November 2022 End-of-Month Commentary

On a year-over-year basis, the Monetary Authority of Singapore (MAS) Core Consumer Price Index (CPI) eased in October for the first time in eight months and edged lower to its August 2022 level of 5.1%, a decline from the 5.3% in September due to smaller increases in prices of utilities, retail, and other goods and services. 1 MAS Core Inflation is expected to average around 4.0% for 2022, up from 0.9% back in 2021. The Singapore central bank anticipates the effect of the impending Goods and Sales Tax (GST) increase from 7% to 8% starting Jan. 1, 2023, to be transitory and has also forecasted a core inflation figure of 2.5%-3.5% for 2023.

With global inflation showing signs of cooling and the U.S. Federal Reserve signaling a possible slowdown of its aggressive rate hikes, market sentiments were boosted and a relief rally was triggered across asset classes in November. Singapore was no exception to the relief rally, with the Dow Jones Singapore Index2 rallying by 6.92% this month and paring back its YTD losses to -12.82%.

The iBoxx SGD Overall gained 1.91% this month, bolstered by a 2.44% gain from Singapore Government Securities (SGS) and a modest 0.98% gain from the non-sovereigns. This brings the index's overall YTD losses to 7.04%

December 2022 Rebalance

This rebalances, SGD 165 million of new notional was inserted into the iBoxx SGD Overall Index via one bond. Concurrently, four bonds left the index, removing close to SGD 1.38 billion of notional. Three of the departing bonds left the index due to their expected remaining lives falling below one year. The other bond (TSHSP 6.9% 2024-10-18) was removed from the index as the amount outstanding fell below the minimum requirement after a tender offer. Additionally, there were six bond rating changes in the index this month; five were based on the iBoxx implied credit quality methodology.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.