BS25106X 6-Month T-Bill Yield Projection

This Opinion post first appeared in my blog here: https://pwlcm.wordpress.com/2025/03/25/bs25106x-6-month-t-bill-yield-projection/

Disclaimer: This post is just for educational sharing purposes. Please do your own due diligence on any products mentioned in this post.

__

Yield Premium Projection

The updated 6-Month T-Bill vs 12-Week MAS Bill Yield chart and the T-Bill Yield Premium Statistics table are shown below:

The cut-off yield of ML25112T is 2.84%. Considering the 2025 statistics with average yield premium of -0.11% and standard deviation of 0.06%. With that, the projected cut-off-yield for BS25106X would be:

Projected Cut-Off Yield = 2.84% – 0.11% = 2.73%

Projected Lower Yield = 2.73% – 0.06% = 2.67%

Projected Higher Yield = 2.73% + 0.06% = 2.79%

Polynomial Trendline Projection

Based on 3rd Order Polynomial Trendline Projection:

From the trendline projection chart, the projected yield is approximately at 2.95%. With standard deviation of T-bill cut-off yield at 0.19% as seen in the T-Bill Yield Premium Statistics table in 2025, the projected cut-off-yield for BS25106X would be:

Projected Cut-Off Yield = 2.95%

Projected Lower Yield = 2.95% – 0.19% = 2.76%

Projected Higher Yield = 2.95% + 0.19% = 3.14%

Summary

Yield Premium Projection:
Projected Cut-Off Yield = 2.73%, ranging from 2.67% to 2.79%

Polynomial Trendline Projection:
Projected Cut-Off Yield = 2.95%, ranging from 2.76% to 3.14%

This round MAS Bill shot up 22 basis points from ML25110S 2.62% to ML25112T 2.84%. Coupled with the supply of BS25106X having a slight drop, there might be a rebound in T-bill yield.

My guess is BS25106X cut-off yield might follow MAS Bill 22 basis points increase to about 2.78%.