Welcome back to Retire Rich Weekly! This week, we’re diving into the world of Singaporean investments, exploring opportunities for both stability and higher yields. We’ll also be taking a look at the surprising price drops hitting luxury properties at Sentosa Cove.

#1. Seeking Stability? Invest in the Upcoming T-Bill Auction

Attention all T-bill lovers! The Monetary Authority of Singapore (MAS) is holding an auction for a brand new 12-month Singapore T-Bill (Treasury Bill) on Thursday, April 18th, 2024. T-bill is a low-risk, government-backed security to help you boost the stability of your retirement nest egg.

New to T-Bills? No worries! Check out our guide on Singapore Government Securities (SGS) to learn more.

Given the current inverted yield curve environment, the yield is likely lower than the latest 6-month T-bill yield which was 3.75%. Our estimate of the 1-year T-bill yield may be around 3.5%.

Historical 1-year T-bill yields. Source: Business Times

Here’s what you need to know about this auction:

  • Name: BY24101X (12-Month T-Bill)
  • Auction Date: April 18th, 2024
  • Issue date: 23 Apr 2024
  • Maturity date: 22 Apr 2025
  • More Information can be found on MAS website.

#2. Chasing Higher Yields? Great Eastern Life’s New Bond

If you want a higher yield than the Singapore Government Bond or Singapore Savings Bond and are willing to take a slightly higher risk. You can look at investment-grade Singapore corporate bonds.

Great Eastern Life recently announced the issuance of a new bond, the 15NC10 T2 Subordinated SGD Bond. This bond offers a potential yield pickup compared to Singapore Government Bonds or quasi-sovereign bonds, potentially increasing your retirement income.

Let’s break down the details:

  • Final Coupon: 3.928% (subject to change)
  • Issue Date: April 17th, 2024
  • Issuer Credit Rating: S&P AA- (considered high credit quality)
  • Minimum Investment: S$50,000 (lower than the typical S$250,000 minimum, but you need to be qualified as an Accredited Investor)

What does “15NC10 T2 Subordinated” mean? 

  • 15: This refers to the bond’s maturity date, 15 years from issuance.
  • NC10: This stands for “Non-Callable,” meaning the issuer cannot “call” the bond in the next 10 years.
  • T2 Subordinated: This indicates the bond’s seniority is “senior subordinate”, which is riskier than senior unsecured bonds as it ranks lower in the repayment order if Great Eastern Life encounters financial difficulties.

Below is the key information for this Great Eastern bond.

Source: Bondsupermart

Remember: Before diving into any bond investment, carefully research it and consider your risk tolerance and investment goals, or consult a financial adviser.

For timely updates on the latest new bond issuance, join our Telegram channel.

#3. Sentosa Cove Property Fire Sale

Singapore’s luxury property market appears to be undergoing a lot of pressure, with significant price cuts hitting unsold units at The Residences at W Singapore Sentosa Cove.

 

 

Let’s explore what’s happening:

  • Massive Price Slashes: Unsold units have seen their prices slashed by over 40% compared to their initial launch price in 2010. Cityview Place Holdings, the developer, is releasing 58 units starting at S$1,648 per square foot (psf) – significantly lower than current neighbourhood condo prices.
  • Potential Reasons for the Price Drop: This situation could result from a decade of stagnant property value growth at Sentosa. Some investors who bought at the peak (S$2,500 – S$3,000 psf in 2010) are still facing potential losses.
  • Shifting Market Conditions: Singapore property cooling measures, Rising interest rates and increasing property taxes for high-value properties could be contributing to a softening of the luxury property market in Singapore.

Singaporeans love property investment. But before you rush into a deal, please do your math first. Is property purchase a booster or sucker for your retirement? Check out my analysis in this article here.

I hope this week’s update is useful to you. Stay ahead of the curve by subscribing to our Retire Rich Weekly newsletter today.

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About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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