Wednesday, January 4, 2012

CapitaMalls Asia to offer retail bonds - Channel NewsAsia

CapitaMalls Asia to offer retail bonds - Channel NewsAsia:

'via Blog this'

CapitaMall Asia is offering retail bonds again. This time, it is a 5-year bond at 3.8% which is substantially higher than what was offered last year. Here are my analysis.

With its maturity at 12th January 2017, it is comparable to F&N's two bonds which matures on 28th March 2016 and 28th March 2018.

F&NTrea 2.48%b160328 - Yield at buying price of $1.005 on 4th Jan 2012 = 2.47%
F&NTrea 3.15%b180328 - Yield at buying price of $1.005 on 4th Jan 2012 = 3.13%

I believe that CapitaMall Asia's offering will be trading at a price somewhere in between this two since its maturity is right in between the two bonds. Thus, I am expecting this bond to trade between $1.035 (Yield of 3.06%) to $1.065 (Yield of 2.35%). Likely to be right in between which is $1.05. This gives me a capital gain of 5% less commission if I were to sell it immediately after I subscribe to it.

It is a trading opportunity with zero risk so I will be applying for its bonds with an aim to sell it at predicted price (I have problems with cash as all my investable money is already committed so need to find money). I hope that I am right in my analysis.

***Update*** I have discussed this with my wife and decided that we will not invest in this bond because we need the cash for family use especially CNY is coming.

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