Asia Pacific bonds

18 August 2026, 08:33 UTC Chief Investment Office GWM Investment Research For investors outside of the US

SGD credit monthly and top picks Asia Pacific bonds Authors: Joel Tan, CFA, Analyst, UBS AG Singapore Branch; Min Huey Chong, Credit Strategist, UBS AG Hong Kong Branch

• SGD rates have climbed alongside US rates: In July, SGD rates climbed higher alongside US Treasury yields, driven by a flare-up in US-Iran tensions and an unconvincing Federal Reserve meeting. Additionally, a weak 20-year Singapore government bond sale in late July also led to a repricing of SGD yields higher.

• Resilient returns for our SGD bond picks: The broader SGD bond index returned -1.6% in July, weighed down by the rise in rates. In contrast, our SGD bond picks have delivered a resilient average return of 0.5% since the end of June, supported by modest duration positioning and a focus on higher yielding credits such as corporate perpetuals.

• Changes to our bond picks: We have added Seatrium's 2.95% 2031 bond to our top picks as we view the yield of 2.8% as appealing for an improving credit. We have also made switches within the perpetual bond curves of Mapletree Logistics Trust and AIMS APAC REIT, retaining the same issuer risk while enhancing yield and/ or adjusting duration. The average yield for our SGD top picks is 3.2%, with an average duration of 4.7 years.

• SGD credit investment strategy: We maintain our SGD investment strategy of selectively taking on more credit risk to augment yields. For fixed-term bonds, we prefer lower-rated IG credit and quality high yield bonds. For corporate perpetuals, we like those issued by fundamentally sound companies that offer yield pickup over senior notes. We also favor subordinated financials from foreign banks and insurers. Duration-wise, we think Source: Getty, UBS the recent spike in SGD rates offers a better entry point to add measured duration risk.

• Please refer to Table 1 for a selection of SGD bonds.

SGD rates have climbed in tandem with US rates demand, with a weak bid-to cover ratio of 1.77x. The bond In July, Singapore dollar (SGD) rates climbed higher was eventually priced at a yield of 2.4%, around 10bps alongside US Treasury yields, as a flare-up in US-Iran tensions higher than existing bonds, resulting in the entire SGD led to a moderate rise in oil prices and higher inflation bond curve shifting higher. All in all, the Singapore 10-year expectations. An unconvincing Federal Reserve meeting also government bond yield have risen more than 30bps from raised questions about Fed Chair Kevin Warsh's credibility, around 2% at the end of June to the current level of around resulting in a steepening of the US yield curve. There were 2.35%. domestic factors at play as well. An SGD 2.6bn 20-year government bond sale in late July was met with tepid

This report has been prepared by UBS AG Singapore Branch, UBS AG Hong Kong Branch. Analyst certification and required disclosures begin on page 7. UBSFS accepts responsibility for the contents of this report. U.S. persons who receive this report and wish to effect any transactions in any security discussed in this report should do so with UBSFS and not UBS AG. Page 1 of 12

Asia Pacific bonds: For investors outside of the US

Contained SGD bond supply amid rate volatility • This switch reduces call duration by one year while Against the backdrop of elevated rate volatility, SGD bond maintaining the same level of yield. Additionally, the reset supply (excluding government bonds) was fairly contained spread on AIMS APAC REIT's (AA REIT) 4.7% perpetual in July, totaling SGD 2.0bn (-45% y/y). Issuance was led by is also higher, entailing a higher likelihood of redemption HDB's SGD 1bn deal, while foreign financial issuers such on the first call date. We continue to view AA REIT's as FWD and Banco Santander also tapped the SGD bond perpetuals as attractive, given their compelling yield for a market during the month. REIT with lower leverage than its peers.

Our SGD bond picks delivered resilient returns despite • Key risks for AA REIT include a decline in occupancy rates, negative rental reversions amid an economic downturn, broader weakness and a higher capital…