply at least BBB- (very bottom of investment grade) to still qualify to be in the index.

It looks like a proprietary index, so we don't have visibility there. At least, the exposure is limited. The document also shows total unrated exposure at 41.08%. That is quite a big chunk, but to be fair, not all are "junk". There is no better alternative ETF, so we have to learn to live with it.

On the flip side, I suppose we are compensated with higher yield for any small junk holdings it may have. So, I don't complain.