This is the auction result
Singapore Saving Bonds SBJAN23 GX23010Z results was released at 3pm today. Let’s look at the result released at 3pm today.
This Savings Bond was allotted using the Quantity Ceiling format. Applicants who applied for S$172,500 or lower were fully allotted, subject to the individual allotment limits.
Applicants who applied for S$173,000 or higher were allotted either S$172,500 or S$173,000.
Approximately 95.93% of these applicants were selected at random and allotted the additional S$500.
It’s been a long while since we see this kind of result. 909.7 million applied out of the 900 million offered by MAS. Everyone will get $173000! This is highly in contrast if we compared to the last month application demand of $1.7 billion worth of application. I actually expected the demand to drop but didn’t expect so much.
This simply mean demand = supply. SSB is always oversubscribed with not enough to goes around to all applicants even with the rate rise this year.
What does this mean for the market? What does this mean for the saver?
Let’s do a comparison
The fairest comparison with SIngapore Saving Bonds would be the recent Treasury Bill. The auction result was with the cut-off yield is 4.28%. Total amount allocated is 4.4 billions out of the 11.8 billion applied. This mean 37.2% are allocated. Out of these 37.2%, 1.6 billion are given to the non-competitive applications (see this post for more details).
For treasury bill, it is still oversubscribed. However, the current SSB is demand = supply? What does this mean? I can think of 3 possible reasons. Let’s see.
Possible reason 1:
The market is no longer interested in the 2.95% rate given by MAS. Investor demands for higher rates. They could get much better rate from other more liquid solution such as Fixed Deposit, Money Market Funds etc that I have mentioned in my past post Best places to put Liquid Cash now. Hence, not many people want to apply for SSB now.
Possible reason 2:
An increase in interest rates can lead to a decrease in liquidity in the market. When interest rates rise, the cost of borrowing money increases, which can lead to a decrease in demand for loans. This can lead to a decrease in the supply of credit, which can in turn lead to a decrease in the overall liquidity of the market.
Does this mean that there is not enough cash liquidity left in the current market. However, if you see the treasury bill, it is still oversubscribed. What do you think?
A “liquidity crunch” is a situation in which there is a lack of funds available for financial institutions or investors to meet their financial obligations or to carry out transactions. This can occur when there is a sudden increase in the demand for cash or a decrease in the supply of cash.
If there is a liquidity crunch, it means market will have issue should there be a crash next year.
Possible reason 3:
It is a freak, unusual or unexpected outcome of an auction result; it just happened that people thought no one will apply and no point to apply so much since SSB always oversubscribed for the past few issues. Hence, people just subscribed less since they thought they won’t be able to get everything anyway. This is similar the last second issue of Treasury bill where the result was 4.4% yield. Hence, is this just a freak result?
How did I fare?
As mentioned in my last post Singapore Savings Bonds SBJAN23 GX23010Z: A Safe and Secure Investment, I have redeemed my old issues and reapplied new issues. Hence, effectively I have managed to refresh my liquidity funds for higher rates 🙂
Which case would it be?
Your guess is as good as mine. No one would know currently but we may find out soon enough. If you notice the recent market, 10 years treasury yield is increasing again. Recession risk also increasing.
For me, I am keeping some cash to wait. It will be sad if you have no cash to buy when asset price become cheap. Patience is a virtue. It is a good quality to have if you want generational wealth.
Good articles that you should read!
People are drawn to dividend investing.
Why? Firstly, dividends provide a regular stream of income, allowing investors to receive a portion of the company’s profits on a periodic basis. This can be particularly attractive for individuals seeking consistent cash flow or looking to supplement their existing income. Additionally, dividend investing is often viewed as a more stable and predictable investment strategy compared to relying solely on capital appreciation.
I always write and share articles, especially on dividends which many people love them. Do read them!
- Simplified Guide to the Key Gist of Grant of Probate and Estate Planning
- Cheapest and best way to trade Singapore Stocks with CDP
- Mastering Dividend Investing: 5 Evergreen Investment Principles
- Unlock Lucrative Returns with IAPD: A High-Yield ETF Providing 7% Annual Yield and Quarterly Payouts
- Unlock Lucrative Returns with SDIV: A High-Yield ETF Providing 11% Annual Yield and Monthly Payouts
- If I am a dividend investor, this is what I would do….
- 7 Things to consider before buy a dividend stock
- 4 Dividend ETFs that can let you sleep well even in the scary bear market
- 5 Best Counters for Passive Dividend Investing
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- What is the best investment strategy in the world?
- Ultimate Strategy of buying REITS: XXX instead of X000?
- Ultimate Free 2 Days Reit MasterClass: Exclusive at Careyourpresent.com only!
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Of course, you can search for other things that would interest you such as “Careyourpresent”, “Reits”, “Side Hustles”, “Fixed Incomes”, “Savings” etc.
Money just buy you the chance of freedom.
When you are young and working, you exchange time for money. When you are old, you can have lots of money but you can’t buy time back, especially the things that you have missed while busying striking out in career. Of course, if you love your career, and consciously know that you are missing out the first time your child walk or talk, that’s ok, but if you are the other spectrum, please do something about it.
Your kids grew up and they no longer need you to accompany them. They no longer want to sit on your lap to share/do things with you…all these time you spent in your 9 to 6 or even longer cubicles…can the money that you have earned by you back these?
We always thought we have more time with our old parents, but we are wrong. Time with them is ticking away every day. One day it will suddenly be gone. There is no regret medicine, no reset in time. Gone is gone and cannot come back. No matter you are billionaires or millionaires, you cannot reset this.
We always thought that we have more time with our spouse every day, but we are wrong. One day they will be gone too. When you read this, please go tell your spouse that you love him/her and he or she is the best thing that you ever had in your life.
I have picked out some of the more life reflecting articles of the CAREYOURPRESENT series. Do read them:
- The Best Advice to Parents and Child
- What if Later never come?
- What will you bring with you on your last day on Earth?
- Time is the ultimate currency, not money
- Our Life only have 5 short Days – we should live the best for every day
- Truly understand Living in the Moment now
- 11 Important Unexpected Life and Money lessons to learn from Your Children
- The days are long but the years are short
- Ditch your mobile phone to build real life
- Careyourpresent: Time is the most important
- Careyourpresent: What is your purpose of life?
- Careyourpresent : Greatest Regrets in life
- Careyourpresent : You might not believe it. It’s little unexpected things that make up a real life
- Careyourpresent: Something only happen once in life, if you missed it, it’s gone forever…
- Careyourpresent : Why is Gold useful?
- Careyourpresent: Frozen. Let it go!
Love your life daily.
You have one less day with your spouse, parents, children and yourself.
Time is ticking away.
For each passing day,
Enjoy and Treasure your Life!
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