Friday, January 26, 2018

How to plot the yield curve using SGS data

Where do you get the necessary data to plot the yield curve? How do you plot the data points? How do you interpret the yield curve? These are some questions that have been on my mind for quite a long time. I have been reading the financial blogosphere and was secretly hoping for someone to address this topic. I've waited and waited to no avail.

As I'm thinking of doing some mathematical modelling with bond data in the future, I decided to force myself to search for answers to my own questions.

First, head over to the Monetary Authority of Singapore (MAS) website. Scroll down to the bottom of the page.

Singapore government bonds

Click on the link titled "SGS: Singapore Government Securities" (circled in red in the above screenshot). You will be brought to the Singapore Government Securities (SGS) page.

Singapore Government Securities

Once you are at the SGS page, click on the "Statistics" link (circled in red in the above screenshot).

Singapore Bond Price and Yield

At the Statistics page, select the "Historical Prices" link (circled in red in the above screenshot).

Singapore bond yield

You will be brought to the above page (see screenshot above). The page details the various parameters that you can tweak. Once your selections have been made, you can display the resultant dataset either on the page (by clicking on the "display" button) or in a csv file format (by clicking on the "download" button).

I'll briefly go through the parameters. "Start Year" and "Start Month" refer to the earliest data points you want in your dataset while "End Year" and "End Month" refer to the latest data points you want in your dataset. The "Frequency" parameter has one of four values for you to select from: (a) Daily, (b) Weekly, (c) Monthly, or (d) Yearly. Depending on your frequency selection, the dataset you end up with could be very huge (e.g. daily data) or very small (e.g. yearly data).

Next, we will look at the checkboxes. These checkboxes are used to select the variables that you want in your dataset. Each variable is defined in terms of its tenure (e.g. 1-year, 2-year, 5-year, etc) and either its yield or price. You are allowed to select however many variables you want in your dataset.

To digress a bit, if you display variables with similar tenure (e.g. 10-year Bond Yield and 10-year Bond Price) across a period of time, you will notice that yield and price are negatively correlated to one another. For newbies, this will help you to internalize the fact that as bond prices head up, yield decreases and vice versa.

Let's go back to actually getting the data that is required to plot our yield curve. Let's leave the Year/Month/Frequency as it currently is (2017, Jan, 2018, Jan, Yearly). Next, select the checkboxes of "2-Year Bond Yield", "5-Year Bond Yield", "10-Year Bond Yield", "20-Year Bond Yield", and "30-Year Bond Yield." (I am following the recommendations of an Investopedia article here). Click on the "Download" button, download the file, and open the file with a spreadsheet program like Microsoft Excel.

singapore yield curve data

You will end up with the above dataset. If you had chosen to display the dataset on SGS website instead of downloading it, you will realize that the time-related variables refer to the end of the period. Hence, in our above screenshot, year 2017 (row 6, column A) refers to the end of 2017 while year 2018 (row 7, column A) refers to the end of 2018. As 2018 has just started, it would most probably refer to the current yield. Columns B, C, D, E, and F reflects the yields of the 2-Year, 5-Year, 10-Year, 20-Year, and 30-Year bonds, respectively.

sg yield curve data

Highlight the data, navigate to the "Insert" tab, and select the "Line" graph option.

singapore yield curve

And there you have it. Two yield curves, with the 2017 and 2018 referring to the end of 2017 and current yield in 2018 (26 January 2018), respectively. Do note that yield curves are static snapshots, much like your balance sheet.

As for interpreting yield curves, do refer to this article by Investopedia.


Saturday, January 20, 2018

History of Cash Calls for REITs (Updated as at 20 January 2018)

Since I have some time now, I have just updated the history of cash calls for REITs list (see here for the updated list).

The last time I updated it was in March 2017 (see here). Since then, there have been a number of additions to the list (Cromwell European REIT and Keppel-KBS US REIT).

Off the top of my head, I recall that the following REITs raised cash during this period: (a) AIMS AMP Capital Industrial REIT, (b) Cache Logistics Trust, (c) Capitaland Commercial Trust, (d) CDL Hospitality Trust, and (e) Manulife US REIT.

As always, don't take my list as it is. There might be a few cash calls that slipped my mind. Do comment if I have missed out on any.


Friday, January 12, 2018

2017 Reflections, 2018 Gameplan

Hi to all my readers. I know this is very late, but here's wishing everyone a happy new year and good health to all!

2017 has been a good year to me. Though some of the challenges I've faced made me doubt myself, I somehow managed to pull through and learn from the experience.

Career-wise, I am thankful for the bump (in my industry, at least) to my salary. At the rate I am going, while keeping my fingers crossed, I will be hitting $100k net worth before the end of 2018 (excluding CPF and emergency fund). When I first started reading personal finance and investment blogs around January 2015, I remember coming across one of Budget Babe's post on saving more than $100k before 30.

It awakened me to the possibility. However, I would not have envisioned myself to achieve just that. Social science researchers with an undergraduate degree are at the bottom-most rung of the food chain. This is further exacerbated by low income growth and a low income ceiling. Furthermore, I did not have AWS for the first 2 years of my working life. Still, I enjoy what I do, but I warmly welcome additional pay anytime! :P

If you ask me in 2015 or 2016 what concerns I have on my savings rate, I would readily point to my salary. The numbers just do not add up; I do not think it is realistic for me to hit a net worth of $100k before 30. To manage my expectations, I have always assumed that I will be drawing fresh graduate pay with zero increment and no bonuses for the rest of my working life. Extreme, I know. But it sure beats my peers who unrealistically believe that they are worth more than they actually are. I have observed my peers setting themselves up for disappointment again and again with this type of mentality they bring before employers.

After being in the workforce for three years, I could say that I have achieved a greater degree of self-awareness. I know where my strengths and weaknesses lie. Socially, I am still rough on the edges. I am task-driven and speak in a matter-of-fact tone (I know some of my blogger friends would disagree with this after experiencing plenty of "nonsense" comments from me. Ahem). Now that I have a subordinate assisting me, I have to consciously remind myself to do otherwise.

Another area in my life that requires serious work is the way I work. I have a Type A personality in the workplace. Don't ask me why, but I have this tendency to clear work ASAP. I feel uncomfortable leaving work undone; uncompleted tasks are a bloody annoying eyesore to me. Obviously, this is not good for my health and I am experiencing some of its negative impacts already (tension headaches, stiff shoulders). I have made some headway on this. It takes some conscious effort not to get swept up in a whirlwind of faux busyness.

This leads me to my next point on blogging. There have been multiple occasions where I was too eager to publish a post. After publishing said posts, I cringed because of the following: (a) I recall a point that previously eluded me which would have been good to include in the post, (b) breaks in the thought patterns in my writings, (c) my "voice" fails to manifest and the post conveys too mechanical a feel, and/or (d) my tone did not come out right.

A good solution is to step back. Save what I have written, come back another day with fresh eyes to look at what I have written. There is no need to rush the completion of a blog post (or non-urgent assignments at work, for the matter). Allowing things to sink in and mulling over them instead of reacting immediately to events in my life.

Why the rush, Unintelligent Nerd? I want growth and I want to collect achievements. The uncertainty brings forth anxiety about my ability to meet my own expectations. As long as there is uncertainty and expectations that "should" be met, there will be anxiety.

This does not mean that, moving forward, I expect nothing of myself. I would still deliver my best. It is a small but subtle shift in my mindset. To speak in metaphors, it is coming to terms with the fact that one unit of effort may or may not always map out to one unit of achievement.

For 2018, I intend to carry this mindset with me. To continue improving myself, to sharpen my craft minus all the stress and anxiety that results from my realization of the discrepancy between what I am now and what I aspire to be. To pay the toll of hard work while I am still (somewhat) young and energetic and to build up my human capital. To be more conscious of my physiological state and to regulate it better (e.g. do not allow my blood pressure to rise when I receive a task to do over email). To divest non-core stuff in my life such as toxic friends and personal development areas-of-interest that lacks synergy with other areas-of-interest.

On the "administrative" side of things, I will be hitting the $20k emergency fund goal once my January 2018 pay is credited in (see here). Depending on how conservative I want to be, I might consider increasing my emergency fund further (at the expense of my cash allocation). This is not set in stone yet and is open for revision.

That's all for now. While some of my peers are busy relaxing in their youths, I will continue to make hay while the sun shines.

As a certain controversial financial blogger would say:

The hard road leads to the easy life
The easy road leads to the hard life