BS25107W 6-Month T-Bill Yield Projection

This Opinion post first appeared in my blog here: https://pwlcm.wordpress.com/2025/04/08/bs25107w-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 ML25114W is 2.aa%. 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 BS25107W would be:

Projected Cut-Off Yield = 2.68% – 0.11% = 2.57%
Projected Lower Yield = 2.57% – 0.06% = 2.51%
Projected Higher Yield = 2.57% + 0.06% = 2.63%

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 BS25107W 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 = 2.57%, ranging from 2.51% to 2.63%

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

This round MAS Bill dropped 16 basis points from ML25112T 2.84% to ML25114W 2.68%. The supply of the coming T-Bill BS25107W remained the same as the previous T-bill at $7.4 billion dollars.

We can probably attribute the weakening of MAS Bill yield to the current bearish sentiment in the equity market triggered by Trump's tariff announcement.

Retail investors might take different reactions to the bloodshed in the equity market. Some might panic sell out of fear and decide to channel their money to safer fixed income instruments or perhaps even cash; some might see this as an opportunity to load up quality counters and decide to raise fund from the fixed income instruments they own; some might simply freeze as they don't know what to do amidst such environment and they won't even think of investing in fixed income instruments.

This means that it is rather difficult to take the pulses of retail investors and gauge their demand on T-bill. Without any idea on retail sentiment, I'm going to follow the institution sentiment, and project that the coming T-bill BS25107W cut-off yield would follow the Yield Premium Projection at 2.57%.