Latest SSB allotment of up to S$10,500 per person. Here’s what it means.

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Bonds

By Beansprout • 27 Oct 2022 • 0 min read

The record high 10-year average interest rate of 3.21% per annum for the November SSB issuance did not draw as much subscriptions as the August issuance.

SSB November issuance allocation
In this article

What happened?

Apart from the auction result on the 6-month T-bills, many investors were also very excited to know how much allocation they'd get for the Singapore Savings Bonds (SSBs)

After all, the interest rates on the latest SSBs just reached a record high in the November issuance. 

So here's the the allotment result for the November issuance of the Singapore Savings Bond (SSB)  (SBNOV22 GX22110A).

Applicants who applied for S$10,000 or lower were fully allotted, subject to individual allotment limits. 

Applicants who applied for S$10,500 or higher were allotted either S$10,000 or S$10,500. 

About 29.15% of these applicants were allotted S$10,500.

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What we learnt from the SSB allotment results

#1 - Strong investor interest in SSBs but demand below previous peak

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Description automatically generatedThere were total applications of S$2.2 billion for the November issuance of the SSB (SBNOV22 GX22110A).

This was higher than the $1.1 billion of applications were received in the October Issuance (SBOCT22 GX22100X). The maximum allotment then was at $42,500.

However, it is still below the S$2.4 billion of applications received for the August issuance (SBAUG22 GX22080V). This might be the reason for the higher maximum allotment of S$10,500 compared to S$9,500 in August. 

SSB allotment November 2022

#2 – Higher interest rates did not manage to draw significantly more applications for SSBs

The lower subscriptions for the November issuance compared to the August issuance may come as a surprise to some, especially with the record high interest rates for the latest issuance. 

You will receive an interest rate of 3.08% for holding the November SSB for one-year.  If you hold the SSB for 10 years, you will receive an average interest rate of 3.21%. 

SSB interest rates – November 2022

SSB interest rate november
Source: MAS

This would be higher than the interest rates in the August issuance.

You will receive an interest rate of 2.00% for holding the August SSB for one-year. If you hold on to it for 10 years, you will receive an average interest rate of 3.00%. 

SSB interest rates – August 2022

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Source: MAS

#3 – Demand moved towards T-bills

Where we think investor interest has moved towards is the 6-month Treasury Bill. 

The yield on the 6-month T-bill during the auction on 27 October surged to 4.19% per annum.

There were S$1.8 billion of non-competitive bids put in for the 6-month T-bill during the auction on 27 October, an increase from S$1.1 billion in the auction on 13 October. 

This is a sign that some investors may have decided to allocate more of their portfolio towards the T-bills rather than SSBs. 

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Source: MAS

What would Beansprout do?

We continue to like the Singapore Savings Bonds as a simple and low-cost way to generate safe returns. 

For those who applied for the November issuance, the issuance will be done by end of day on 1 November. 

SSB Application and Redemption Timeline

We also see the T-bill as a sound way to earn a decent yield especially for shorter maturities. 

By investing in these two government-backed bonds, we would be able to make our money work harder rather than putting it in a bank. 

Join our Telegram group if you have any questions about the Singapore Treasury-bill, SGS Bond, or SSB!

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