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iBoxx SGD Monthly Update June 2021

07 June 2021 Rahul Sharma

May 2021 End-of-Month Commentary

Earlier this year, Singapore was looking forward to hosting a special meeting of the World Economic Forum in May. Alas, this event was postponed to August due to Covid related travel challenges. Nonetheless, May was an eventful month for the city state, though again, not for desirable reasons.

As cases and clusters proliferated through the end of April and early May, the government imposed Phase 2 Heightened Alert restrictions starting from 16 May to last at least 4 weeks. Around the same time the long touted travel bubble between Singapore and Hong Kong burst once more before launch.

So perhaps unsurprisingly, whilst the local equity market suffered somewhat, the Singapore Bond market made gains during May, outshining many of its regional peer bond markets.

The iBoxx SGD Overall index posted a return just shy of 1%. Within the index, gains were observed across all credit rating and maturity buckets (with the IG segment outperforming HY and the longer-end of IG doing particularly well). Furthermore, the iBoxx SGD Government index return exceeded the Non-Sovereign sub index return.

On the last day of the month, Prime Minister Lee offered some encouragement to the city's dwellers and said restrictions may be relaxed if virus cases continued to abate. On this day, the iBoxx SGD Overall index offered a yield of 1.75% with a duration of 6.95 years.

June 2021 Rebalance

Three corporates and a single HDB bond added S$ 1.84 billion of new notional to the iBoxx SGD Overall index during this latest rebalance.

Meanwhile, only 2 bonds were removed from the index as their expected remaining lives each fell below 1 year. S$ 375 million worth of notional was extracted from the index due to these departures.

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Posted 07 June 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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