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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.
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.
