New 6-month Singapore Treasury bill at end Jan 2023 Return below 4.1% unless CPI rises tomorrow (for Singapore savers)

An issue of Singapore Treasury Bills (BS23101S) will be auctioned on Thursday, January 18, 2023.

If you want to subscribe successfully, get your order through Internet banking (Cash and SRS) or in person (CPF) by January 17. You can also apply with your CPF-OA and CPF-SA funds, but you would have to go to a bank (OCBC, UOB and DBS) and do it in person. You can also apply the same problem with your cash and SRS.

you can see the details in the MAS here.

In the past, I have shared with you the virtues of Singapore Treasury Bills, their ideal uses, and how to write them here: How to Buy 6-Month Singapore Treasury Bills (T-Bills) or 1-Year SGS Bonds.

In the last issuance announced two weeks ago and recently completed, current Treasury bonds traded at a yield of 4.28%. In the end, the cut-off yield for the Treasury ended up pretty close to that of 4.2%.

For the second time, if you select a not competitive bid, the amount you bid may be prorated to you and would produce 4.2%. If you want to make sure you’ve secured everything you offer, it’s best to select a competitive offer, but you must bid correctly.

A good rule of thumb is to make sure you get what you want and accept any cutoff yield offer of 50% of the last cutoff yield. In this case, you can bid 1.95%. Whether your ultimate cap yield is 2% to 4.3%, your 1.95% offer will help you secure the full allowance you need.

Obtain information about the next yield of Singapore T-bills from the daily closing yield of existing Singapore T-bills.

The following table shows the current interest yield at which six-month Singapore Treasury bills are trading:

The daily closing yield gives us a rough indication of how much the 6-month Singapore T-bill will be trading at the end of the month. Based on the daily closing yield, we should expect the next Treasury bill yield to trade close to the yield of the last issue.

Currently, 6-month Singapore Treasury bills are trading near a yield of 4.18%, but we see that in the last few days there is a significant drop in yields.

Obtain information on the upcoming yield of Singapore Treasury bills from the daily closing yield of existing MAS bills.

Typically, the Monetary Authority of Singapore (MAS) will issue a 4 and 12 week MAS bill for institutional investors.

The credit quality or credit risk of the MAS Bill should be very similar to Singapore T-bills, as both are issued by the Singapore government. The 12-week (3-month) MAS Bill should be the closest tenor to the six-month Singapore T-bills.

Therefore, we can get information about the performance of the upcoming T-bill from the daily closing performance of the 12-week MAS Bill.

The cutoff yield of the last MAS ticket auctioned on January 10 (yesterday) is 4.25%. The MAS bill shows a drop since the last issue of two weeks ago.

Currently, the MAS ticket trades close to 4.28%.

Given that the 12-week MAS yield is 4.28% and the last traded 6-month T-bill yield is 4.18%, what is the likely T-bill yield this time around?

There are more obvious signs that the story is about an impending recession. The performance reflects that.

Barring some inflation spikes in tomorrow’s (Jan 12, 2023) CPI numbers, the Treasury bill yield for the end of January should be closer to 4.1%, if not lower.

With a higher CPI impression, significant more than 4.2% can be on the cards.

Here are your other highest-yielding, safe, short-term savings and investment options for Singaporeans in 2023

You may be wondering if other savings and investment options give you higher returns but are still relatively safe and liquid enough.

Here are other different categories of values ​​to consider:

This table is current as of November 17, 2022.

There are other securities or products that may not meet the criteria to return their principal, high liquidity and good yields. Structured deposits contain derivatives that increase the degree of risk. Many Robo-advisors and banks cash management portfolios contain short duration bond funds. Their values ​​can fluctuate in the short term and may not be ideal if you need a 100% repayment of your principal amount.

The returns provided are not set in stone and will fluctuate based on current short-term interest rates. You should embrace more goal-based planning and use the most appropriate instruments/stocks to help you build or spend your wealth rather than having all your money in short-term savings and investment options.

If you want to trade these stocks I mentioned, you can open an account with interactive corridors. Interactive Brokers is the leading low cost and efficient broker that I use and trust to invest and trade my shares in Singapore, the United States, the London Stock Exchange and the Hong Kong Stock Exchange. They allow you to trade stocks, ETFs, options, futures, forex, bonds, and funds around the world from a single, integrated account.

You can read more about my views on Interactive Brokers at this deep-dive series from Interactive Brokers, starting with how to easily create and fund your Interactive Brokers account.

Kyith is the owner and sole writer behind Investment Moats. Readers tune into Investment Moats to learn how to build a stronger and stronger foundation of wealth, how to have a passive investing strategy, learn more about investing in REITs, and the practical aspects of active investing.

Readers also follow Kyith to learn how to plan well for financial security and financial independence.

Kyith worked as an IT Operations Engineer from 2004 to 2019. He currently works as a Senior Solutions Specialist at lump-sum wealth advisory firm Providend.

You can see Kyith’s current portfolio herewho uses his Free Google Stock Portfolio Tracking.

Your preferred investment broker is interactive corridorsallowing you to invest in securities from different exchanges around the world, at very low commission rates, no custody fees, almost spot exchange rates.

You can read more about Kyith here.