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(16-02-2014, 04:27 PM)felixleong Wrote: (16-02-2014, 01:01 PM)Porkbelly Wrote:  Does anyone know if the interest payments are taxable? IRAS website is confusing.
dun think so Thanks felixleong for your reply.
(16-02-2014, 08:45 PM)CY09 Wrote: (16-02-2014, 05:32 PM)felixleong Wrote: Surely many feels 3% is low so what % is fair or attractive? If u want high yield what about olam 6.75%?
I think you may have to rephrase: Its that Many (in VB) feels 3% is low. My talks with the "common ppl" (aka those who believe investment products you get from your neighbourhood branches are one of the best deals); to them these 3.08% bond seems like it is an alright investment since it has "capita" as issuer and 3.08% to them is ok since FD is only 1.2% pa.
People are trapped by their own sphere of reality. To many, an average 6% return p.a. seems to be an illusion when the products they are offered are capable of providing them only a "reported 4.75% p.a." return. However to us in VB, an average 6% return p.a. is a reality. Thus the relative comparison differs; most VB members have a different expected rate of return vs "the common man in the street".
Not trying to be elitist in this post. Just highlighting the financial ignorance of the majority
As in most buying, price is the key. "common people" do not have the amount of cash to invest and along comes a retail bond priced at $1 with a minimum of $2,000 ( I think ). To some, "bond" is sophisticated enough and they have been impressed that diversifying their investment into bonds is part of the game plan.
If they buy shares, lets say, Singpost, at current price of $1.33 with expected dividend rate of 0.05 cts per annum, the yield is 3.75%. And that is 'expected'. With a bond, it is like an FD, with some certainty. The issuer is also known as a stable company with good pedigree.
Putting the same amount into CPF is also a good idea but then... the key is thrown away. With the bond, there is light at the end of the tunnel!
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(16-02-2014, 05:11 PM)dydx Wrote: (16-02-2014, 02:18 PM)CY09 Wrote: I do not advocate applying for the retail bonds. Corporations are taking advantage of the low I/r environment to lock in low servicing of their debts. People will only subscribe to this simply because "it is better than FD", which is what they only know (besides insurance) in their sphere of investment knowledge.
I fully agree with this.
Why would people with the right mind want to part with their hard-earned money for a long 7-year period and get such a low fixed return of only 3.08% p.a. in interests throughout the entire period?! I am sure not many banks would do it even at 5.00% p.a., as a 7-year bullet term loan (i.e. full repayment of the principal amount is only due at the end of Year 7 in one lump sum!) is very much like taking an equity risk on CapitaMall Trust.
Well said. Personally, i dont think there is any difference between a retail bond offering or an equity IPO. In an equity IPO, investors' animal spirits are triggered by bull markets and greed. In the current bond offering, the past 5years (and counting) of low interest rates make a 3.08% p.a. return extremely tempting.
Unless it is a distressed situation, which is obviously not, the seller gets to choose the time and the price. As for the buyer, the odds are PROBABLY never in his/her favor.
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My family has applied today. i treated it as an IPO stag's coffee money. Hope it will be oversubscribed at least 1.5-2.0 times. Any thing > is a Bonus. If no coffee money then "TANG KU KU" lol!
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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(17-02-2014, 09:03 AM)Temperament Wrote: My family has applied today. i treated it as an IPO stag's coffee money. Hope it will be oversubscribed at least 1.5-2.0 times. Any thing > is a Bonus. If no coffee money then "TANG KU KU" lol!
frankly i don't see the upside in subscribing for the long term if the YTM is 3.08% thereabouts.
if big demand, take a bit of coffee money and go.
if not, you are stuck for 7 years on something yielding 3% that will only have upside if interest rate falls (not much room for that), and sitting on capital losses if credit ratings fall or interest rates rise. Isn't it better to just sit on the cash and wait for better opportunities if the opportunity cost is only 3%?
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(17-02-2014, 09:45 AM)godjira1 Wrote: (17-02-2014, 09:03 AM)Temperament Wrote: My family has applied today. i treated it as an IPO stag's coffee money. Hope it will be oversubscribed at least 1.5-2.0 times. Any thing > is a Bonus. If no coffee money then "TANG KU KU" lol!
frankly i don't see the upside in subscribing for the long term if the YTM is 3.08% thereabouts.
if big demand, take a bit of coffee money and go.
if not, you are stuck for 7 years on something yielding 3% that will only have upside if interest rate falls (not much room for that), and sitting on capital losses if credit ratings fall or interest rates rise. Isn't it better to just sit on the cash and wait for better opportunities if the opportunity cost is only 3%? Agree!
That's why i say i am in it for coffee money only.
If unable to stag then wait longer period for coffee money lol. Err..........hope don't need to wait for 7 long years.
Yak! Horrible to think of it.
It is a possibility though i think it is quite remote-7 long years.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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http://infopub.sgx.com/FileOpen/CMTNewsR...eID=275226
Balloting result out:
Public offer of S$150 million 2.8 times subscribed; placement tranche of S$50 million 2.4 times subscribed
Total offer upsized to S$350 million
Bonds expected to commence trading at 9.00 a.m. on 21 February 2014
Me small investor got everything I applied for, so 6 lots. Looking forward for listing on Friday..
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(19-02-2014, 06:19 PM)valuebuddies Wrote: Me small investor got everything I applied for, so 6 lots. Looking forward for listing on Friday..
balloting ratio was interesting - 1:1 meaning everyone who applied got something (just a matter of how much u got)
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(19-02-2014, 07:06 PM)AlphaQuant Wrote: (19-02-2014, 06:19 PM)valuebuddies Wrote: Me small investor got everything I applied for, so 6 lots. Looking forward for listing on Friday..
balloting ratio was interesting - 1:1 meaning everyone who applied got something (just a matter of how much u got)
Yes, it favour small players, those applied under 10 lots should get everything
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Is is worth getting this bond at 3.08% when the Reits is giving double?
Of course Bond is considered safer than Stocks and rank higher when company goes bankrupt. That's the only advantage I can think of.
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(19-02-2014, 07:31 PM)Investmentrealm Wrote: Is is worth getting this bond at 3.08% when the Reits is giving double?
Of course Bond is considered safer than Stocks and rank higher when company goes bankrupt. That's the only advantage I can think of.
This actually depends on individual risk appetite. My wife put money in FD earns 1%, me put money in bonds earns 3%. Why is it so? Because she is 8 months older than me, old peoples are more conservative 
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