SIA issues 3.03% 5 year fixed-rate bonds

IMPORTANT DISCLAIMER: Do note that the content below is only provided for your information only. It is not intended to constitute as ANY investment advice or recommendations. We urge everyone to be personally responsible and read to their own discretions. (Photo adapted from Singaporeair.com)

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:

  1. Debt to Equity/ Gearing Ratio
SIA’s Balance Sheet adopted from Yahoo Finance

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
SIA’s income statement adopted from Yahoo Finance

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

SIA’s Cash Flow Statement adopted from Yahoo Finance

Operating Cash Flow should be positive (check for previous years as well)

4.Maturity Date

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.

click HERE to find out !

SIA Bond Details

Application period
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

  1. ATMs of DBS (including POSB), OCBC and UOB (together the “Participating Banks”)
  2. Internet banking websites of the Participating Banks
  3. Mobile banking application of DBS (including POSB)


Denominations

The minimum amount is S$1,000 and in multiples of S$1,000 thereof.

Others

  • 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 !

The information contained in this post and/or its attachment(s) is provided to you for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. The information or opinions provided in this post do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or invest in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein are suitable for you. The Wealth Exchange and/or any of its members will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this email. The information and/or materials are provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials.

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