With all else being equal, valuation of existing bonds (and REITS) will be priced lower.Originally Posted by teddybear
Newbie
With all else being equal, valuation of existing bonds (and REITS) will be priced lower.
Newbie
Bloomberg article http://www.bloomberg.com/news/2014-1...an-credit.html
Swiber seems to be the whipping boy these days..
Global recession is coming....
REITs going to die already...............
Junior
In Apr 2013, my banker recommended me five year USD tracker certificate Global Shale basket index fund. At that time, CNBC ,Bloomberg etc financial news were talking about the US shale gas revolution. It will help US less dependent on oil from OPEC. I did not invest as I don't TRUST the research team recommendation. I also do not want to invest when CNBC , Bloomberg financial media talking all positive thing about US shale gas. Now the OPEC refusal to cut the oil output will challenge US shale gas. It policy will spur a crash in the US shale gas industry. It already happening as some of the related shale gas stock down > 8% in a single day.
As reported from the strait times money page. Swiber & Ezra holdings are schedule to repay $720 million of notes within the next 2 years. It will be a testing time for individual bond investors for the next 1 -2 year. To hold or to sell. I do hope the oil correction is not long term. We need to wait till the next 6 mths oil outlook when OPEC will meet again.
Junior
The saudis want to make sure US shale industry to go belly up. All that fake data on shale oil production really works. Genius touch on the part of the US. They are defending their petro dollar status.
Last edited by indomie; 29-11-14 at 10:03.
Junior
The Big Story Isn’t What You Think It Is
November 29, 2014 at 10:30 am by Kris Sayce
Tags: asx, Australian economy, Australian stock market, Chinese economy, oil
For the past six years, the mainstream has looked for the one thing that would cause markets to crash. They’ve come up with no end of ideas. Each has failed miserably. After a few wobbles here and there, the market hasn’t crashed.
That doesn’t mean that it won’t one day, but so far the mainstream has gotten it horribly wrong.
The one thing the mainstream has picked up on is the falling oil price. But even there they haven’t got it 100% right. As usual, they have only scratched at the surface. They aren’t looking at the layers beneath.
The key to understanding the falling oil price is that it’s not just about slowing economic growth or cheaper fuel at the petrol pump. It’s about understanding the knock-on effect of lower oil prices on the oil industry, on the economy, on consumer confidence, and on the rest of the financial markets.
If there’s one thing you should know about the markets and economies, it’s that everything is connected. The oil price can’t rise or fall by US$20–30 a barrel without it impacting every market sooner or later.
If the oil price stays below US$70 per barrel, or continues to fall even further, it will have a huge impact on the world’s markets. It will create an environment where stocks ultimately rise to a record high over the next four years before crashing in spectacular fashion.
That’s right, the downturn that happened on the ASX recently was nasty. But it wasn’t the big event. Nonetheless, that volatile period scared many investors out of the market as they thought it was the big crash. As the market settles and begins to rise, these same investors will realise their mistake and begin piling back into the market.
When they do, stocks will take off again.
That can seem hard to believe with all the scary headlines in the papers. But that’s how markets work. Sometimes they scare the heck out of investors. Investors panic and sell. Then they panic and buy back in again.
The result will be what I see as a four-year rally that will take stocks to a record high in 2018. And I don’t just mean a small advance from where the Dow Jones Industrial Average is today. I’m talking about the Dow rising another 50–100% from where it is today…and the Aussie index taking out a new high as it surges past the 2007 peak.
It could mean that the Aussie index doubles, perhaps triples from where it is today. Again, I know that may sound outrageous. It’s supposed to. Bull markets tend to begin when the market is in the throes of despair.
But you shouldn’t for a moment think that I’m cheerleading for stocks to go higher, or that I’m ignorant to the problems facing the world economy.
This isn’t about stocks doubling over the next four years and then continuing to rise forever. This is about the events that are happening today that will lead to an extraordinary stock rally and then a just as extraordinary bust.
China isn’t the only fraud
It’s not just the Aussie market and oil taking a beating — or gold, although it has rebounded recently.
The Chinese market continues to get roughed up. Despite China’s huge growth rate of 7.3%, the market still seems to be more focussed on the slowing growth rate rather than the aggregate growth.
It’s amazing. Even if China’s growth rate averages 5% in the years ahead, the economy will still double in size from where it is today in less than 15 years.
Just think about that for a second. As big as China’s economy is today, in 15 years it could be twice as big. At the moment China’s GDP is around US$10 trillion. The US economy’s GDP is around US$18 trillion. So if China grows at a 5% average growth over the next 15 years it will exceed the size of today’s US economy.
I don’t know about you, but to me that’s incredible.
And yet the mainstream can only focus on one thing, the potential for China’s economy to collapse. It explains this report in the Financial Times:
‘China’s foreign exchange regulator has uncovered $10bn in fake cross-border trade since April last year and has turned 15 cases over to police in a crackdown aimed at curbing hot money flows…
‘The gap between Chinese customs data on exports to Hong Kong and Hong Kong customs data on imports from China hit an all-time high of $28bn in March last year. The gap is viewed as a proxy for how much exporters are inflating their invoices. But by July this year, the gap had fallen to $9bn.’
The outright inference is that dodgy things are going on with China’s statistics and trade numbers. I won’t argue with that. I’m almost certain things aren’t 100% above board.
However, let’s not fall into the trap of thinking China is the only economy that fudges numbers. Maybe you remember this report from 2012. But odds are you don’t, because very few media outlets reported on it at the time:
‘The mystery of the trainload of biodiesel that crossed back and forth across the Sarnia-Port Huron border without ever unloading its cargo, as reported by CBC News, has been solved.
‘CBC News received several tips after a recent story about a company shipping the same load of biodiesel back and forth by CN Rail at a cost of $2.6 million in the summer of 2010. It turns out the shipments were part of a deal by a Toronto-based company, which made several million dollars importing and exporting the fuel to exploit a loophole in a U.S. green energy program.’
Well, what do you know? Import-export fraud. Only a fool would think this is the only case of import-export fraud crossing the US and Canadian borders. Doubtless there’s fraud crossing the US and Mexican border…and fraud with US and European, and US and Asian trade too.
Surely everyone must know now that any statistic that goes through the government ‘spin-cycle’ should be taken with a grain of salt. And lest anyone think that it’s only the dodgy foreigners who milk the numbers, take this from the ABC:
‘Federal Treasurer Joe Hockey says he wants answers to the problems the Australian Bureau of Statistics (ABS) has had with unemployment figures.
‘Mr Hockey, who is in the US to discuss Australia’s G20 agenda, said last month’s unemployment figures were “extraordinary”.
‘The rate was 6.1 per cent after jumping to a 12-year high of 6.4 per cent the previous month.
‘The ABS has now taken the rare step of abandoning seasonal adjustment for its latest employment data.’
It’s no doubt a stretch to say that fraud is in play with the ABS numbers, but it goes to show you that you shouldn’t trust a set of numbers, whichever government stands behind them.
China has problems. There’s no doubt about that. A country can’t go through a once-in-a-century growth spurt without it causing some distortions in the economy. But also remember that on its way to becoming the world’s biggest economy, the United States went through a huge growth spurt too.
It too had troubles (including a civil war) and distortions.
The bottom line is when you’re investing based on looking at the big picture, it’s important to actually look at the big picture, and not let the mainstream daily news cycle divert you from the right course.
Regards,
Kris Sayce +
Publisher, Money Weekend
Senior
Wow. Global Share market has really retreated today. Time to for the dip. Keppel corp corrected by more than 40cent.
Junior
From retail investor words.
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I am (sorry for being so naïve) tired of analyst. I think they are professionals, have all the information at their finger-tips (unlike us) and etc. So far when I listen to them to buy, kena screwed, share price fall pretty soon. Exceptions are far and few in between
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Date Tgt price Price call
20/11/2014 10.74 HOLD Maybank Kim Eng Price Target News
03/11/2014 11.75 BUY OCBC Price Target News
03/11/2014 11.00 BUY DBS Vickers Price Target News
03/11/2014 11.30 BUY CIMB Price Target News
23/10/2014 11.75 BUY OCBC Price Target News
23/10/2014 11.10 BUY DBS Vickers Price Target News
23/10/2014 11.30 BUY CIMB Price Target News
08/10/2014 9.64 SELL Nomura Price Target News
08/10/2014 12.60 BUY DBS Vickers Price Target News
24/09/2014 12.50 BUY OSK-DMG Price Target News
17/09/2014 12.60 BUY DBS Vickers Price Target News
17/09/2014 13.20 BUY CIMB Price Target News
02/09/2014 12.31 BUY OCBC Price Target News
21/08/2014 13.00 BUY MacQuarie Price Target News
25/07/2014 12.31 BUY OCBC Price Target News
25/07/2014 10.95 HOLD Maybank Kim Eng
25/07/2014 13.00 BUY MacQuarie Price Target News
Never 100% trust the analyst recommendation. They get the timing wrong. Only trust "Fear".
Senior
Most of them have personal agenda especially coming to the end of the year before Christmas. Always do sufficient homework and challenge them.
Senior
A barrel of crude oil is going below US$65. Opportunity is coming.
Senior
was 63+ a few hours ago but now 67+.
Junior
Back to bonds, the continued slide in oil price is expected to ease global inflation. Fed might slightly delay or reduce the magnitude for rate hike in 1H15.
I am getting my banker to list down all , Eizon , Ezra, Keppel corp & SembCorp bond. Want to know the price movement for all the oil rig companies.
I was not allocated the SembCorp perp bond 5% during the IPO. B4 the oil crisis, the price was 103.
Junior
Carnage in the Oil Market — Sound the Contrarian Alarms
December 2, 2014 at 12:04 pm by Tim Dohrmann
Tags: Australian stocks, contrarian investor, energy stocks, oil, oil price
When a billionaire oilman warns that his product could drop to US$30 a barrel, how do you respond?
Do you drop your bundle, rush to your broker and sell all your stocks, putting energy companies first against the wall?
Does the chilling forecast put you in a death grip, unable to think straight — let alone look at your portfolio?
Or do you take his prediction as a strong, subtle signal…one that undeniably screams ‘buy’?
The type of investor you are will determine how you respond. It will also decide whether you’ll scoop the biggest potential gains — not just in today’s stock market, but also in any market, anytime, anywhere…
By now, we’re sure you’ve seen the news. Oil continued its price plunge after last week’s meeting of the OPEC cartel. Yesterday, Aussie stocks copped it in the neck — none more so than the energy-linked companies whose fortunes depend on healthy oil prices.
Crude oil just reached a five-year low — dragging the Aussie dollar to its lowest level against the greenback since July 2010.
All the chatter is coming around to our view that interest rates are staying low for an extraordinarily long time. That’s erased any notion that the AUD is a safe-haven, high-yield currency — and returned traders’ perception to its former guise as a ‘commodity currency’.
Our currency shares plenty of history on that front with the Canadian dollar. When commodity markets freak out, so too do the AUD and CAD. That goes some way to explaining the portent of doom we mentioned earlier…
On Friday, billionaire Murray Edwards — the chairman of Canadian Natural Resources Ltd [TSE:CNQ], and of one of Canada’s single biggest oil investors — pulled the emergency cord. Speaking at a business forum, Murray said of crude oil:
‘On a given day you can have market fluctuations where prices fluctuate far more than the underlying economic value of the unit.
‘Prices could spike down to $30, $40. It got down to $35 in 2008, for a very short period of time.’
Crude oil at US$30 per barrel would spell disaster. The black gold cashflows that support the budgets of Saudi Arabia, Russia, Iran et al would dry up. If that happens, it would make 2011’s ‘Arab Spring’ look like a walk in the park.
But when you hear a business leader make such an apocalyptically low call — and when you see mainstream analysts rushing to publish similarly gloomy forecasts — it’s time to bet against the herd.
When the consensus is strong, it’s wrong
Cast your mind back to 2008, when the price of oil rocketed past US$145 per barrel. Goldman Sachs Group Inc [NYSE:GS] called for oil prices to hit US$200. Other well-respected analysts foresaw the price going much higher.
Right on cue, oil cratered — bottoming out at less than US$40 per barrel. Most mainstream commentators reversed their bullish oil price predictions — just in time for the commodity to rally.
More recently — less than a month ago — nearly 1,000 institutional investors and traders participated in the latest Barclays Global Macro Survey. On average, they predicted that energy would bring investors a return of more than 30% by the end of March 2015. There’s still time for the market to prove them right — but today, just three weeks in, that forecast is in tatters.
Many people like to call themselves contrarian investors. It’s easy to talk about — but it’s one of the hardest arts to master.
With oil prices slumping to new lows, watch out for a rash of bearish forecasts. The calls for an era of permanently cheap oil will become the new consensus.
But if you only take one lesson from the history of the oil markets, it should be this: the outcome that most people expect is the one that’s least likely to come true.
Ditch the ‘dumb money’
These lessons are just as useful in the stock market as they are in the commodity and debt markets.
You should be sceptical of anyone who forecasts an epic boom after prices have already risen, or a catastrophic collapse after they’ve fallen hard.
It takes guts to bet against the herd and it may not always come off. But that’s where you can bag the biggest gains for your portfolio. If you foresee, and act ahead of, a change in investor sentiment, you mark yourself out as a true contrarian.
Your friends may laugh. They might even find your methods crazy. But when your gut tells you the markets are out of order, and prices have moved too far…it could be time for you to ditch the crowd. Make your move before the ‘smart money’ does the same.
Regards,
Tim Dohrmann+
Editor, Money Morning
Newbie
Useful article on performance of 2014 issuances, the bonds up for maturity in 2015, etc: http://tradehaven.net/market/singapo...rs-and-losers/
Junior
DATED Apr 2013.
==========
When Foreign bank recommends the below FX Aus Usd trade. I suspect Aus will weaken. Furthermore, I get some info that Soros is shorting Aus mths ago. I do not know who is the issuer. It could be GS , JPM etc. All foreign banks are very good at selling "bad investment idea to those inexperience investors in the private banking. Let observe the below trade & see how it preform. I Rejected >90% of their investment recommendation by the foreigner bank.
12 Monthly Range Target Payout Forward on AUDUSD[/B]
Underlying: AUDUSD
Notional per Fixing: AUD 150,000 per fixing
Max. number of fixing: 12
Fixing Frequency: Monthly
Target Redemption Cap Level (TRCL): 5 fixings within the range
Range: 0.9825 – 1.0750
Payout per fixing(if within range): USD 2k per Fixing
How it works:
• On every fixing,if AusUS fix within the range,client will receive USD 2k.
• If AusUS has fixed within the range for 5 X, the structure will be KO’ed.
• Risk if AusUsd fix at or <0.9825, client has to Buy AUD 150k at 0.9825.
• Risk if AusUsd fix at or >1.0750, client has to Sell AUD 150k at 1.075
===============================================================================================
USD/AUD spot now is 0.84. See how the foreign bank recommends bad trading idea to the private clients. From 1.039 drops to 0.84 (Aus$1=S$1.34 to $S1.1). A big 20% FX loss if he is unable to cut loss. Try not to do Dual currency deposit (DCI) or Premium currency invest (PCI) at this low VIX environment or you are new to it or invest it against the herd. Not worth the bet. Chances U will not gain anything from it.
During the crisis in 08/09, I think US/Aus drop to below 0.80. Now it is 0.84. For investing in Aus$, it is wise to buy when the interest rate is going down. It is even better to buy when interest rate is at bottom (next year). Buy & then patiently wait for the interest rate to go up again together with raising Aus currency.
Now Russian Rouble$ is interesting. It is >50% down against USD. There is FEAR in RUSSIAN currency + energy stock. Maybe Buy Russian energy stock is one of the way to get dual capital gain if the oil price goes up again (stock+currency up). Get a qualify banker to advise.
Newbie
Interesting article: http://tradehaven.net/market/bonds-i...market-winter/
As it notes, there hasn't been a new SGD issuance in Singapore in 3 weeks
Global recession is coming....
I am expecting oil price to drop much more than US$60 before it stabilizes.
Reason being Saudi doesn't want other people to eat their "lunch", ops, their market share...........
Why should they be the one to cut production to push up prices?
Why can't other people cut production to push up prices?
But US oil production are by many companies, and they can't coordinate to cut production!
We will need to see some heavily leveraged shale companies bleed to bankruptcy or multiple take-over first before oil price will stabilize...
When? Nobody knows! For sure not in 2015 because most US shale companies hedged their price for about a year, so within 1 year they still can tolerate, after one year they will fall one after another!
Junior
Russian bond has been badly hit due to the fall in oil & rubble. Are U a risk taker ?
GAZPROM,Russian gas producer, majority owned by Russian government
Currency EURO
Coupon = 3.75%
Mature in Mar17
Nov13 price was 104.
16 Dec14 price is 92. YTM est 7.9%
LTV > 50%.
Euro loan interest only 0.95%
*Russia and China signed the biggest contract in the entire history of Gazprom.
The gas supply contract with China is worth $400 billion over 30 years. ”
This is Gazprom’s biggest contract.
Newbie
Looks like the Ruble has been shut out of the global mkts: http://www.zerohedge.com/news/2014-1...ssian-entities
Junior
I am looking to buy Russia unit trust fund.
I just want to ride through the "FEAR" period.
I am lucky to sold my Gazprombank USD Perp bond 7.875% in Mar13 @102.5 when
Russian relationship with Ukraine next from bad to worst. Now it is 60.
rdgs,
Vic
Junior
Take the risk & most fear period to buy Russia equity fund US$50k.
Dec13 high was 150.
Dec14 now is 75.
Global recession is coming....
Russia is NOT in NORMAL time now...
There may be CAPITAL CONTROL...
When there is capital control, I don't know how the fund managers are going to deal with redemptions! You sell but they can't pay you!!!!!!!!!!!
BEWARE until we see some clarity!
Junior
Thank for your valuable input. It will be a short term holding.
Newbie
Bro cbsh
Hope you make $$ on Russia saga...I too chicken to go in, as usual, miss the boat again.
Newbie
Update on retail trading of bonds next year: http://www.todayonline.com/business/...ss-bond-market
Published: 10:05 PM, December 23, 2014
SINGAPORE — The Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) have announced changes to make it easier for retail investors to buy bonds following a consultation paper released in September.
Wholesale bonds, which are offered only to institutional and accredited investors or in large denominations of at least S$200,000, can now be offered by eligible issuers without a prospectus to retail investors after the bonds have been listed for six months.
These “seasoned bonds” can be re-denominated into smaller lot sizes and be offered to retail investors via secondary trading.
The MAS proposed that only plain vanilla bonds will be allowed under the SGX’s framework to give greater access in the bond market to retail investors. The MAS noted that plain vanilla bonds have features such as a fixed term not exceeding 10 years, provision for repayment of the principal sum at the end of the fixed term and have periodic and non-deferrable interest payments.
Bonds that fulfil more stringent criteria can be offered directly to retail investors at the start of an offer without a prospectus. As such, these investors need not wait six months for the bonds to be “seasoned” to buy them.
The MAS also addressed concerns raised about bond liquidity in the public feedback received for the consultation paper. “Investors should take note that unlike equity securities, bonds are generally less liquid and there may not be an active secondary market for the trading of bonds. Thus, while bonds are considered less risky and volatile than equity securities of the same issuer, investors considering an investment in bonds should take into account their ability to hold the bonds to maturity,” it said.
Under the SGX’s framework, the exchange will lower the minimum issue size for the initial bond offer to institutional investors and accredited investors from S$300 million to S$150 million. It will also reduce the threshold for a company’s aggregate amount of bond issuance over the past five years on SGX from S$750 million to S$500 million.
The “look back” period of the issuer’s financial position will be shortened from five to three years, but it has to show a positive net operating cash flow on average.
A company that plans to issue “seasoned bonds” will have to fulfil criteria based on its size, listing record and credit position.
Among other requirements, the firm must have equity securities listed on the SGX or a recognised securities exchange for at least five years, or has listed or guaranteed the issuance of debt securities listed on the SGX for at least five years.
The MAS said based on the eligibility criteria, about 120 issuers in Singapore can potentially issue bonds under the SGX framework, of which about 60 can offer bonds directly to retail investors at the start of an offer without a prospectus.
The MAS is in the process of finalising the prospectus exemptions and is seeking comments on the draft regulations, to be submitted by Jan 23.
Junior
Bought @74.6 (include 1%com) on 17th Dec14. [email protected] on 24 Dec14.
est 10% profit.
If I bought one day early on 16th Dec14@66. Profit will be 20% +.
Part of being a winner is knowing when enough is enough
Junior
Swiber Holdings has proposed a rights issue to raise $45.9 million for working capital.
The company, which provides engineering and construction services to the offshore oil and gas industry, will issue up to 305.7 million new shares at 15 cents each on the basis of one rights share for every two ordinary shares held.
The rights shares are priced at a 49.2% discount to the stock's Dec 30 closing price of 29.5 cents and are 39.2% below Swiber's theoretical ex-rights price of 24.7 cents.
Maybe a temporary good news for those holding short dated 2015 straight Bond.
Newbie
Looks like the tap for new bond issuances has opened again...
++++
Initial Yield guidance at cost: 3.5% area
Expected Issue Size: TBD
Denomination: SGD 250k x 250k
Timing: Books Open
LV: 65% indicative
Issuer: Mapletree Greater China Commercial Treasury Company (HKSAR) Limited
Guarantor: DBS Trustee Limited (in its capacity as trustee of Mapletree Greater China Commercial Trust)
Expected Issue Rating: Baa1 by Moody's
Status: Senior, unsecured
Issue Size: TBD
Distribution: As per Information Memorandum, Singapore selling restrictions under Section 274/275 of SFA
Format/Docs: Reg S Bearer / Issuer's USD1,500 million Euro Medium Term Note Programme
Tenor: 7-Year
Denomination: SGD250K
Governing Law: Singapore Law
Listing: SGX-ST
Clearing: CDP
Selling Restrictions: Sections 274 and/or 275 of the Singapore SFA
Sole Bookrunner: HSBC
+++
Commentary: http://tradehaven.net/market/sgd-new...-magic-7y-3-5/
Newbie
Initial Yield guidance at cost: 7.875% area
Expected Issue Size: USD Benchmark
Denomination: USD 200k x 1k
Timing: As early as today
INDICATIVE LV: 55%
ISSUER: Country Garden Holdings Company Limited
GUARANTOR: Certain of the Issuer’s Restricted Subsidiaries outside the PRC
ISSUER RATINGS: Ba2 by Moody’s (Positive) / BB+ by S&P (Stable) / BB+ by Fitch (Positive)
EXPECTED ISSUE RATINGS: Ba2 (Moody’s) / BB+ (S&P) / BB+ (Fitch)
FORMAT: Regulation S Registered
STRUCTURE: Senior Fixed Rate Notes
CURRENCY/SIZE: US$ Benchmark
TENOR: 5NC3 years
USE OF PROCEEDS: Solely for refinancing the 2018 Notes and other existing indebtedness and related refinancing fees and expenses
COVENANTS: Customary high yield covenants
DETAILS: US$200,000/1,000 denoms, SGX listing, New York Law
TIMING: As early as today's business
JLMs/JBRs: J.P. Morgan, Goldman Sachs (Asia) L.L.C., HSBC, Deutsche Bank and CLSA (A CITIC Securities Company)
B&D: Deutsche Bank
+++
Commentary: http://tradehaven.net/market/usd-new...-5y-nc3-7-875/
Newbie
Final Yield guidance at cost: 6.75% (The Number)
Expected Issue Size: CNH 300mio
Denomination: CNH 1mio x 10k
Timing: As early as today
INDICATIVE LV: 70%
Issuer: Golden Bauhinia Investment Holdings Company Limited
Parent Guarantor: China Financial Services Holdings Limited (605.HK) ("CFSH")
Third-party Guarantor: China United SME Guarantee Corporation ("Sinoguarantee")
Sinoguarantee ratings: Baa3 stable (Moody's) / BBB- stable (S&P)
Expected notes rating: Baa3 (Moody's)
Format: Regulation S, Registered
Status: CNH Senior Notes, fully and irrevocably and unconditionally guaranteed by CFSH and Sinoguarantee on a joint and several basis
Size: Up to CNH300MN
Tenor: 3-year
Coupon: Fixed, S/A, actual/365
Settlement date: 5 March 2015 (T+5)
Maturity date: 5 March 2018
Use of proceeds: Development of CFSH's business in Hong Kong and other general corporate purpose
Details: HKEX listing, Hong Kong law, CNY1m/10k denoms
Sole Global Coordinator & Sole Bookrunner: JPM
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