Singapore Saving Bonds (SSB) yield have topped once again this year with the first-year yield at 3.08%.

Shawn Sng  |   07 Oct 2022  |    170 views

**Do note that application and redemption of SSB can only be done via the banks**

 

With the ongoing interest rate hikes, recent issued bonds rates have also increase in tandem with the latest Singapore Saving Bonds (SSB) issuance on Monday (3 Oct 2022) having its first year yield at an all-time high of 3.08% and its 10-year average yield of 3.21%.

 

SGNOV22 – GX22110A (November Issuance rates)

Source: MAS

 

This is the highest yield that was announced since 2015 where the November issuance was at 2.78%.

 

Singapore Savings Bonds Historical Yield

Source: MAS, Phillip Bond Desk

 

So what exactly are Singapore Saving Bonds (SSB)?

Well just like Singapore Government Securities (SGS) bonds and Treasury Bills (T-bills). SSB is a government security that is issued and fully backed by the Government of Singapore. It gives individual investors an alternative savings option apart from the usual fixed deposits that banks offer, and it is almost close being risk free while offering the flexibility to redeem your principal in full as compared to fixed deposit, SGS bonds or T-bills.

 

Here is a quick overview on SSB bonds:

 

Below is an overview on the application timeline and how does one apply for SSB

Source: MAS

 

In terms of benchmarking & comparison

Here are some recent sovereign issuance and their respective rates to have a rough benchmark:

                   

 

Comparing SSB against some recent statutory board issuance:

Singapore CPF Ordinary Account (OA) is paying out a rate of 2.5% while the SSB first year payout is at 3.08%. From the tables above, the November SSB issuance also appears to be rather attractive as compared to the different statutory board. Hence this could be something that may peak the interest of investors with smaller risk appetite.

 

Conclusion

Investors who wish to lock in this rate for a longer period of time may consider parking some of their funds in this latest issuance of SSB to capture the all-time high interest rates. It not only provides stability but also flexibility for investors who may wish to shift their fund allocations in the near future. However, with the latest FOMC meeting signaling that the rate hikes are probably not slowing down any time soon, investors can perhaps allocate a portion of it to this issuance while waiting for December’s issuance in hopes for higher rates.

Related Articles

Sembcorp Industries 4.6% 7Yr Senior Green Bonds

Sembcorp Industries (SCI) recently announced the issuance of its Senior unsubordinated Green bonds at a final price guidance of 4.6%.

Shawn Sng  |   09 Mar 2023

Hotel Properties Limited 5.25% 5Yr Senior SGD

Hotel Properties recently announced the issuance of its Senior unsubordinated bonds at a final price guidance of 5.25%.

Shawn Sng  |   02 Mar 2023

Barclays PLC 7.3% AT1 Perpetual SGD

Barclays PLC recently announced the issuance of its additional tier 1 perpetual notes at a final price guidance of 7.3%.

Shawn Sng  |   01 Mar 2023

Recent Articles

Sembcorp Industries 4.6% 7Yr Senior Green Bonds

Sembcorp Industries (SCI) recently announced the issuance of its Senior unsubordinated Green bonds at a final price guidance of 4.6%.

Shawn Sng  |   09 Mar 2023

Hotel Properties Limited 5.25% 5Yr Senior SGD

Hotel Properties recently announced the issuance of its Senior unsubordinated bonds at a final price guidance of 5.25%.

Shawn Sng  |   02 Mar 2023

Barclays PLC 7.3% AT1 Perpetual SGD

Barclays PLC recently announced the issuance of its additional tier 1 perpetual notes at a final price guidance of 7.3%.

Shawn Sng  |   01 Mar 2023

Disclaimers

These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the "Research") contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

?>