Low default rates: Most issuers have credit profiles that are either strong or manageable in our view. Aside from losses stemming from Hyflux (SGX:600
) and the offshore marine sector in the mid-2010s, defaults have been rare. Excluding the statutory boards, most issuers that are TLCs or in the banking or real estate sector have remained resilient thus far.
With the Federal Reserve expected to lower interest rates in 2024, would it be a good time to invest in bonds? The Singdollar credit market could remain interesting in this market.
Composition of the Singdollar fixed income market
Sizeable market with somewhat diverse issuer profile: The SGD credit market has well over $100 billion in outstanding amounts, comprising bonds, corporate perpetuals, and bank capital. It is roughly split 30-30-20-20 by issuer type between statutory boards, Temasek-linked companies (TLCs), financials and banks, and non-financial corporates.
