Weekly recap: T-bill yield declines with higher demand

Many T-bill investors were disappointed to see the cut-off yield on the 6-month T-bill fall to 3.75% in the latest auction.

The decline in T-bill yield came amidst a fall in global bond yields and higher demand compared to the previous auction. 

This led to questions on whether we should try to secure the current high interest rates while they last. 

Thankfully, the best 6 and 12 month fixed deposit interest rates have been maintained at 3.60% per annum.

The current issuance of the Singapore Savings Bonds also offer an attractive 10-year average return of 3.40%, one of the highest on record. 

The interest rates on savings accounts have also been kept at fairly high levels for now.  

After you have worked hard to secure the best 11/11 promos, why not spend some time this long weekend to make your savings work harder too? 

🧐 ALL EYES ON BOND YIELDS

What happened? 

Fed Chairman Jerome Powell warned that officials will not hesitate to raise interest rates further to control inflation if needed.

What does this mean?

The 10-year US government bond yield rose following Powell’s comments, but still closed the week little changed from the previous week. 

Earlier, US government bond yields fell sharply as investors gained confidence that the Fed might be done with rate hikes.  

Why should I care? 

The calm in US government bond yields drove a continued bounce in US stocks, which was led by the tech giants. 

With Powell’s warning, we will be looking out for the upcoming consumer price index to determine if the rally can be sustained. 

💡 THE BIG IMPORTANT STORY

T-bill yield falls to 3.75%. What’s driving the decline?

The cut-off yield on the latest 6-month Singapore T-bill on 8 November fell to 3.75%.

🚗 WHAT'S MOVING

• DBS reported a net profit of S$2.63 billion for the third quarter, 18% higher compared to the previous year due to higher net interest margin and higher commercial book non-interest income. DBS reported a dividend of 48 cents per share for the third quarter. 
• OCBC reported a net profit of S$1.8 billion in the third quarter, a 21% increase compared to the previous year. The higher profit was driven by record growth in net interest income and higher non-interest income. 
• SIA reported a net profit of S$1.4 billion for the first six months of its financial year ended 30 September, an increase of 55.4% compared to the previous year. The company also announced that it intends to redeem half the remaining mandatory convertible bonds (MCBs) that were issued in June 2021. 
• Singtel reported a headline net profit of S$2.1 billion for the six months ended 30 September, a 82.6% increase compared to the previous year, driven by an exceptional gain from regional associate Telkomsel’s integration of IndiHome, a fixed broadband provider in Indonesia. Operating revenue, however, declined by 3.2% due to the strength of the Singapore dollar. 
• Sembcorp Industries announced a target to grow its gross installed renewables capacity to 25 Gigawatt (GW) by 2028 as part of its strategic plan for 2023 to 2028. Read our analysis on why investors became more optimistic about Sembcorp Industries following the Investor Day

Source: Bloomberg, CNBC, Financial Times, Business Times, Edge Singapore

🤝 PARTNER CONTENT

Syfe Cash+ Guaranteed raised to 3.8% p.a. Better than T-bills and fixed deposits?

Syfe Cash+ Guaranteed recently raised the guaranteed return offered to investors to 3.8% per annum. We compare Syfe Cash+ Guaranteed with T-bills and fixed deposits to find out if it's worth considering.

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 13 Nov: Singapore Public Holiday
• Tuesday, 14 Nov: US Consumer Price Index (CPI) data, Sea Ltd earnings
• Wednesday, 15 Nov: Webinar: Singapore REITs vs Dividends – Tips on how to invest for rising interest rates, Closing date of United SG Dynamic Income Fund Initial Offering Period. 
• Thursday, 16 Nov: Alibaba earnings

Source: Bloomberg, SGX 

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