Singapore government is launching Singapore Savings Bonds in later half of 2015.
The government is likely to launch S$4b worth of bonds, since many people are risk averse, and nothing beats the security of keeping money with the government. http://business.asiaone.com/news/govt-could-issue-s2-4b-singapore-savings-bonds-year
I see it as a form of wealth transfer.
Government uses the money from Singapore Savings Bonds for investment. Even if the return is at the low end of 10%, and it pays out 2% to bond holders, there is a surplus of 8% to fund welfare, eg Pioneer Generation, workfare etc.
Meanwhile banks have to increase interest rate for both savers and borrowers.
This will lead to the increase in SIBOR, cost of living, and inflation rate.
If the average return of Singapore Savings Bonds over 10 years is 3%, the banks will have to offer 3.5% to the savers. The borrowers will have to borrow money at the cost of 5% or more.
Working adults have less spending money. The savers keep the money in Singapore Saving Bonds, while those who have mortgage and car loan have to pay higher interest to the banks.
The aged ones and the poor gain from the government welfare program. Even if they have not much money to buy Singapore Savings Bonds, they gain from the investment returns earned by the government.
I doubt the share price of the three major banks in Singapore will go up in the later part of the year.
Perhaps the shareholders will sell the shares of banks, and use the money to buy bonds that pay 4% or more.