Risks in bonds Interest rate risk This refers to the risk that a bond’s price could decline if interest rates rise. As compared to shorter maturity bonds, bonds with a longer time to maturity are more susceptible to price declines when interest rates rise, which means investors in longer-dated bonds require additional compensation for taking on […]
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Government Bonds Have No Risk! While it is common to refer to government bonds as “risk-free” securities, this may not be completely accurate. While it is true that credit risk is not a concern for most government bonds, investors who invest in a government bond are still exposed to interest rate risk – should yields […]
Bonds Lose Money When Interest Rates Rise It is common knowledge that bond prices and interest rates are negatively correlated – that is, when one rises, the other falls. However, the relationship is not always that straightforward. Bond yields are a reflection of both the interest rate environment, as well as the credit risk of […]
Higher Bond Yield Always Better? All things equal, a higher yield on a bond should be preferable to a lower yield. However, all things are rarely equal! A higher yield on a bond is usually offered to compensate investors for higher risk undertaken. For example, a lower quality company will have to offer investors a […]
Bonds Always Make Money While bonds are structured to make money for investors, there are two key instances where investors may lose money when investing in a bond. First, the fixed nature of coupon payments and principal repayment are only valid if the bond is held to maturity. Should an investor sell the bond in […]
Terms of Bond : Principal: The Face Value of Bond. It is the amount paid back to the bond holder by the issuer on the maturity day. Coupon Rate: This is the annual rate issuer paid to the bond holder, e.g. annually, semi-annually, quarterly.Maturity Date: This is the date issuer paid back the principal to […]
How the economy impact bonds? Investment grade bonds are usually favoured when economic conditions are deteriorating. However, under buoyant conditions, demand for high yield bonds increases. Amid stronger global growth, higher yielding bonds have generally outperformed lower yielding ones. Interest rates and their effect on a bond’s rating Duration, which is often measured in years, […]
The classification of bonds The good news for investors is that it is relatively straightforward to generally assess the risk profile of a bond, with much of the detailed research carried out by external credit rating agencies. The three most significant firms in the market are Standard & Poor’s (S&P), Moody’s and Fitch, who screen […]
Type of Bonds Fixed Rate Bonds: These are bonds with the interest rate fixed throughout the entire investment period. The interest rate does not change with the market interest rate. Callable Bonds: The issuer has the right to redeem the bond at the predetermined redemption price prior to the maturity date. For example, the […]
Investors should pay attention to the risk of loss absorption and the coupon reset mechanism. The first is the risk of loss absoprtion. There is a trigger mechanism in CoCo bonds. Generally, when the Tier 1 capital adequacy ratio of the issuing bank drops below a certain level (generally 5.125% to 7%) or when the […]
What is CoCo Bonds? Contingent convertible bond is also known as CoCo bond. It is a supplementary capital tool commonly used by banks, helping banks bolster capital to meet tougher regulation. One of the most frequently seen terms in the international financial regulatory standards set in Basel III is capital adequacy ratio, which requires banks […]
SHK 2022 & 2024 USD Bonds offering Net YTMs of 3% to 4% Highlights: Despite the economic downturn driven by COVID pandemic and social unrest in last couple of year, Sun Hung Kai still achieved a rise in profit. The company’s overall credit quality remained stable with a healthy cash position and low gearing. Sun […]
If you can’t or don’t want to borrow money from a brick-and-mortar bank or a conventional online lender, peer-to-peer (P2P) lending is an option worth exploring. P2P lending works differently from the financing you may have received in the past. You are not borrowing from a financial institution but rather from an individual or group […]
Highlights: the deleveraging performance in the Chinese real estate sector is remarkable. More than 90% of the developers have reached the “yellow light” or “green light” level under the three red lines guidelines. The passing rate of net gearing ratio and cash to short-term debt ratio both reach positively at 90%, while the passing rate […]
Two ways to make money from bond Bond Yield Bond Investors receive a coupon if bond held to maturity. The coupon corresponds to a level of yield (or interest) on the bond principal (or face value). These coupons makes up the major contribution to an investor’s return. The unvarying nature of coupons from bonds is […]
BOND FUNDS vs DIRECT BONDS Pros & Cons Investing bond fund help risk diversification and usually perpetual without maturity date Investing direct bond mostly have a fixed maturity date & coupon payments, so it offers a certainty with a rate of return, assuming the bond is held to maturity. Important to understand their differences and […]
Bond vs. Bond ETF Investing and holding directly renminbi bonds will receive regular coupon payments. In contrast, investing RMB bond ETF may not recieve any regular distributions, particularly if the underlying bond index is a total return index. There may not be any guarantee on the rate or frequency of distribution by RMB bond ETFs. […]
Update on RMB Bonds: How and when to invest Chinese real estate high yield RMB bonds? Summary: Given the default case by China Wealth land , the overall yield of mainland real estate high-yield bonds has recently increased. Other macro economic factors, such as Chongqing Energy’s failure to repay debt, rising concern about tight […]
“Rapidly growing WealthTech players are either developing advanced wealth management platforms and intuitive advisory solutions for their partnerships with big banks or using their low-cost structure to directly tap the middle-class population. Although currently at a nascent stage within wealth management, payments firms have strong plans to grow in Asia Pacific, using their e-wallets to […]
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“Cash is trash, US Bond is stupid, Chinese Bond rising” Ray Dalio, the founder of Bridgewater Associates, the world’s largest hedge-fund firm. Latest Comments: Cash is trash, returns negative relative to inflation. Any dollar asset or US bond pays less than inflation. Short cash position preferable than dollar stock/bond mix. Tax & capital control […]
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Fintech investment falls to six-year low in Asia-Pacific region Corporate accelerates digital transformation in the face of COVID-19 Payments space proves most resilient with M&A /IPO deals e.g. eNettwas, Judo Bank, Toss, Razorpay Early-stage Fintech struggles, focuses on conserving cash To outlast the pandemic, investment shift from Southeast Asia into established markets Interest in IPO […]
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Since August last year, the long term interest rate of U.S. Treasury Bond had bottomed out with accelerated rise since the beginning of the year. The maturity spread has widened substantially. After the outbreak, under the impact of the deteriorating economic environment and the Federal Reserve quantitative measure, the long-term interest rate of U.S. Treasuries […]
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UAE’s Central Bank (CBUAE) and China’s Central Bank ‘s Digital Currency Institute (PBC DCI) announced joining HKMA and Thailand Central Bank (BOT) ‘s digital currency project for cross-border payments named as “m-CBDC Bridge”. The m-CBDC Bridge project involves: developing a proof-of-concept with distributed ledger technology (DLT) facilitating real-time cross-border foreign exchange payment-versus-payment transactions in a […]
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“China’s bank regulator, the China Banking and Insurance Regulatory Commission (CBIRC), said on Saturday tightened requirements on online lending by commercial banks and internet platforms from 2022 in a hope to foster a healthy growth and mitigate any financial crisis. Highlights: New rules will require all online lending platforms to contribute 30 per cent of […]
A Norwegian biometrics company’s fingerprint sensors and biometric software have been included in digital RMB (digital Renminbi currency) trials launched by the Postal Savings Bank of China. This digital RMB initiative is the only legal digital currency in China. The technology included as part of a so-called hardware wallet is enabled for both online […]
At the dawn of 2021, Bitcoin continues its strong upward trend. It was within a whisker of $50,000 yesterday, as it drew unprecedented flows from big and small investors after Elon Musk ‘s major announcement of investment and potential to sell his electric vehicle for bitcoin. Also, many research institutions believe that as Wall Street […]
KPMG China Top 50 FinTech 2020 On January 18, 2021, the “2020 KPMG China 50 Leading Fintech List and Report Conference” was held in Beijing. During the event, KPMG released its annual selection of China’s top fintech companies. This year, the China Fintech 50 report was extended to feature 100 companies to showcase the sector’s […]
Dogecoin (DOGE) surged more than 50% on Thursday morning to trade around $0.059 per coin. The news was apparently welcomed by Elon Musk, who made several tweets about the cryptocurrency, despite a pledge two days ago to stay off Twitter for “a while.” In one, Musk shared a “Lion King”-inspired Meme featuring a photoshopped image of […]
With the launch of iAM Smart platform, over 20 commonly used online government services will be accessible through the platform. It is expected that iAM Smart users will be able to access over 100 online government services through the platform by mid-2021. To promote the use of iAM Smart in the financial sector, the Hong […]