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Singapore

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

27 Oct 2022

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

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

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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