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Global stock markets continued to climb in May as some countries
began to relax their Coronavirus lockdowns. The fall in equity
volatility and corporate credit spreads, along with the
stabilisation of commodities markets, started pointing towards the
return of some "risk on" sentiment.
However, the Singapore economy and its stock market were still
very much curtailed by the nationwide circuit breaker over May. On
May 26, just a week before phase 1 reopening of the city state, the
government announced its fourth fiscal stimulus package (the
Fortitude Budget), clearly acknowledging the ongoing precarious
situation.
SIBOR rates fell over the month, reflecting the Monetary
Authority of Singapore's accommodative stance that has allowed the
S$NEER to depreciate since March. SGD bond yields also fell over
May, helping generate a 1.04% gain for the iBoxx SGD overall index.
Gains in the index were recorded across the board, in all rating
and maturity buckets.
The non-sovereign sector out-performed the government sector.
The best performing bonds came from the high yield sector and the
worst performing bonds were concentrated in real estate.
The overall index closed the month offering a yield of 1.35% and
a duration of 6.77 years.
June 2020 Rebalance
The June rebalance removed just under SGD 2 billion of notional
from the index via four financials while adding SGD 300 million of
new notional via two real estate bonds.
Please see the table in the full commentary for rating changes
observed in June 2020.
Posted 08 June 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.
