Singapore Bonds Deliver 6.4% Return, Outpace 22 Markets

Singapore’s government bonds have emerged as a standout performer in 2025, delivering a 6.4% return in the first half of the year. This performance has outpaced 22 major markets, positioning Singapore as a key player in the global bond scene. The yields on Singapore bonds are now 210 basis points below U.S. Treasuries, a significant divergence that has attracted considerable attention from investors. Experts attribute this success to the strong liquidity of the Singapore dollar, limited issuance of bonds, and the city-state’s reputation as a safe haven. Analysts such as Winson Phoon from Maybank and Frances Cheung from OCBC highlight the stability and reliability of Singapore’s bond market, which continues to draw regional demand for safe investments.

The bond market in Singapore has seen a notable shift in yields, which have dropped sharply due to stable liquidity and low issuance volumes. The 10-year yields are now well below comparable U.S. Treasuries, a trend that analysts believe is not temporary. Frances Cheung from OCBC points out that Singapore’s fiscal flexibility allows the government to time its issuances effectively, as it does not borrow to fund spending. Winson Phoon from Maybank adds that the regional demand for safety will continue to drive flows into Singapore bonds. The Singapore Overnight Rate Average, currently at 1.8%, is lower than its one-year average, indicating supportive liquidity conditions. These factors collectively present a strong case for the continued strength of Singapore bonds in 2025.

The Korea Development Bank’s recent decision to list $200 million in bonds in Singapore underscores the growing confidence in Asia-Pacific’s bond market resilience. The listings include a SOFR-linked bond and a fixed-rate 5.25% bond, both of which reflect a broader trend of regional demand for credit-safe investments. Moody’s and Fitch have rated KDB’s bonds at Aa2 and AA-, respectively, highlighting the bank’s strong balance sheet and sovereign ties. These ratings place KDB far above many peers in riskier emerging markets. By choosing Singapore over other financial hubs like London or New York, KDB demonstrates its faith in the region’s future and the stability of its bond market.

Singapore’s tightening grip on digital asset regulation is having a significant impact on the financial sector. The Monetary Authority of Singapore (MAS) has set a firm deadline of June 30, 2025, by which all entities serving foreign markets must secure a Digital Token Service Provider (DTSP) licence or shut down cross-border operations. The penalties for non-compliance are severe, including fines of up to SGD 250,000 and a possible three-year prison term. These stringent regulations are aimed at addressing concerns about anti–money laundering and counter–terrorism financing. The MAS’s focus has shifted from users and servers to business incorporation, meaning any company registered in Singapore falls under this mandate, regardless of where its clients are. This has put intense pressure on crypto ventures that have used Singapore’s clean image while skirting stricter laws overseas, leading some companies to relocate to more relaxed hubs like Panama or Dubai.

In an unsteady global market, Singapore bonds are proving to be a reliable investment option. With stable liquidity, limited issuance, and strong demand, they offer consistency and safety. The Korea Development Bank’s move to list its bonds in Singapore reinforces this view, as its high-rated bonds now reside in a market known for transparency and depth. Crypto investors are also starting to look toward fixed income as a stabilizer, further supporting Singapore’s financial ecosystem. For investors navigating economic headwinds and geopolitical noise, Singapore government securities remain a wise anchor, offering real yields and a sense of calm in turbulent times.