31 January 2013

200 Investment Rule

I always try to simplify the rule of investment to be very easy to be remembered. One of the Investment Rule I like is 72Rule. It applies to the number of years to take to compound given the return rate. For example, if you are earning 10% a year, it takes about 7 years to double up your portfolio. If you are earning 8% a year, it takes about 9 years to double up your portfolio. It is a simplified version of course.

So what is this 200 Investment Rule about? I always use 200 times monthly expenses as your required retirement capital. For example, if your monthly expenses is 5,000.00, you would need to prepare for at least 1,000,000.00 or 1M for your retirement fund.

Why am I saying so? This is because if you could find a 10% compound annual return investment tool, so you could generate 100K per annum or around 8K per month for 1M portfolio. You could still save another 3K per month for re-investment purpose.

I do see a lot of retired person who just relies on their invested portfolio to enjoy their retirement life. Of  course, if you do not want to leave lump sum to your children, you may donate the retirement fund to any charity or foundation you like.

Life is beautiful. Enjoy it.

30 January 2013

Understand Your Limit

Before we go further, let me explain the reasons why I wrote this blog.

1. You are the Unique One in the world. There is no another You in this world. So the only way you can do is to follow your heart, follow your decision made. Nobody would able to change other person except themselves. So you must make decision yourself, even after taking consideration of others advice to you. You understand you yourself most, you know what you want to achieve for the rest of your life. You want what you gonna do in next 10,20 or 40 years to make yourself a better man.

2. Invisible asset that you are holding now such as your personality - honesty, integrity, capability, kindness, hardworking etc could make yourself a successful person. But with correct way. You must strongly believe in this - no one is born to be a Poor Guy. There is a lot of opportunities outside, but you must be prepared. Opportunities only are given to people in prepared.

3. Hardwork makes perfect. There is no free lunch in the world. Even there is, you also have to take initiative to go and grab it before others come in. I am not a smart guy, and I always act after people. But with strong perseverance, I slowly improve my English communication skills, and build up my confidence in speaking and writing in English. I always appreciate what other said about my weakness. And I keep on improving it.

4. There are more important things to do besides earning $$. As part of society, we should contribute back to it to show token of appreciation, especially to schools. The corporate social responsibility (CSR) is established among companies to help our society to improve. Once standard of living is improved, we could see a stable Economy Growth and a better lifestyle.

Ok, so back to our topic here - understand your limit. I have been thinking of becoming multi-millionaire for long time. Ya, it's only a mind building and no action yet. When I tried to share my ideas of becoming multi-millionaire to my friends and family, what they response to me are always negative. I believe this is the reason why most of us still not yet become millionaire due to negative mindset. So I keep on telling myself that, yes, you can be a millionaire. And others will tell me - please know your limit. Why? In order to be multi millionaire, you are either to inherit fortune from your parents or to be a businessman / investor / professionals. So I admit that I do not Har a talent to be a professional like an actor or a doctor, so I have to train myself to be a business-like investor.

I have a good friend who is a businessman and likes to share with me his positive thinking mindset. It makes me think same like him. And I appreciate that so much till now. One of the lesson I learnt from him is to understand your capital limitation. Few years ago, I tried to learn from him in property investment. He told me that it's good that if you can buy land and commercial properties. Those are the prime categories of property, but you can't do it now as you have limited capital. At that time, I only have around <100K RM. So I have no choice but to grow my capital via shares investment, thanks god, my return not too bad, I was able to generate >20% return per annum. It turns out to be a good result. Now I started to venture to >500K property investment. Each project could generate >20% return or it means that I could get 6 figure return for each investment. Thanks god. But I do not still have the capability to investment in few million project, I believe it will take another few more years before I could do so.

So, always understand your limit - Time, Capital, and Capability. You could however, leverage on other people's time and money in later stage once your portfolio reach 7/8figures.

25 January 2013

Singapore Economic Calendar (27 January - 1 February 2013) - Source: SGX, Bloomberg


Sunday, 27 Jan
CH – Dec Industrial Profits YTD (YoY) (0930)
Monday, 28 Jan
SG Earnings (2)
SG Earnings – Ascendas Hospitality Trust (C)
SG Earnings – Indiabulls Properties Investment Trust (E)

Ex-Div – Frasers Centrepoint Trust (SGD 0.024)
Ex-Div – Mapletree Industrial Trust (SGD 0.0214 + SGD 0.0018)
Ex-Div – Old Chang Kee Ltd. (SGD 0.05)
Ex-Div – Singapore Exchange Limited (SGD 0.04)

EC – Dec Euro-Zone M3 s.a.(1700)
TH – Dec Manufacturing Production Index (YoY)

CH – Dec Leading Index (28 Jan – 31 Jan)

 Tuesday, 29 Jan
SG Earnings (3)
SG Earnings – CDL Hospitality Trusts (C)
SG Earnings – SMRT Corp Ltd (C)
SG Earnings – Starhill Global REIT (C)

Ex-Div – CapitaCommercial Trust (est. SGD 0.0401 + est. SGD 0.0007)
Ex-Div – Mermaid Maritime Public Co Ltd (THB 0.0274)

US – Jan Consumer Confidence (2300)

CH – Dec Leading Index (28 Jan – 31 Jan)

Wednesday, 30 Jan
SG Earnings (4)
SG Earnings – AMG Bioenergy Resources Holdings Ltd (E)
SG Earnings –Multi-Chem Ltd (E)
SG Earnings – SATS Ltd (C)
SG Earnings – Tuan Sing Holdings Ltd (C)

Ex-Div – Suntec Real Estate Inv Trust (SGD 0.01276 + SGD 0.0056 + SGD 0.00494)

JP –  Dec Retail Trade (YoY) (0750)
HK – Dec Money Supply M1/M2/M3 (YoY) (1700)
EC – Jan Euro-Zone Consumer, Economic Confidence (1800)
US – Jan ADP Employment Change (2115)
US – Jan 4Q QoQ GDP (Annualized) (2130)

CH – Dec Leading Index (28 Jan – 31 Jan)

Thursday, 31 Jan

SG Earnings (5)
SG Earnings – AIMS AMP Capital Industrial REIT (C)
SG Earnings – CEI Contract Manufacturing Ltd (E)
SG Earnings – Creative Technology Ltd/Singapore (E)
SG Earnings – OSIM International Ltd (C)
SG Earnings – STATS ChipPAC Ltd (C)

Ex-Div – Goodland Group Limited (SGD 0.005)

SG – Dec Bank Loans & Advances (YoY) (1000)
SG – Dec Money Supply M1/M2 (YoY) (1000)
SG – 4Q Unemployment Rate (1000)

JP – Jan Markit/JMMA Manufacturing PMI (0715)
JP – Jan Japan buying Foreign Bonds/Stocks (0750)
JP – Jan Japan buying Japan Bonds/Stocks (0750)
JP – Dec Industrial Production (YoY) (0750)
IN – 1Q Annual GDP Govt. Estimate YoY% (1330)
HK – Dec Government Monthly Budget Surplus/Deficit (1630)
IN – Dec Fiscal Deficit INR Crore

CH – Dec Leading Index (28 Jan – 31 Jan)
Friday, 01 Feb
SG Earnings (10)
SG Earnings – Aussino Group Ltd (E)
SG Earnings – CapitaRetail China Trust (C)
SG Earnings – CH Offshore Ltd (E)
SG Earnings – Fragrance Group Ltd (E)
SG Earnings – Global Yellow Pages Ltd (E)
SG Earnings – Hutchison Port Holdings Trust (C)
SG Earnings – Hwa Hong Corp Ltd (E)
SG Earnings – IPC Corp Ltd (E)
SG Earnings – Mercator Lines Singapore Ltd (E)
SG Earnings – Oxley Holdings Ltd (E)

Ex-Div – Fraser and Neave, Limited (SGD 0.12)
Ex-Div – Macquarie Int’l Infra Fund Ltd (SGD 0.0275 + SGD 0.03)

JP – Dec Jobless Rate (0730)
CH – Jan Manufacturing PMI (0900)
EC – Jan PMI Manufacturing (1700)
EC – Dec Euro-Zone Unemployment Rate (1800)
US – Jan Change in Nonfarm Payrolls (2130)
US – Jan Unemployment Rate (2130)

JP – Jan Official Reserve Assets (01 – 07 Feb)

23 January 2013

Sino Grandness - 1 of My Favorites - Updated November 2013

Sino Grandness, one of my favorites in Singapore stock market. The price is quite volatile, that is why I do not think it is suitable to every investor. It is suitable to those who has big risk appetite (e.g. can stand for huge volatility), as this company is a young company.

Background: The CEO, 黄总 was one of the senior management in GLC handling export matters. So he is quite experience in managing talents who are experienced in this export industry. His ambition is to have a brand same as 王老吉,a famous herbal tea brand in China as well as in Asia region.

Anyway, for last 1 year I have been keep tracking his company report. His plan is to get his fruit drinks arm listed in the Hong Kong Exchange. Why HKEx and not SGX? I believe Hong Kong is a better place, and you could get higher valuation price there as compared to Singapore. Why? Mainly due to the reasons most of the Singapore investors do not have the capability fly over to China mainland to check the operations there.

Why am I saying that it is a high risk counter?

  1. The company is in the expansion stage. A lot of CAPEX needed, and the company has to obey / fulfill some debt covenant to make sure the debt rating is in control. 
  2. With fund manager / Private Equity Manager on board of director for its fruit juice division, I believe the senior management will work harder with them to ensure they can meet the target to get listed in Hong Kong. It is still very uncertain whether Sino Grandness can fulfill the internal target set by Fund Managers to get listed in Hong Kong. Anyway, I do see it is on track. Corporate Finance is the main topic to be concerned with. 
  3. This is a S-Chip. S-Chip have bad records in quality of financial report as well as not able to perform well in later years. That is why many investors in Singapore tend to ignore S-Chip counters, although I do believe there are some good counters there. 
The price is currently at rocket high. I believe the room of improvement is getting smaller. So if you still want to bet, it's either you bet on its possibility to get its fruit drinks arm listed, or you bet its canned fruits division can grow faster. 

Ya, it is in a transformation stage. And I hope 黄总 is an integrity person. No doubt, he is a capable person who can grow Sino Grandness to another level. Let's wait and see if its fruit drink division can get listed in Hong Kong later years or not. 

Disclaimer: Buy on your own risk. Above post is not made for any recommendation or comment, and is just purely my opinion. It cannot be used as fact.

Update -  November 2013:

Sino Grandness in-house beverage brand Garden Fresh has been valued at RMB 3.5 Billion or S$714 M according to Brand Value Data Certificate issued by Asia Brand Association Experts Committee and Asia Brand Research Centre.  The Brand Valuation Exercise was jointly organized by Global Times, Asia Brand Association, National Development and Reform Commission as well as China Economic Herald. It validates the growing significance of intangibles for companies operating with branded business divisions such as Sino Grandness. The latest quarter result will be released on 14 November 2013, which I believe should be a better relative performance.

22 January 2013

Things to Note When Investing in Retail Shop Lot

Not too long ago, I purchased a shop lot in Imperio Mall, Malacca. A lot of my friends told me I was crazy to buy a tiny unit with overpriced tag. I would like to share with you things to note when purchasing a retail shop lot:

  1. Compare the Rental Yield among the peers first. Rental yield is the most important factor I could think of. In order to sell your retail lot in faster way, it is good to have a retail lot with tenants. To get a good tenants, location and quality of management are important factors. In Malacca, the best retail shopping mall I could think of is Mahkota Parade, which is in the center of the Melaka Raya, CBD area of Malacca state. However, we should not neglect the quality of the management, in order to achieve a good long term rental yield. You could easily get the figure from well known property website such as mudah.my, propertygury.com.my, and iproperty.com.my etc,  
  2. Compare the Selling price among the peers too. You should also understand the selling price too. Different size of retail lot has different price tag. Some retailers require big rent-able size, while most require smaller size. You have to have your own targeted group. Normally you will get a more stable income via Food & Beverages tenants, especially if they are some established companies, so you do not worry of late rental payment. For me, I would start small by purchasing a 228sft unit, and hopefully think that I could get RM100 per day rental income. Anyway, as far as my concern as a business owner, I do not hope my rental payment cost me more than 20% of operating cost, and if I am targeting at least 50% gross profit, it means that I should achieve at least RM1,000 per day income from the shop lot that I rent for. While it is uncertain to guess whether my tenants could get RM1,000 sales per day, so I could only pray god and hope it is a good choice. In Mahkota Parade (hottest spot in Malacca now), some could get at least RM30 psf, but some is at RM15 psf. I also knew that Hatten Square is now not having a good business due to lack of supports from locals for IT products, and normally visitors are not targeting at IT products. Nonetheless, with recent opening of Hatten Hotel just above the Hatten Square, I hope that it can bring in more crowd. With two famous hotels - Ibis and Two Tree, I hope that this project can lure more middle class and above guys to come over there. 
  3. Quality of Management - It is a very bad move if you buy a retail shop lot without checking background of the developer. There are few abandoned shopping malls in Johor Bahru city, such as Kemayan City and Pacific Malls due to lack of good management. So if you are really want to buy a retail shop lot, please double check whether the developer is capable enough to make it success. The developer also should be the stakeholder (e.g. one of the shop lot owners) to make sure this project can be success in long run. You can see now many developers turn to be a REIT player, to ensure the shareholders can have a good return and the shopping malls can have a better management plan + occupancy rate. 
  4. Accessibility. In Malacca, most of the locals there are earning average income (for those who are not a business owner near tourist attraction). So it really depends on tourists to help to boost the retail sales there. So far, Malacca is only famous of its 600 years history of development, and many tourists who visit West Malaysia must come there to truly understand the history of Malaysia. F&B is definitely earning great there as most of the tourists must eat the famous local food there while traveling. If this is the case, it is wise if we can setup a F&B outlets near tourist attraction. I am not too sure if visitors come and buy fashion clothes in Malacca, as more will prefer bigger cities like Kuala Lumpur and Penang. Unless the developer can make a change , else it is quite an aggressive move to have luxury shopping malls such as KL Pavilion or Star Hill Lot 10 in small city in Malaysia. 
  5. Future Ongoing Plan for the whole City - Government's push and private investment are two key factors when developing a city. So we should keep track how local government to push for development in the city, as well as to check on demography changes (e.g. Average Income Increase etc) to check on sustainable growth rate. 

18 January 2013

SGX Weekly Calendar 20 Jan to 25 Jan 2013 (Source: SGX, Bloomberg)


Sunday, 20 Jan

- NIL -
Monday, 21 Jan
SG Earnings (5)
SG Earnings – Cache Logistics Trust
SG Earnings – M1 Ltd
SG Earnings – Keppel REIT
SG Earnings – K-Green Trust
SG Earnings – First Ship Lease Trust

Ex-Div – Ascendas Real Estate Investment Trust (SGD 0.0362)

JP – December Machine Tool Orders (YoY) (1400)
HK – CPI Composite Index (1630)

Tuesday, 22 Jan
SG Earnings (8)
SG Earnings – Ascendas India Trust
SG Earnings – Frasers Centrepoint Trust
SG Earnings – Keppel Telecommunications & Transportation Ltd
SG Earnings – Mapletree Industrial Trust
SG Earnings – Neo Group Ltd
SG Earnings – Singapore Exchange Ltd
SG Earnings – Suntec Real Estate Investment Trust
SG Earnings – Sysma Holdings Ltd

Ex-Div – Asia Pacific Breweries Ltd (SGD 0.85)
Ex-Div – WBL Corporation Limited (SGD 0.05)

JP – Bank of Japan Target Rate
JP – Nov All Industry Activity Index (MoM) (1230)
EC – Jan ZEW Economic Sentiment Survey (1800)
US – Dec Existing Home Sales (2300)

Wednesday, 23 Jan
SG Earnings (8)
SG Earnings – Ascott Residence Trust
SG Earnings – CapitaCommercial Trust
SG Earnings – CapitaLand Ltd
SG Earnings – CosmoSteel Holdings Ltd
SG Earnings – First Real Estate Investment Trust
SG Earnings – Keppel Land Ltd
SG Earnings – Mapletree Commercial Trust
SG Earnings – M1 Ltd

SG – December Consumer Price Index (1300)
SG – Automobile COE Open Bid Cat A/B/E (1600)

CH – Conference Board China December Leading Economic Index (1000)
JP –  Bank of Japan and Cabinet Office Monthly Economic Report for January
UK – November Employment Change (3M/3M) (1730)
EC – Euro Area Third Quarter Government Debt (1800)
EC – Jan Euro-zone Consumer Confidence (2300)
US – IMF releases World Economic Outlook Update (2300)

Thursday, 24 Jan

SG Earnings (4)
SG Earnings – Fortune Real Estate Investment Trust
SG Earnings – Keppel Corp Ltd
SG Earnings – Marco Polo Marine Ltd
SG Earnings – Mapletree Commercial Trust

JP – Dec Merchandise Trade Balance Total (0750)
JP – Jan Japan buying Foreign Bonds/Stocks (0750)
JP – Jan Japan buying Japan Bonds/Stocks (0750)
CH – January HSBC Flash Manufacturing PMI (0945)
HK – December Trade Balance (1630)
EC – Nov Euro-Zone Current Account (1700)
EC – January PMI (1700)
US – Jan Initial Jobless Claims (2130)
US – Jan Continuing Claims (2130)
US – Conference Board Revisions of Leading Indicators (2300)

Friday, 25 Jan
SG Earnings (5)
SG Earnings – CapitaRetail China Trust
SG Earnings – Design Studio Furniture Manufacturer Ltd
SG Earnings – Frasers Commercial Trust
SG Earnings – Parkway Life Real Estate Investment Trust
SG Earnings – SP Corp Ltd

Ex- Entitl – Sinobest Technology Holdings Ltd. (Cash distribution SGD 0.009)
Ex-Div – Thai Village Holdings Ltd (SGD 0.008)

SG – December Industrial Production (1300)

JP – December National CPI (YoY) (0730)
CH – China MNI January Business Sentiment Indicator (0935)
US – Dec New Home Sales (2300)

Source: SGX and Bloomberg

Please note that scheduled earnings releases are subject to change 

16 January 2013

Yangzijiang falls after announcing warrants issue plan

SINGAPORE, Jan 16 (Reuters) - Shares in Yangzijiang Shipbuilding (Holdings) Ltd fell 7.7 percent to a
one-week low on Wednesday on concerns over the potential dilution of its stock after it announced plans to issue S$20 million ($16.32 million) worth of warrants. 

By 0955 SG Hour, Yangzijiang shares were at S$1.015, with 48.9 million shares traded, 1.2 times its average daily volume over the last five sessions. 

Yangzijiang said it plans to sell 330 million warrants at S$0.0605 a piece, and each will carry the right to subscribe to one new share at 7.617 yuan ($1.23).  

"There is some uncertainty over why the company is raising funds. It's not a large amount they are getting and the exercise price of the warrant is also quite high considering their share price today," said a local trader. 

($1 = 1.2252 Singapore dollars)
($1 = 6.2136 Chinese yuan) 

14 January 2013

Buy and Hold Strategy?

Buy and Hold Strategy?

It only good to buy when the price is right, and when the counter can last for at least 10 years.

Singapore is a developed country, hence its long run GDP growth Ratio should be on par with other developed economies. Nonetheless, as its economy size is still very small compared to other developed nation, it still is able to grow through expanding to oversea or through higher technology sectors.

Let's look at Buy and Hold Strategy here. It does not really mean that we have to just buy anytime and hold it forever, and just wait for a good result. It could only work IF AND ONLY IF we have done a thorough job in due diligence on the counters that are under our radar. Some industries do have market leaders, and if we decided to hold for long term, then we should choose those that can fall into at least 1 field:

  • Managed by a group of experienced and capable guys with passion and integrity. My ex chairman shared with us that it is good if we can start our own business as early as possible, as he started his very first business when he was in his 20s. He inspired me to start up as a tiny stock broker, but with big dream to be a professional wealth manager in near future. Normally we should look at the board of director, and they should have at least more than 10 years working experience before they can be part of the board. We also should learn some corporate governance, by checking the relationship of independent directors and the board of directors, and the services independent directors can provide to enhance the value of the corporate (e.g. be advisors to BOD). 
  • Core value that a company can bring it to the customers. For example, the more values you can bring it to your clients, the higher profit margin you could get from your clients. Apple has transformed itself from being a computer maker to technology gadget maker (e.g. iPod, iPhone, iPad etc). The company should have its own corporate culture and bring it down to every employees. A good company will always try to create new products that suit clients' needs. 
  • Market leader in Mature Sector. A market leader definitely already is a "brand" to customers and normally market leader can survive even when market crisis comes. The economy of scale it has allows it to beat other competitors in long run.   
  • Renovator in Mature Sector. If you do more homework, this type of companies normally can generate bigger return. But as they are yet to be tested to be success companies, so you have to be really in patience to wait for it to grow its market shares and generate more revenue in longer period. You have to have your own circle of competence to find out the next "Shining Star".
Welcome to share your strategy on Buy And Hold. 

13 January 2013

How to Find an Under Value Company?

While I am still learning how to find an under value stock in the stock market, I understand from Real Estate Investment is that, we can find under value real estate from Auction Market. While there are more undervalue properties in this auction market? The reasons could be due to following:

  1. The sellers cannot afford to continue to pay for the mortgage loan installment. Hence they have no choice but to allow banks to auction their real estates:
    1. Hike up of the Interest Rate. It happened during year 1997-1998
    2. Economic Crisis. It happened in US during year 2007-2008 and in Europe on year 2011-2012. 
    3. The sellers are too optimistic on real estate market and they over leverage to buy and created a bubble in real estate market until the bubble bursts.
But before that, we as a buyers / investors must know the market value of the assets before we can determine whether this asset is undervalue or over value. In stock market, we as a fundamental analysis followers should find out the intrinsic value of the counters. But how do we go for that? In real estate market, we can go through banks to get the bank valuation of the properties. In stock market, we can utilize on the various valuation methods such as Discounted Cash Flow Model, PE Ratio Comparison, Dividend Yield Comparison etc to find out the undervalue stocks. In long term investment, it is still ok if we can buy a counter with reasonable price and hold it for long period as it could surpass its peers in term of revenue and income in long run. 

Discounted Cash Flow:  A company that can generate net operating cash flow after deducted necessary cash flow is a good company. But when we cannot find a good company from this model, we can go for PE + ROE + Dividend Yield model. 

PE + Dividend Yield + ROE Model: I would think a Low PE + High Dividend Yield + High ROE Model is a good valuation model we should look for. When experience grows, you may add in more fundamental indicator for you to search for good counters in long run. Most importantly, you must find a good counter and buy it in cheap price and hold it for long term before it reaches its intrinsic value or you could find another good counter that is in deep discount rate. 

11 January 2013

Singapore Shares Market Daily Update - 11 January 2013

Shares in Focus: Ezra, Ocean Sky, STX OSV, Transcu, 

Ezra - EOCL announced 1QFY2013 result. Revenue dropped 83% compared to 1QFY2012. EPS was 0.67US Cent compared to 7.64 US Cent a year ago.

Ocean Sky - The company announced sale of property at 33rd Floor Duplex Flat D of Tower V, The Water Front, Hong Kong with the price at USD5.2 Million. The purpose of the selling is to allow the group to reduce debt level as well as working capital requirements.

STX OSV - The group announced on 11 January 2013 that Tidewater Inc. (“Tidewater”) has acquired contracts for three Platform Supply Vessels (PSVs) under construction at STX OSV in Norway. STX OSV had originally secured the contracts for the design and construction of three vessels for STX Pan Ocean Co. Ltd. in 2010, and Tidewater has now entered into an assignment agreement with STX Pan Ocean to take over these contracts.

The first vessel in the series will be delivered  to Tidewater  during 1Q 2013. Deliveries of the next two vessels are scheduled for Q2 and Q3 2013. Mr. Roy Reite, Chief Executive Officer and Executive Director of STX OSV, said, “STX OSV has in the past delivered ten offshore vessels to Tidewater.  We are delighted to welcome Tidewater back  to us as a client, and we look forward  to cooperating with their team again.” The vessels are of STX OSV PSV 09 design, developed by STX OSV Design in Ålesund, Norway. The overall length of the vessels is 87.9 meters, with a beam of 19 meters. The hulls are built at STX OSV Tulcea in Romania. Two vessels will be delivered from STX OSV Søviknes, the third from STX OSV Aukra in Norway. Tidewater is a leading provider of larger Offshore Service Vessels to the global oil and gas industry. With a fleet of more than 300 vessels, Tidewater is the oldest, largest and most experienced provider of the marine support services for this vital industry. Tidewater has a global footprint, with over 90% of its fleet working internationally in more than 60 countries. With its large, new vessel fleet, global  footprint, leading safety performance, and over 50 years of experience providing marine support services, the company is serving customers who are operating in more remote, deeper and increasingly hostile environments in order to meet the world’s energy demands.

Transcu - The company announced that the issue and allotment of an aggregate of 79,499 ordinary shares in the capital of the Company, pursuant to the exercise of the 79,499 Warrants on 9 January 2013 at the exercise price of S$0.04 each. These new shares have been listed and quoted for trading on the Main Board of the Singapore Exchange Securities Trading Limited with effect from 9.00 a.m. on 11 January 2013.
Pursuant to the allotment and issue of the new shares, the total issued share capital of the Company has increased to 3,510,304,954 fully paid-up ordinary shares. The new shares will rank pari passu in all respects with and carry all rights similar to the existing issued shares in the Company. Warrant holders are reminded that the right to subscribe for new ordinary shares in the capital of the Company comprised in the Warrants has since expired at 5.00 p.m. on Wednesday, 9 January 2013

10 January 2013

26% - A Magic Figure in Investment Journey

It's been about 10 years plus since I learnt about shares investment and practiced it a lot. Quote from Cari Guru - KLSE.8K, I learnt about this number 26% from him, and it is an eye opener to me.

With 26% Compound Annual Return Rate, we can grow our money to 10 times after 10 years. Yes, do not be surprise if you know that someone can achieve this in long run ( > 10 years) and still continue to do so. Below is the illustration of the Magic 26% figure:
Year  Year End Value
1 12,600
2 15,876
3 20,004
4 25,205
5 31,758
6 40,015
7 50,419
8 63,528
9 80,045
10 100,857

Illustration: 10 years growing trend with 26% Compound Annual Growth Rate

It's quite impressive right? So now we have to find out the ways to achieve 26% CAGR return. Below are some of my thoughts that we can achieve it:
  • Buy a Company that Worth to Hold for a Long Term, yet still can beat the rest for its performance. Look for those companies that enjoy higher profit margin than its peers. The only the company that can still making money during downtrend is the company that enjoy higher profit margin compared to the peers, especially when they started to have a pricing war. Higher profit margin makers will win the battle. To stay in higher profit margin for sustainable period, the company should come out with certain strategies - Cost Leadership or Niche Market. When middle class is growing, what I think is that, those niche market leader could earn more compared to Cost Leadership players. Anyway, this is only my guess, as I do not think that The largest is the best, but the best niche players can survive eventually, due to higher client's loyalty and a better long term relationship in between itself and clients.  This strategy only suitable for those investors who do a lot of homework and have a very strong belief in the management in their integrity as well as capabilities to grow the business in sustainable way. 
  • Buy when Market Crash and Sell when Market Boom - As this invites more frequency of trading, it may create opportunity cost for you. Anyway I believe that the more experience you have, the better you can get. How do we know whether the price is cheap? Or the price is Expensive? To me, it is a combination of Art and Science in determining the intrinsic value of the companies. However, I believe that a company that can perform well in bad times can always perform better in good times. So, it is time for you to look for a good company that can still make $$ when market crash, and just to buy it until you can find another undervalued stock. Always stay monitoring the market to find a hidden gem.
  • Leveraging - You can leverage on people and money. In Real Estate Investment, you can leverage on money you borrow from bank. In Equities Investment, you can leverage on management of the public listed companies you invested in. Once you can get to know more people, you can start growing your circle of competence, so that you can have better ideas in your investment / business. 
When you have a lot of experiences and hard work, you will understand that it is actually not too hard to achieve this Magic Figure. Let's work harder to achieve this. Yup, this is my long term goal as well. Welcome to leave your comments here. 

How to manage your money when you are in retirement life

I have some clients who are in their retirement age. They tend to be more conservative partly due to their income stream is now reduced to near to zero as most of their cash flow are coming from monthly pay slip. It brings a question of how to manage your money when you are in retirement age.

In most of the wealth management courses, it teach us to set aside (100-your age%) in equities. The higher age you are, the lower percentage of equities should be allocated in your portfolio. Most of the retired people are more willing to park their excess cash in Fixed Deposits, Fixed Income Instruments or money market fund to enjoy stable monthly income. In Singapore, you can even sell and less back your real estate from Singapore government. It can allow you to have a stable monthly income even if you are in your retirement.

Basically we also have a theory of having at least 70% of your monthly income prior to your retirement, to support your life style. For example, a man with age 65 years old could have 4,000 dollar in his income. So he would need at least 2,800 dollar per month to support his daily expenses, not to talk about the other expenses such as medical expenses and traveling expenses. If this is the case, you can easily use a financial calculator to get a figure to sustain your lifestyle. In this case, a man would need at least 1,680,000 dollar based on assumption of 2% annual return with infinite investment horizon. If you need to add in the inflation factor, then you could need to add in another 3% (so in total 5% discount rate) and therefore you need at least 168 times of your monthly income before retirement or around 14 years income savings for your retirement.

Can we use 30-40 years to accumulate savings of 14 years income? I believe some are able to achieve it only if they have their own sound investment and saving strategy to meet this requirement. You will need to have a proper asset allocation in your portfolio to achieve this. In long run, Fixed Income can best on par or slightly better than inflation rate, while Equities can beat inflation rate with careful strategy. Let's say if you are now in early 20s, you should fully utilize your advantage of having more "Time" to invest in Equities or leveraging products such as mortgage loan + Real Estate or Margin Loan + Equities after a lot of thorough homework. Be prudence to your hard earned money, especially you are approaching retirement age.

I always believe in hard work. There is no free lunch in this world. You have to do your own homework even others give you so called tips to make the money. The more experience you are, the better result you could get. In Long Run.

08 January 2013

How to Create A Portfolio Consists of Real Estate and Equities

If you realize that, the Fix Deposit (FD) rate is as low as 1% in Singapore and 3.7% in Malaysia. So it is unwise if you keep on parking your excess cash in FD for more than 3 years, unless you keep it for short term purpose, such as education fee for kids, personal travelling expenses etc. So if you like to create a portfolio consists of real estate and equities, below is my humble opinions:

  1. 50% Real Estate, 40% Equities, 10% Cash - This is a balance portfolio, to prevent you from suffering from a sudden drop from Stock Market and enjoy a stable rental income while fighting against the inflation. To me, I prefer to have this portfolio as the you can always strive to a balance portfolio, to avoid you to face cash flow problem. I understand that real estate investment is one of few investment tools that do not need to face the "Margin Call" risk, as long as you get meet the monthly instalment payment rule. To me, you have to have more time monitoring the stocks in your portfolio, as it can be long term or short term investment. But real estate investment is more like a long term investment, so you do not need to pay for the capital gain tax within 5 years. 
  2. 70% Real Estate, 20% Equities, 10% Cash - If you are more comfortable with real estate investment, which means you are a person who prefers stable rental income and do not have much time in stock picking, you could prefer to have larger portion in Real Estate. But please be aware that you might face "liquidity" issue when you try to dispose off real estate under your name, unless you are willing to sell it at slightly lower price compared to current market price. 
  3. 20% Real Estate, 70% Equities, 10% Cash - if you are more comfortable with stock investment, it is wise that you put larger portion of your invested capital in equities. Why do we still put 20% in real estate? It is to allow you to enjoy stable rental income when stock market crashes, so that you will get lesser impact on cash flow problem. 
On top of that, you can see that normally real estate value is normally quite high. In Johor Bahru, a new cluster house can simply cost you for about RM500K - RM600K and above. Of course, you have to be more rational when calculating return on real estate. A rental yield of 8% and above can be a very good investment in real estate, while you need to set at least 15% annual return for your stock investment, to allow you to grow faster in your portfolio.

The beautiful part in real estate investment is that, you can borrow up to 90% bank loan in Malaysia and 80% in Singapore. With little down payment amount, we can leverage up to 10 times in Malaysia and 5 times in Singapore. If we can "Flip" the properties (but we still need to pay the interest if it takes time for us to flip), we can enjoy a decent return even after deducting capital gain taxes. But it is always a risk if you have this mindset always. It could become a "gambler" mindset and you may end up suffer a loss. Always calculate the underlying risk before you go and "hoot" in the investment you prefer.

For equities wise, I still prefer to have at least 50% in equity market in long run, so that I can enjoy higher capital appreciation compared to the rest investment tools. If we can invest in bear market, the return could be more than 100% when market turns to a bull market. Nonetheless, you have to spend more time in studying all the public listed companies you are interested on. You have to be more sensitive in the market movement as the shares price is more volatile compared to real estate market. You can make use of this to earn more.

Oh ya, I always have at least 10% in cash in mind, to allow me for a bargain hunting or for emergency fund purpose. It is a good ratio for me for cash portion, as I do not need to have more than 10% in my portfolio, to allow me to fight against the inflation demon. In long run, it is wise to build your own portfolio to see it grow bigger and bigger, instead of leave it at bank to let others to get richer.

07 January 2013

Things to Take Note When Purchasing Shares Online

We are now in the Internet time horizon, enjoying a lot of convenience through purchasing items online. A lot of IT gadgets such as iPhone / iPad or Samsung Galaxy Tab series help us from making use of internet to perform numbers of daily activities such as viewing Youtube / Listening to iTunes Musics etc. Now we are in Post-PC period, where we are relying on mobile devices such as smart phones / tablets to conduct daily tasks. One of the topics I would like to touch on here is about the Online Stock Trading / Investing via your mobile devices.
  1. Change your password Regularly. It is advised to update your password regularly, e.g. once every 3 months. You may also set your password in a combination of numeric and character, in 6-12 characters. 
  2. Double check when Key In an Order. When you key in an order, normally you have to fill in certain fields such as No. of Shares, Counter Name / Symbol, Payment Mode (Cash/SRS/CPF etc), Transaction Mode (Buy / Sale) etc. So when you fill in the form, you must look through at least twice to avoid any mistake. Some trading platform would prompt you confirmation box to confirm the data that you filled in before it goes to the booking system. 
  3. Check the contract value when the trade is done and be ready to make a payment. While some brokers are willing to allow you to play "contra", it is a common practise an online broker to allow you to trade only after the cash is transferred into trust account. You have to check properly the exact amount paid to a broker as well as the amount you will be received from your broker. You may also receive email containing daily statement / contract notes if you opt for this option. 
  4. Contact your broker if there is anything you need. Since you are paying your brokers by using their services (e.g. Research reports, Education courses, Online Trading Platform etc), so you definitely can give your broker a call, such as asking them on market updates, platform updates, or any research reports on certain counters listed in the stock market. They are more than happy to provide services to you. Of course, it if good that you can establish a good relationship with good brokers, as now it is harder to get a good broker to serve you due to lowering commission rate trend. 
  5. Always have a Trading / Investment Strategy. As it is too convenience for you to access to stock market, so you may end up spending too much time on the market and put your full time job aside. It is advised that you have a proper strategy to stay profitable in long run. You may have joined some education course to improve your trading / investing strategy. 
I hope this could help you to take note when purchasing shares online. 

03 January 2013

Singapore Shares Market Daily Update - 3 Jan 2013

In Focus - Singapore Shares, SPH, Osim, Mercator Lines, Enviro-Hub, Gallant Venture
Singapore share prices opened higher on 3 Jan 2013 with the STI up 23.64 points to 3,225.38. At 9.05 am., volume was 526.4 million shares worth S$166.2 million. Gainers outnumbered losers 242 to 17.
SPH - Singapore Press Holdings Limited announced that it will release its financial results for the First Quarter ended 30 November 2012 on Monday, 14 January 2013.
OSIM - The company informed that it will be releasing its financial statement on the results of the Company and of the Group for Full Year ended 31 December 2012 on Thursday, 31 January 2013. A press conference cum results briefing with media  and analysts will be held on the same day
Mercator Lines - The company announced that together with Mercator International Pte. Ltd. (“Mercator International”), has on  28 December 2012 entered into two separate early termination and settlement agreements (the “Early Termination Agreements”) with the owners (the “Owners”) of M.V. “Chaitali Prem” and M.V. “Chanchal Prem” (together with M.V. “Chaitali Prem”, the “Vessels”), pursuant to which the Company  and the respective owner  have agreed to the early termination of  the respective charter of M.V. “Chaitali Prem” and M.V. “Chanchal Prem”.

Enviro-Hub - The Board wishes to announce that the Company has received further proceeds of approximately S$7.8 million from the exercise of Warrants by Shareholders as at the date of this announcement (excluding the proceeds of approximately S$4.2 million which has been utilised by the Company in accordance with the announcements of the Company dated 27 July 2012 and 18 October 2012 respectively). As at the date of this announcement, the Company has utilised approximately S$4.9 million and approximately S$0.2 million of such further proceeds for purposes of partial repayment of bank loans and for purposes of working capital of the Group respectively. The Company will announce the utilisation of the remaining amount of S$2.7 million of such further proceeds when such amount is utilised
Gallant Venture - The Board of Directors of Gallant Venture Ltd (“Company”) wishes to announce that the Company’s subsidiary, Verizon Resorts Limited (“VRL”), has agreed to extend the tenure of a convertible bond in the principal amount of S$47,500,000 (“PT AIB Convertible Bond”) issued by PT Alam Indah Bintan (“PT AIB”) on 1 January 2005, for another year from current expiry date of 31 December 2012 to 31 December 2013 (“Extension”).

CapitaMall Trust - The company announced that it will release CMT’s financial results for the full year ended 31 December 2012 before 8.00 am on Friday, 18 January 2013.

Parkway Life REIT - The company will be announcing Parkway Life REIT’s full year financial results for the financial year ended 31 December 2012 after trading hours on 25 January 2013.

Sabana REIT -  The company announced that it will release its financial results for 4Q 2012 on Thursday, 17 January 2013, after trading hours.

02 January 2013

Singapore Home Price Rose Again in 4Q2012

While we do expect a slower growth in Singapore Economy, yet the inflation rate in Singapore remains high due to higher Housing and Transport cost added to the residents. I cannot imagine if the inflation stay strong in longer period while the wage increase cannot catch up with the inflation in long run. It could increase Singapore political risk as getting more citizens unhappy with rising property prices as they have to bear with the living costs. While Singapore government is trying to use monetary policy to increase SGD conversion rate with its peers, it still cannot tame down the property price down, as this is due to the supply-demand theory, as a lot of people are parking their money in Property market instead of Fixed Deposit as the highest FD rate that we can find here is around 1.xx%, which is still lower than CPF-OA compulsory return rate (2.5%). People tend to cash out their CPF monies and invest in property market, as long as the return rate is lower than property rental yield, which I believe is around 3-5% now. 
Nonetheless, I do expect a lot more citizens / working persons move to Iskandar Malaysia (IM) once the accessibility and security is improved. Currently there are hundreds of buses traveling in between IM and Singapore, where Woodlands Custom is having heavier traffic volume compared to TUAS custom due to cheaper toll fees (SGD1.20 compared to SGD3.80). However, it does not deter Expats (especially those with higher wage) from traveling in between IM and Singapore and send their kids to study in International School in Malaysia due to cheaper rates while having same standard with Singapore's. I believe we will see a difference once more foreigners are willing to buy a second home at relax in IM and go shopping in Singapore. This is a win-win strategy for both countries, I believe. 

SINGAPORE - Singapore's home prices in the fourth quarter, which saw the strongest quarterly increase in 2012, raises further risks that the government will introduce new measures to cool the housing market, property consultant Colliers International said in a note.
According to preliminary data from the Urban Redevelopment Authority, Singapore's private home prices rose 1.8 per cent in the fourth quarter compared to the previous three months. The Housing and Development Board's flash estimate also showed resale prices of public housing units rose 2.5 per cent in October-December from the third quarter.
"The increased momentum in the quarter-on-quarter price up-trend, particularly in the mass-market housing segment, as well as the return of buying interest in the high-tier segments, are likely to keep the authorities high on guard again and have further heightened policy risks in the residential sector," said Colliers.
However, it noted that Singapore's private home prices rose 2.8 per cent for 2012, slower than a 5.89 per cent rise in 2011, indicating the government's cooling measures have been effective to a certain extent in moderating price growth.
CIMB Research continues to prefer developers who are less focused on Singapore's residential market, such as CapitaLand Ltd and UOL Group Ltd.
The brokerage expects demand to remain resilient in 2013, although larger supply of new homes and more discounts and residential launches could rein in prices and volumes.
CapitaLand shares were up 1.4 per cent at S$3.75 while City Developments Ltd was up 1.2 per cent at S$13.03. Property developers in Singapore outperformed the broader market last year, with the FTSE ST Real Estate Index jumping 47.6 per cent against the Straits Times Index's 19.7 per cent rise. - REUTERS

SGX Performance +19.7% on Year 2012

STI generates a +19.7% gain in 2012

In 2012, the Straits Times Index (STI) rebounded from its 2011 decline, generating a gain of +19.7% over the year. Dividends boost the total return of the Index to +23.5% in 2012. Over the past three years the average annualised return of the STI including dividend distributions amounted to +6.4%.

The five best performing STI stocks over 2012 were CapitaMalls Asia (JS8, +72.1%), CapitaLand (C31, +67.4%), Global Logistics Properties (MC0, +58.4%), Fraser and Neave (F99, +55.8%) and Hong Kong Land (H78, +54.4%). The five underperforming STI stocks over 2012 were Wilmar International (F34, -33.0%), Olam International (O32, -26.8%), Genting Singapore (G13, -8.9%), Golden Agri Resources (E5H, -8.4%) and Jardine Cycle & Carriage (C07, -0.3%)

Singapore Shares Market Daily Update - 2 Jan 2013

Singapore Economy - The Singapore economy grew at 1.1% on a year-on-year basis in the fourth quarter of 2012, an improvement from the flat growth in the previous quarter, advance government estimates said 2 January 2013.
On a quarter-on-quarter seasonally-adjusted annualised basis, the economy grew by 1.8 per cent, an upturn from the contraction of 6.3 per cent in the preceding quarter, the Ministry of Trade and Industry (MTI) said.
US Economy - Republicans in the US House of Representatives are looking to add an amendment to the Senate-passed "fiscal cliff" legislation that would cut spending by US$330 billion, Republican Representative Darrell Issa said on Tuesday.
Republicans are now weighing whether they will be able to get enough votes to pass such an amendment. If not, they will hold an up-or-down vote on the Senate-passed measure, a Republican aide said. - REUTERS
Singapore Property - Urban Redevelopment Authority (URA) data on 2 January 2013 showed that overall private home prices rose 1.8% in the fourth quarter, compared to the 0.6% rise in the preceding quarter. For the full year 2012, private home prices rose by about 2.8% (based on the preliminary 4Q2012 flash Estimate), lower than the 5.9% increase in 2011.

LionGold - Nicholas Ng Yick Hing was appointed as Managing Director and Group CEO starting from 1 January 2013.
Ezion - The Company had completed the subscription of new shares allotted and  issued 14,269,620 Subscription Shares to the Subscriber on 31 December 2012. Pursuant to the completion of the Subscription, the number of issued Shares of the Company (excluding treasury shares) has increased from 895,621,483 Shares to 909,891,103 Shares.

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