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iBoxx SGD Monthly Update: July 2020
June 2020 End-of-Month Commentary
Despite fears of a second wave and a resurgence of Covid-19
cases, recent trends persisted into June with many equity, credit
and commodities markets continuing to rally.
In Singapore, the circuit breaker that had been in effect since April, ended on 1 June 2020 and by 19 June the citystate had embarked on its "phase 2" of safe reopening. June saw the city-state begin to somewhat favour "risk-on" again, at least in fixed income.
The non-sovereign segment of the SGD fixed income market gained (+0.77%) over June with financials comprising the top-five best performing securities. Conversely, Singapore Government Bonds lost ground (-0.65%) dragging the overall index down (-0.19%) for the month. Longer dated government and sub-sovereign related debt were amongst the worst performers. In general higher grade credit performed worse relative to A, BBB and High Yield rated bonds, as seen in the table below.
As the first half of 2020 (arguably the most disrupted year in recent history) draws to a close, we note the overall SGD index has registered a year-to-date performance of +5.26%.
July 2020 Rebalance
The index deleted four bonds from its membership via the July
rebalance. The deletions included three corporates and an S$ 8
billion Singapore Government bond, all removed due to their
expected remaining lives falling below one year.
S$ 885 million of notional was added via two corporates (a 5yr and 10yr).
Please see the table in the full commentary for rating changes observed in the July 2020 rebalance.
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