(Bloomberg) Singapore government bonds beat their biggest developed-market peers in May as a flare-up in virus infections in the city state fostered demand for haven assets.The securities gained 1.1% last month, a performance which trails only that of South African, Mexican and Indonesian bonds among 30 of the world’s largest debt markets, according to data compiled by Bloomberg. Fifteen- and 20-year bonds outperformed other tenors.Singapore was forced to reimpose a month of lockdown-like conditions from May 16 to quell a rising number of infections, its first return to tighter restrictions since last year. The city-state’s bonds also caught a bid from subdued inflation and a lack of supply pressures.“The implicit increase in household savings from restrained activity has been beneficial for longer-tenor bonds and supporting their relative outperformance,” said Philip McNicholas, ASEAN foreign-exchange and rates strategist at Bloomberg Intelligence. ȁ
Singapore Panel Proposes Shift Away From Libor by End-April (1)
The Southeast Asian financial center still faces challenges in the transition to a Libor alternative, given the limited historical use of the domestic interbank funding market, said Philip McNicholas, Asean FX and rates strategist at Bloomberg Intelligence.
However, as SORA is based on an average of past overnight lending rates, it may bolster the interbank lending market depth and liquidity, producing better and more efficient price discovery.
A spokesperson for the Association of Banks in Singapore said that the banks represented in the steering committee subgroups on business/syndicated loans and consumer products are on track to meet the timelines.