By Clifford Lee
THIS year is shaping up to be a record for the Singapore bond market, which has, to date, witnessed a record issuance volume of S$23.2 billion.
This has been helped along by a number of factors - namely, the increasing ability of the Singapore bond market to absorb issues of size and long tenor, and evidence of rising secondary market liquidity.
With the improvement in global market sentiment this year, Singapore issuers also flocked to the local debt market to take advantage of record low interest rates and renewed investor risk appetite.
DBS, which has a market share of over 40 per cent of the Singapore-dollar bond market, helped to launch benchmark transactions for several rare issuers, such as the Land Transport Authority, Singapore Telecommunications, Singapore Post and Neptune Orient Lines.
This year was also marked by several landmark deals, including a benchmark Sing-dollar sukuk, or Islamic bond, issued by Malaysia's sovereign wealth fund, Khazanah Nasional - its first. Temasek Holdings's 40-year issue was also a milestone for the Singapore bond market and set Temasek's credit curve as a benchmark for other bond transactions.
The diversity of issuers and debt tenors available in the Sing-dollar bond market have fuelled participation in the local bond market as investors continue to look for alternative investment options to the traditionally popular cash, equities and properties. As a result, many issues this year have been over-subscribed, with a number seeing sizeable allocations to private banking customers.