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iBoxx SGD Monthly Update: August 2021

05 August 2021 Rahul Sharma

July 2021 Performance

July welcomed the delayed start of the Tokyo 2020 Olympics as well as the easing of restrictions in some countries with sufficient vaccination rates. Singapore, however, turned course in July as the city-state returned to Phase 2 Heightened Alert restrictions given a number of local virus outbreaks related to the Delta variant.

The risk of coronavirus variants stymieing economic rebounds was also reflected in global markets where equity performance was mixed and safe-haven bond markets made gains.

The iBoxx SGD Overall index made 1.34% over the month. Positive returns were observed across the board with the Government portion of the index (approx. 65% of the index by market value) making 1.60% over the month. The Non-Sovereigns part generated 0.86%.

Other observations to note are that:

  • Higher credit quality bonds outperformed lower quality segments
  • Longer maturity bonds outperformed shorter ones
  • AA bonds performed particularly well relative to other rating buckets

Furthermore, the iBoxx SGD Overall index attained a new milestone in July. It began tracking over S$ 200 billion of bond notional amount outstanding, across almost 250 bonds.

The index closed the month offering a yield of 1.62% with a duration of 7.7 years.

August 2021 Rebalance

This rebalance, S$ 4.75 billion of new notional was inserted into the index via 5 bonds, including a 10 year Singapore Government Bond and a 12 year HDB bond.

Three corporate bonds and a Public Utilities Board bond left the index (due to each of their expected remaining lives falling below 1 year) resulting in S$ 637.5 million of notional being removed.

Please refer to the full report for rating changes observed at the August rebalance.

SEE FULL REPORT HERE

Posted 05 August 2021 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.


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