RHB fixed deposit

[dork32]

Who cares FSMOne? I can get direct from SGX at 102.61 now through my broking firm and the cost is 102,851.92. $103,151.70 is a rid off?

yeah loh. maybe you are tokking about different tranches

 

[henrylbh]

let me arbitrate, the bond price is 102.5 now on the sgx. so henry is right

there are two more coupons so bbc is right in that 4700 +10k call back price. i take
it 8.5months is ok so both are right

so the return is 10470 - 10250 = 220 so henry is right.

and the rate of return is 220/10250/8.5 months * 12 months = 3.03% and henry is right again.

but I only concern with the net yield of about 2.4% net of premium and my trx cost on first call date.

But he tried to smoke my maths by saying "you'll get just shy of 1.5%. To claw back the missing ~0.2% compared to a 1.7% fixed deposit you need to cycle those dollars into a 3.5 month fixed deposit (which doesn't exist)"

 

[dork32]

but I only concern with the net yield of about 2.4% net of premium and my trx cost on first call date.

But he tried to smoke my maths by saying "you'll get just shy of 1.5%. To claw back the missing ~0.2% compared to a 1.7% fixed deposit you need to cycle those dollars into a 3.5 month fixed deposit (which doesn't exist)"

appreciate wat bbc has done. he did a small simulation. if the price of the counter were to rise slightly to 103++, it will erode your returns away.

 

[henrylbh]

appreciate wat bbc has done. he did a small simulation. if the price of the counter were to rise slightly to 103++, it will erode your returns away.

If you already bought at 102.50 or 102.60 who cares if the price rice to 103.00.

At 103.00 it may not be that attractive to go in but still there is a chance of it not being recalled and thereafter the yield is fabulous. Even if not that attractive, there is no real loss on a recall compared to 1.7% FD.

 

[henrylbh]

yeah loh. maybe you are tokking about different tranches

I don't think it's about different tranches. He may buy it from FSMOne while I get the same product directly from SGX.

 

[BBCWatcher]

Here's what I wrote:

....FSMOne thinks you'll end up with a 2.111% p.a. yield to call on that particular BBB rated bond, after costs and at this instant....

I told you exactly how I calculated these figures, including the name of the broker (FSMOne) providing a quotation, net of all costs. But if you found a better brokerage deal, great, fantastic! And wouldn't it be nice if you shared their name?

 

[henrylbh]

What is there to share when is so common knowledge. Buy directly from SGX through any broking firm will be the same ..... except your choice of FMSOne.

 

[henrylbh]

How do you figure that? FSMOne thinks you'll end up with a 2.111% p.a. yield to call on that particular BBB rated bond, after costs and at this instant. Let's assume 8.5 months to call (looks about right), so you'll get just shy of 1.5%. To claw back the missing ~0.2% compared to a 1.7% fixed deposit you need to cycle those dollars into a 3.5 month fixed deposit (which doesn't exist) at about 1.45% p.a....

According to FSMOne's current estimate[/url], as I write this, for this BBB rated bond you would pay $103,151.70 now to get one promised $4,700 coupon and $100,000 at maturity (total $104,700), netting $1,548.30. That's across 8.5 months

Here's what I wrote:

I told you exactly how I calculated these figures, including the name of the broker (FSMOne) providing a quotation, net of all costs. But if you found a better brokerage deal, great, fantastic! And wouldn't it be nice if you shared their name?

How 'your' figures are calculated is not relevant to me. Your 'uncommon' source gives a cost of $103,151.70 (at what price per share?) and a yield of xxx.

My all-in cost would be $102,851.92 buying directly from SGX at 102.61, if I bought at today's closing price , though few days ago it at 102.50 (all-in cost $102,741.66).

Let's assume 8.5 months to call (looks about right), so you'll get just shy of 1.5%. To claw back the missing ~0.2% compared to a 1.7% fixed deposit you need to cycle those dollars into a 3.5 month fixed deposit (which doesn't exist) at about 1.45% p.a....

You used the above to say that the yield is shy of 1.5% and need to claw back the missing ~0.2% compared to 1.7% FD and has a need to cycle those dollars into a 3.5 months FD How misleading is that?

Because of the above, I have to make it clear.

When the cost is $102,500 and the return is $2,200 (net of premium paid) for 8.5 months, it beats $1,700 for 12 month without need to recycle. Never mind how FSMOne or how I calculate the yield. The outcome not clear?

 

[henrylbh]

You still got chance to buy at 102.60 if you are thinking of 1 year or so FD.

Don't bother with the rating and the likely early redemption (on 22 Nov). All banks can collapse but not DBS After buying you can dream or hope for no early redemption. Even no hope, you gain.

 

[BBCWatcher]

How 'your' figures are calculated is not relevant to me.

Your 'uncommon' source gives a cost of $103,151.70 (at what price per share?) and a yield of xxx.

Henry, FSMOne is a popular, typically low cost broker in Singapore, and I conveniently and transparently named it for you, right from the beginning. FSMOne provides online price quotations, cost inclusive -- it's all very simple. If you know of a better broker, great, fantastic...so why not name it? And why not provide a link to their total costs to execute this trade, as I've done? You're upset for some weird reason, but you're not actually providing helpful, actionable information. Which other broker do you recommend that'll provide a lower cost trade?

My all-in cost would be $102,851.92 buying directly from SGX at 102.61, if I bought at today's closing price , though few days ago it at 102.50 (all-in cost $102,741.66).

Henry, you cannot buy that bond "directly from the SGX at 102.61." There are two problems:

1. That's the closing Bid price. Aren't you familiar with how markets work? The available price if you want to buy this bond is the Ask(ing) price, which was 102.78 per unit at market close. (If you want to sell this bond, you'd look at the Bid price.) And that's the available price for some number of units, not necessarily the full number of units you might want to buy. But let's assume you can get your full order filled at 102.78.

2. You buy SGX listed securities, including this bond, via a broker, not "directly." Thus you then add to that 102.78 price the broker commission, exchange costs, and GST. Once you've done that, you have your total cost for this particular bond.

FSMOne happens to make all this simple in terms of looking up all-in (cost inclusive) quotations, but you're welcome to nominate another named broker if you'd like. By the way, the SGX trading code for this particular bond is MU7.

You still got chance to buy at 102.60 if you are thinking of 1 year or so FD.

You also have a "chance" to buy that bond at 100.60, or at 80.60. It's not a very big chance, but you've got a chance. The actual closing Ask price yesterday for this bond was 102.78, and that is (was) the going price if you're a buyer for some non-zero number of units.

 

[henrylbh]

I am referring to DBS 4.7% ncps (SGX stock code MU7 or ISIN Code SG2C54964409).

Who is upset? You talked only. I bought already

It is available directly from SGX from any broking firm like Kay Hian, Kim Eng Securities etc etc etc. If you got a different pricing from FSMOne, who cares

Today closing price is $102.61. The all-in cost is $$102,851.92. You want me to detail how the all-in cost is calculated?

how can I not know how it works. I even know how to calculate the all-in cost of buy or selling before receiving the contract note.

I have already bought 1000 shares at average of 102.70. Wanted to buy more when it dropped to 102.50 but equities were more attractive then (for trading)

 

[henrylbh]

You also have a "chance" to buy that bond at 100.60, or at 80.60. It's not a very big chance, but you've got a chance. The actual closing Ask price yesterday for this bond was 102.78, and that is (was) the going price if you're a buyer for some non-zero number of units.

Why talk about dumb chance to buy at 100.60 or at 80.60 instead of more realistic current prices unless you thinking market going to crash.

Be patient and queue and you will get what you bid, if not to far off when market is negative. No need to buy at asking price unless the yield is good enough for oneself. I usually place all my buy and sell the nite before and adjust, if needed when the market opens.

 

[BBCWatcher]

Henry, I remain amazed you apparently don't understand Bid and Ask prices.

 

[dork32]

Be patient and queue and you will get what you bid, if not to far off when market is negative. No need to buy at asking price unless the yield is good enough for oneself. I usually place all my buy and sell the nite before and adjust, if needed when the market opens.

this para shows henry understands bid and ask

 

[BBCWatcher]

this para shows henry understands bid and ask

When you're estimating costs, you cannot count on receiving the Bid price, or even near the Bid price. You have to assume the (current) Ask is what you can get, then you calculate from there. And assuming you're placing a small order, not a gigantic one, since the Ask price could represent only one unit.

Otherwise you could argue the same thing about a bank's fixed deposit offer, or any offer. "Oh, my Relationship Manager can give me another 5 basis points." Maybe, maybe not, but start with the "street price," compare, and if a hypothetical offer improvement would make a meaningful difference, see if you can do better.

Indeed, as I write this, looking at current market data, the Bid price is now up to 102.625 this morning. The Ask price is holding steady at this moment at 102.78. A big (or even medium) sized buy order would be difficult to clear even at the Ask price since this MU7 market is quite thin. Bond markets in Singapore are "lumpy," and you properly need to respect the Bid-Ask spread, if you're honest anyway.

 

[henrylbh]

this para shows henry understands bid and ask

Doesn't matter.

Let him say what he likes or talks only

This year to date, I have a trade volume of 50 and value of more than 600k, excluding 2 structured products.

Today (Fri), I queued for OCBC at 20 bids below bid and ask price and managed to get 2000 shares at 10.20

 

[dork32]

i want to say both of you are not wrong.

if you want an immediate number to evaluate the return bbc method is not wrong

if you set a realistic number and put it in queue and manage to it at that price, henry method is correct.

 

[henrylbh]

FSMOne is a popular, typically low cost broker in Singapore, and I conveniently and transparently named it for you, right from the beginning. FSMOne provides online price quotations, cost inclusive -- it's all very simple.

FSMOne is popular to you but not me ... at least for purchase of MU7. It's all very simple to you, but not me.

How 'your' figures are calculated is not relevant to me. Your 'uncommon' source gives a cost of $103,151.70 (at what price per share?)

You or your source are not able to say what is the bid or ask price that gives the cost of $103,151.70. At this cost, I would have to pay $102.91 per share.

According to FSMOne's current estimate, as I write this, ...... you would pay $103,151.70 now

On 5 Mar as you wrote above, the 'bond' was traded (based on bid as well as ask price) between a High of $102.63 and a Low of 102.61 on volume of 1,600.

The all-in cost based on High I would need to $102,871.97 only and based on Low, it's $102,851.92 only.

Even the unfilled ask price of 102.70 for the day would only cost $102,942.13.

Hence, you would pay $103,151.70 is quite rubbish or just saying what you want

And concluded that you remain amazed. I am amazed

 

[henrylbh]

Today's ask price $102.60 only. Was done as low as $102.31 only

 

[henrylbh]

The yield got better at today's closing price of $102.40 (lowest done was $102.28) compare to RHB's 12 months FD at 1.70%. The absolute $ gain for 254 days of holding exceeds the 12 months interest on FD