Guide to Singapore Gov Securities & T-Bills
These 2 guides on Singapore Government Securities (SGS) and Treasury Bills (T-bills) offer a good introduction to our government’s debt instruments for practically risk-free investing.
Besides CPF voluntary contributions which sacrifice liquidity for the 2.5%pa interest floor rate, SGS and T-bills offer another alternative for the conservative risk-averse investor.
One important point to note is that SGS bonds are traded on a “clean ”price basis, i.e. without adjustment or accrued interest, but settled on a “dirty ”price (or total price plus accrued interest) basis. Therefore, the data at MAS-SGS website reflects the final yield and the ‘clean price’, but not the ‘dirty price’ or the settled price taking into account coupon interest accrued to date payable to the bond seller. Another note is that the data reflects transactions based on the standard "market lot" transaction between interbank dealers which is S$5,000,000. For retail investors, the offer yield is likely different which results in typically a higher bond price for the same issuance. Fundsupermart is one retail distributor for SGS bonds where the minimum denomination of SGS/T-bill is $1,000.
