Before we begin, let’s lay some foundations:
- Bond Price = Current Market Price
- Coupons = Interest payment as promised by the issuer
- Yield = The actual return of bond investment
- Yield to maturity = Actual return upon bond maturity
How to determine whether it is worth investing in a Bond:
- Debt to Equity/ Gearing Ratio
Total Liabilites (Red) = $12,929,900
Total Shareholders Equity (Blue) = $14,251,200
Gearing Ratio = Total Liabilities/ Total Shareholders Equity = 90.7%
Debt to Equity/ Gearing Ratio should be less than 100%
2. Net Profit Margin
- Net Profit / Revenue = Net Profit Margin
Net Profit Margin =936,800/15,806,100 = 5.93%
APAC Airlines average Net Profit Margin was 3.8% in 2018 (According to IATA Economic Performance analysis).
The Net Profit Margin of a company you are looking to invest in should be higher or equal to sector average.
3. Operating Cash Flow
Operating Cash Flow should be positive (check for previous years as well)
The longer you hold, the higher the risks. Vice Versa.
We would like to add that there are many more factors to consider before investing in the bond such as:
- Management of Company
- Industry and its competitors
- Competitive Advantage of Company for Bond Maturity Period
- And many more!
It is not only all about the numbers, learn how to qualitatively analyze a company HERE.
SIA Bond Details
The Bonds under the Public Offer will be open for application from 9.00am on 20 March 2019 and close on 26 March 2019, 12.00pm.
For DBS and OCBC, applications can be submitted 24/7. For UOB, applications (both ATM and ibanking) can only be submitted between 6am to 9.30pm, daily.
Where to apply
- ATMs of DBS (including POSB), OCBC and UOB (together the “Participating Banks”)
- Internet banking websites of the Participating Banks
- Mobile banking application of DBS (including POSB)
The minimum amount is S$1,000 and in multiples of S$1,000 thereof.
- You will need to maintain an individual Central Depository (CDP) securities account and link it to your bank account with direct crediting service (DCS).
- A non-refundable fee of $2 will be deducted from your bank account at point of each application.
We hoped that the above explanations will aid one in making a more informed decision, should you choose to do so.
Stay Tuned! Till Next Time…
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MAI GONG BO JIO !
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