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iBoxx SGD Monthly Update: September 2021

06 September 2021 Rahul Sharma

August 2021 Performance

Global equity markets posted gains over August despite it being holiday season. Even ongoing concerns over the Delta variant could not keep some US indices from hitting their all-time highs.

Towards month-end, Jerome Powell, spoke at the virtual Jackson Hole symposium and further supported global market risk sentiment by suggesting that US rates won't change anytime soon, However, he did open up the possibility of asset purchase tapering by year-end.

SGD bonds fell during August, a month during which Singapore celebrated its 56th birthday and began its transition towards treating Covid-19 as endemic. The fall was in line with most developed bond markets that saw yields rise during the month. The overall SGD index made a loss of -0.51%. Longer-dated high credit quality SGD bonds suffered the most with AA 20-year duration LTA bonds being amongst the worst performers. The Huarong 3.8% 2025 bond was the top performer this month. After mid-month bailout news hit the markets, the bond rebounded with an astonishing monthly gain of 40.56%. The BBB and high yield index segments made gains of 0.58% and 0.33%, respectively.

By the end of the month, 80% of Singapore's population had been fully vaccinated - the highest vaccination rate in Asia. The overall SGD index closed August offering a yield of 1.70% and a duration of 6.90 years.

September 2021 Rebalance

This rebalance, S$ 2 billion of new notional was inserted into the index via 3 bonds, including a 1.5 yard ultra-long from Temasek with 50 years to maturity.

Four corporates and 2 HDB bonds left the index (due to each of their expected remaining lives falling below 1 year) resulting in S$ 2.25 billion of notional being removed.

Please refer to the full report below for rating changes observed at the September rebalance.

SEE FULL REPORT HERE

Posted 06 September 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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