May 2020 Singapore Savings Bond and Weekly Updates

Average interest per annual for 1-year and 10-year period

May 2020 Issue

Average Interest Per Year (over 10 years): 1.39%

Application Closes: 9.00pm, 27 April 2020

Details on this month SSB can be found on SGS website

As the Fed reduces the interest rate to close to zero, the SSB interest rate also collapsed to a new low of 1.39% if you held the bond for 10 years. The 1-year interest rate also dropped drastically to below 1%. What this means to me is that the government does not want our money. Lowering interest rate is one of the ways to stimulate the economy by encouraging more spending.

This week, one of the focus is probably on the results of a few REITs which released their quarterly results. Retail investors are concerned at how the pandemic has affected performance and how much dividend will be cut. Some of REITs will be cutting DPU over 50% in order to conserve cash. But there was no panic selling so far after these results are released, and the price remain well supported. It seems like these were within the expectations of investors, and had already been priced in.

The other focus is probably on the collapsed of oil price and the filing of bankruptcy by Hin Leong. All the 3 local banks have exposure to Hin Leong, and are expected to have some impact to these banks. This is the reason why I am still hesitant to enter banks at the moment as the extend of impact to banks due to bad debts are still not clear.

I am still looking for opportunities to enter but remain cautious. 

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