SGS yield calc?

[Laguna123]

https://www.mas.gov.sg/bonds-and-bi...?issue_code=NX16100F&maturity_date=2026-06-01

Can someone help explain to me about how is the Yield-to-Maturity (%) at 3.19% calculated?
If I put in $1k at the start of this bond, understand that coupon rate of 2.125%/pa is payout half yearly, but how come by bond maturity the pay out is $1k+$10.63?
So what is the total interest in % that 1k can get by the bond matured?

 

[sglandscape]

https://www.mas.gov.sg/bonds-and-bi...?issue_code=NX16100F&maturity_date=2026-06-01

Can someone help explain to me about how is the Yield-to-Maturity (%) at 3.19% calculated?
If I put in $1k at the start of this bond, understand that coupon rate of 2.125%/pa is payout half yearly, but how come by bond maturity the pay out is $1k+$10.63?
So what is the total interest in % that 1k can get by the bond matured?

try using the excel xirr formula with dates to help build intuition around it

 

[sky1978]

https://www.mas.gov.sg/bonds-and-bi...?issue_code=NX16100F&maturity_date=2026-06-01

Can someone help explain to me about how is the Yield-to-Maturity (%) at 3.19% calculated?
If I put in $1k at the start of this bond, understand that coupon rate of 2.125%/pa is payout half yearly, but how come by bond maturity the pay out is $1k+$10.63?
So what is the total interest in % that 1k can get by the bond matured?

3.19% is your annualised return if you hold the bond to maturity, which they refer to as yield to maturity. It is higher than the 2.125% coupon because you are buying at around 97 rather than 100, so you get an additional 3 dollars upon maturity when they pay you back the 100 in full.

The final 1k + 10.63, as for the 10.63, it is your final half-yearly interest payment.

https://www.wallstreetprep.com/knowledge/yield-to-maturity-ytm/

 

[tangent314]

I'm calculating 3.22% for some reason using XIRR, think I'm missing something

 

[sglandscape]

I'm calculating 3.22% for some reason using XIRR, think I'm missing something

Try try using exact days for the coupon instead of /2 I think that may help explain the small difference

 

[highsulphur]

My biggest gripe is the to buy that 1k notional of bond worth 979 I have to use 1150 cash upfront

 

[reddevil0728]

My biggest gripe is the to buy that 1k notional of bond worth 979 I have to use 1150 cash upfront

technically the bond price wouldn't be known until AFTER the auction, hence they have to account for the possibility of it being above par even if the probability might be low.

anyway bid last moment?

 

[highsulphur]

technically the bond price wouldn't be known until AFTER the auction, hence they have to account for the possibility of it being above par even if the probability might be low.

anyway bid last moment?

I'm using cpf which is why I'm annoyed. I'm tempted to "over bid". I have 180k atm available of which i committed 93k for today's 6 months. Today my avaliable balance still shows 180k. Technically I will have about 91k available for the 2y issue. But I can bid only 77k based on the 115% rule even if I were to bid competitive at say 3% (which if i win I will be buying below par and not above) so even less than 77k will be deducted.

 

[reddevil0728]

I'm using cpf which is why I'm annoyed. I'm tempted to "over bid". I have 180k atm available of which i committed 93k for today's 6 months. Today my avaliable balance still shows 180k. Technically I will have about 91k available for the 2y issue. But I can bid only 77k based on the 115% rule even if I were to bid competitive at say 3% (which if i win I will be buying below par and not above) so even less than 77k will be deducted.

for SGS Bonds do they also do net amount?

Are you on UOB?

 

[highsulphur]

for SGS Bonds do they also do net amount?

Are you on UOB?

Think if I bid 77k, I need to commit 115% funds and if my comp bid is say 3% (0.98), they will deduct only 75k+

Im on dbs. My balance is still haven't deduct for today's 1Y t bill issue.

 

[highsulphur]

Alternatively I will wait for the 5Y issue which is a new issue and hence won't have the 15% rule

 

[Laguna123]

This bond better investment compare with the current 1year t-bill?

 

[Laguna123]

Alternatively I will wait for the 5Y issue which is a new issue and hence won't have the 15% rule

What’s the 15% rule about?

 

[reddevil0728]

This bond better investment compare with the current 1year t-bill?

different tenure, serves different objective.

lock in relatively lower rate for longer. or lock in higher rate for shorter..

when u look at the absolute returns that's what matters..

so depends on what you define as a better investment?

 

[reddevil0728]

What’s the 15% rule about?

when you apply, every dollar you apply, $1.15 will be taken upfront and the difference be refunded later

 

[Laguna123]

Seem like the “dirty price” went up slightly to 98.01 now.

 

[Laguna123]

different tenure, serves different objective.

lock in relatively lower rate for longer. or lock in higher rate for shorter..

when u look at the absolute returns that's what matters..

so depends on what you define as a better investment?

If interest rate going down maybe a longer tenure with lower rate better?

 

[reddevil0728]

If interest rate going down maybe a longer tenure with lower rate better?

If that's what you expect, then you got your answer as to which is a "better" investment

 

[DevilPlate]

Alternatively I will wait for the 5Y issue which is a new issue and hence won't have the 15% rule

Yes, new 5/10y SGS is js around the corner….
We can possibly smell 3% for 5y SGS in late March especially IF Fed delay rate cut

 

[DevilPlate]

Seem like the “dirty price” went up slightly to 98.01 now.

Actually idk how to buy sgs from secondary market…..
Aim to buy direct via auction.