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iBoxx SGD Monthly Update: April 2022

06 April 2022 Rahul Sharma

March 2022 End-of-Month Commentary

March saw several developed equity markets recover some of their prior months' losses. Spirited stock gains were made despite ongoing headwinds from inflation, rate hike expectations, curve shape dynamics, the pandemic, and the Russia-Ukraine conflict. In the US, equity implied volatility abated considerably as economic data came in strong. EM equities were less resilient with Asian EM equity markets declining, largely driven by China. Commodity indices continued to rise spurred on by energy prices.

In Singapore, local equities posted gains, but it was an abysmal month for SGD bonds which sold-off severely as rates underwent significant repricing. The iBoxx SGD Overall index made a loss of
-3.03%. This was the worst monthly loss* the index has endured since inception. The long-end faced the sharpest declines, but losses were observed across all maturity-by-rating buckets. The government sub-index (-3.54%) fared worse than the non-sovereigns sub-index (-2.14%). The BBB and HY sub-indices performed the best but still fell into the red. Ultra-long duration Temasek, Singapore Government and LTA bonds were among the worst performers.

The SGD Overall index closed the month offering a yield of 2.69% with a duration of 7.03 years.

Central banks continue to pivot to more hawkish postures. The US Federal Reserve raised the Fed Funds Target Rate at its mid-March meeting and expects multiple more hikes through the year. Singapore core inflation eased in March but the next MAS meeting, due in April, will tell whether further policy action will be enacted at this juncture.

April 2022 Rebalance

This rebalance, S$1 billion of new notional was inserted into the iBoxx SGD Overall index via a 5-year HDB bond.

Four bonds left the index this rebalance including a S$ 600 million HDB bond. All departing bonds left the index due to their respective expected remaining lives falling below one year.

Please refer to the Appendix in the full report for rating changes observed at the April rebalance.

SEE FULL REPORT HERE

Posted 06 April 2022 by Rahul Sharma, Director - Indices, IHS Markit


IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.


This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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