Despite this volatility that also impacted yields of the Singapore Overnight Rate Average (Sora), the Singapore dollar (SGD) credit market remained resilient with $8.9 billion of new issuances priced from January to June. Considering that Housing & Development Board (HDB), a government-related issuer with deals that are typically very large, was absent among SGD bond issuers in 1H2023, this year’s volume is comparable with 1H2022 levels of $8.8 billion and above 1H2021 levels ($8.4 billion) if we also exclude HDB’s issuances from prior years. By comparison, Asia ex-Japan G3 issuances in the first half of 2023 were down approximately 35% y-o-y according to Bloomberg.
The first half of 2023 turned out to be a very different period for credit markets compared to recent history. While certain influences remained similar versus the last six months of 2022 including rate hikes, inflation and geopolitical tensions, a regional banking crisis erupted in the US as rising interest rates exposed vulnerabilities in bank balance sheets while weakness in sentiments contributed to Credit Suisse Group’s forced merger with UBS Group and the surprising write-down of Credit Suisse Group’s Additional Tier 1 bank capital instruments. During this time, volatility was almost unprecedented with two-year US treasury yields posting its biggest three-day decline since the stock market crash of 1987.
Some things remain the same
