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iBoxx SGD Monthly Update: March 2021

04 March 2021 Rahul Sharma

iBoxx SGD Monthly Update: March 2021

February 2021 End-of-Month Commentary

Whilst global stocks, in general, rallied over February (given vaccine distribution efforts and stimulus package expectations), it was not a good month for bonds.

As fixed income markets priced in higher growth and higher inflation expectations, most bond indices declined during the month. Yields rose and curves bear steepened over the period. In the US, for example, 10yr CMT yields rose over 40 basis points whilst the 2s10s CMT curve steepened 30 basis points.

In the SGD bond market, average yields also rose (approx. 30 bps) with the overall iBoxx SGD index registering a loss of -1.92% for the month. Government and sovereign related SGD bonds performed the worst, particularly at the long-end of the curve. Shorter-end BBB bonds made some gains that were offset by losses at the intermediate maturity segment.

Within IG, all 10+ year buckets registered losses apart from the BBB bucket that is composed of a single Keppel Corp 20-year bond (it was in fact the 5th best performing bond in the overall index this month). The HY index landed in positive return territory but only by a whisker.

The iBoxx SGD overall index ended the month offering a yield of 1.69% with a duration of 6.74 years.

March 2021 Rebalance

Only one new bond (from the Real Estate Investments and Services sector) entered the index at the March rebalance, inserting S$62.5 million* of new notional at the 10 year part of the curve.

Six bonds (with expected remaining lives less than a year) were removed from the index. These removals deleted just over S$1.3 billion of notional*. The removals included a S$900 million Housing and Development Board bond as well as some Real Estate related Financials.

Please refer to the table for rating changes observed at the March rebalance in the full commentary.


Posted 04 March 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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