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Month: June 2017

Noble Group new white knight?

Mapletree

Can founder Richard Elman save Singapore-listed, Hong Kong-based commodity trader, Noble Group? This is the most pressing concern for shareholders as the crisis-hit company battled crisis after crisis for over two years. The latest news on investments from a surprise Middle East investment group, Goldilocks Investment Company (GIC), must have brought a huge relief for shareholders.

While I certainly do not deem GIC as Noble Group’s new white knight, the latest investment is a sign of endorsement for Noble Group. GIC is part of Abu Dhabi Financial Group, a diversified global group with asset management of USD5 billion. The Middle East investor has a reputation of buying distressed companies.

According to the SGX filing on 22 June 2017, GIC purchased 50,546,000 ordinary shares in Noble Group. Taken together with GIC’s existing 15,454,000 ordinary shares it purchased on 19 June 2017, GIC became a substantial shareholder of NGL on 20 June 2017.

Noble Group

I am careful not to label Goldilock as a new white knight as the investment is not a form of cash injection in return for equity stake. It seems that the Middle East investment group bought the shares from open market and built up its stake within two days …

Can SingTel fight gravity?

SingTel

Hailed by many analysts as Asia top telecommunication company, SingTel is facing heightened competition from emerging players seeking to knock it from the perch. Australia’s TPG Telecom stunned the market by not only becoming Singapore’s 4th telecommunication player in late 2016, but also Australia’s 4th telecommunication player in early 2017. Given the increased competition in Singapore, Australia and India, can SingTel fight gravity?

To put things into perspective, SingTel did not sleep walk into the dominant position in Asia by chance. Listed in SGX main board back in 1993, the company embarked on a slew of overseas acquisitions spree, with backing from Singapore sovereign wealth fund, Temasek Holdings.

As a result, SingTel enjoyed a massive investment moat of 600 million mobile phone subscribers across South East Asia countries like India, Philippines, Thailand, Indonesia, Singapore and Australia. This is an impressive feat that took more than 24 years to establish. In this regard, it is unlikely that TPG Telecom’s entry would pose short-term threat to SingTel.

In Singapore, the telecom industry is regulated by IMDA. When the regulator announced that a fourth license would be issued a couple of years ago, many investors and industry players were puzzled. While …

You can sell combs to monk

funding

The story of how to sell combs to monk is an age-old story that never fails to inspire me to become a better version of wealth builder. Most people regard it as a motivational story for salesmen to achieve sales target. But I see it as otherwise because the learning points can also be applied in investing, career development and entrepreneurship.

I have adapted the story for the sake of my followers. But before proceeding, readers must note that this article is not meant to mock any religion nor aim to make fun of any professionals. My objective is to inspire readers to learn how to be better wealth builders. In today’s context, this is important because hard work alone would get you nowhere in this competitive society.

sell

Once upon a time, a merchant who owned a comb factory in Singapore wanted to penetrate the huge China. Thus, he advertised for a position of Regional Sales Manager in the newspaper. Understandably, many applicants applied for the job. Therefore, during the interview sessions, he asked the applicants on how they would sell combs to monks. Many of the candidates were stumped by his question because we all know monks do not …

Temasek Holdings’ Pre-IPO investment in HRnetGroup

NetLink NBN

On 16 June 2017, HRnetGroup’s IPO on the SGX Mainboard created much hype among retail investors and local finance bloggers. Many investors had wanted a slice of the IPO because of the excellent financial performance indicated in the prospectus. But many investors may not be aware of Temasek Holding’s Pre-IPO investment in HRnetGroup.

What is pre-IPO and does it matter to you from the perspective of a stock investor? Read on to find out how the big boys make money in this game.

Fundamentally, how big boys like Temasek Holdings make money is very different from retail investors in the market. Most of us made money upon selling the shares allocated during IPO. But then again, there is no guarantee that you would be allocated the IPO shares because for the public, the shares are allocated through balloting. There is also no assurance that the share price would rise above the IPO offer price. In short, for the man in the street, it is like punting when it comes to IPO.

HRnetGroup

However, pre-IPO works in a different manner. Big boys like Temasek Holdings want certainty in their return of investments and they also want to win the game. In return …

Retrenchments for Singapore Airlines?

SIA Engineering

After announcing a recent shock quarterly loss of $132 million, CEO Goh Choon Phong hinted that there could be retrenchments for Singapore Airlines (SIA). Arising from the first quarterly loss in five years, the premium airline has set up a Transformation Office to conduct a wide-ranging review, encompassing network and fleet, product and service, and organisational structure and processes.

Upon closer examination of the financial results, the explosive loss suffered by Singapore Airlines was largely due to the provision of $132 million for the EU court fine slapped on SIA Cargo. More than ten years ago, SIA Cargo was alleged to participate in an air cargo cartel with 10 other airlines. Due to this, the EU antitrust regulator fined the airlines a total of $1.2 billion.

Singapore Airlines

The massive fine incurred by SIA Cargo was a wake-up call and reflected the structural change in the air freight market over the years. This could explain the rationale for re-integrating SIA Cargo as a Division within SIA. The move is expected to be completed by first half of 2018 and aims to improve synergy and efficiency. However, the quarterly results indicated that SIA Cargo was one of the best performers within the SIA …

Horror show of SingPost shares

SingPost

SingPost shares took a hit as the company announced a stunning quarter loss of $65.2 million. The loss came about after SingPost decided to write off $185 million for the ill-fated TradeGlobal, S$20.5 million for Postea Inc., and S$9.3 million for an industrial property at 3B Toh Guan Road East.

The latest setback for Singapore’s postal service provider came at a time of transformation for the 150 years old institution. As more and more companies switch to electronic statements, SingPost is transforming its business to eCommerce logistic. At the centre of the storm was the significant impairment of TradeGlobal, which was only acquired by SingPost less than two years ago.

Many investors were shocked that SingPost decided to write off its investment in TradeGlobal so soon. Two years are considered a relatively short time frame to judge a company’s potential growth. One plausible factor could be that the management is not convinced of a turnaround for TradeGlobal and hence, made the decision to cut losses early. It was reported that instead of a projected profit of S$9.4 million for FY16/17, TradeGlobal incurred a significant loss of S$25.8 million.

Given the extent of the impairment to SingPost’s investment in TradeGlobal, SingPost …

A Better Florist Blooming Flower Business

UOB stock

If you’re someone who doesn’t like to spend a lot of time shopping online, scrolling through endless choices that force you to eventually give up, A Better Florist is the florist for you. They make your complete shopping experience a total breeze. Not only is it easy to shop via desktop or mobile, they offer high-class blooms at lowest prices.

florist

If you’re impressed by quality not quantity, this is the florist that is going to suit your taste. Their website isn’t overflowing with information. They know their clientele is there to purchase authentic, impressive blooms, and they are dedicated to giving you enough choices but not so much that you aren’t able to decide. At all times, you’re able to jump on their website, and choose one of the most popular bouquets, arrangements or bundles, that are always ready to go. Just click on your favourite, and your shopping experience may begin.

It’s my favourite cheap florist in Singapore, whose blooms impress me over and over again. Not only are they fresh, they are carefully and thoughtfully designed into a bundle that is sure to impress even the most avid flower connoisseurs.

They call themselves the bloomcrew, and their …

Will Noble Group shares see daylight again?

SembCorp Marine

The month of May had been horrendous for investors of Noble Group and many of them must be wondering if the shares would ever see daylight again. The short answer to this would be: not at the moment.

After two years of struggling, Noble Group was about to stage an impressive recovery when it announced a shocking quarterly loss of USD 129 million in May. That stunning news really knocked the wind out of investors and led to the collapse of its share price. The free fall of its shares also turned off potential white knight, Sinochem Group, which subsequently gave Noble Group the snub.

The financial results raised fresh question marks over the management’s ability to revive the company’s fortune and fulfill the debt obligations. Because of this, credit ratings agencies had been ferociously downgrading Noble Group’s credit ratings for the past few weeks. On 26 May 2017, it was reported that Fitch Ratings Ltd cut the commodity trader’s rating for the second time within the space of 10 days.

Noble Group

As far as I can recollect, it is very rare for a credit ratings agency to downgrade a company’s rating within such a short span of time. While such …

SingTel’s NetLink Trust IPO application approved

Hyflux

On 2 June 2017, SingTel received SGX’s approval to list NetLink Trust on the Mainboard, paving the way for the mega IPO of the year. This will be a short post to provide an update on the NetLink Trust IPO.

Since 9 February 2017, SingTel had announced that it had hired three banks to manage the initial public offering for its broadband subsidiary NetLink Trust. This is pursuant to Singtel’s undertaking to the Info-communications Media Development Authority (IMDA) to divest its stake in NetLink Trust, a 100%-owned associate of Singtel, to less than 25% ownership by 22 April 2018.

NetLink Trust designs, builds, owns and operates the passive infrastructure for Singapore’s Next Generation Nationwide Broadband Network (NextGen NBN). Under the IMDA’s structural separation requirements for the NextGen NBN, Singtel does not have effective control in NetLink Trust.

Stock investing

Most Singaporeans would be more familiar with OpenNet, the predecessor of NetLink Trust. In 2008, OpenNet used to be owned by a consortium consisting of SingTel (30%), SP Telecommunications (15%), Singapore Press Holdings (25%) and Canada’s Axia NetMedia (30%). However, in 2014, SingTel, through NetLink Trust, bought over all the shares of OpenNet from the rest of the major shareholders.

As a result …

Health insurance

health insurance

My mother-in-law recently got admitted into a public hospital for an operation and was warded in a subsidized Class B2 ward. For the past few days, she had been complaining about being unwell and in acute pain. On a few occasions, we informed the nurses about this but they appeared nonchalant and were not helpful at all. It was indeed a frustrating experience but it also vindicated my decision to upgrade my family’s health insurance to private medical shields since last year.

The follow-up appointment was an even worse experience. We waited for 7 hours before the doctor’s consultation. The nurse was also very rough in her handling and caused a lot of discomfort for my mother-in-law.

When Singapore government rolled out the Medishield Life in 2015, many Singaporeans assume that there is no need for private medical shield plans. After all, the coverage of the new Medishield Life seems comprehensive, covers everyone and protects you for lifetime.

health insurance

So why waste money on upgrading your health insurance to private medical shield plans? But then again, not many people realize the gaps that exist in the system.

Firstly, since Medishield Life covers everyone, it is really hard to imagine hospitals giving …

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