4 min
Singapore Mid-Year 2020 Credit Outlook: Staying Defensive (Andrew Wong) OCBC Treasury Research and Strategy - Podcast
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- Business
Heading into 2H2020, significant risks and opportunities abound. Defaults globally are expected to rise and in the SGD market, an issuer has just missed the payment of a bond upon maturity. Interest rates pinned to the floor with an uncertain outlook may turn perpetuals into fodder to buffer balance sheets, as evidenced by the non-call of ARTSP 3.065%-PERP. Although credit spreads have widened significantly even for fundamentally sound issuers. unpredictability with the pandemic leads us to recommend investors stay defensive and in high quality credits. As part of a diverse basket however, we think it is opportune for investors to expand beyond the highest grades to consider also Neutral (4) Issuer Profile names under our profile with the worst of the credit crunch likely behind us.
Heading into 2H2020, significant risks and opportunities abound. Defaults globally are expected to rise and in the SGD market, an issuer has just missed the payment of a bond upon maturity. Interest rates pinned to the floor with an uncertain outlook may turn perpetuals into fodder to buffer balance sheets, as evidenced by the non-call of ARTSP 3.065%-PERP. Although credit spreads have widened significantly even for fundamentally sound issuers. unpredictability with the pandemic leads us to recommend investors stay defensive and in high quality credits. As part of a diverse basket however, we think it is opportune for investors to expand beyond the highest grades to consider also Neutral (4) Issuer Profile names under our profile with the worst of the credit crunch likely behind us.
4 min