Thursday, June 7, 2018

TEMASEK RETAIL BOND OR SINGAPORE SAVINGS BONDS?

Temasek Retail BondsDear readers, currently, Temasek Holdings is offering a 10-year bond for retail investors that offers a 4.35% yearly interest. As this is a first retail bond offering from Temasek Holdings, naturally it generates quite a lot of buzz among the investor community. Temasek is a brand name and the yearly interest is also decent. Decent returns and relatively safe and I believe many investors would consider whether to invest in it.

And there has also been quite some comparisons made between Temasek retail bond with Singapore Savings bonds, the latter being another bond offered by the Singapore Government. While Temasek retail bonds offers a higher interest yield of 4.35% yearly versus Singapore Savings bond of around 2% yearly, I would think that one factor which investors should consider between the two is the “lockup” period. If we compare the “lockup period” of the capital between the two bonds, Singapore Savings bonds, in my opinion will easily triumph.

This is because investors in Singapore Savings bonds could liquidate their investment at any time without penalty while investors in Temasek retail bond would have to hold the investments for a minimum of five years before they could sell the bond if they wish (the duration of Temasek retail bond, like the Singapore Savings bonds is ten years).

Ultimately, whether one invest in the retail bond or savings bonds depends on each investor’s strategy. If an investor would think that some time down the road, there is going to be a stocks markets correction, then it may be wise to have some liquid cash on hand to bargain hunt when the market opportunities arise. In this case, an investment with no lockup in capital will be synergistic to the investor’s strategy. Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.


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