SGX eyes first US-dollar bond amid acquisition push: source

[SINGAPORE] The Singapore Exchange is planning a maiden dollar bond offering, which would make it the latest entrant in a rush by Asian firms to lock in cheap borrowing costs.

The city-state's sole equities bourse hired banks for a potential US currency note and will hold investor calls from Tuesday, according to a person familiar with the matter, who asked not to be identified because they're not authorised to speak about it.

The exchange, which posted a drop in its latest annual profit in part due to rising costs, has been expanding its fixed income, currency and index businesses through acquisitions as it diversifies from equities.

Expenses will remain elevated as it continues to invest in growth, chief financial officer Ng Yao Loong said at an earnings briefing earlier this month.

Boosted by the acquisition of MaxxTrader and potentially more M&A activity, Singapore Exchange's revenue growth may be led by market data, connectivity and indices, and fixed income, currencies and commodities, Bloomberg Intelligence analyst Sharnie Wong wrote in an Aug 10 note.

The bourse isn't the only borrower poised to add to Asia's pipeline of US currency bonds. China Merchants Bank also hired banks for a potential offering of sustainability and green notes. Still, the primary market was muted on Tuesday with only one company marketing its deal.

Borrowers have so far sold more than US$254 billion of dollar bonds in Asia excluding Japan this year, on track to approach last year's record of about US$346 billion, according to Bloomberg-compiled data. Yield premiums on the region's investment-grade dollar notes fell below 126 basis points on Monday, a level last seen in February 2020.

ASIA

The primary dollar bond market remained low-key on Tuesday, with ABC International Holdings marketing the only deal. The lack of activity comes as investors await the Jackson Hole symposium later this week, a key event that may offer insights into how the Federal Reserve plans to taper bond purchases.

BLOOMBERG