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.

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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.

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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.

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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?
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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.

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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.


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.

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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.

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