THE government will introduce the new Singapore Savings Bonds (SSB), a type of Singapore Government Securities (SGS) for local individual investors, announced Josephine Teo, Senior Minister of State for Finance and Transport, at the annual conference of the Investment Management Association of Singapore (IMAS) on Thursday.
Like SGS, the Singapore Savings Bonds are safe investments, principal-guaranteed by the government, Mrs Teo said. Holders of the SSB can also get their money back in any given month, with no penalty, and can earn interest that is linked to long-term SGS rates. Also, unlike bonds that pay the same coupons each year, the SSB pays coupons that increase over time.
The government and the Monetary Authority of Singapore (MAS) are still working on the details of the SSB programme, and will release more information later.
To improve the availability of corporate bonds to Singapore retail investors, MAS and the Singapore Exchange (SGX) will also ease the financial and administrative costs for issuers seeking to tap the retail market, Mrs Teo said.
Two new frameworks as well as a tax deduction have been proposed, and MAS and SGX are targeting to implement the proposals in the second quarter of 2015.
"We hope that corporate issuers with strong financials will utilise the new frameworks and tax concession to issue retail bonds, which will enhance the investment choices for Singaporean investors," Mrs Teo said.