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Singapore Government Bonds to Trade on SGX by Mid 2011
Finance Minister Tharman Shanmugaratnam said that Singapore government bonds will trade on SGX by mid 2011.
The listing of the Singapore government bonds on SGX would probably lead to a greater awareness of the product. However, liquidity and trading volume might be limited as retail investors of bonds would usually hold them till maturity.
Nevertheless, this is a positive step towards making bonds more easily available to retail investors.
I remember many years ago where you have to go down to a bank’s branch just to apply for some Singapore government bonds. And many of the bank staff don’t even know how to do this kind of transaction. The running joke is that you have to go to the branches which has the “bond girl”.
Then things improved when sites like Fundsupermart allowed you to buy Singapore government bonds on the secondary market. I wonder whether FSM might stop offering this service after the bonds are listed on SGX.
And finally last year, CDP allows you to apply for new issues of Singapore government bonds via ATMs.
With this final step of listing them on SGX (making secondary trading possible), the market for Singapore government bonds would be more or less fully transparent and liberalized.