I have previously written an article on ISOTeam, a facilities maintenance company based in Singapore. This article is to provide an update on the latest developments of ISOTeam.

On 31 May 2016, the company announced the securing of private and public sector contracts worth $26.32 million. The contracts will have a positive impact on the earnings per share and net tangible assets per share for the current financial year ending 30 June 2016.

Company’s profile

ISOTeam’s capabilities lie predominately in the property maintenance and property upgrading and restoration. The entry barrier for this industry is not high, therefore in order to differentiate itself from their competitors, ISOTeam’s niche is in providing eco-conscious solutions.

In recent years, the company has secured a lot of public works and has established good track record with town councils, statutory boards, main contractors and developers. Due to this, ISOTeam is able to repeatedly win tenders for public projects even though their offers are not the lowest in price.


Strategies for growth

Going forward, ISOTeam’s growth strategies are to develop more green solution offerings, expand through acquisitions and reach out their services to other untapped private and public sectors. These strategies make sense as Singapore government plan to green mark 80% of the building in Singapore. Thus, there are a lot of opportunities for ISOTeam to grow if it pursues the green technology path.

Between February to April 2016, ISOTeam has filed in SGX a series of shares buy-back at price between $0.305 to $0.310. By 1 April 2016, the total number of accumulated shares from acquisitions amounted to 3,680,000. Normally when a company buy-back its shares, it may be the case that the management feel that the shares are undervalued. But is it really the case? Let’s review the financials of ISOTeam.

Financial performance

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TalkMed Group Ltd

In the context of Singapore’s ageing demographic trend, healthcare and medical services companies are expected to continue to grow in the coming years because of the increasing demands for specialized medical treatments and growing affluence in South-East Asia countries. Riding on this wave, Singapore’s TalkMed Group Ltd may be a trail-blazer in medical tourism.

Business Profile

TalkMed was listed in Catalist on 30 January 2014 and has since established itself as one of the market leaders in medical tourism in Singapore, with more than 60% of its patients from foreign countries for the past few years. The company has three subsidiaries, namely Singapore Cancer Centre Pte Ltd (SCC), TalkMed Vietnam Pte Ltd and Stem Med Pte Ltd. With 13 doctors in their arm, TalkMed’s niche businesses are in medical oncology services and palliative care services.


Business Potential

I like TalkMed’s business model because it is a scalable business which revolves around the provision of medical consultancy services and stem cell processing services. Through SCC, TalkMed doctors provide stem cell transplant and palliative care to the oncology patients. Its overseas investments include partnership with Thu Cuc International General Hospital to set up a medical centre providing medical oncology services in Hanoi. Arising from this collaboration effort, TalkMed Vietnam was established in March 2014.

In June 2015, TalkMed used part of its IPO proceeds to invest US$8.4 million for 30% stake in Hong Kong Integrated Oncology Centre Holdings Limited. This is a strategic move as the investment is a stepping stone for TalkMed into the China market. So for the long-term, the Hong Kong unit is likely to contribute positively to the bottom-line of the Group.

TalkMed derives its revenues mainly from medical consultancy services and stem cell processing services. Both services are regulated by Ministry of Health and thus this represents …

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Is SingPost a value trap?

This post has been amended on 11 July 2016 to address errors made in the last sentences of the second and eighth paragraph.

Being the national postal service provider for the past 150 years, SingPost has transformed into a mail and e-Commerce technology giant within Singapore in recent years. Throughout the years, SingPost had consistently received numerous awards for its branding, innovation and business excellence. Its largest shareholders include SingTel and AliBaba Group. With such an impressive background, the past few months must have been a nightmare for SingPost, at least for its investors.

Crisis brewing for SingPost

Following a special audit in early May 2016, the Accounting and Corporate Regulatory Authority (Acra) is investigating SingPost for potential breaches of the Companies Act. The special audit was undertaken to look into the disclosure of a board member’s interest in the firm that advised on SingPost’s recent acquisitions.

One of the most damaging findings in the 52 page summary report was the lack of “prescribed policy, process or procedure for the evaluation and approval of Merger and Acquisitions transactions”. For an institution that won two ASEAN corporate governance awards in 2015, this is indeed an embarrassing audit finding. It exposes the weak corporate governance on disclosure by its board of directors.


In light of this incident, the composition of the board committees was changed. Major shareholder, SingTel also stepped in and replaced SingPost chairman Mr Lim Ho Kee, with Mr Simon Israel. At this moment, SingPost is still looking for suitable candidate to replace group CEO Dr Wolfgang Baier, who resigned in December 2015. Its COO, Dr Sascha Hower also announced resignation on 21 June 2016. Amid the current mess the company is facing, will SingPost rise from the ashes?

Financial Performance

Despite the troubles, SingPost appears to be in …

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Gold and silver on fire

In the aftermath of Brexit, investors scramble for safe haven assets and set gold and silver on fire. The precious metals have climbed to new highs in recent weeks as investors realize that even a stable currency like Sterling pound can drop in value over-night.

As investors pile into gold, the price of the yellow metal surged by 28%, making it one of the best performing assets to hold. At the rate it is climbing, gold may hit the level of US$1,400 per ounce. This is a remarkable turn-around as previously, gold price has declined to a low of US$1050 per ounce in December 2015.


Precious metals bull-run

The current market sentiments seem to suggest that gold may be at the start of a bull-run. The sustainability of the bull-run will depend whether there are further market shocks that trigger investors to flee for safety. For 2016, shell-shocked investors have already witnessed the Chinese stock market carnage, plunging oil prices and then Brexit. These events have fuelled the surge in gold and silver prices.

While gold has been attracting investors’ attention, silver price has also stormed to record level. At US$20.16 per ounce, spot silver rose by 47% since December 2015. Traditionally seen as more volatile as compared to gold, silver is a favourite asset among traders because of its low-cost. Silver has not reached the record level of US$43 per ounce seen in 2011 yet. But given the amount of uncertainties in the market now, there is sufficient leg room for silver to rise much further.

Interest rates

Market analysts are optimistic that US will not raise interest rates this year. A low interest rate environment is good for gold and silver because it will reduce the opportunity cost of holding physical precious metals as gold and silver bullion …

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Is SIA Engineering Company a value trap?

SIA Engineering Company announced on 30 June 2016 the divestments of its 10% stake in Hong Kong Aero Engine Services Ltd (HAESL) to Rolls-Royce Overseas Holding Ltd. At the same time HAESL will divest its 20% stake in Singapore Aero Engine Services Pte Ltd (SAESL). The divestments will result in a net gain of $178 million for the SIAEC Group, representing a windfall for SIA Engineering Company (SIAEC).

The move to divest SIAEC’s stakes in several joint ventures is long overdue as its network of joint ventures (JV), associates and subsidiaries have become so complex that it affects the company’s ability to compete for the aircraft aftermarket business. To a certain extent, some of its JV may even be competing against each other for maintenance, repair and overhaul (MRO) business. So this streamlining operation may bode well for the company going forward.


Business Challenges

Unlike its parent, SIA, the MRO business is more stable and predictable as compared to airline operations. This is because aircraft are required to be maintained at certain interval in order to be deemed as airworthy. Thus, the business model of SIAEC is recurring. However, the emergence of new composite aircraft like B787 and A350 changed the game for big MRO players like SIAEC and ST Aerospace.

The next generation aircraft require less maintenance works and longer interval of inspections and maintenance because of better materials and advanced technologies used in the design of the aircraft. While this trend is good for airlines like SIA, it presents a challenge for SIAEC, in terms of lesser work.

To mitigate the impact of technology advanced fleets, SIAEC went into recent partnerships with aircraft manufacturer like Boeing and Airbus. These strategic moves are needed in order for SIAEC to gain bigger market and increased competitiveness.

Shares buy-back


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Gold price to surge to USD65,000 per ounce in 5 years?

Before Brexit took the world by storm last month, BullionStar boldly predicted that gold price will surge to USD65,000 per ounce in 5 years in one of their articles. To be frank, even though I am bullish on the long-term prospect of gold, it is difficult to envisage that gold price will reach such stratospheric level.

If gold really do reach USD65,000 per ounce, it would be approximately 48.5 times the present level. Those who have bought just one piece of the 1kg PAMP Gold Bar would become an instant millionaire. But then again, under such circumstances, inflation would probably be ultra-high, hence that one or two millions worth of fiat currencies would probably have limited purchasing value.

One important lesson that I have learnt from my years of financial blogging is that it does not matter whether BullionStar’s prediction is accurate or not. It only matters if you are prepared to build wealth with gold bullion. No analysts or economists can predict the future and there will always be endless debates who is right or wrong. At the end of the day, you have to ask yourself what actions have you taken in the course of your wealth journey to succeed financially.

If you are reading this article, you may be a high net worth individual who is busy with your business. You may even be a highly qualified professional (e.g. lawyer or dentist) earning high incomes. If so, you probably have limited time to research or study the stock market. If that is the case, then you need to start thinking how to protect your hard-earned wealth and assets.


The matter of fact is that selecting the right stocks to invest is not easy and requires much effort and various strategies to achieve success. Even though technically …

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CSE Global Limited

CSE is a global integrator for software services specializing in the automation, telecommunications and environment sectors. CSE started life as a subsidiary of ST Group but after a successful management buy-out in 1997, CSE became a public listed company in 1999. After a series of acquisitions, CSE Global Limited evolved into an international technology firm with more than 30 offices across the globe.


For the first quarter of 2016, the group achieved $5.5 million profit after tax, a decrease of 20.9% year-on-year. This performance reflected the challenging weak economic sentiments in the industry sectors that the Group is operating in.

CSE is a key player in the offshore oil and gas sector, providing system services such as Supervisory Control and Data Acquisition (SCADA), process control and safety shutdown systems. Thus, the current down-turn in this sector has a significant impact on the Group’s business.

Business outlook is challenging as many of CSE’s client are cutting costs. As a result, CSE has a reduction of 23.8% new orders from continuing operations. The number of outstanding orders from continuing operations has also reduced by 28.9%.

In light of the challenging operating environment, CSE has managed to rein in operating expenses, which were 6.4% lower at $17.8 million as compared to previous year. In addition, the Group’s effort on cost cutting measures had yielded some positive results. Year-on-year overhead bases saw a reduction of 16% and management had committed to stay vigilant in managing cost and working capital.

To grow the company, CSE has acquired CC America and Mobile Masters for $10.4 million. Impressively, the Group achieved net cash of $57.3 million, higher than $54.2 million as at 31 December 2015. For this quarter, cash flow operating activities is $19.6 million. Hence, the company’s financial health is strong and resilient enough to …

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Devastating effect of Brexit

As one of the very few reserve currencies in the world, Britain’s Sterling pound is considered to be one of the most popular reserve currencies held by many central banks. Historically, Sterling is the third most widely held currency, after US dollar and Euro. Thus, one cannot ignore the devastating effect of Brexit on Sterling pound when it recently plummeted to historic low. Currently, Sterling is trading at a 31-year low and this led to a lot of fear in the market.

Market turmoil

The current turmoil stems from the massive drop in the Sterling pound which wiped off billions from the markets. Governments which hold Sterling pound as foreign currency reserves suffer huge losses. Many investors fled for safety and bought into Japanese yen, causing the yen to rise substantially. The upward swing results in Japanese exports becoming expensive overnight and potentially worsen the deflation condition in Japan economy.

The havoc in the currency markets may prompt central banks to take drastic actions before the situation manifests into global crisis of confidence. Some of the possible measures may include further interest rate cuts, stimulus packages to encourage spending or even negative interest rates, which Japan and several European countries have recently implemented. Central banks may likely to also increase their gold holdings to mitigate the losses from the Sterling devaluation.


The intervention risks arising from monetary policies would have significant consequences for the man in the street because these actions often led to inflation or deflation. Inevitably, the value of their currencies will diminish and thus those who hold their wealth in fiat currencies would see their purchasing power drop. In the face of uncertainties arising from Brexit, investors do not have many alternative safe assets to preserve their wealth.

Gold as safe haven

Gold is seen as a …

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If you are a high net worth individual, you would certainly not want to take chances with your wealth. Usually wealthy individuals would choose private banking because of their specialized financial needs and the desire for discretion. In Singapore, there are many banks that offer private banking services and one of them is OCBC Bank’s private banking subsidiary – Bank of Singapore (BOS).

In my previous article, I touched on OCBC’s acquisition of Barclays Asia Wealth Management and highlighted it as a strategic move that allows OCBC to enhance its investment moat in the arena of private banking. Indeed, the real money to be made is actually from the rich and wealthy clients, not the mom-and-pop depositors.

Amidst the global economic downturn, OCBC reported strong results for 1Q16 private banking income. Operating profit from Global Consumer/Private Banking grew from $218 million to $253 million, an increase of year-on-year 16% for 1Q2016. This was OCBC’s best performing segment for 1Q16 and given the growing affluence of Asians, there are a lot of opportunities for growth in this banking niche.

In 2015, BOS was one of only 5 private banks in Asia to record more than 5% growth in assets under management (AUM). In fact, this segment has been growing steadily and the AUM has grown by compounded annual growth rate of 40% since 2010.

The private bank is also proactive in collaborating with partners to offer wealthy clients investment solutions that cater to their needs. For example, in 2015, BOS partnered with Blackstone to avail the latter’s investment platforms to wealthy clients, raising more than US$170 million.


To capture growth in the highly lucrative private banking segment, OCBC announced the hiring of several strategic talents in May 2016 to strengthen BOS’ product management capabilities. Among them is Mr Johan …

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Brexit sparked explosive gold price surge

With the score-line at 0-0 nearing full-time, Brexit voters unleashed an unstoppable volley past the “Remain” goal-keeper and claimed an unexpected victory on 23 June 2016. UK has chartered into unfamiliar horizon. 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 as expected.

Flight to Safety

At one point, when the Brexit was released, gold price stormed past USD1,300 per ounce as investors bolted to park their wealth in the safe haven amid carnage in the global currencies. Notably, Euro and sterling pound suffered record meltdown as investors flee for safety. Their concerns were not unfound as UK is the world fifth’s largest economy. Decoupling from European may have deep implications in terms of trade and military cooperation.

Whilst it is easy to argue that UK voters had let their emotions ruled their heads, it should be highlighted that the issue of immigration has always been sensitive in an open economy like UK. Many global leaders and analysts grossly underestimated that ground sentiments can swing the voting results, even though there are a lot at stake, in terms of political and economic stability. This is because when it comes to voting, personal interests always come before national interests.


Reason for “Leave” 

No doubt European Union (EU) is a massive bloc that allows UK to have access to a market of more than 300 million people and global investors had always regarded London as the gateway to trading with Europe. But such privilege also comes with conditions as UK is obliged to meet EU’s immigration and economic policies. Under the EU regime, UK residents are hapless against the massive influx of immigrants from …

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You’ll Never Walk Alone with Central Provident Fund

For many football fans, the song “You’ll Never Walk Alone” is synonymous with English football club, Liverpool. The song is the anthem of Liverpool and has inspired many great comebacks for the football club. Although glory days are clearly over for Liverpool, many fans still adore the club because of its great tradition and core values.

Indeed, values define who we are and guide us through good times and bad times. The Central Provident Fund (CPF) was implemented in 1955 by the British authorities with the aim of abolishing the pension schemes in Singapore and introducing a national saving scheme. The scheme requires employers and employees to contribute a portion of the employee’s monthly salary into their CPF accounts.

The intent of the CPF scheme was to instill among Singaporeans the value of hard work and saving for retirement. Each of us is responsible for growing our wealth and save for rainy days.

Over the years, the CPF scheme had gone through significant changes, especially during the eighties, when the late Mr Lee Kuan Yew was at the peak of his power. These changes were needed to cater for the growing aspirations of Singaporeans. As a result, CPF was expanded to include healthcare, housing and investment purposes. Because of these changes, many Singaporeans tend to forget the main function of CPF, which is basically to provide for our retirement needs.

Perhaps a victim of its own success, the CPF scheme has become so entrenched and pervasive in our lives that many of us take it for granted. Some have even argued that because of CPF, many Singaporeans are not willing to take the entrepreneurship risks. If you think about it, this reasoning is not exactly flawed. After all, the monthly current employer’s contribution rate is 17% and employee’s contribution rate …

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How safe is your money in Singapore banks?

No bank is too big to fail and one question that every depositor may ask is how safe is our money in Singapore banks. During the Great Financial Crisis, Citigroup was on the brink of collapse before being rescued by the U.S government, which had to guarantee losses on more than US$300 billion worth of assets and injected US$20 billion into the troubled company. At that point of time, Citigroup’s share price was trading less than US$1, which was the historical record low for the bank.

Money Crisis

Fast forward today, Citigroup recovered from the crisis but is no longer the world’s largest bank in terms of assets. However, its share price has surged to close to US$50. Investors who bought the shares back then and held it till today would have made a fortune. But the point that I want to reiterate is that Citigroup was very close to being made bankrupt in 2008 and savers who put all their hard-earned savings in banks may have lost their monies overnight if the renowned bank collapsed unexpectedly.

Singapore Banks

In the aftermath of the financial crisis, people start to realize that the prospects of bank failures are real even in Singapore. Hence, the Deposit Insurance Scheme and Policy Owners’ Protection Scheme (PPF Scheme) was amended to provide more protection for Singapore depositors. This insurance scheme is needed to protect small depositors’ savings in the event of bank failures.


Safeguard Your Wealth

Take note that the Deposit Insurance Scheme covers aggregated deposits in savings accounts, fixed deposit accounts, current accounts, CPFIS, CPF Minimum Sum and Supplementary Retirement Scheme up to S$50,000. This scheme does not cover securities, stocks, unit trusts or foreign currency deposits. Furthermore, not all banks in Singapore are covered. You may check the list of scheme members here.

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SGX Hall of Shame

On 3 March 2016, Singapore bourse operator, SGX, included 41 listed companies into its infamous watch-list due to the implementation of the 20-cent Minimum Trading Price (MTP) rule. In all, there were 76 companies under the SGX watch-list, which was like the Hall of Shame.

To be part of this watch-list can be very embarrassing because it means that affected companies have to buck up and improve their financial performances. Otherwise, they may face the prospect of being delisted from the stock exchange.

The expansion of the watch-list to include companies failing to comply with the MTP rule had riled market players because this move essentially blurs the distinction between market quality and business fundamentals.

To be fair, even though a company’s share price is trading below 20 cents, it does not mean that the company has shaky business fundamentals. So to put those failing to meet the MTP with those companies with financial problems is deemed by many to be onerous.


To put things into perspective, the MTP rule was introduced in the aftermath of the penny stock crash in 2013. Many retail investors lost their pants after dabbling in Blumont, LionGold and Asiasons Capital. The three penny stocks surged to incredible levels within a short period of time and then dived spectacularly, prompting rumours of market manipulations by the Big Boys. To prevent this sort of incident from happening again, SGX introduced the MTP in a bid to raise the quality of shares in the SGX.

In my own opinion, I am not sure whether this MTP will actually serve its intent to improve the stock market and prevent market manipulations by the Big Boys. To meet this rule, many penny stock companies have to resort to share consolidation to avoid being in the watch-list.

Then again, meeting …

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Record retrenchments in Singapore

On 13 June 2016, the Ministry of Manpower (MOM) announced a surge in the number of workers being made redundant. Overall, 4,710 workers were retrenched by their companies, representing a record level of retrenchments in Singapore for first quarter layoffs since 2009.

The MOM data is not surprising as it tallies with the ground situation for the employment landscape. In fact, there are many recent articles of Singaporeans struggling to find work after being given the retrenchment notices by their employers. Many of them are actually qualified professionals with many years of relevant working experiences in their industries. Hence, it is understandable that they feel bitter and resentful.

Being fired or retrenched from the workplace can be the worst thing that can happen to an employee, possibly even worse than been passed by for promotion. This is because losing your job is more than just losing your income, it can be extremely damaging to your self-worth and ego. Understandably, you may feel emotional and victimized. The “why me?” will definitely pop up in your head and you start to demonize your ex-bosses or colleagues. But as a wealth builder, you must pick yourself up quickly and move on from the self-pity stage. After all, you still have bills to pay and you simply cannot afford to waste time nursing bruised ego.


For those who got retrenched, the biggest challenge is moderating their expectations. Many Singaporean job seekers expect to find similar job titles and salaries in their job hunt but they failed to realize that they don’t have the bargaining chips. They need to wise up and understand that without a job, it is difficult to negotiate with prospective employers because they have the upper hand and so it will be a “take it or leave it” approach.

The …

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Neptune Orient Lines: End of another Singapore icon

In a month in which SGX-listed Haw Par Corp announced the closing of the Underwater World Singapore, Temasek Holdings tendered all their shares and paved the way for French giant, CMA CGM to take Neptune Orient Lines (NOL) private. This marked the end of another Singapore icon and highlighted how fragile the economy is right now.

The take-over offer for NOL is $1.30 and it is unconditional. According to the listing rule, NOL can be delisted once it obtains more than 90% of the shares. The offer is deemed by many to be fair given that NOL has been bleeding for several years due to the collapse of the Baltic Dry Index (BDI). Temasek Holdings had been looking for a white knight for NOL for quite some time and CMA CGM came to the rescue.

The downturn in the shipping industry took many players by surprise. After all, the BDI stormed to 11,000 level in 2007 and subsequent crashed to near 700 level with the arrival of the Great Financial Crisis. Nevertheless, the downturn turned out to be much longer than expected and its seems that Temasek Holdings, which is the parent company of NOL, decided to throw in the towel.

stock market

To continue playing the game, Temasek Holdings must invest more capital to increase the scale of operations within NOL by buying more container ships. The economy of scale is needed to offset the devastating effects of the low BDI levels. Otherwise, NOL simply has no chance to compete against other global players in the midst of cut-throat freight rates. This was the rationale when NOL acquired APL for a cool $825 million back in 1997.

Temasek Holdings’ decision to sell NOL could be a turning point for the shipping industry. Given that NOL is our national carrier, its sale …

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Stroke of Calamity

Since 2013, I have written articles paying tribute to my late father during Father’s Day. This year will be no exception. Dad passed away at home after 20 years of struggle with a major stroke that resulted in him being half-paralysed. It was really a stroke of calamity for our family and the last 20 years were like “lost decades” for us. Dad had played a major role in shaping my values, character and life’s perspectives. I cannot claim to remember everything that he said but most of his important teachings still live in my heart. I hope that by walking down this memory lane, my children will appreciate and learn from his legacy.

As a child, I had very little opportunities to spend time with Dad because he was always working. In fact, he even worked on weekends because in the late 80s, there was a huge construction boom in Singapore. Dad was a self-employed lorry driver and business was thriving back then. He was a typical baby-boomer – hardworking, thrifty and disciplined. Every morning at six, he would wake up and had quick shower and breakfast. Then he would do some quick calculations using the Chinese abacus and then promptly left for work.

personal finance

As the sole breadwinner, Dad had to work really hard to support a family of six. So when he was down with stroke, we were totally caught off-guarded by this family crisis and did not know how to handle the situation. We did not send him for treatment at hospital because in those days, awareness of stroke was really low. We thought that by letting him rest at home, he would recover in due course. We only send him to hospital after a few days when his condition did not improve. By then, the damage …

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Buy and store bullion in Singapore

Below is an email from one of my readers. I feel obliged to reply him because it is the first time that I received queries that touched on precious metals, a topic that I have a lot of interest in and am still learning. Through this sharing, I hope that there is a better understanding of precious metals among Singaporean investors.

Dear SG Wealth Builder,

I came cross your blog and enjoyed reading the articles. I am considering to buy gold and silver bars from dealers and also like to rent their vault storage facilities in Singapore. As such, I will be very grateful if you could help me by answering my questions stated below.

1. Do you have the list of licensed bullion dealers in Singapore?

To the best of my knowledge, based on information gathered from IE Singapore, there is no licensing requirements for the import and export of precious metals in Singapore. IE Singapore is the lead agency tasked to grow Singapore into a precious metal trading hub. Thus, this policy of not regulating bullion dealers make sense because Singapore government’s objective is to ensure a free flow of precious metals through Singapore without any hassle.

Actually, until a few years ago, I also shared the same thoughts that bullion dealers are regulated by Monetary Authority of Singapore until BullionStar revealed to me that bullion dealers don’t actually need a license to trade in Singapore.

2. I understand from friends that there were instances of exit or closure of some bullion players in the Singapore market in the past. How are investors or customers who keep their bars in their vaults protected in the event of their closure/bankruptcy and exit from the local market? Is there any provision for recourse in the Securities and Futures Act on

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Mayday for Noble Group!

In the world of aviation, one of the most dreadful radio distress signals is “Mayday!”. When the pilot-in-command made this signal, he would be facing some emergency situations that might be potentially life threatening. On 4 June 2016, it certainly was Mayday for Noble Group when the company’ share price tumbled to its lowest since 2003 after the announcements of a rights issue to raise $500 million and the shock resignation of founder, Richard Elman. This latest episode marks another embarrassing chapter for Noble Group after it was kicked out of the benchmark Straits Times Index in March 2016.

Today, Noble Group’s share price tanked further when the commodity trader announced that the proceeds for the rights issue will be used for working capital instead of paying down its massive debt. Obviously, investors are not happy with the management’s move given that only 20% of the proceeds from rights issue will be used to pay for the net debt of $3.7 billion. Furthermore, the price of the rights issue is at a huge discount of 63% to its price of $0.30 at the date of announcement. As a result, many traders punished the share price and sent it tumbling by 13%.

stock market

The rot for Noble Group started in 2015 when it engaged in an epic battle with US short-seller Muddy Waters and research firm Iceberg Research over Noble Group’s questionable accounting practices and allegations of misleading debt levels. Whether who was right or wrong was immaterial but the market had spoken when Noble Group started sliding from $0.90 in 2015 to the current price of $0.23. And in the history of SGX-listed companies, there were very few successful turnaround stories.

I am not vested in Noble Group and have never invested in its shares before. Nevertheless, through the years, …

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The winning formula

Our ability to excel in life lies on whether we can constantly re-invent ourselves to continue playing the game. To achieve this, we need to keep learning new skills and knowledge in this new economy in order to position ourselves for success. Obviously to a certain extent, most of us yearn for career success but how many of us are willing to learn and earn? There is no secret winning formula as everyone has a different life path. But then again, successful wealth builders almost certainly share some common traits.

Receptive to new ideas

Even though you may be very experienced or have deep expertise in your job, you should always stay curious and be receptive to new ideas. In my job journey, I have come across many colleagues who are afraid of experimenting different approaches to resolve issues because they only believe in tried-and-tested methods. Because of their rigid mindsets, work productivity were often affected.

A few years ago when Singapore exempted Goods and Services Tax (GST) for investment-grade bullion, I asked a few fellow investment bloggers their main reasons for not buying gold and silver in Singapore. Most of them shared that they don’t believe in diversifying their wealth in gold and prefer to focus on Singapore shares. Their lack of understanding of precious metals could be the reason for the resistance to new ideas on wealth building. It is difficult to imagine that they would be successful in their wealth building journey down the road because it only takes a major stock market correction to wipe out their portfolios’ value.


Know what you don’t know

One of the reasons why the rich always become richer is because they know what they don’t know. Thus, they either delegate it to professionals to focus on their strengths or improve …

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Miss the forest for the trees

Would you drive to Johor Bahru (JB) from Singapore on a monthly basis to stock up milk powder and diapers for your children? On a daily basis, we are confronted with choices to make regarding money. Ultimately, there are no right or wrong decisions but whatever choices you made, they always come with trade-offs. As a wealth builder, sometimes I feel that many Singaporeans miss the forest for the trees.

I saw an article by fellow finance blogger who pointed out he saved $50 by shopping in JB for his children’s milk powder and diaper. He then claimed that if he did so on a monthly basis, he can save a mighty $600 annually. With the magic of compounding, he would be able to pay for his children’s university fees in 20 years. As a parent of two young kids, I can certainly relate to his financial concerns of raising a kid. Nonetheless, I cannot agree with his way of thinking, which is basically warped.

Firstly, there is no way that you can pay off your children’s tertiary education with the above approach simply because most young kids start eating adult food and stop using diapers after 5 year-old. So it is unrealistic to make the 20 years extrapolation. Granted even if the assumption is true, there is no way you can make such explosive returns or saving interest rates enough to pay off your kids’ tertiary education fees in 20 years.


Secondly, as a wealth builder, I will not go through such hassle just to save $50 in a month, simply because the effort is not worth it. Imagine you waste hours on the traffic jam. Not to mention the possibility of being robbed or having your car stolen in JB. Is that $50 even worth it in this …

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Record demand for silver in 2015

According to The Silver Institute, the silver market posted record demand in 2015, driven by new highs from demand of jewelry, coins and bars. Last year also saw the third consecutive annual silver market deficit of 129.8 million ounces, reflecting the continued strength in silver demand.

The data from The Silver Institute reveals a couple important trends that wealth builders should take note. Firstly, unlike gold, silver has very wide industrial applications. Thus, the majority of silver demand come from industrial fabrications for electronic devices, photography, solar and brazing alloys. In 2015, due to the weak global demand, the overall industrial demand declined from 611.2 million ounces in 2014 to 588.7 million ounces last year.

Interestingly, the data on investment demand for silver bars and coins reflected a contrasting picture in 2015. Silver coin and bar investment surged 24% to reach a feverish high of 292.3 million ounces as investors took the opportunity to buy silver on the cheap in the midst of market correction. This was the highest demand on record and overtook the previous high in 2013. The explosive demand from investors was a result of lower average annual silver price of USD15.68 per ounce. The low price of silver in 2015 was due to the slowdown of China and strengthening of US dollars.

Gold and Silver Bullion
Gold and Silver Bullion

Since the start of 2016, silver has bounced from a low of USD13.80 per ounce to the current USD16.00 per ounce. Based on the price trend, silver seems to be at an inflection point of moving up. Wealth builders should seize the opportunity and consider diversifying some funds into silver bullion. After all, to make money from investments, you should always adopt a contrarian approach and buy when prices are low. This is the same for precious metals too.

The …

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Falling from the peak

Borrowing a phrase from the Taiwanese, the late Mr Lee Kuan Yew described those Singaporeans born from the eighties onward as “The Strawberry Generation” because of the perceived lack of resilience. Indeed, compare to him, many Singaporeans don’t have the experience of living in the World War II period and thus do not understand what hardship really means. Due to this, we often lose the fighting spirit of our fore-fathers in overcoming life obstacles. This is especially so when we start falling from the peak of our lives.

Contrary to what most people thought, the difficult part of mountain climbing is not the ascending phase. It is actually the descending that is more treacherous because after reaching the top of the mountain, the climber would have expended all his energy and fatigue began to set in. He would not have put much thinking on the journey downward and because of this, he become complacent, which led to his downfall literally. In fact, statistics have shown that most climbers die on their way down the mountain, rather than on the way up.

Similar to our education system, you need years of training to build up your body stamina and fitness in order to scale the highest mountain. You would realize the lack of oxygen at high altitude and it’s all about mental endurance once you are up there. If you are not careful, you would fall. In Singapore, we spend at least 16 years to obtain tertiary qualifications and then enter our first jobs to start earning incomes. This is a very long period of gestation time but nevertheless, you need to ask yourself honestly whether the paper qualifications prepare you well for the challenges that you face in your daily life. If so, good for you! If not, then what …

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Falling knife for EZRA investors?

One of the victims of the global oil crisis, EZRA Holdings announced a set of terrible 2nd quarter financial results on 14 April 2016. Losses after tax came in at USD282.6 million for 2nd quarter and USD336.4 million for the first half of the financial year. This is a massive financial loss and there are not many companies in Singapore which can withstand this sort of impact. If EZRA investors are thinking of dollar-cost averaging and buying EZRA shares on the cheap, they need to be careful of catching a falling knife.

The company is actually biting the bullet for 2QFY2016 and realized the impairment losses from all front – loss-making joint ventures, losses on fixed assets and bad-debts. Given the depressing market conditions for the oil and gas industry, it is still unknown whether there is any more impairment to be made for EZRA Holdings further down the road.

Many investors thought that dollar-cost averaging is a good strategy to buy more shares at a lower price. But many of them don’t understand the difference between price and value. This technique, if applied wrongly, can cause massive wealth destruction to an investor’s portfolio, especially if the business fundamentals of the company are shaky. Investors of EZRA need to be honest with themselves and question whether this is the time to cut loss or pump more hard-earned monies into this stock. After all, EZRA’s share price fell from a mighty high of $3.90 per share in 2007 to the current $0.07 per share.

stock market

Another aspect to highlight is the falling revenue, which decreased 14% year-on-year for 2QFY2016. This reflects the challenging period for EZRA as the industry witnesses massive cuts in spending across all value chain. In light of the falling global demand, one way for EZRA …

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Record Negative Inflation for Singapore

On 23 May 2016, Singapore smashed the record for the longest streak of negative inflation, recording a stunning 18 consecutive months of declining Consumer Price Index CPI (all items). On a year-on-year basis, CPI (all items) for February 2016 was -0.8%. Is this a good development for Singapore and should wealth builders pop the champagne because things are going to be cheaper? This is certainly not the case because the data is disturbing and reveals dark sides of the economy that every Singaporean should take note.

The statistics on consumer price development track three data, namely CPI (all items), CPI-OOA which excludes rental from owner-occupied accommodation and MAS Core Inflation, which excludes the cost of accommodation and private transport costs. The top reasons for the negative CPI (all items) are due to declining housing prices, weaker Certificate of Entitlement (COE) premiums and slump in global oil prices. Together, these three factors drove CPI (all items) to 18 months of downward trend. The negative trend is expected to continue as Monetary Authority of Singapore (MAS) forecasted that CPI (all items) is projected to average -1.0 to 0.0% for the whole year.

On the other hand, MAS Core Inflation rose to 0.5% in February due to higher food inflation. Hence, due to this consumer price trend, Singaporeans are paying more for food while things like petrol prices, recreation products, rental, COE and housing become cheaper. Given that Singapore is a price-taker in terms of food imports, the inflation in food prices is inevitable because of poor climate conditions. In my view, being a small country with no resources, there is nothing much that Singapore can do to tackle this problem because this is a global phenomenon.

However, the continuing decline in CPI (all items) warrants much concern because it covers comprehensive prices …

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The Terrace Executive Condominium

Prior to our purchase, one of the questions that my wife and I had been thinking over and over again is whether it is worth buying The Terrace Executive Condominium (EC). We are certainly not buying for investment purposes but then again, as a wealth builder, you would want a home with potential to appreciate in value significantly over the long run. In Punggol and Sengkang residential areas, we shortlisted three ECs for consideration and they are The Vales, Bellewaters and The Terrace EC, which is known famously as “Venice of Punggol”.

In terms of location, The Vales is considered the best among the three because it is located within walking distance to the SengKang MRT. However, as an upgrader, we need to pay the resale levy for The Vales, hence this project is not an option for us. Then again, we also noted that virtually most of the good-facing units have been sold. Those remaining unsold are either road-facing or facing the nearby SengKang Hospital. To make things worse, the recently launched EC, Treasure Crest is located just beside The Vales. Thus, the residents of The Vales will have to put up with the incessant noise and dust pollutions for at least 3 years after moving into their new homes.

In terms of interiors, Bellewaters is slightly better than The Terrace and there is no need to pay for the resale levy. We would have purchased this project if not for the fact that the Temporary Occupation Permit (TOP) is earlier than my Minimum Occupation Period (MOP). But beyond these points, wealth builders need to look at the big picture level, SengKang ECs lose out to Punggol ECs for the lack of major developmental projects that cater to lifestyle needs.

Eventually, we are glad to purchase The …

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SGX-listed stocks lack quality?

Almost a year ago, the Straits Times Index tanked from almost 3500 points to the current 2760 points. The fall in the Singapore stock market benchmark index reflects the challenging economic conditions and those who invested in SGX-listed stocks would have suffered from a certain level of wealth destruction. Incidentally, the market correction started since the previous SGX CEO, Magnus Bocker, was replaced by the current Loh Boon Chye. But the rot probably started during Bocker’s time and it would not be fair to blame the current CEO for this mess.

One thing for sure is that Bocker was highly unpopular during his helm as SGX’s chief because of his slew of projects that did not yield much improvements to Singapore market. The biggest flop definitely had to be the introduction of a new $250 million trading engine that promised to propel Singapore into Asia’s top trading centre. Instead, a massive technical fault in 2014 caused SGX to stop trading for at least 3 hours and left SGX red-faced. To make things worse, this embarrassing incident came after SGX tried to restore confidence following the penny stock crashes involving Blumont, LionGold and Asiasons.

stock market

The penny stock crashes in 2013 probably summed up the lack of quality in SGX-listed stocks. Many retail investors have lost their fortunes investing in these three counters seemingly unaware of the traps that are awaiting them. For example, alarm bell should have been rung when LionGold rose from $0.10 in 2009 to $1.70 in 2013. Such astonishing ascent in price was not normal and the relevant authorities should have intervened much earlier instead of letting them imploded on their own.

Besides these three companies, there are quite a number of “deadwood” listed companies in SGX as well. To improve transparency, SGX recently launched a half-yearly update …

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Buy Gold, Now or Never?

When it comes to investing in gold, there is a need to understand the fundamentals and study the long term trend of the gold spot price movements. According to BullionStar, the global daily amount of gold mined is only 9 tonnes, yet the daily trading volume in London amounts to 5,500 tonnes. Why is this so and how does this affect the price of gold? Should wealth builders buy gold, now or never?

London is the heart of all the gold trading activities and is regarded as the world’s largest gold market. The market in London set the price for spot gold for the rest of the world to follow and London is also the home of London Bullion Market Association (LBMA), a renowned trade association known for setting the refining standards, trading documents and trading practices. Henceforth, the data concerning gold trading activities in London will provide insights on the value of gold moving forward.

Generally speaking, the supply and demand rule is not strictly applicable to physical gold. In fact, the total amount of gold mined will have limited effect on the price movements of gold because 95% of the gold traded in London is actually unallocated. This means that the trading instruments for gold in the London market are mostly not backed by physical gold. Investors are merely betting on the movement of the gold spot price to make money and it is important to note that there is no underlying real gold for many of these paper gold trading instruments.

The trend of the paper gold plays a dominant factor in how wealth builders should allocate gold in their portfolios. Like all asset classes, there are bull and bear cycles for gold. From 1977 to 1979, gold soared from USD150 per ounce to USD820 per …

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Build wealth with property

There are a lot of online debates on how to build wealth with property. In my humble view, there is no absolute right or wrong answer for this topic because whether property is a wealth enhancer or value trap really depends on how you play the game. If you play your cards right, there is no doubt that property investment is one of your best tickets to financial freedom. However, if you don’t have a clear strategy on playing the property game, it can be your greatest financial nightmare.

One thing that readers must be clear is that property investment may not be suitable for everyone because every wealth builder’s financial needs, goals and profiles are different. As such, when it comes to building wealth from property, it is not possible for Singaporeans to adopt a blanket approach. The conventional wisdom is to wait for a financial crisis and expect housing prices to drop and then you go in for the kill as a bargain hunter. However, in today’s context, things are not so straightforward anymore.

To illustrate my point, I shall use my family’s real estate strategy and compare it with a working couple. Let’s assume that both my family and the working couple are presently living in a 3-room HDB flat and planning to purchase the next property. Let’s also assume that both families each have outstanding loan of approximately $100,000 housing loan. For my case, my family will be upgrading to an Executive Condominium (EC) while the working couple is planning to buy an additional property and has obtained approval from HDB to decouple the HDB flat. Which family is better off and why?

Many Singaporeans would have taken the approach of the working couple and purchase a private property while keeping their HDB flat. This is …

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The Terrace Executive Condominium (EC)

In one of my previous posts, I updated that I have recently purchased an Executive Condominium (EC), which is actually The Terrace at Edgedale Plains, Punggol Drive. In this article, I will touch on the motivating factors for my family’s purchase and also share with readers the buyer referral scheme offered by the developer of The Terrace Executive Condominium (EC).

HDB Resale Levy

In 2013, HDB announced that second-timers must pay a resale levy for new ECs launched on or after 9 December 2013. However, for land sale before 9 December 2013, applicants need not pay the resale levy. There is a list of ECs that HDB upgraders need not pay resale levy and it is found here. One of the motivating factors of my purchase of The Terrace EC is that this project is exempted from resale levy, which in my case, amounted to $45,000. If you have previously bought a new Design, Build and Sell Scheme (DBSS) or received a CPF Housing Grant, then you need to pay a resale levy when you purchase your next home.

Due to the fact that my family’s first subsidised flat was a 5-room flat, so we need to pay $45,000 for projects that come with resale levy. My wife and I were reluctant to pay this amount of monies to the government. After all, we received only $40,000 housing grant, so why should we pay back $45,000? Henceforth, we were attracted to The Terrace EC because it is one of the last few projects which upgraders need not pay resale levy.

SG Wealth Builder

Good Location and amazing amenities

In terms of location, The Terrace is situated right next to the Kadaloor LRT Station. In fact, upon visiting the actual site, our unit is literally a stone throw away from the LRT …

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Gold demand ignites price rally

According to World Gold Council, global demand for gold grew 21% to 1289.8 tonnes, the strongest Q1 on record. As gold demand ignites price rally, many investors are caught by surprise at the yellow metal best performance in 30 years.

The sudden change in the global economic and financial landscape has certainly caused investors to flee for security. Significant uncertainties stem from the sluggish economic growth and the Negative Interest Rate Policies (NIRP) implemented by Japan and European countries. Against this backdrop, many analysts anticipate that the pace of US interest rate increases is expected to slow down significantly. These factors combined to send gold price to rally by 17%, making gold one of the best performing assets in Q12016.

Among the key engine of growth is the astonishing come-back of gold-backed Exchange Traded Funds (ETFs), which saw an increase of 300% this quarter. This is indeed a revelation as it comes about after three years of straight outflow. While this type of scale is unlikely to be sustained for gold ETFs going forward, this trend reflects an improved outlook for gold.

Interestingly, the trend of gold bar and coins followed closely to that of the ETF market in Q1. Demand for bullion shot up by 55% year-on-year from 11.8 tonnes to 18.3 tonnes, representing 11% increase over 5 year average. Sales of the popular American Eagle coins rose by 68% year-on-year, to 7.6 tonnes while sales of 24k American Buffalo coins rose by 7% to 1.9 tonnes.

Gold and Silver Bullion
Gold and Silver Bullion

During this quarter, India government announced their first official gold coin which is minted by the Indian government mint. As India is one of the biggest importers of gold bullion in the world, the sale of the Indian gold coin will help to ease the pressure on the …

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