Primary bond offerings from Singapore-domiciled issuers reached US$12.8 billion so far this year, a 23.2% decline in proceeds after a strong period during the first half of 2016, as local companies tapped both domestic and offshore bond markets to raise funds. During the second quarter of 2017, proceeds reached US$4.5 billion, a 45.8% decline from the first quarter of 2017 and down 41.7% from the second quarter of 2016. Singapore issuers tapped the US-dollar bond market and raised US$3.3 billion, up 5.8% in proceeds compared to the same period last year. Notably, perpetual bonds issued by Singaporean companies totalled US$1.4 billion to date, up 49.3% from the comparative period in 2016.
United Overseas Bank (UOB) is currently the most active issuer/borrower in terms of bond proceeds so far this year, capturing 13.9% market share worth US$1.8 billion (including issuance from subsidiaries).
DBS Group Holdings currently leads the Singapore-issued bonds underwriting this year with related proceeds of US$3.0 billion, and accounts for 23.2% of the market share. Oversea-Chinese Banking Corporation (OCBC) and HSBC Holdings rounded out the top three with 11.9% and 9.3% market share, respectively.
According to Thomson Reuters, DBS Group booked an estimated US$12.9 million in fee revenues, and accounted for 23.7% of Singapore’s bond fee pool. Imputed underwriting fees from bond issuance by Singaporean companies totalled US$54.5 million, down 33.8% from the first half of 2016.
Financials Accounted for 61.8% Market Share
Singaporean companies from the Financials sector tapped the bond markets and raised US$7.9 billion, a 19.0% decline in proceeds compared to the same period last year. Financials captured 61.8% of the total bond proceeds issued by Singapore borrowers.
Real Estate sector accounted for 9.9% market share, raising US$1.3 billion in proceeds, up 25.4% from the first half of 2016. Government & Agencies, Energy & Power and Industrials captured 7.8%, 5.8% and 4.6% market share, respectively.
SGD Bond Markets Picks up Activity in Q2 2017
Singapore-dollar bond market reached S$6.7 billion (US$4.8 billion) during the second quarter of 2017, up 35.4% in proceeds from the first quarter of 2017 as number of primary issuance grew 45.0%. This brings total Singapore-dollar bond issuance to S$11.6 billion (US$8.3 billion) so far this year, or 7.1% lower compared to the proceeds raised in the first half of 2016. The Financials sector accounted for 53.0% of the SGD bond market and raised S$6.2 billion (US$4.4 billion) so far this year. Real Estate and Government & Agencies followed behind with 16.1% and 14.6% market share, respectively.
Foreign issuers tapping the Singapore-dollar bond market raised S$3.7 billion (US$2.7 billion) thus far, a 13.0% decline in proceeds from the comparative period last year (S$4.3 billion), as number of primary issuance slowed down by 54.8%.
HSBC Holdings issued its debut Singapore offering of Additional Tier 1 capital in June for S$1.0 billion (US$724.4 million), the largest issuance this year in the Singapore-dollar bond market, following a string of European banks tapping the SGD bond market this year, such as – Commerzbank AG, Landesbank Baden-Wuerttemberg (LBBW) and BNP Paribas.
Source: Thomson Reuters data