Stable Singapore dollar bond market faces challenges ahead
ABR releases the top sellside firms and arrangers in Singapore dollar bond market in 2018, a market in which government bonds form about 98% of total debt sales
2 Oct 2018 | Asset Benchmark Research

Among ASEAN economies, Singapore constitutes the third largest bond market, after Thailand and Malaysia. The growth in the Singapore dollar bond market eased to 1.8% q-o-q in June, following an increase of 3.7% q-o-q in March, mushrooming to a size of US$281 billion.

Between 1 June and 15 August, Singapore's local currency (LCY) bond yields decreased for all maturities except the 3-month and 12-month tenors, which increased 9 basis points (bps) and 4 bps, respectively. With the recent Fed rate hikes and a trade war that is highly likely to be prolonged, the whole yield curve is expected to continue shifting upward in the long run.

In terms of market growth, like most emerging Asian markets in the region which had lower corporate issuance, Singapore had the largest drop due to rising interest rates which makes borrowing costs higher.

The growth in bond market was solely driven by the rise in the stock of outstanding government bonds. It amounted to US$101 billion, propelled by issuance of Monetary Authority of Singapore bills and Treasury bills and bonds. The robust issuance is part of the authority's efforts to mop up excess liquidity in the market.

Government bonds form about 98% of total debt sales in the Singaporean market, and this situation might explain the movement of ranking in top arranger in Singapore dollar bond primary market, according to ABR.

With interest rates continuing to increase and a gloomy outlook for the trade environment anticipated, as an export-dependent economy, GDP growth could also be dampened. A stronger US dollar and weaker fundamentals would challenge the sellside firms in the Singapore dollar bond market to provide trade ideas in secondary market trading and highlight hidden relative value in the primary market. It is against this background that ABR is announcing the top sellside firms and arrangers in Singapore dollar bond market in 2018.

To view the rankings of the top banks in the secondary market and top bank arrangers for 2018 please click here.

Top Banks in Asian Currency Bonds 2018 methodology

The Asian Local Currency Bond Benchmark Review 2018 surveyed over 380 institutional fixed income investors who are active in 10 Asian currency bond markets: China (onshore and offshore i.e. CNH), Hong Kong, Indonesia, India, Malaysia, Philippines, Singapore, Taiwan, and Thailand.

Survey participants included asset managers, banks, and insurance companies from both domestic and international institutions. They were asked to rate the best banks or securities companies across a series of buying criteria and identify their trading counterparties in the secondary market. The banks are ranked in each market according to their wallet share; the names of the top three are published. Additionally, investors nominated the best banks/securities houses as arrangers in the corporate and government primary markets in terms of the quantity and quality of the issues.

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