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Sunday 26 September 2010

SIA Bonds at 2.15% Coupon Rate

The SIA bonds at 2.15% coupon rate are not attractive.  You can buy better alternatives like the OCBC Preference Shares at the SGX (Singapore Stock Exchange).  Preference Shares have bond-like features like coupon rate (dividend payments) and tenure (5 years, etc.). The dividends payable range from 3.9% to 5.1% depending on which type of Preference Shares you buy.  At the moment you have to pay a high premium as the Shares are popular because of the low interest rate environment. Wait for the market to correct (expected to be next year & thereafter as the Federal Reserve will need to raise the interest rate sooner or later), then buy at the lower prices! Well, sometimes you just need to do some homework and research to look for better alternatives for your investments.  Happy Investing!

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