White Knight for Noble Group

As 2016 comes to an end, it is timely to review the significant developments of some of the popular stocks listed in Singapore stock exchange (SGX). Beleaguered Noble Group certainly is in the hit list as it made the headline news for all the wrong reasons. Is the company really doomed or would there be a White Knight for Noble Group?

The free fall of Noble Group’ share price represents one of the most dramatic declines in modern-day equity market. Listed in Singapore stock exchange back in 1997 and backed by China’s sovereign wealth fund, China Investment Corp (CIC), the commodity trading company used to be one of the revered stocks in SGX. Make no mistake, at one point, it was even trading at a record high of $2.40 per share back in 2004. Now languishing at $0.16, those giddy days must seem so surreal to long-term investors of Noble Group.

In fact, Noble Group was still in the elite Straits Times Index (STI) earlier this year but got booted out of the list in March 2016. Then again, being included in the prestigious STI should be the least priority for the management at this moment because there are more pressing problems to deal with.

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Crazy year for gold price

It has been a crazy year for gold price! Towards the tail end of 2015, gold price dramatically fell to USD1054 per ounce upon the announcement of the interest rate increase by US Federal Reserves. Since the start of 2016, global investors were stunned when gold price surged to USD1350 per ounce within seven months.

The surge in gold price was due to the sudden crash in the China stock market which caught many by surprise. The massive sell-off in the stock market of the world no.2 economy triggered tremendous panic and caused many investors to flee for safety. As gold is traditionally seen as a safe haven for investments, gold price stormed to USD1237 per ounce. A majestic fine run indeed!


Gold price was given further boost in mid-year as a result of the fall out from Brexit. As the epicenter of the event in London unfolded, gold climbed to USD1360 per ounce at one point. Government officials, analysts and economists were all dumbfounded by the results as most of them expected UK to remain part of European Union. In the midst of the chaotic situation, Brexit sparked an explosive gold price surge once again.

Somehow after the event, gold price peaked and had a free fall, reaching USD1255 per ounce.

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SIAEC share price crashed to 5 year low

SIAEC share price crashed to 5 year low! Amid the global economic uncertainties and challenging aviation outlook, SIAEC’s performance continued to slide as revealed in the financial results for 1HFY2016/17. This article contains my latest SIAEC stock analysis. I am not vested in this counter but have been monitoring this maintenance, repair and overhaul (MRO) stalwart for many years.

Operating profit for 2nd quarter declined to $24.5 million as compared to $27.0 million last year. Cash flow from operations was a negative $7.4 million as compared to positive $2.4 million in the previous year. The dismal quarter results reflected the massive challenge faced by the management in navigating SIAEC through this storm.

It is certainly not business as usual for this MRO powerhouse as airlines are buying new aircraft like A350, B787, A320NEO and B737-MAX to replace their older fleets. These new aircraft require less maintenance checks and longer maintenance task intervals, especially in the first few years of entry into service. Arising from this new trend, the MRO sector in Singapore has seen a decline in business for the last 2 years. This is because about 90 per cent of the local aerospace work is tied to aircraft maintenance and repairs.

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Salary increase

On 12 December 2016, National Trade Union Congress (NTUC) announced that cleaners will receive yearly salary increases from 2017 to 2019 for a total of S$200. Various government agencies like Ministry of Manpower, National Environment Agency and Workforce Singapore said the salary increase will benefit more than 40,000 resident cleaners employed by 1,200 cleaning businesses.

For an industry that faces high turnover rate due to the perceived unsustainable low wages, this is a good move by the government. According to NTUC, the median salary for full-time cleaners was S$1,100 and gross wages were S$1,200 in 2015. With such low salaries, it is hard to imagine how a cleaner can live a quality lifestyle in an expensive city like Singapore.

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For the longest time, our society has always downplayed the contribution of cleaners. The general perception is that due to the low skills required for their jobs, they don’t deserve a respectable level of salary or salary increases (if any) for that matter. But we seem to neglect the fact that cleaners play an important role in maintaining Singapore’s reputation as a clean and green city. We need them to do the dirty jobs of clearing rubbish chutes and cleaning toilets. If the salary is too low, how can the industry attract workers, especially Singaporeans, to do these dirty jobs?

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CPF’s Home Protection Scheme (HPS)

The most significant big-ticket item for my family in 2016 was the purchase of our Executive Condominium (EC), The Terrace, at Punggol Waterway. Like many Singaporeans, being able to upgrade to an EC is our Singapore Dream. Arising from this purchase, we had taken a quite a big mortgage loan from one of the local banks and in the course of doing so, I did some research on mortgage loans. In this article, I will share some of my knowledge on CPF’s Home Protection Scheme (HPS).

HPS eligibility

More than 80% of Singapore residents live in HDB flats. If you are using your CPF savings to pay your monthly housing loan instalments on your HDB flats, you are required to be insured under HPS. Note that HPS does not cover private residential properties, such as executive condominiums (ECs) or privatised Housing and Urban Development Company (HUDC) flats. Because of this exclusion clause, my family is not eligible for HPS cover.

For the current HDB flat that my family is living in, it is covered under the HPS although the loan is from a commercial bank. As our loan amount is only $150,000, the annual premiums is very affordable and can be deducted from my CPF Ordinary Account.

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Inspirations from a Singapore finance blogger

In recent years, there has been a proliferation of finance bloggers joining the scene. Many of them are good bloggers who write better than me. But in my humble opinion, what differentiates a great blogger from a good blogger is his ability to create inspirations among readers. In one of his latest articles, Singapore finance blogger, “Got Money, Got Honey” (GMGH), inspired me.

In his article, GMGH articulated very well his philosophy of giving. I was very impressed by his structured thought-process because although most people donate to charity, not many can think so deeply as him. It also set me thinking about the future direction of my own blog.

As a Singapore finance blogger, it was never my intention to become an influencer in the first place. My original idea was to create a crowd-source platform that attracts readers to contribute ideas on various wealth building ways. Over time, SG Wealth Builder has evolved into a wealth blog that focuses mainly on stock analysis, gold bullion and career management.

           Gold and Silver Bullion

There are many Singapore finance bloggers who write about their dividend income reports and portfolio performance. They contribute interesting articles but I seldom read such articles because I prefer to look at those with deep analysis on stocks.

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Singtel increased investment moats aggressively

In August 2016, Singtel increased its investment moats aggressively through the acquisition of stakes in Thailand’s Intouch Holdings Public Company Limited (Intouch) and India’s Bharti Telecom Limited (Bharti Telecom) for a total consideration of S$2.47 billion from parent company, Temasek Holding.

This transaction will be funded through internal cash, short-term debt and proceeds from a share placement of 386 million new Singtel shares to Temasek totalling S$1.605 billion at a price of S$4.16 per new share.

Rationale for acquisition

Investors may think that this is just one of those asset transfers between the two Singapore entities but I view this development differently. To put things into perspective, it is difficult for Singtel to directly acquire foreign telecommunication companies because these are high growth entities and most governments are generally reluctant to let foreign entities own 100% such strategic assets. By purchasing these stakes in Intouch and Bharti through Temasek, SingTel can increase its regional market share without facing foreign regulatory resistance.

SGX stocks

Being a regional player, Singtel derived only 29% of its net profit from Singapore in FY2016. The majority of its revenue and profit are driven by its regional joint associates because the management is smart to acquire strategic stakes in telecommunication companies with either number 1 or 2 market share in regional countries.

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Analysis on Jumbo Group’s shares

Listed in SGX’s Catalist board on 9 November 2015, Jumbo Group has Temasek Holding subsidiary and Osim boss among its investors. With such strong support from institutional investors, it is no wonder that its share price surged from $0.25 to the current $0.65. Jumbo Group’s shares is definitely on form but what will be its outlook for 2017?

The one thing I like about Jumbo Group is that its business is simple and easy to understand. Basically as a multi-concept dining food and beverage company, Jumbo has a total of 15 F&B outlets in Singapore and 3 F&B outlets in the PRC, under 5 restaurant brands – Jumbo Seafood, JPOT, NG AH SIO Bak Kut Teh, Chui Huay Lim Teochew Cuisine and J Café. It also manages 1 Singapore Seafood Republic outlet.

SGX stocks

As a consumer, I have also patronized many of Jumbo restaurants before and [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Buy gold bullion in Singapore

Since Donald Trump became US President-elect, gold price has been falling for the past few weeks. Amid the price weakness, wealth builders must be wondering whether to buy gold bullion in Singapore now.

To put things into perspective, there is a dichotomy between the price of gold and the actual demand for the precious metal. Most economist would tell you that the prices of all goods and services are governed by supply and demand. The higher the demand, the higher the price. However, gold is unique in the sense that such logic does not always hold true.

One reason for such strange phenomenon is because gold price discovery is primarily in the paper market, and not the demand for physical gold. London Gold Market dominates global gold price discovery and is regarded as the leading global centre for over-the-counter (OTC) transactions. According to BullionStar, 95% of the gold traded in London is unallocated, has no legal title, and is merely part of a fractionally reserved paper gold system. In this regard, the dynamics of the markets for paper gold and physical gold differ greatly, even though both are linked by the gold spot price.

gold bullion Singapore

In view of the current weakness in price, wealth builders should seize this opportunity to buy gold bullion as part of portfolio strategy.

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Why the Singapore Economy Really Isn’t That Bad

Whenever we appraise economic growth, there is always a tendency to take a short rather than a longer-term perspective. Such a focus not only encourages us to see things in a less favourable light, but it also undervalues the importance of historical trends and any incremental growth that the global economy has experienced over the course of the last 30 years or more.

A quick glance at the global economy reveals that the levels of growth sustained since the Great Recession began in 2008 has been immensely disappointing by most metrics. Any prosperity that has been evident in either developed or emerging economies during this time has been sporadic, while uncertainty and geopolitical volatility has also caused significant fluctuating in the financial markets.

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Despite this, PWT data on average, real-time inflation per capita GDP tells a slightly different narrative. This reveals that the global population was 80% richer financially in 2010 than it was in 1980, while also underlining the fact that gradual, long-term growth trends are all too easy to overlook. Interestingly, the average material well-being of society is three-times what it was in 1950, and this is an economic trend that should offer hope for future generations.

The Singapore Economy: Should We View it From an Alternative Perspective?

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