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The overall index gained 1.20% as its yield fell 15 bps to 1.24%
by the end of the month. Notably the index duration surpassed 7
years for the first time since index inception.
Monthly return dispersion across ratings and maturity was quite
small with all segments, apart from the AA/5-7 year segment, making
positive returns.
The AA sector as a whole bounced back strongly from the previous
month with the 7-10 maturity segment posting strong gains. Across
the whole index, the top 5 performers were also AA rated issues
(Ultra long-end Land Transport Authority bonds).
The government index (+1.31%) outperformed the non-sovereigns
index (+0.99%) this month. Year to date, Singapore government bonds
have returned 8.15%.
The HY segment underperformed relative to the previous month,
making a return of +0.90%.
August 2020 Rebalance
The index took four new corporate bonds at the August rebalance,
inserting just over S$ 1.5 billion of fresh notional. The three new
financials added are fixed-to-float type bonds with initial coupon
rates in the 3.1 to 4.1% range.
Five bonds with a combined notional of just over S$ 1.6 billion
were removed from the index as their expected remaining life fell
to below one year.
Please see the table in the full commentary for rating changes
observed in the August 2020 rebalance.
Posted 06 August 2020 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.
