Weekly recap: What lower bond yields mean for T-bills and SSBs

There’s one thing investors have been talking about in recent weeks – bond yields have been declining sharply. 

We find out what the decline in bond yields would mean for the upcoming 6-month T-bill auction on 23 November.  

With the 10-year Singapore government bond yield falling below 3% as of 17 November, many investors are eyeing the latest SSB issuance with a 10-year average return of 3.4% per year. 

If you are wondering if you should subscribe to the current SSB or wait for the next issuance, check out our latest SSB interest rate projections here. 

To find out how much more interest you may earn from swapping your previous SSBs with the current issuance, check out our SSB swap calculator here. 

🤑 INFLATION IS FINALLY EASING

What happened? 

The US consumer price index (CPI) rose by a smaller than expected 3.2% in October compared to the previous year. 

Excluding volatile food and energy prices, the core CPI rose 4.0% compared to the previous year, the smallest increase since September 2021. 

What does this mean?

The latest inflation data provided further hopes that stubbornly high prices are starting to ease. 

This also led to rising investor confidence that the Federal Reserve (Fed) will stop raising interest rates.

According to the CME FedWatch Tool as of 18 November 2023, traders are now assigning a very low likelihood that the Fed will hike rates further. 

Why should I care? 

US stocks continued to rally following the latest inflation data, with gains led by large-cap tech stocks.

Singapore REITs also rebounded as investor worries about higher interest rates fade. Check out our REIT tool to discover the best REIT for your portfolio. 

💡 THE BIG IMPORTANT STORY

3 Singapore blue-chip stocks paying out consistent dividends

We look at the share price performance of three Singapore blue-chip companies that have a track record of paying out consistent dividends to shareholders.

🚗 WHAT'S MOVING

• OCBC’s subsidiary has agreed to buy Commonwealth Bank of Australia’s (CBA) stake in its 99%-owned Indonesian banking subsidiary PT Bank Commonwealth (PTBC) for an upfront cash consideration of about A$220 million. 
• Singapore Airlines (SIA) reported a 24.5% increase in passenger traffic in October compared to the previous year. Its cargo loads also rose by 7% compared to the previous year.
• Genting Singapore reported net profit of S$216 million in the third quarter, a 59% increase compared to the previous year. The company also announced a total investment of S$6.8 billion into Resorts World Sentosa. 
• Sea Limited (SE)  reported a loss of US$144 million for the third quarter of 2023, missing market expectations for a profit of US$102 million. The losses came as the company shifts its focus to growth for its e-commerce segment. Read our analysis on whether the worst is over for Sea Limited here.
• Alibaba (BABA) announced that it would not proceed with the full spin-off of its cloud business due to US chip export restrictions. 

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

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 20 Nov: Zoom earnings
• Tuesday, 21 Nov: Nvidia earnings
• Wednesday, 22 Nov: SGX x SIAS x Beansprout webinar: What shareholders need to know about VTAC’s proposed de-SPAC with 17LIVE 
• Thursday, 23 Nov: SIAS webinar: Introduction to Exchange Traded Funds (ETFs)

Source: Bloomberg, SGX 

👩‍💻 WATCH OUR RECAP

Missed out on what has been happening in the markets? We're pleased to partner with Securities Investors Association Singapore (SIAS) to bring you a Weekly Market Review. Catch the video every Monday on Facebook.