CMT retail bond more for savers than investors

THE first retail bond offering of the year by CapitaMalls Trust (CMT), Singapore's first and largest real estate investment trust (Reit), offering a yield of 3.08 per cent for seven years, comes at an interesting time.

Global bond investors are increasingly jittery as the US Federal Reserve continues to reduce its monthly bond purchases. If the US economy performs better than expected, as many analysts have been saying, pressures will build for the Fed to raise rates soon to prevent the economy from overheating. The current forecast is for the first rate rise to hit at the end of next year.

But an emerging market scare in January, along with some profit taking in developed market stocks, has caused money to flow back into bonds, lowering yields. US 10-year Treasury yields were trading at 2.67 per cent earlier in the week, compared with 2.86 per cent a month earlier.