Singapore's bond market still a good bet

SINGAPORE'S primary bond market has enjoyed a strong run in 2016. Singapore dollar (SGD) denominated bonds recorded a healthy growth of 15 per cent in issuance volumes, some S$15.6 billion (year to date), versus the same period last year. This stands out against the broader South-east Asia region which saw a 2 per cent decline in volumes.

The increased activity has been largely driven by low interest rates, which have steadily declined since the start of the year, giving rise to lower funding costs for issuers.

The three-month Swap Offer Rate for example, was quoted at 0.754 per cent on Aug 22, having fallen nearly 60 per cent from its January high of 1.762 per cent.