Singapore SGS Bond

tangent314

tangent314

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HMAN said:
it is advisable to bid Non-competitive.. ? About to submit..
Click to expand...
You should bid non-competitive if you are willing to accept any cutoff price for the bond. You will almost certainly get the full allotment of the amount you put in unless there is a huge increase in NC bids, in which case you will get a prorated allotment.

You should put in a competitive bid if you cannot accept a yield below a certain amount. If the cutoff yield is lower than your bid, then you will not get any allotment. If the cutoff yield is higher than your bid, you will get the full allotment at the cutoff yield.

Generally yes, you should bid non-competitive if you are not sure.
 
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lzydata

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HMAN said:
it is advisable to bid Non-competitive.. ? About to submit..
Click to expand...

The SSB SBSEP23 application is also closing today. If you get the SSB and hold it for up to two years, you will earn 3.01% pa. Same issuer - the Singapore government - with more flexibility than the SGS bond in that you can redeem anytime and be guaranteed your principal and accrued interest.

Hence the logic of putting a competitive bid of 3.02% pa, because if the SGS bond yields 3.01% pa or less, that's not worth it for you - you might as well get the SSB. And there are also other alternatives.

This is the reasoning behind competitive bidding.

If you really don't understand all this and just do not want to commit to any number, then bid non-competitive. Almost all the time you will be fine, just that you have a (pretty small) chance of not being allotted in full - if there are too many people bidding non-competitive.
 
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Squaredot

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Kayeesha said:
Using XIRR to calculate the YTM for this 2-year bond (N520100A), I arrived at the yield of 3.62% based on the closing price 93.57 and accrued interest $1.60 (for a $1k par value).

Can anyone explain why the YTM for this bond is lower at 3.59% according to MAS website?

Thanks.
Click to expand...
@lzydata
may I ask if you know the calculation to get YTM 3.59% :s11:
 
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HMAN

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lzydata said:
The SSB SBSEP23 application is also closing today. If you get the SSB and hold it for up to two years, you will earn 3.01% pa. Same issuer - the Singapore government - with more flexibility than the SGS bond in that you can redeem anytime and be guaranteed your principal and accrued interest.
Hence the logic of putting a competitive bid of 3.02% pa, because if the SGS bond yields 3.01% pa or less, that's not worth it for you - you might as well get the SSB. And there are also other alternatives.
This is the reasoning behind competitive bidding.
If you really don't understand all this and just do not want to commit to any number, then bid non-competitive. Almost all the time you will be fine, just that you have a (pretty small) chance of not being allotted in full - if there are too many people bidding non-competitive.
Click to expand...

thanks, eventually I put in a bid close to last closing date cut off yield.
first time buying SGS bond, ok to keep it for 2 years.


Sent from EDMWER Pro app!
 
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oceanicmanta

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Squaredot said:
thanks ocean!
I always do my own calculations for YTM :grin: maybe my inputs or logic is not correct. Never mind, it's ok. Thanks.
Click to expand...

the differences could b due to

1) amount of Accrued Interest (MAS web is only 10c incremental, and stated as indicative)
2) dates ... this issue's coupon date falls on 1 May which is PH

but tried various input, I still could not tally
 
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vsvs24

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Results is out.

Trying to understand how SGS re-open bonds work. Look at cutoff yield or closing yield ?

Anyone can show illustration based on numbers ?
 
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lzydata

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vsvs24 said:
Results is out.

Trying to understand how SGS re-open bonds work. Look at cutoff yield or closing yield ?

Anyone can show illustration based on numbers ?
Click to expand...

Definitely don't look at the closing yield at the top, look under Auction Results.

And when I mouseover the "i"s i see this:

Cut-off Yield - calculated based on the clean price
Cut-off Price - includes accrued interest (i.e. dirty price)

3.56% p.a. and 93.869 - so the cut-off yield is clean but the cut-off price is dirty o_O

The cut-off price is what you would actually pay for the bond (i.e. get a refund of 6.131 per 100). The cut-off yield is like for you to understand what your money is yielding.

In the SGS bond calculator, I choose N520100A, settlement date 4 Sep 2023 and price 93.69, because this input is for clean price. It computes accrued interest as 1.70 and dirty price as hence $93.69 + $0.17 = $93.86. This roughly matches the Auction Result's 93.869 which is the dirty price.

https://www.mas.gov.sg/bonds-and-bi...ore-government-securities/sgs-bond-calculator
 
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oceanicmanta

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lzydata said:
Definitely don't look at the closing yield at the top, look under Auction Results.

And when I mouseover the "i"s i see this:

Cut-off Yield - calculated based on the clean price
Cut-off Price - includes accrued interest (i.e. dirty price)

3.56% p.a. and 93.869 - so the cut-off yield is clean but the cut-off price is dirty o_O

The cut-off price is what you would actually pay for the bond (i.e. get a refund of 6.131 per 100). The cut-off yield is like for you to understand what your money is yielding.

In the SGS bond calculator, I choose N520100A, settlement date 4 Sep 2023 and price 93.69, because this input is for clean price. It computes accrued interest as 1.70 and dirty price as hence $93.69 + $0.17 = $93.86. This roughly matches the Auction Result's 93.869 which is the dirty price.

https://www.mas.gov.sg/bonds-and-bi...ore-government-securities/sgs-bond-calculator
Click to expand...

If the Cut Off Yield is actually based on Clean Price, does it mean the "Actual Yield" is lower, since investor had paid the accrued interest upfront ?
 
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findingEva

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My application for this SGS is not successful. But I still haven't received the refund. I use UOB. .....a bit strange...Have you received refund?
 
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