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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%.
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.
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.
