Weekly Market Recap: Stick to T-bills or buy stocks and bonds?

This week, I came across an interesting column suggesting that “earning 3% from Singapore T-bills may not last or be enough,” and that investors should “embrace risk and allocate more to high-quality equities and bonds” instead.

The comments section revealed a split in opinions. Those focused on capital preservation expressed concerns about potential capital loss, preferring safer options like fixed deposits, which can still offer yields above T-bills. 

For investors seeking stability, we’ve highlighted a few safe places to park your cash to earn a yield above the T-bill.

On the other hand, investors open to taking on more risk may achieve higher potential yields through high-quality equities and bonds. We’ve previously shared how to select the best bond fund for your portfolio and a few other investment options to consider.

For equity investors, our high dividend stock screener can help you identify strong opportunities in the Singapore market. 

For those sticking to T-bills, the next auction on 19 December—the final one of the year—could be worth watching. We share our insights on what to expect for the T-bill auction.

Here’s my take on the debate: there’s no one-size-fits-all approach to investing. Each investor has unique objectives and risk tolerances.

If you’re unsure, ask yourself this: Do I know enough about this investment, and am I comfortable holding it?

I hope these insights help you navigate the many options available. 

Happy growing! 

Gerald, Founder of Beansprout

⏰ This Week In Markets

🏛 Steady inflation fuels rate cut expectations

What happened? 

The US Consumer Price Index (CPI) increased by 0.3% in November compared to the previous month, in line with market expectations. 

This marks the fourth straight month of a 0.3% rise in CPI.

What does this mean?

The steady inflation data has reinforced investor confidence that the Fed will cut interest rates at its upcoming meeting.

According to the CME FedWatch Tool, there is now a 96% probability that the Fed will reduce rates by 0.25% at its meeting on 18 December.

Why should I care? 

Despite growing expectations of interest rate cuts, US stocks ended the week mixed, as investors took profits following the post-election rally.

Tech stocks outperformed, led by Tesla (+12%) and Google's parent Alphabet (+8%), after Alphabet unveiled a new quantum computing chip it called a major breakthrough.

Singapore stocks maintained strong momentum, with Yangzijiang Shipbuilding hitting a new 52-week high on the back of robust order wins.

🚗  Moving This Week

• DBS bought back 2.6 million shares at an average price of S$43.67 per share for week ending 8 December. This takes the number of shares bought back on the current mandate to 0.11 per cent of its issued shares (excluding treasury shares).
• SGX securities daily average value (SDAV) surged 51% year-on-year (y-o-y) in November to $1.44 billion, as anticipation of market reforms and the start of lower interest rates boosted trading volumes.  
• Keppel DC REIT received 79.4% excess applications for preferential offering. The preferential offering units are expected to be listed and quoted on the mainboard of the SGX-ST with effect from 9.00 a.m. on 18 Dec.  
• Digital Core REIT completed its acquisition of an additional 15.1% stake in a Frankfurt data centre, bringing its interest in the Frankfurt facility up to 65% from 49.9% before.
• AIMS APAC REIT is divesting a warehouse at 3 Toh Tuck Link in Singapore for S$24.4 million. The sale price represents a 32.5 per cent premium to the property’s valuation of S$18.4 million as at 31 Mar 2024. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

Where to park your cash for higher yield?

We share the best ways to earn a yield on your cash through fixed deposits, Singapore T-bills, SSBs and money market funds.

🤓 What we're looking out for next week

• Wednesday, 18 Dec: US Federal Reserve Meeting
• Thursday, 19 Dec: 6-month Singapore T-bill auction,

Check out the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

Source: SGX, Bloomberg, Refinitiv

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