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PR Newswire
22-09-2010, 12:32 AM
It is a good start that SGX will finally list these bonds for retail investors. It is way overdue given that Singapore is a major financial hub for Southeast Asia. There are also Japanese, Korean and Indian companies who have bonds listed here, but those bonds are still only for institutional investors. The next logical step is for SGX to make all the SGD corporate bonds it already lists, available for retail investors. After that, all the non-SGD bonds.
As for the SIA bonds themselves, clearly SIA is taking advantage of the low interest rate environment to lock in cheap financing. SIA is among the world's best-run airlines, and these bonds could be considered fairly safe. However, the coupon is terrible. No sensible investor should buy the bonds at par. IMHO they would become a good investment only if there is a big crisis and the bonds plunge in price, raising the yield to maturity significantly e.g. to 10% or more.
As for the SIA bonds themselves, clearly SIA is taking advantage of the low interest rate environment to lock in cheap financing. SIA is among the world's best-run airlines, and these bonds could be considered fairly safe. However, the coupon is terrible. No sensible investor should buy the bonds at par. IMHO they would become a good investment only if there is a big crisis and the bonds plunge in price, raising the yield to maturity significantly e.g. to 10% or more.