https://eservices.mas.gov.sg/statistics/fda...ssuePrices.aspxMAS primary dealers quote 3.75% p.a., so 10 basis points spread means 3.65% p.a.
Will bid 3.65% p.a., 4k SGD from OCBC.
QUOTE(poooky @ Apr 9 2024, 04:33 PM)
How do you guesstimate how much to bid for and for how long? What happens if bid is unsuccessful? Is it the cash stays uninvested and then gotta wait for for next month's offering?
You can read back the previous posts. There are many ways to come up with a smart guess. I explain some of them below:
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1. MAS primary dealer's quotations (check here:
https://eservices.mas.gov.sg/statistics/fda...suePrices.aspx)These are mid-point quotes by SGS primary dealers in SG (you can find a list of PDs here:
https://www.mas.gov.sg/bonds-and-bills/inve...primary-dealer).
They are updated on a daily basis after market close in SG at around 5.30-6 pm.
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2. Bloomberg I107 SGS Yield Curve data. (see example here:
https://forum.lowyat.net/index.php?showtopi...st&p=109429727)This yields the same data as the above but gives you the bid and ask yield/price as well, so you know precisely what yield to bid. The MAS PD data previously only tells you the middle yield (halfway between bid yield and ask yield).
As stated in an earlier post, I can't access the Bloomberg terminals today, so I can't provide today's screenshot for reference. Sorry for that.
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3. Bloomberg FXFA function
This requires a bit understanding of Finance. Bloomberg's FXFA function relies on the so-called Covered Interest Rate Parity no-arbitrage condition to deduce the interest rate from 6-month USD.SGD forward FX rates and compares it with US SOFR rates and SGD SORA rates.
https://corporatefinanceinstitute.com/resou...te-parity-cirp/It's complicated, but it gives you a rough estimate as well. See example screenshot here:
https://forum.lowyat.net/index.php?showtopi...ost&p=109429727-----------------------------------
Now armed with 3 smart guesses, you can make a good guess of how much to bid. The best time to submit T-bill bid(s) is always "last minute", i.e., just hours before the 9 pm application deadline via the 3 local SG banks' portal. If you submit earlier, you lose earning daily interests from the bank (this interest varies from person to person, some uses multiplier account with 3-4% p.a. effective interests, some like me use the basic account with 0.05% p.a. interests, the opportunity costs really depends on each individual's case.)
If a bid is unsuccessful, your money will be refunded on the auction day itself, around 3-4 pm for OCBC, around 5.15 pm for DBS (not sure about UOB as I don't have an account with them, probably somewhere in between the 2 banks?) In very rare instances, if the auction is too hot, the money may be credited back to you as late as 8-9 pm on the same day, it happened a few times towards the end of last year when T-bill yield hit 4% p.a. and above.
As the refunded money goes into your account on the same day, you are free to decide what you wish to do with it. 6M T-bills are issued in the primary market every 2 weeks, so I just wait for 2 weeks and continue bidding. Every 3 months, like in this month, there will be a 1-year T-bill offered too. You can wait for one week later, and resubmit your bid for the 1-month T-bill, if you are interested.
Hope the above info helps.
Apr 9 2024, 02:52 PM
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