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pref shares may not ever be redeemed. so you are still subject to principal risk since pref share prices can move up and down.
ReplySuch bonds are meant for big fish or those with deep pockets.
This world is cold and cruel; no money no talk.
Compared such bonds (with min 250k etc), I would go for pref shares.
ReplyYes, there is a HDB 3-yr note just launched. Details at http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/0938879B58BA978A482576560020264E?OpenDocument.
Though the yield is not that great, I am prepared to go in as I trust HDB. Now, if only I can find $250k loose change.
Why doesn’t HDB issue notes in smaller bundles eg $10k for small retail investors? All these big govt organisations are after big fish. First Temasek, now HDB. No one cares a damn for the ikan bilis.
ReplyHi VSL,
There are some stat board loans denominated in 10k that are sold on the SGX. LTA, HDB, JTC are some of them. Though the HDB bond I last saw has matured already.
ReplyYes, my concern is the US currency too. But why these bonds are not issued in SGD?
I saw from papers; HDB issued a 3 years notes with coupon at 1.55%pa (pse verify). This yield is so lousy!
ReplyI am abit unsure why retail investors would want to buy this bond. The minimum is US$250K, which is not a little sum of money. It is quoted in US$, a sophisticated investor would know how to hedge the US$/S$ exchange rate exposure,
a retail investor may not know. He could very well get less if the US$ depreciates, or vice versa.
If this was quoted in S$, then I agree the govt should allow us a bite, but I doubt it.
ReplyHi Lion Investor,
Isn’t it better to buy such bonds in the primary than secondary markets?
http://news.asiaone.com/News/the%2BStraits%2BTimes/Story/A1Story20091021-174760.html
These bonds were sold out within hours!
Why Temasek does not offer retail investors a chance to buy its bonds?
ReplyHi Jasmin,
7% was actually sold to retail investors.
You can also buy it from the secondary market but need a minimum of $250k to transact, as with most other bonds traded on the secondary market.
ReplyI wonder if the borrowings mean Temasek is using leverage in its investments.
Leveraging will juice up returns when times are good, and magnify losses when things turn bad.
One of the issues which caused the financial crisis, was the over use of leverage to juice up returns which helped the fund managers get much bigger bonuses, at least when things when swimmingly well.
I wonder if the govt imposes any limits on Temasek with regards to leverage or it will just leave it to “market forces”.
ReplyHi Daniel,
Temasek had to pump in a fair amount of cash to support all the Rights issue over the past year. eg DBS, Keppel Land, NOL, Capitaland.
I am not surprised it needs to raise cash at some point in time.
ReplyHi LI,
Do you think this bond issue will be open to the retail public? No mention about it in the press. Tks.
ReplyHi VSL,
The offer has been fully placed already. Retail investors can now buy on the secondary market, indicative yield is around 4.2% but the minimum transaction size is $250k. So retail yes, but need deep pockets.
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