Not many local folks know about how to invest in Singapore Government Bonds. They can:
- Purchase via auctions through the 3 local banks (OCBC, UOB and DBS).
- Purchase through Fundsupermart.com.
Now there is a third method which is through SGX when it is listed by mid 2011:
Singapore government bonds will begin trading on the Singapore Exchange (SGXL.SI) by the middle of this year, providing retail investors with a safe but higher-yielding alternative to bank deposits, Finance Minister Tharman Shanmugaratnam said on Monday.
He said retail investors concerned about the low savings rates can also participate in government bond auctions or buy high-quality corporate bonds that are now traded in smaller lot sizes on the exchange.
Singapore’s annual inflation hit 3.8% in November, the highest since January 2009, and analysts said the rate could accelerate further in the first few months of 2011, prompting the central bank to maintain or further tighten policy.
Now I do not know how much this will help the inflation situation but I think it’s a good move to improve visibility of SGS Bonds.
Not too long ago I highlighted in an Insurance evaluation that SGS Bonds can be a cost effective alternative to savings insurance.
In the current environment, even 3.80 years to maturity bonds look unattractive. But short term bonds will become very attractive when inflation speeds up.
Then, short term bonds become more attractive compared to longer term ones, since they mature faster yet their coupon yields are close to those longer term ones.
Still not many people know where to buy them but many know how to trade stocks (its abit strange really) So listing on the SGX is good for visibility I feel.