Bonds: Still in favour

● 卢业月  By Amy Low　The inter-bank market - where banks bor-row from or lend to each other- is flushed with money at the moment, due to aflood of for-eign funds and the continued fall in interest rates.　This means that banks here have more mo-ney than they needand are motivated to lend out such "idle money". Hence, the low housing loan rates, for example. This contrasts with thesituation at the height of the Asian economic crisis when there was a liquidity crunch, and interbank rates, which arethe rates at which banks borrow from or lend to each other, hit as high as 12%.　Also, interest rates have fallen significantly over the last few months, a phenomenon that would stimulate economic growth as lower borrowing costs and savings rates will en-courage businesses to invest and households to consume.　In such a low interest-rate environment, it may still be good for investors to consider in-vesting some money in bonds because they will be able to achieve a higher return than cash deposits.　For example, in Singapore, current short-term fixed deposit rates are now about 1%, compared with 3% for a 5-year Singapore government bond and 3.6% for a 5-year HDB bond.　In other words, relative to short-term de-posit rates, onecan pick up 2% more by hold-ing the bond for 5 years.　Interest rates aside, the retail investor should pay heed to a more fundamental principle a-bout investing in bonds: it does not matter whether interest rates are high or low-bonds play an essential part in a person's investment portfolio.　Investors may find this statement hard to swallow, given the current stock market rally.　No doubt, the Singapore stockmarket has risen by about 55%over the last six months and is the best performing asset class now; yet, it is important to note that the stockmarkethad also fallen substantially by about 37% in the first 9 months of 1998 alone.　Therefore, investors should be mindful of the volatility of the stockmarket.　Bonds, measured by the UOB Government Bond Index, are lessvolatile although the probability of earning higher returns than equities is lower.　Cash deposits, measured by the three-month Singapore Inter-Bank Offer Rate, are the least volatile but this is offset by the fact that returns are the lowest.　In a nutshell, an investor should consider investing in bonds as an alternative asset class for the purpose of diversification and in consi-deration of his overall investment objectives.　These objectives include whether there is a greater need for capital gains or regular in-come. Other considerations such as liquidity needs and time horizon also determine an in-vestor's appetite to assume risks and, accord-ingly, his choice of asset class to invest in.　As a bond pays a regular coupon, or interest rate, it may be suitable for investors, for exam-ple, retirees, who require a regular income over a specific time horizon.　The higher need for certainty of income would mean a lowertolerance for volatility. Although cash deposits may earn interest, however, due to their shorter tenors, or time-frames, an investor may face the risk of roll-ing over, or reinvesting his money, at lower interest rates whenthe deposit matures.　For example, in early 1998, when inter-bank rates were as high as 12%, investors who locked in their funds at high deposit rates of about 6% for a year would have had to roll o-ver at much lower interest rates 12 months la-ter when their deposits matured and rates had fallen to about 1%.　Secondly, if an investor has excess cash which he intends to use at a later date, it may be advisable to invest his excess cash in less volatile instruments to preserve his savings as well as enhance his returns.　Therefore, bonds, like stocks or any other asset class, can fulfil certain investment ob-jectives.　How does one invest in the bond market?　Currently, retail investors can buy Singapore government bonds over the banking counter. The minimum investment for government bonds is S$1,000 and treasury bills is S$10,0000.　Investors can buy and sell on a daily basis. The cost of transaction is usually the differ-ence between the purchase price and sale price of the bond, and may vary from bank to bank.　They can also buy bonds as and when new issues are launched. For example, HDB and JTC bonds were offered to theretail market during their primary launches.　Alternatively, investors can consider invest-ing in fixed income unit trusts. The benefits of unit trusts are that investors are able to invest in smaller denominations with typical invest-ments of S$1,000.(The writer is a Fund Manager of Morgan Grenfell Asia Ltd. This Column has the support of the Investment Management Association of Singapore and the Stock Exchange of Singapore.) 　　债券依然炙手可热 　　　在外国资金流入和利率持续下跌的带动下，目前银行间彼此借贷的银行同业市场资金充斥。　　这意味着，这里的银行拥有的资金比它们所需要的多，所以乐意把这些“闲钱”借出去。例如说，把房屋贷款利率调低。比起亚洲危机最紧张的时期，情况刚好相反，当时的资金紧缩、银行间彼此借贷的同业拆息率高达12%。　　此外，利率在去几个月里明显下跌，这是一个可刺激经济增长的征兆，因为较低的贷款成本和储蓄利率将鼓励商家投资和家庭消费。　　在这样的低利率环境下，投资者可以考虑把一些资金投资在债券，因为他将能取得比现金存款高的回报。　　例如，在新加坡，目前的短期定期存款利率大约是1%，而5年期政府债券是3%，5年期建屋发展局债券是3.6%。　　换句话说，与短期存款利率比较，持有5年期债券可得到的回报相对多了2%。　　除了利率之外，散户投资者也应该注意投资债券的基本原则：不论利率是高还是低，债券在一个人的投资组合中扮演重要的角色。　　目前的股票市场牛劲十足，投资者可能觉得这种说法难以消化。　　毫无疑问的，新加坡股票市场已经在过去六个月里涨了大约55%，是表现最优异的资产等级；但是，值得留意的是，单单在1998年的首9个月，股票市场也曾经显著下跌了大约37%。　　因此，投资者应小心股票市场波动。　　以大华银行政府债券指数衡量的债券，虽然赚取比股票高的回报的可能性低，但是波动比较没有那么大。　　以3个月银行同业拆息率衡量的现金存款，它的波动最低，但是它的回报也是最低的。　　总的来说，投资者应该考虑把债券投资当作另一个资产等级的选择，以达到多元化投资和整体投资目的。　　这些目的包括是否要取得资本回报或是定期的收入。其他的考虑还有变现的需要，而投资期也决定投资者承担风险的胃口，因此影响他选择投资的资产等级。　　债券定期支付利息，可能比较适合那些在固定时期内需要有定期收入的投资者，如退休人士。　　越需要有稳定的收入的人，对波动的容忍能力越低。虽然现金存款能带来利息，但是它的投资期限较短，投资者面对的风险是，如果存款到期时的利率比较低，得把资金再作投资。　　例如说在1998年初，当银行同业拆息率高达12%时，以大约6%的存款利率把资金锁定一年，存款期于12个月后到期时，利率已经跌到约1%，投资者得以显著较低的利率更新存款。　　第二，如投资者有多余的现金并希望在日后使用，可能比较适合把这些多余的现金投资在波动没有那么厉害的工具，以保住他的储蓄，以及加强他的投资回报。　　散户投资者现可通过银行柜台购买新加坡政府债券。政府债券的最低投资额是1000元，而国库券的最低投资额是1万元。　　投资者可每天买卖。交易成本通常是债券的买价和卖价之间的差距，每家银行不一样。　　他们也可以在有新债券发行时购买。例如，建屋发展局和裕廊镇管理局的债券初次发行时，都在散户市场出售。　　又或者，投资者可以考虑投资固定收入单位信托。单位信托的好处是，投资者可作较小数额的投资，典型投资额是1000元。　　（作者是摩根建富（亚洲）公司的基金经理。本栏是新加坡股票交易所和新加坡投资管理协会联办的公众教育计划）

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