Thursday, September 30, 2010

SIA 2.15% 5-Year Corporate Bond

SIA for the very first time in Singapore's history to issue corporate bonds to retail investors, at a much lower capital requirement.  The minimum investment sum has been reduced from the normal S$250,000.00 to a mere S$10,000, with applications in increments of S$1000.

In terms of return, the bond yield is really low, it is only 2.15%.  Mind you, the official inflation rate for the past quarter in Singapore is ~3.5%.  This means the bond yield is not even enough to cover the depreciation by inflation, but then if you compare with the interests the banks give out to your savings accounts or fixed deposit accounts of less than 1% pa, it is still much better.  It is no surprise then the bond issue is still very very hot.  I applied for 10,000 units, but I got none!  This means there are many people out there with some cash savings looking for more decent yield.

What this reflects will be something interesting to ponder.  Happy investing :)

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