SGX stock review 2017 – Noble Group

Due to a request from reader, I am consolidating a series of analysis for Noble Group in 2017. The links to the articles are below and they are unprotected for a limited time. Thereafter, they will be locked up and you need to register as member of SG Wealth Builder to access the premium content.

Do take note that this counter is very risky and novice investors should not attempt to trade it if there is a lack of understanding on the business model. This article is also only for information and not meant to induce or serve as a form of financial advice.

Noble Group

For Noble Group, 2017 will go down in its history as the most dramatic year as the commodity trader engaged in an epic swim-or sink-battle. From management upheaval, to lawsuits involving ex-CEOs, to plunging share price, vicious short-selling attacks, accusations of accounting malpractices, credit ratings downgrades, record earning losses and reported loss of bank support (DBS), Noble Group certainly looked on course to an explosive self-destruction path.

Despite the relentless troubles, Noble Group continued to attract institutional investors’ support. In June, Abu Dhabi’s Goldilocks emerged as surprise major shareholder while China sovereign wealth fund, CIC, remained one of its largest shareholders, with stake of 9.5%. With such strong support from China and Middle East, it is inconceivable that Noble Group will sink into default. But in the corporate world, never say never.

Readers should read the following articles to assess my insights on this ex-blue chip:

  1. The end of Noble Group?
  2. Nightmare of Noble Group continues
  3. Noble Group’s horror show
  4. Noble Group new white knight?
  5. Will Noble Group shares see daylight again?
  6. Collapse of Noble Group share price
  7. Meltdown of Noble Group shares
  8. Noble Group will sink or swim?
  9. Is Noble Group doomed?
  10. Will Noble Group
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5 SGX stocks to invest in 2018

With Dow Jones on course to hitting 25,000 points, the US stock market is certainly on a bull run. Over in Singapore, the Strait Times Index is not doing too badly either, adding 1.8% for the month of November and bringing its year-to-date dividend inclusive return to 23%, compared to an SGD denominated average returns of 18% for the benchmarks of Australia, Hong Kong and Japan. In this article, I will share my views on the 5 SGX stocks to invest in 2018.

For the past 7 years, I had been sharing my insights and strategies on a number of SGX stocks in this blog. However, two years ago, I have divested all my stock holding to fund the purchase of my new home. In spite of this, I have been analysing selected SGX stocks which I would invest in 2018 once my war chest is built up. On this note, it must be emphasized that I do not have a vested interest in the following SGX stocks. Readers and members must do their own diligence before investing in these counters.

SGX stock

OCBC

I am still beating myself for missing the boat on this one. Since 2016, I have been tracking OCBC when the shares were trading at about $8.00 level. Unexpectedly, the share price went on a rampage and stormed to $12.00. Is this counter over-valued? Based on my analysis, current shares are likely to be worth much more than its trading price. Why is this so?

Read my analysis on OCBC’s value, its recent financial performance and how it fared against DBS and UOB. To access the articles, please sign up as member of SG Wealth Builder.

  1. Battle of Singapore Banks (OCBC, DBS and UOB)
  2. OCBC shares worth $50?
  3. OCBC Bank to rock the market with multi-billion hidden assets?
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Learn from Singapore government on how to use your CPF monies

The recent article by Dollar And Sense on how you can build one million dollar wealth using CPF by 65 certainly created a storm among netizens. While I do not dispute that this feat is definitely achievable, such an article does not paint a holistic picture and probably created plenty of false hopes to those who just started their financial journey. Let me share my insights in this article and how you should learn from Singapore government on how to use your CPF monies.

To put things into perspective, the author, Timothy Ho, is the founder of Dollar And Sense. Being an entrepreneur, it is unlikely that he contributes to his Ordinary Account. I may be wrong on this point and if so, I stand corrected. Therefore, when he encouraged readers not to use CPF monies to finance properties, he is probably speaking from his own experiences.

Okay fair enough, there are thousands of self-employees like Timothy who don’t have much CPF savings. Just think of taxi drivers, entrepreneurs and hawkers. But hey, the article was on how to build one million wealth with CPF right? Thus, what I am advocating now is managing your CPF monies to build a sustainable wealth.

CPF

Half-truth

In his article, Timothy claimed that there is a heavy opportunity cost when you use your OA to pay for your home because you “no longer earn the interest of 2.5% to 4% on the money”. Well this is only the half-truth because you actually still earn the interest of 2.5% to 4%. Yes, I am serious. You think you can get away with it by using CPF monies to finance your house? Not a chance. The CPF Board tracks every penny you take out from your CPF accounts. Everything is computerized and there is no …

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My stock analysis of Raffles Medical Group

Have you bought Raffles Medical shares recently? Since my last coverage on this counter on 24 August 2017, the share price of the private healthcare service provider had a 10% correction. What is happening? Should shareholders run for their lives?

To add value to readers, I will share my stock analysis of Raffles Medical Group. Through this, I hope readers will learn how to perform a basic evaluation on stocks and sign up as members of SG Wealth Builder.

Circle of Competence

When it comes to stock investing, the best approach is to invest within your “circle of competence”. This means that you don’t have to be an expert in every company in order to succeed. Instead, invest in an area in which you have a significant knowledge than the rest of investors. For example, if you are a healthcare worker, you are likely to know the trend of the healthcare industry, the market leaders, the demand and supply, and the key developments in the medical field. Thus, it is likely that you would be familiar with Raffles Medical Group and how it has fared in recent years.

But what if you don’t have the circle of competence? Then the risk should be mitigated by the understanding of business model. In short, the business should be something simple enough for you to understand in one sentence. For example, most Singaporeans would know that Raffles Medical Group is one of the largest private integrated healthcare providers in Singapore.

Raffles Medical Group

If you can meet either of the above two criteria, then half the battle will be won and you would know the underlying reasons for a stock’s performance. Let’s use Raffles Medical Group as an example. Even though the company occupies a niche area and healthcare is an evergreen industry in …

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Top 5 Personal Finance Blog Articles

As the year draws to a close, it is timely to review how you have fared financially for 2017. Are your personal finances in order and did you grow your wealth? In this article, I will share my journey for the past one year and also the top 5 personal finance blog articles (in terms of traffic).

This year has been an exciting one for my family as we have finally moved into our new home. The motivation to upgrade from a 3-room HDB flat to an executive condominium was not purely a financial reason. Sure, the potential to “cash out” after the Minimum Occupation Period (MOP) is tempting. After all, ECs are sold at subsidized prices and home owners stand to make handsome profit after selling their homes. But the case for my family is different. We wanted our children to grow up in a better environment and forge a better future.

Due to the upgrade, I have done extensive research relating to home ownership, property taxes, home loans and financial matters relating to CPF. The analysis and strategies were subsequently shared in this blog. Many readers had feedback that they found the articles useful and insightful. Their comments had been heartening, so I have compiled the list to benefit those who may have missed out these gems. Now, I am ready to share these important articles which could be game-changing to your wealth journey.

Personal Finance Blog

To access the exclusive articles, you must register and be a member of SG Wealth Builder. There is a need for me to look after the welfare of paying members who have supported my blog and believe in this project. Therefore if you wanted to grow, come and be part of the community.

Rank #1: The thin fine line between “Joint Tenancy” and “Tenancy-in-Common”

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Don’t invest in Bitcoin until you read this!

How high will it go? The recent euphoria over Bitcoin certainly caught the attention of many investors as the cryptocurrency soared past USD17,000, a remarkable 17-fold increase since the start of the year. Many wealth builders lamented that they had missed the boat of opportunity. While on the other hand, experts warned of an explosive bubble forming. In this article, I will share my view on Bitcoin and whether it is worth to invest in this digital currency.

Dawn of new currency

When it comes to investing, ignorance is not bliss. Therefore, it is important to look at both sides of the coin (no pun intended!) before making judgement. To put things into perspective, Bitcoin was first invented at a time of tremendous financial chaos – the Great Financial Crisis in 2008. Many young investors new to the money game may not be aware of the crisis of confidence in the financial markets back then. All over the world, people’s confidence of the banking systems were shaken to the core when Citibank, then among the world largest banks, was almost brought down to the knee.

Singapore was also not spare of the crisis either and the government was forced to intervene. The government announced in October 2008 that up to S$150 billion of past reserves had been set aside to guarantee deposits in Singapore until the end of 2010. The guarantee was supposed to cover all Singapore dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the Monetary Authority of Singapore (MAS).

Luckily, no financial institutions had failed in Singapore and hence, there was no drawdown of the $150 billion past reserves. Nonetheless, the crisis had made people all over the world to question the role of fiat currency and …

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SingTel knocked the wind out of Starhub

Should Starhub investors run for their lives? The month of November had been a dreadful one for Singapore’s number two telecommunication player as its major shareholder, DBS, sold off 900,000 shares, then followed by the shock announcement of CEO Tan Tong Hai who will step down in May 2018. The bad news came swiftly after the announcement of the poor 3Q17 financial results. On the other hand, arch rival SingTel announced a set of smashing good financial results after the divestment of NetLink Trust.

Starhub in crisis?

The announcement of the departure of Tan Tong Hai was indeed surprising, coming at a time when the industry is undergoing a major shake-up. The disruptions caused by technology has led to challenging operating environment faced by all players as many consumers used applications to access overseas calls and short messages. The trend has led to declining revenue from mobile and fixed lines. In the past, IDD call charges and SMS had been cash cows for the telco players. Now, consumers typically use applications to bypass such services.

For Starhub, the decline started many years ago when it lost the monopoly of Pay TV coverage of English Premier League to SingTel in 2009. That was a real turning point and SingTel had really knocked the wind out of Starhub.

Singtel

Turning point

Thus, it is unfair to pin the blame on Tan Tong Hai, who assumed the CEO position only in 2013. But under Tong Hai’s leadership, the subscriber base has been shrinking. As of 30 September 2017, Pay TV subscriber base was 467,000 subscribers after the quarter’s net churn of 10,000 subscribers. Compared to a year ago, Pay TV subscriber base decreased by 40,000 subscribers or 7.9%.

To put things into perspective, Starhub has never derived the bulk of revenue from its Pay …

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Make Singapore a caring society

The recent case of Annie Ee Yu Lian, a mentally disabled woman who was tortured to death by her long-time friend, certainly caused outrage among Singaporeans. It is indeed a tragic story and should never have happened in a first world country like Singapore. It made me wonder whether in the pursuit of wealth, can we afford to become a more gracious and caring society?

In life, what goes around comes around. I always believe in paying it forward. In response to my previous article, “GST should be raised to 12%”, some readers had also expressed concerns that the poor would be the most affected by the impending tax hike. Although such concern is indeed valid, it is important to note that part of the increased government spending could be on social needs. Then again, the perennial thinking is that the government should be responsible for making Singapore a caring society. Below is an article I wrote in 2014. I hope readers would be inspired to reach out for our fellow Singaporeans.

The scene was at a supermarket where grandmother and her two grandchildren were shopping for groceries. Her granddaughter saw a lovely strawberry cake and wanted to buy it. However, when checking out the items at the cashier, grandmother realized that there was not enough money to buy the cake. Thus, she promised her granddaughter that she would buy it another time.

caring society

The little girl was very disappointed but nevertheless, left the shop reluctantly with her grandmother and brother. Just then, a gentleman was standing behind them and saw the situation. He paid for the cake and caught up with them. Gentleman gave the cake to the little girl but grandmother refused to accept it. At that point of time, the gentleman related his story to them.…

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Civil service bonus

Against the backdrop of improving economic performance, Singapore government announced civil service bonus of 2 months, consisting of Annual Variable Component (AVC) of 1 month and Non-Pensionable Annual Allowance (NPAA) of 1 month. Lower-wage civil servants will get a minimum year-end AVC of $1,800.

Together with the mid-year Annual Variable Component (AVC) of 0.5 month, the total civil service bonus that will be paid to civil servants in 2017 is 2.5 months. This is excluding individual performance bonuses and other additional bonuses.

The civil service bonus was announced at a time when Singapore economy is undergoing a period of restructuring. Even though the economy expanded at a better than expected 3.5% for the first three quarters of 2017, labour demand remained uneven across sectors in 2017. The number of retrenchment for 2017 is expected to be much lower as compared to 2016, which hit a peak of 19,170, the highest since Great Financial Crisis.

Civil Service Bonus

The civil service bonus is widely used by the private sector as benchmark for staff bonuses. Usually, private companies tend to peg staff bonuses to civil service bonuses and reward staff who had performed well. Nonetheless, the private sector bonus also depends on how well the sector is doing. For those working in the embattled oil and gas industry, they should be thankful that they are still gainfully employed. While those working in the banking and financial sector should look forward to receiving good bonuses.

Many of you have slogged hard for the whole year. With the coming festive season, rejoice and think about what you should do with the extra monies on hand.

Money framework

For those who received good civil service bonus, this is the time to consider the best approach to manage the monies. In view of the cautious market outlook, it is …

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7 reasons to sign up SG Wealth Builder Membership

It seems like yesterday when I founded SG Wealth Builder. I can still remember the explosive passion and excitement when launching this wealth blog. Seven years had passed and the energy remains amazingly strong. During this period, there had been a lot of twists and turns. Nevertheless, the brand of this blog grew from strength to strength. Over time, I have also developed a voice that connects with my readers. It is this distinctive voice that attracted readers to keep coming back to this blog and many had become long-time followers. Now, I feel that it is the right time to convert this blog into SG Wealth Builder Membership site.

Value is what attracted readers and followers to SG Wealth Builder. Many people who visited my blog had provided numerous feedback that they had learned useful things that they were able to apply in their wealth building journey. Such compliments often invoked deep sense of self-satisfaction and achievement inside me.

To be able to make a difference in others certainly create a profound feeling. Thus, the motivation to bring this relationship to another level. In this article, I am going to share 7 reasons to sign up SG Wealth Builder Membership. Read on if you are interested to grow and become a better wealth builder. Remember, this is a blog for wealth builders, by wealth builders. Hence, this is not about me, but about you.

SG Wealth Builder

Manage money

The mission of this blog is “to make money, to build wealth and to preserve wealth”. In short, this is a journal detailing the process of building wealth in Singapore. It contains my strategies, insights and analysis on various wealth instruments like stocks, bonds, properties, CPF and precious metals. The lessons learned and experiences gained have served me well and I hope to …

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BreadTalk Group to unlock value with property divestments?

BreadTalk Group is a home-grown SGX stock which I have always admired because of its strong brand name and high-quality bakeries. When its founder, George Quek launched the first store in 2000, nobody could have predicted that he would go on to grow the BreadTalk chain store to such extent that it got listed in Singapore Exchange in 2003. Within three years, BreadTalk had become a force to be reckoned with in Singapore market and George had certainly wasted no time in exporting the brand overseas.

Today, BreadTalk operates close to 1,000 outlets across Singapore, Mainland China, Hong Kong, Taiwan, Malaysia, Indonesia and Thailand. Supported by a global staff strength of 7,000, the stable of brands include BreadTalk, Toast Box, Food Republic and the operating rights to Din Tai Fung restaurants from Taiwan. These are all household names and together, they helped to reinforce BreadTalk business at the global stage.

BreadTalk

But behind the scene, George Quek had quietly built up an impressive portfolio of investment portfolio. Over the years, the divestment of these properties had generated a slew of dividends for loyal investors.

For example, in Q1FY16, the management [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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Battle of Singapore banks (OCBC, DBS and UOB)

Singapore “Big Three” local banks recently announced third quarter 2017 results. Although all three banks suffered from collateral damage arising from loan exposure to the oil and gas sector, the latest results were generally upbeat and data revealed resilient growth for OCBC, DBS and UOB.

Competition continued to be stiff among the banks but growth for all three banks is expected to be positive for the full-year as Singapore economic growth was predicted to exceed 3% for 2017.

OCBC took the lead

Net Performing Assets (NPAs) continued to weigh on the banks’ earning as the ailing oil and gas sector showed no signs of revival. DBS recorded a devastating 25% decline for 3Q17 profit as compared a year ago. Profit stood at $802 million, the worst among its close rivals. The dismal result for DBS was due to the massive allowances of $815 million made, largely for the loan exposure oil and gas sector. This was a huge provision and the amount indicated that the DBS CEO might have grossly underestimated the oil slump.

On the other hand, OCBC smashed in a solid profit of $1.06 billion for 3Q17, 12% above S$943 million a year ago. UOB came in second with profit of $883 million, 12% above a year ago. Among the three banks, OCBC made the least allowances for 3Q17, at only $156 million while UOB made provisions of $247 million. Whether the earning growth was attributed to lesser allowances remained to be seen but OCBC was leading ahead in terms of financial performance.

The key reason for OCBC trashing DBS and UOB was because the venerable bank traditionally derived its earning from various sources like insurance and wealth management. The oldest bank in Singapore remains the only bank that owns an insurance company – Great Eastern. OCBC also …

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GST should be raised to 12%?

On 6 August 2015, the Ministry of Finance took a rare step in refuting claims “the Government planning to raise the GST after the next General Elections”. Singapore government slammed online websites for spreading baseless claims that the GST would be raised from 7%. Personal finance website, Dollar And Sense, also rubbished the notion that GST would be raised to 10% on 22 September 2015.

Well, they could be wrong as PM Lee Hsien Loong recently dropped big hint that there could be impending tax hike due to increased government spending.

In my perspective, I feel that there could be a grave need for the GST to be raised to 12%. Yes, it is 12%. Why so? Am I crazy? After all, it had been 10 years since GST had been raised from 5% to 7%. That GST hike had been perceived to inflate the cost of living and many people feel that the tax is regressive because the poor would be affected the most.

Before dismissing this article, it is important to look at the big picture and understand the macroeconomic dynamics. In doing so, Singaporeans can then better understand the insights of our leaders before jumping to conclusions.

GST

Great Financial Crisis

In the history of Singapore, the government had only drawdown our national reserves once. Yes, only once since we achieved independence in 1965 and that was during the height of the Great Financial Crisis in 2009. That was a chaotic period of time as major global financial institutions were on the brink of collapse.

Arising from this, there were concerns of a long and deep recession, prompting the government to announce that up to $150 billion of past reserves had been set aside to guarantee deposits in Singapore until the end of 2010.

However, …

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Can SGX Win the World Largest IPO?

In what is believed to be the world largest IPO ever, Saudi Arabia oil company Aramco is seeking to list 5 percent of the company, which is valued at USD2 trillion, in both domestic and international stock markets. The move is part of the plan by the Saudi kingdom to diversify its economy and reduce the reliance on the black gold. International stock exchanges from New York, London, Hong Kong and Singapore have been vying to win the prized trophy of winning the IPO. Can SGX win the game?

To put things in perspective, the chance of Singapore Exchange securing the prestigious secondary listing in SGX is remotely small. The rate of success is probably 5% and I would be extremely surprise if SGX could pull it off. This is because if the intention of Saudi Arabia is to seek an international listing to diversify income, then market size is significant. Logically speaking, the natural choice would be New York, London or Beijing.

In my opinion, the New York Stock Exchange is the most likely destination for the Aramco IPO. London offers the prospect of being the major investment gateway to European market but Brexit had totally changed the game. As for Beijing, the stock exchange is not accessible to foreign investors and for Saudi Arabia to list Aramco there would defeat the purpose of a secondary listing. Thus, United States’ New York Stock Exchange is in pole position to land the blockbuster IPO of the century.

SGX

If the conclusion is forgone, why would SGX waste time in making pitches to the Saudi Arabian? In my humble opinion, it is probably because the stock exchange is trying to send a statement of intent.

Wave of privatizations

Since CEO Loh Boon Chye took over the helm from the late Magnus Bocker …

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The end of Noble Group?

Embattled Noble Group firmly had investors on tenterhooks as media reports emerged of DBS bank cutting lending facility and the resignation of co-CEO. The double blows sent share price plunging to $0.198, below the $0.20 critical support level. Considering the fact that there was a 10 into 1 share consolidation done in May 2017, the adjusted share price is actually $0.0198.

Investors who had subscribed to the rights issue in last year would have lost their pants if they had held on to the shares until today.

A week before, the SGX-listed company reported a stunning USD1.17 billion losses for the third quarter. Losses for the nine months ending 30 September 2017 amounted to a scary USD3 billion. Prior to this, investors were already preempted about the gigantic loss on 23 October 2017. Nonetheless, the latest setback sent the shares into a tailspin. Is it really the end of Noble Group?

Noble Group

The frightening aspect of the latest results was the [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.]

Read my articles on Noble Group:

  1. Nightmare of Noble Group continues
  2. Noble Group’s horror show
  3. Noble Group new white knight?
  4. Will Noble Group shares see daylight again?
  5. Collapse of Noble Group share price
  6. Meltdown of Noble Group shares
  7. Noble Group will sink or swim?
  8. Is Noble Group doomed?
  9. Will Noble Group do an Osim or Swiber?
  10. White Knight for Noble Group
  11. Mayday for Noble Group!

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Should HDB owners upgrade to private property now?

Have prices of private properties bottomed out and is it the right time to buy private property now? If so, should you buy freehold or leasehold properties? To answer these questions, it depends on whether you are an upgrader or investor. Recently, I received the following email from a follower and decided to share some of my thoughts.

Hi Gerald,

I am a big fan of your blog. It’s very informative and insightful.

Currently we are staying in fully paid 4room HDB flat. My husband and I have been searching for property to upgrade this year. We are looking for freehold condominium or landed property with SGD2 million budget. Do you think it’s possible? Any good projects to recommend? Appreciate and thankful in advance.

Previously, I have written an article on my thoughts on freehold and leasehold properties in Singapore. Readers should check it out and have the right mindset when buying freehold properties, taking into consideration the rules and government policies for land use in Singapore. Do not assume that you really own the land and house just because it comes with a freehold tag. In a land-scarce nation like Singapore, you never really own a house. The government has various legal provisions to acquire your property for development purposes – regardless its freehold or leasehold.

Landed or non-landed?

The next question is whether SGD2 million is sufficient to purchase a freehold condominium or landed property. In my humble opinion, the budget is definitely impressive. However, if you are looking at new freehold landed property, SGD2 million may not be enough. A comfortable figure should be SGD4 million. But even with SGD4 million, you can probably only afford those projects that fall outside of the central region.

private property

However, with a budget of SGD2.5 million, buyers can look at 99-year …

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SATS share price

SATS is a SGX stock which I have always admired because of its historically strong business performance. The company is a leading provider of gateway services and food solutions, with the major bulk of business mainly in the aviation sector. Recently, the share price of SATS experienced a loss of form. What is the situation? Has the management lost the plot?

Since the announcement of the 1QFY2018 financial results in 21 July 2017, the share price experienced a major bout of decline. From $5.10 to $4.60, there was a drop of almost 10%. Technically, this represented a correction for SATS share price. It is only lately that this counter started to recover and climbed to $4.77 on 3 November 2017.

It appears to me that investors had decided to punish this counter for delivering quarterly profit of $57.3 million in Q1FY2018, a decline of 10.6% compared to prior year. But I think it is not justified because in the previous year, the profit was bolstered by the sale of the Senoko plant, which provided a non-operating gain of $9.3 million.

SATS

In fact, SATS performance should be considered resilient because current quarterly results excluded one-off items like disposal of assets. Revenue and operating profit remained flat, at $426.5 million and $53.5 million respectively.

The operating environment continued to be challenging for SATS because it is in the mid-level value chain. As a service provider to the airlines, it faces price pressure from airlines. Thus, if the airline industry suffered from low yields, business will be affected as well. Take for example, the operating margin has shrunk 0.3 percentage points to 12.5% for the current quarter.

With a market share of 80% at Changi Airport, SATS’ main competitor is [This is a premium article. The rest of the content is blocked and

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Losing your job due to retrenchment

Losing your job due to company down-sizing can be both dramatizing and depressing. Indeed, with the rise of machine-learning and artificial intelligence, thousands of jobs are being made redundant on a daily basis. What this means is that many skills are becoming obsolete. However, the topic of retrenchment is seldom discussed in Singapore because of the social stigma. Recently, when I touched on the SPH retrenchment exercise, a reader questioned my agenda and even condemned me for being anti-government. I wish to use this article to set the record straight.

Building this blog from zero had been both challenging and at the same time, rewarding on a personal level. I have gained useful knowledge that readers have shared in this blog. Over the years, I have received numerous compliments from readers through emails and Facebook messages. Yet at the same time, this blog had also attracted a fair share of criticisms from detractors and critics questioning my agenda and intentions for sharing my articles.

Perhaps, critics who denounced my blog may not have spent time reading the articles that I have shared freely over the years. If they did, it would be clear to them that this blog is about promoting financial literacy and helping others to make better decisions. This blog is not about fear-mongering nor attacking government policies. Instead, SG Wealth Builder is all about empowering fellow Singaporeans to make sound financial strategies and choices.

I don’t claim to be any sort of guru because I am also a fellow wealth builder struggling to achieve financial freedom. But if given a choice, would you prefer to walk this journey alone or together with people of like-mind? Sometimes, building wealth can be a lonely journey. Sometimes, it can be scary too.

Through raising awareness of the rules and regulations …

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The Dark Side of Loan-to-Value (LTV) ratio

Once again, this is an article that all existing home-owners and aspiring home-buyers should never miss. Many Singaporeans tend to focus on the interest rates offered in the market when shopping for home loans. However, the biggest nightmare for home-owners is not the rising interest rates. After all, even if the interest rate of your home loan did spike overnight, the monthly installment amount is not going to be catastrophically high. Instead, the scary thing about home loan is when you are faced with margin call due to the loan-to-value (LTV) ratio.

What is margin call? What is loan-to-value (LTV)? Why do they matter and how could they possibly lead to your financial downfall? Once again, I am putting a disclaimer that this article is not meant to be a financial advice. I am sharing this article based on my home-buying experiences. If you have any doubts, please seek advice from your property agent or financial adviser.

If you are using HDB loan to finance your property, then you can sleep well as you would not be subjected to margin calls. This is because HDB loan is a form of concessionary loan granted to Singapore citizens. Unlike banks, HDB would not force home-owners to top up the loan difference in the event that the value of the HDB flat plummeted. So how does margin call or loan-to-value (LTV) works?

Generally, there are two main criteria banks used to assess your loan eligibility and they are the Total Debt Servicing Ration (TDSR) and loan-to-value (LTV).

Loan-to-value ratio

TDSR refers to the ratio of combined total monthly debt obligations (including car loan, credit debt, student loan, existing home loan(s), etc) to the total monthly gross income. Under this framework, the monthly repayment installments for all property loans and other debt obligations are not to …

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Invest in Jumbo Group?

2017 is a milestone year for Jumbo Group as the F&B outfit celebrates its 30th anniversary. Listed in SGX Catalist only in 2015, Jumbo counts sovereign wealth fund, Temasek Holdings and Osim founder, Ron Sim, among its major shareholders. Temasek Holdings has a stake of 1.24% while Ron Sim holds 10%. With such strong support from institutional investors, is Jumbo Group a safe bet for retail investors and is it worth the effort to invest in this counter?

Share performance

In my last article in December 2016, I wrote that the share price was on bullish form. Indeed, there was a minor bull run which saw Jumbo share price surging to a peak of $0.78 in February 2017. Subsequently, the shares went on a correction mode and tumbled to a low of $0.54. It was only in recent weeks that the share price recovered to $0.60 level.

Despite its share performance, I like the growth story of Jumbo Group. The revenue had been growing consistently from $87.6 million in FY2012 to $136 million in FY2016, demonstrating management’s track record in growing the company. For the 9 months ending in FY2017, the revenue amounted to $106 million. Based on projection, it is likely that total revenue for FY2017 would surpass the previous years. Similarly, profit before tax had been rising from $8.8 million in FY2012 to $18.4 million in FY2016. Profit for FY2017 is also likely to exceed FY2016, barring unforeseen circumstances.

Business model

The main thing I like about Jumbo Group is that the business model is simple and can be scalable. Basically, as a multi-concept dining food and beverage company, the Group’s network of F&B outlets (including those of its associated companies and those under licensing arrangements) spans Singapore, the PRC, Japan and Vietnam. Jumbo also provides …

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Lending money to yourself through insurance loan

Do you need cash? It may sound odd but you can lend money to yourself. Life insurance loan allows you to do so. Before you dismiss this as yet another click-bait article, I want you to keep an open mind and read on. Because this strategy may be extremely useful in your wealth building journey.

In various stages of life, we may face cash flow problems. Sometimes the money woe may be due to a loved one incurring unforeseen massive hospital bills due to an accident or it could be the purchase of a big-ticket item like a new house which requires substantial hard cash for down-payment and renovation expenses.

Whatever the case, we are likely to encounter phases of life whereby we may need some financial help. In this article, I would share how you can lend money to yourself through insurance loans.

As a general principle, I would not encourage readers to borrow unnecessarily. We should all live within our means. But recent events made me realize the vulnerability of many low-income families in Singapore. I read an article of a security guard who suffered from a massive heart attack and thereafter struggled to pay hospital bills amounting to a staggering $78,000. Faced with such financial disaster, it is difficult to imagine how the poor and needy can crawl their way out of the holes without financial aids.

Insurance loan

According to Ministry of Law’s Insolvency Office, 1253 bankruptcy orders were made in Singapore this year. This is an average of about 140 people being made bankrupt per month. You would want to avoid bankruptcy because there are a lot of restrictions and you may also face difficulties in looking for a job. In Singapore, being a bankruptee is also a mark of social disgrace and the stigma is incredibly …

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SPH retrenchments

Festive season is only two months away but for many SPH staff, there is nothing to look forward to nor cheer about this year. Within a month of taking over as the new CEO, Ng Yat Chung announced the shocking decision to accelerate the culling of 10% of its workforce. Originally, the 2016 plan was to carry out the lay-offs over two years. Now, the decision is to bite the bullet and complete the SPH retrenchments by end of this year.

The SPH retrenchments come at a time when the media giant is struggling big time to adapt to the disruptions brought forth by technology. In the latest full year financial report, SPH reported net profit of $350.1 million, 32% higher than last year. But upon delving deeper into the financial results, the performance of the core business (the media segment) was not so rosy after all.

Operating revenue declined 8.2% year-on-year to $1.03 billion. But of more alarm was that the media segment clocked in the worst performance among the business divisions for the operating revenue – a drop of 13%. In terms of profit, the media segment also registered a decrease of a whopping 42% to $114 million due to lower income from the advertisements. If not for the fair value gain on the investment properties and the divestment gain of a joint venture, the full year financial performance would have been devastating. Probably because of this, the new CEO was prompted to take actions to rein in staff cost. And retrenchment often offers the best route to cost saving for a company.

SPH retrenchments

According to reports, about 130 SPH staff were retrenched last week and 100 would be retrenched by end of this year. The SPH retrenchment exercise is expected to incur costs of about $13 million for …

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Eldershield defies logic?

In a couple of years, I am turning 40 and would be automatically enrolled in Eldershield. Launched in 2002, this national scheme is aimed at providing basic financial protection to Singaporeans who need long-term care. My late father was one of the beneficiaries of Eldershield payouts. Henceforth, in this article, I will share my views on this insurance policy.

According to the Ministry of Health’s website, it is estimated that 1 in 2 Singaporeans who are healthy at the age of 65 is at risk of having a long-term disability over their lifetime. However, not many Singaporeans are prepared for such a scenario. To meet this gap, ElderShield provides eligible policyholders a monthly cash payout for a period of time, in the event of suffering from severe disability.

ElderShield policyholders can choose to enrol in Eldershield 300 or 400. The former is for policyholders who joined between 2002 and 2007. The payout amount is $300 per month and duration is 5 years. My dad qualified for this plan back in 2005. Eldershield 400 is for policyholders who joined after 2007 and the payout amount is $400 with duration up to six years.

Eldershield

Enrolling in Eldershield is easy because by default you are automatically enrolled into the scheme unless you choose to opt out. However, qualifying for the payout is incredibly difficult. You need to be assessed by [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.]

Read my other articles on CPF:

  1. What will happen to your CPF monies upon death?
  2. CPF nomination and making a Will
  3. Devastating HDB Loan and CPF Accrued Interest
  4. CPF’s Home Protection Scheme (HPS)
  5. The Dark Side of CPF Housing Withdrawal
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Freehold or Leasehold Property?

One of the most often raised questions among property investors is whether to purchase a leasehold or freehold property in Singapore. While many would argue that freehold is definitely better than leasehold because of the perceived perpetual ownership, this argument may not hold water in Singapore due to the Land Acquisition Act.

In this article, I would share my views on freehold property in Singapore. Once again, I am putting a disclaimer that this article is not meant to be a form of financial nor legal advice. The content is produced to the best of my knowledge and research. If there are any factual errors, please feel free to let me know. I would be happy to amend my article.

Leasehold property

Generally, 99 years old leasehold property must be returned to the government upon expiry of lease. In March 2017, Minister for National Development, Lawrence Wong, highlighted specifically that all leasehold private and public housing will be returned to the state upon expiry. Due to land scarcity, the government needs to recover land to meet changing social needs.

Effectively, this means that home-owners will [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.]

Read my other articles on property:

  1. Negative HDB sales
  2. Wealth destruction from CPF Accrued Interest
  3. Devastating HDB Loan and CPF Accrued Interest
  4. CPF’s Home Protection Scheme (HPS)
  5. The Dark Side of CPF Housing Withdrawal Limit

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Superb form of Haw Par share price

For the longest time, home-grown multinational group, Haw Par share price had been in laggard form. Although the business fundamentals had been consistently good over the years, the share price had been hovering way below its Net Asset Value (NAV) of $12.00. But in 2017, Haw Par share price suddenly came to life and roar ahead to reach a record high of $12.28 recently.

Founded by the Aw brothers in the early 19th century, Haw Par is well-known for its Tiger Balm oilment products. However, the family business went through a tumultuous period in the 1970s when massive irregularities almost led to a spectacular collapse of the company. The government of Singapore had to intervene and pulled in the late Michael Fam to restore order.

Following the crisis, there was a three-way battle vying for the control of Haw Par between Hong Leong Group, Jack Chia Limited, and United Overseas Bank (UOB) headed by Wee Cho Yaw. In 1981, merger wizard Wee Cho Yaw emerged victory in the fight and the rest is history.

Under the brilliant leadership of Wee Cho Yaw, Haw Par grew from strength to strength and was transformed into a diversified conglomerate with operating business in healthcare, leisure, property and investments.

Today, Wee Cho Yaw remains its Chairman and his sons, Wee Ee-chao and Wee Ee Lim are also among the board of directors. Notably, Lee Kuan Yew’s younger brother, Lee Suan Yew is also one of the directors. The reason for the Wee Cho Yaw to retain control of Haw Par is probably because the company held about 71.9 million shares of UOB through its Investment arm in 2016. The UOB shares provided $49 million worth of investment income in 2016.

Haw Par

According to the 2016 FY report, the Investment arm also owned 69.5 million …

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SIA Engineering Company shares rocked by JP Morgan’s sale

On 4 October, SIA Engineering Company shares tumbled to 6-year low following news of JP Morgan’ sale. Share price fell in the early morning of trading to $3.15 before recovering to $3.20 level. In my opinion, the correction is long overdue as the business outlook for the MRO giant has considerably dimmed in recent years with the entry-into-service of new aircraft requiring much less maintenance works.

Financial results for 1Q2017/18 revealed that profit declined 82% to $36.2 million. The huge decline was because of the absence of divestment gain in last year (SIA Engineering divested 10% stake in Hong Kong Aero Engine Services Ltd (“HAESL”) to Rolls-Royce Overseas Holdings Limited (“RROH”) and Hong Kong Aircraft Engineering Company Limited (“HAECO”)).

However, even after excluding the impact of the divestment in the quarter ended 30 June 2016, profit for the current quarter of $36.2 million was $1.8 million or 4.7% lower. Revenue also remained flat, at $272.8 million. Although the results were not exactly that disappointing, they seemed to suggest that SIA Engineering business fundamentals might have peaked.

SIA Engineering

To be fair to the management, SIA Engineering had tried to engineer growth in view of the challenging operating environment. Last year, SIA Engineering began to [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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What will happen to your CPF monies upon death?

Recently, my colleague passed away unexpectedly, leaving behind two young daughters and wife. His wife is a full-time housewife. In grieving his death, I wondered whether my family would be able to cope if I suffered the same fate. Like my late colleague, both of us are sole breadwinners. So, I can imagine the family’s financial concerns and the fundamental questions on the destiny of CPF monies upon death.

Most often, there are misconceptions on the distribution of CPF monies upon death. There were even false rumours that Medisave savings go to the government after death as they are not included in CPF Nominations. In this article, I will attempt to explain the framework and try to gain a better understanding of the system. Again, I must put a disclaimer that this article is not meant to be a legal nor financial advice. In case of any doubts, please seek advice from licensed professionals.

Upon death, you would want your loved ones to have access to your CPF savings. This is especially so if the family’s financial situation is not so ideal. You don’t want your family to undergo financial hardship after you passed on. Ultimately, how you plan your estate will determine the outcome. For example, previously I wrote that CPF monies cannot be included in your Will as they do not form your estate.

In the following, I will explain the process of the distribution of your CPF monies. Basically, it really depends on the decisions you made before death. Most crucially, the situation is dictated by whether you have made a CPF nomination. Read carefully and think through carefully before making judgement.

CPF monies

With CPF nomination

If CPF nomination had been made, things are quite straight forward because the CPF monies will be distributed in accordance to the …

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Invest in SingPost shares?

The past two years had been of great chaos for SingPost as it endured a significant management upheaval, a special audit, massive impairment of an overseas acquisition and adjustment of a long-standing company dividend policy.  For a country that prides itself of being world-class efficient, the mess in Singapore’s national postman certainly raised a lot of eyebrows among concerned investors.

On looking back, the appointment of Dr Wolfgang Baier as CEO back in 2011 could be a knee-jerk attempt to re-invent the mailing company into an e-commerce company in light of consistently falling revenue from domestic mails. His appointment was itself surprising given his young age and the perceived lack of C-suite experience.

When Wolfgang was appointed as CEO, he was only 37 and was from a management consulting firm, McKinsey & Company. Given SingPost’s venerable standing in the industry, attracting a more experienced business leader should not be a challenge. To be frank, I have no objections to foreign talents taking on top positions in Singapore companies. However, Wolfgang lasted only four years and resigned abruptly in end 2015, leaving Mr Mervyn Lim to cover his CEO duties for one year.

SingPost

During Wolfgang’s tenure, SingPost had mixed financial performance, with net profit falling from $160 million in 2011 to $141 million in 2013 and then rising to $161 million in 2015. SingPost also did not progress nor transformed itself into an eCommerce player as envisioned under his leadership.

Nevertheless, the appointment of Wolfgang seemed to have a positive effect in the stock market as the share price surged from $1.10 in 2011 to a record high of $2.14. Those who bought the shares in 2011 and sold them off in 2014 would have made about 100% profit. But then things started to turn unexpectedly sour as SingPost navigated through …

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Retirement strategy

It is everyone’s dream to achieve financial freedom and escape from the rat race as young as possible.  Like everyone else, I share the same aspiration. That is primarily one of the reasons for founding this wealth blog. In recent years, many local financial bloggers shared that they have attained semi-retirement status and left the corporate world for good. In this article, I will share my retirement strategy and how I aim to reach my goals.

According to BlackRock’s Global Investor Pulse Survey 2017, it was revealed that Singaporeans worry about outliving their retirement savings but not doing enough to prepare for retirement. Results showed 64% of Singaporeans worry about running out of money in retirement, the highest proportion in Asia-Pacific. Nearly nine out of 10 Singaporeans (87%) believe they are responsible for their own retirement income.

Retirement

Everyone has their pathway in life and one should not compare their financial status with others. My retirement strategy is very simple – I plan not to retire at all. This statement may come across as oxymoron but simply put, I hope to extend my career shelf life as long as possible. I don’t relish the idea of idling around and being seen as not contributing to the progress of the society.

Life is all about challenges and experiences. At the end of the day, I may not have accumulated sufficient wealth to have a comfortable retirement, but I certainly hope to lead an enriching life.

For those who hate working for money, ask earnestly whether you have a purpose that justify retiring without a job. Chances are, you would struggle to find other meaningful purposes or activities that can keep you occupied or active on a day-to-day basis for the rest of your life. You would find that time slow down when …

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Bullish form of Suntec REIT shares

Suntec REIT share price is enjoying some sort of bullish form in recent months. The share price hit a 2-year high in July after the announcement of a 50% interest in Premium Grade office in Melbourne. However, a look at the recent financial results indicated things may not be so rosy after all for the venerable REIT. Total return for 2Q17 was actually a decrease of 23% compared to last year. So why did the share price rise and is Suntec REIT a value trap?

Suntec REIT portfolio

Being one of the first REITs to be established in Singapore, Suntec REIT was listed on the SGX mainboard on 9 December 2004. Besides having a respectable history, the real estate investment trust also boosts a unique portfolio of properties comprising office and retail spaces.

Suntec REIT owns Suntec City mall and certain office units in Suntec Towers One, Two and Three and the whole of Suntec Towers Four and Five, which form part of the integrated commercial development known as “Suntec City”. The property portfolio also comprises 60.8 per cent effective interest in Suntec Singapore Convention & Exhibition Centre (“Suntec Singapore”), a one-third interest in One Raffles Quay (“ORQ”) and a one-third interest in Marina Bay Financial Centre Towers 1 and 2, and the Marina Bay Link Mall (collectively known as “MBFC Properties”) and 30.0 per cent interest in 9 Penang Road (formerly known as Park Mall).

Suntec Reit

Business expansion in Australia

Since 2016, Suntec REIT has embarked on an overseas expansion drive and made several strategic acquisitions in Australia. The move to diversify revenue from Suntec City Mall and Marine Bay office is a positive strategy by management as it helps to reduce concentration risk in Singapore market. Suntec REIT holds a 100 per cent interest in the commercial building located …

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