OREANDA-NEWS. There were 28 new bond listings in December last year bringing the total number of bonds listed in 2014 to a record number of 521 with total proceeds also at a new high of S\$213 billion. It also represents a 12% jump compared to 465 bonds listed and 21% increase compared to S\$176 billion raised in 2013. The increasing popularity of SGD bonds is also reflected in the Singapore Fixed Income indices (SFI). As of 31 December 2014, the amount of issuances tracked by the index has grown by 11.4% (to 254 issuances) year-on-year with the SFI constituents valued at over S\$138 billion.

Apart from traditionally active Korean issuers, the Asian debt capital market remains vibrant with increased participation especially from issuers in Singapore, Japan and India as reflected in the number of debt securities listed by issuers in these countries in 2014.

73% of companies that issued bonds in SGD bond market also listed the bonds on SGX.

There were a total of 149 bond issuances in 2014 and 73% of the total were listed on SGX while 24% are not listed. In comparison, out of 140 bond issuances in 2013, 58% were listed while 39% where not listed. A listing venue provides issuers with a platform for timely dissemination of corporate announcements to their investors  base and potential investors.

Significant growth is also observed in the home market where bond listings from Singaporean issuers jumped 46%  in 2014 relative to 2013 and accounted for 26% of total bonds listed on SGX. The bonds by these issuers vary in issuance size, structure, as well as currency. Bonds are increasingly used by companies in Singapore as a capital raising tool for diversification of funding source supported by market fundamentals.

Bond Listings by companies in Japan have markedly increased in 2014 compared to 2013

Japanese corporate issuers are also seen to be an important driving force behind bond listings on SGX recently as they increase their participation in the Asian bond market on the back of recovery in domestic investment spurred by Abenomics and continued low interest rate environment. Japanese issuers accounted for 11.5% of total new bond listings on SGX in 2014 versus 9.5% for 2013. In 2014, Japan is the third largest contributing issuer with 60 bonds listed on SGX compared with 44 bonds in 2013 or a 36% increase compared to 2013.  

In terms of the amount raised from bond issuances listed on SGX, Japanese issuers accounted for the lion share with 22% in 2014 compared to 18% in 2013. This is a significant increase in comparison with the second largest market share (in terms of funds raised) by Korean bond issuers at 16%, followed by Singaporean issuers at 15%. In absolute terms, Japanese issuers listed debt capital that raised S\$48 billion relative to S\$32 billion raised in 2013. On average, the amount issued per bond listing by Japanese issuers is S\$800 million.

The majority of the bonds listed by Japanese issuers are traditionally fixed rate in nature. Of late, we have seen more floating rate notes and convertible bonds being issued in response to market conditions. Notwithstanding the predominance of USD-denominated bonds in these Japanese bond issuances, the recent rally in the Japanese stock market have made issuing convertible bonds denominated in JPY more attractive for Japanese corporates. Apart from the banks, Japanese companies are observed to be increasingly tapping into the fast growing Asian debt capital market.

Listing applications for wholesale debt securities can now be processed in one business day

Effective 2 January 2015, listing application for wholesale debt securities can be processed by SGX in one business day.

This is part of SGX’s continuous efforts support issuers with timely access to the debt capital market and to provide an efficient listing platform for debt securities.  

Debt Securities (with ? US\$500 million issue size) listed on SGX in December 2014:

Issuer Amount Issued Description Listing Date
QBE Insurance Group Limited US\$700 Million 6.75% Subordinated notes due 2044 3 Dec 2014
Korea East-West Power Co., Ltd US\$500 Million 2.5% Senior unsecured notes due 2020 3 Dec 2014
Cagamas Global P.L.C.   US\$500 Million 2.745% Notes due 2019 11 Dec 2014

SGX Fixed Income

SGX's fixed income market is organised into two main segments: the retail bond market and the wholesale bond market. SGX-listed retail bonds are offered to the public and traded on the exchange's Mainboard in much the same way stocks are. SGX-listed wholesale bonds are only distributed to institutional or accredited investors in larger denominations and are primarily traded over-the-counter.