SingTel stock price collapsed amid short-selling attacks

Class is permanent, form is temporary. On 28 June 2018, SingTel stock price collapsed to 9-year low, falling to as low as $3.08. Amid attacks by short-sellers, SingTel stock price retreated to below the psychological level of $3.10. At the rate of decline, SingTel stock price seems destined to free fall to below the $3 mark.

The devastating decline in SingTel stock price would have caused massive paper losses for many wealth builders. Investors would know the theory of “be fearful when the market is full of greed and be greedy when the market is full of fear”. Now that the opportunity arises to invest in a blue chip, would you go for it?

The long-term fundamentals of this evergreen blue chip remain intact. Henceforth, the current bearish trend may provide a good opportunity for investors to accumulate at attractive price. But having said that, it is important to be wary of the movement of the big boys because you don’t want to incur losses when these whales flipped.

Perfect storm

It certainly seems that the bears are out in full force and hell-bent on sending SingTel stock price to the bottom, wiping off $8 billion worth of market capitalization from SingTel stock price. This resulted in the dividend yield of SingTel to be 5.65%. While it may be tempting for investors to buy SingTel stocks on the dip, it pays to be careful of the big whales’ movements.

As can be seen from the data below, troubles started brewing when short-sellers short sold $60 million worth of SingTel stocks in the week of 7 to 11 May 2018. That really ignited the slippery slope of value destruction. SingTel stock price started falling from $3.55 to the current $3.08.

Weekly Short Sell ReportShort Sell VolumeShort Sale Value
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Singapore Savings Bond versus OCBC 360

Singapore Savings Bond is a new type of government bond that was launched by the Monetary Authority of Singapore in 2015. The bond is considered to be a safe and flexible product that allows Singaporeans to meet their savings and investment needs.

However, demand for Singapore Savings Bonds had been lacklustre in the initial years, presumably because products like OCBC 360, had been giving it a run for its money (literally). Nonetheless, recent developments had caused Singapore Savings Bond to be very attractive. And that led to a change in my view of this bond.

In my previous article on Astrea IV bonds, I shared that I am not ready for fixed income at this stage of my life yet. My stance has not changed. Basically, my family is looking at a safe financial product to store our emergency fund. Thus, we are looking at Singapore Savings Bond from the perspective of wealth protection, rather than wealth building.

In this article, I will share my insights on how Singapore Savings Bond can play a part in strengthening your wealth portfolio through passive income and how it fair in comparison to the popular OCBC 360 account.

Locked-in Interest rates

The first criteria for my family is safety when it comes to managing our emergency fund. Conventional government bonds fulfil this requirement but the yield is pretty low and the volatility of the interest rates would impact the bond price in the secondary market. In 2014, OCBC bank launched the OCBC 360 account which offers an incredible 3.05% (upon meeting certain criteria like salary credit, online payment and spending), we were sold.Singapore Savings Bond

Rated as one of the strongest banks in the world by Bloomberg in 2015, we are also convinced that our savings are safe with OCBC 360.

However, good things don’t …

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SingTel and StarHub stock prices sank on MyRepublic’s debut

21 June 2018 would be remembered as a day of reckoning for local telco players as MyRepublic set the mobile market on fire by offering one of the most innovative and competitive data plans in recent years – Smart 35. On the day of the launch, SingTel and StarHub stock prices got bombed-out. Whether the corrections are knee-jerk reactions remain to be seen but MyRepublic certainly debuted in style.

It would be sweet revenge for MyRepublic which had lost out to TPG Telecom in the bidding for the fourth telco license back in 2016. Despite losing the spectrum bid war, MyRepublic vowed to make a comeback back then. And it certainly did. With a bang.

Without having to make heavy investments on the network infrastructure, Mobile Virtual Network Operators (MVNOs) like MyRepublic is seriously giving incumbent telco players a new dimension of challenge. The biggest winner out of this telco war is of course the consumers. But should investors be punching the wall as SingTel and StarHub stock prices suffered melt-down?

StarHub stock

MyRepublic turn on the style

Smart 35 comes with 7GB data, 1000 minutes free talktime and 1000 SMS. There is no contract needed and customers may change plan later at no extra cost. MyRepublic even throw in free incoming calls, SMS and caller ID. The Boundless data feature rivals that of “unlimited data” offers by its competitors. With Boundless data, the speed will be reduced after you hit your data allowance but you won’t be charged extra.

I would certainly have grabbed the Smart 35 offer with no questions asked if I had not been tied down with a 2-year contract with M1 recently. For someone who [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder

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StarHub share price plunged to 13 year low

On 21 June 2018, StarHub share price plunged to a 13 year low. Trading at $1.64, this popular stock is a shadow of its former self. Even during the dark days of the Great Financial Crisis in 2009, StarHub share price had never dipped to such abysmal level.

Certainly, nobody could have predicted Starhub share price would suffer from such a devastating run. When it comes to technology disruptions, it is always a wild card. In the good old days, StarHub can bank on SMS, IDD and Pay TV for growth. But the advent of technology has significantly eroded margins from these former cash cows for telco players.

StarHub’s recent payment row with American entertainment giant, Discovery Channel, also casts a dark shadow over Pay TV business outlook amid stiff competition from video streaming players like NetFlix.

For those who bought StarHub shares at $4.20 in 2015, they would be staring at massive paper losses, even if you factored in the dividends issued during that period. Incoming new CEO, Peter Kaliaropoulos certainly have his work cut out for him when he takes over in July 2018.

But before writing this stock off, it should be highlighted that the current StarHub share price has caused the dividend yield to be at an attractive 9.47%. In view of this, is this counter a value trap or potential dividend play?

StarHub share price to continue falling

The plunge in StarHub share price certainly marked a massive wealth destruction for many shareholders. Whether this counter can stage a magical recovery is a big question mark as StarHub share price reflected not just the broad sell-down in the current Singapore stock market (StarHub is an STI component), but also mirrored its declining business fundamentals.

In my point of view, StarHub share price will [This

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Does Hyflux deserve a comeback like OSIM?

Can Hyflux stage an incredible comeback like OSIM? Or rather, does Hyflux even deserve to be rescued? The embattled water treatment specialist has obtained a court protection to restructure its outstanding debts. It has also stopped payment of distribution on its $500 million 6.00% Perpetual Capital Securities which was due on 28 May 2018. The swift turn of events caught shareholders by surprise and marked a treacherous chapter for Hyflux.

Under current circumstances, investors who pumped in their hard-earned monies on the shares and perpetual bonds have every right to be angry with the management of Hyflux. How on earth did the former A-list company end up in such a sorry state is beyond me.

Whether Hyflux can emerge stronger and leaner from this embarrassing fiasco remains to be seen but the corporate drama is so bad that its good, at least from my perspective. When this counter reopens in six month time, investors should ask themselves whether they should run for their lives or risk throwing good money after bad.

Hyflux

I wish I did not have to write this but those who are vested in Hyflux shares or bonds should hope for the best but expect the worst. Check out the other articles written on the Hyflux saga:

Sembcorp Industries should invest in Hyflux Ltd

The holy water of Hyflux Perpetual Securities

Lack of focus

For a start, it certainly seems like Hyflux CEO bites off more than she could chew when she takes on so many board memberships through the years. As recent as 22 May 2018, she was an independent non-executive director with ST Engineering. Currently, she is board member of International Enterprise Singapore, UBS Unique Advisory Board, Chinese Development Assistance Council and Singapore Business Federation. Apart from these commitments, she was also a former Nominated …

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SingTel share price plunged to six year low

After leading SingTel to achieve an impressive record net profit of $5.45 billion for FY2018, CEO Chua Sock Koong must be stumped for words when SingTel share price plunged to a six year low on 18 June 2018. At $3.17 a piece, SingTel share price is technically entering into a bear mode territory. In the context of the current SingTel share price, is this counter a value buy or could it be a falling knife?

Many investors had pointed that the entry of fourth telco player could have played a part in the sharp decline of SingTel share price in recent months. But then again, the earnings from Singapore mobile market is significantly much lesser than that from its Australia Optus and Indonesia Telkomsel. In this regard, the current headwind should be due to its poor performance from its regional associates rather than the heightened competition in Singapore market.

Falling SingTel share price

At current dividend yield of 5.5%, SingTel share price is indeed alluring if you compared it to the coupon rates of the recent Astrea IV bonds and Singapore Savings Bonds. Barring unforeseen circumstances, the Group expects to maintain its ordinary dividends of 17.5 cents per share for the next two financial years. With such generous dividend payout, SingTel is indeed giving bond issuers a run for their money.

Singtel share price

Being 52.24% owned by Temasek Holdings and 5.25% by Central Provident Fund Board, SingTel is considered to be too “big to fail” for the Singapore government. Henceforth, in my opinion, it is too exaggerated to deem the current SingTel share price as falling knife as it will not be in government’s interest to see the share price collapses.

At best, the falling SingTel share price should be viewed [This is a premium article. The rest of the content

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Buy private property to protect wealth

The mission of SG Wealth Builder is to build and protect wealth. Real estate, especially private property, offers one of the most viable routes to reaching financial freedom for many wealth builders. In this article, I will discuss the outlook of both public and private property in Singapore.

Hard truth about HDB flat

In 2017, Minister of National Development Lawrence Wong rocked the real estate market by clarifying that not all older HDB flats would be eligible for the selective en bloc redevelopment (SERs) scheme. Of more chilling is that all HDB flats must be returned to the government at the end of the 99-year lease. The stunning revelations raise the question on whether Singaporeans should buy private property to protect their wealth.

To put things into perspective, Singaporeans should wise up to the fact that the mandate of HDB is to build affordable homes for Singaporeans. It is not the role of HDB to build homes for Singaporean investors to build wealth. Thus, there is a need to adjust our mentality and refrain from thinking that HDB flats is a form of investment asset.

The Terrace

The Terrace Executive Condominium

You can definitely rent out your HDB for asset monetization purposes in order to supplement your retirement income. But do not bank on the approach of capital appreciation because government policies will always influence the price and demand for HDB flats.

On looking back, Minister Wong may be forced [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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Fairytale of Mapletree Commercial Trust

With a market capitalization of $4.53 billion, Mapletree Commercial Trust (MCT) is the largest REIT sponsored by Mapletree Investments Pte Ltd. Temasek Holdings has a majority stake of 34.71% in this REIT while other big boys like AIA Group and NTUC Enterprise own stakes amounting to 4.92% and 2.42% respectively.

With such stellar group of major shareholders, Mapletree Commercial Trust is certainly an attractive real estate investment trust. But could it be an investment trap or potential multi-bagger?

Since this REIT debut in SGX Mainboard in 2011, it has consistently outperformed STI. The total returns (including capital appreciation and distributions paid out) is 138.5%. For the longest time, I am torn between investing in Mapletree Logistics Trust or Mapletree Commercial Trust. In this article, I will attempt to make an investment analysis of Mapletree Commercial Trust.

Business Profile

Looking at the portfolio, it is not difficult to understand why this REIT is so popular among Singaporeans. MCT has five properties in Singapore namely, Vivocity, PSA Building, Mapletree Anson, Bank of America Merrill Lynch HarbourFront and Mapletree Business City I. All these assets are either premium office or properties that are strategically located in the CBD area. VivoCity is also Singapore’s largest mall located in the HarbourFront Precinct.

Mapletree

Broadly speaking, the growth strategy of Mapletree Commercial Trust is two-pronged – acquisitions and active asset management. The Manager pursues potential asset acquisitions that will provide attractive cash flows and yields. For example, Mapletree Anson and MBC I were [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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5 reasons on why I decided not to invest in Astrea IV bonds

It seems like yesterday when more than 10,000 retail investors in Singapore lost more than $500 million during the Lehman Brothers Minibond saga. That was in 2008. Fast forward to 2016, many accredited investors lost at least $250,000 after investing in Swiber junk bonds. And then in May 2018, Hyflux stunned the market by halting the trading of its $500 million perpetual bonds and the payment for the coupon payments. Given the spate of bond tragedies suffered by investors in recent years, one must be wondering if “this time it is different” for Astrea IV bonds.

For sure, it would not be fair to compare Astrea IV bonds to Minibonds, Swiber Bonds and Hyflux perpetual bonds. Even though they are all basically debt instruments issued by companies to raise capital, Astrea IV bonds are indirectly issued by Temasek Holdings (the Sponsor, Astrea Pte Ltd, is wholly-owned by Temasek Holdings). With such a strong issuer, the possibility of default is extremely improbable, to be frank.

Astrea

Furthermore, the CEO of Temasek Holdings is Madam Ho Ching, the wife of Singapore Prime Minister. For Temasek Holdings to offer such unprecedented innovative product to retail investors, there are surely safeguards designed to ensure that it will not fail. Otherwise, public confidence would be shaken to the core. Probably because of this, only half of the tranche ($121 million), Class A-1 Bonds, are opened to public subscriptions.

In my opinion, it is quite clear that Temasek Holdings is using this exercise to “test water” and possibly to gauge the market demand because for a giant sovereign wealth fund like Temasek Holdings, such small size bond offering is really not worth the hassle.

At 4.35% per annum, the interest rate is certainly very attractive for a premium bond (it is expected to be given A …

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SembCorp Marine to ride out the storm?

It had been a harrowing ride for SembCorp Marine as the world number 2 oil rig builder faces crisis after crisis in the aftermath of the global oil slump. The past few years had seen Sembcorp making an explosive impairment amounting to $609 million in FY2015, engaged in a bitter legal battle against Marco Polo Marine and embroiled in the intriguing possible link to Sete Brasil corruption scandal.

However, in early 2018, United States President Donald Trump had proposed an aggressive plan to transform the country into a superpower energy nation. Against the backdrop of improving oil price, can SembCorp Marine ride out this vicious storm?

The four key capabilities of SembCorp Marine are Rigs & Floaters, Repairs & Upgrades, Offshore Platforms and Specialized Shipbuilding. The businesses of SembCorp Marine are all in direct competition against fellow peer, Keppel Corporation.

But unlike Keppel, SembCorp Marine is a pure offshore and marine company and therefore don’t have the buffer from other business segments to withstand the impact from the downturn in the oil and gas sector. In this regard, the financial destiny of SembCorp Marine is perceived to be more impacted by the oil slump than Keppel Corp. To find out more about my analysis of the parent company, SembCorp Industries, do sign up as member to access the protected article.

SembCorp Marine

Demand for Oil Rigs

In the oil industry, the Baker Hughes Rig Counts is an important indicator that reflects the demand for products used in oil drilling. According to the data from Baker Hughes, the number of new rigs [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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But my boss told me I am safe from retrenchment!!

In Singapore’s context, there are only three category of jobs that are immune from retrenchments. Successful entrepreneurs, civil servants and full-time homemakers do not have to fear the dreaded retrenchment. If you have chosen to climb the corporate ladder, this is the golden rule you must always remember. The second rule is never to forget the first rule.

With disruptions brought forth by technologies and the emergence of new business models, it is definitely not “business as usual” for many companies. Changes in the industry will only gather pace and this means that businesses would have to evolve as well. In most circumstances, companies often choose the easy way out by laying off staff whose skills and competencies are considered obsolete. Through retrenchment, substantial costs can be saved and management is therefore able to provide answers to shareholders.

According to data released by Ministry of Manpower, the total number of retrenchments reached a peak of 19,170 in 2016 and subsequently tapered down to 14,720 in 2017. The job market is expected to improve significantly in 2018 as Singapore economy had shown signs of growing since the second half of 2017. Nonetheless, employees should remain vigilant of the headwinds in the market.

retrenchment

Retrenchment is here to stay

For sure, losing your job is not the end of the world but [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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Understanding Singapore REITs

For most retail investors, real estate investment trusts (REITs) offers the best alternative to owning a real estate without the need of forking obscene amount of cash or the hassle of dealing with difficult tenants. But of course, like all investments, there are always pitfalls to watch out for when investing in REITs. In this article, I will share my insights on investing in REITs.

Over the years, the landscape for REITs had evolved significantly, with the change in the regulatory gearing limit, asset enhancement initiatives by the bigger REITs and the emergence of perpetual bonds (Mapletree Logistics Trust was the first REIT to use perpetual bonds in 2012). Against this backdrop, for sure there are REITs that outperformed the rest while there are those which may not worth your time and money.

Over in Sabana REIT, a group of irate investors called for the manager to be removed in 2017 over its poor performance and falling unit price. Although the revolt was unsuccessful, it has resulted in the change of the leadership. What are rules governing the removal of REITs manager and what are the rights that REIT investors can leverage to protect their investments?

Industry trends

Under Monetary Authority of Singapore (MAS), REITs are collective investment schemes that invest primarily in real estates and real-estate related assets. Thus, a listed REIT may consist of multi-properties, such as commercial offices, industrial warehouses, hotels, shopping malls, serviced apartments or even hospitals. In this regard, when investing in REITs, investors should make the effort to study the specific industry trends that could impact the growth of the subject trust.

REITs

For example, in the past few years, there had been a supply issue for the industrial property market in Singapore, causing market leaders like Ascendas REIT to [This is a

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How to Explain an Employment Gap on Your Resume

Applying to jobs after a period of unemployment can be intimidating. The application pool is already so competitive across the board, you’re worried this might be a red flag for potential employers. You can let out a sigh of relief because a gap in employment doesn’t have to be catastrophic to your application.

Taking time off from one time to another is normal. Maybe you were caring for a child or relative or you went back to school. Maybe you simply decided to travel and see the world or focus on a side project. No matter why you left the traditional world of employment, you don’t have to write off your hiring chances. Keep reading for a guide to explaining an employment gap on your resume!

resume

Image via Unsplash

First, decide if you need to mention the gap on your resume.

Depending on the gap in employment, you might not need to mention it on your resume at all. If the gap in your employment was in the past and you’ve been employed since it doesn’t need to be on your resume. Remember, you don’t have to include your entire professional history on your resume. It’s commonplace to include only the most recent and relevant information. While you shouldn’t lie on your resume, you shouldn’t feel pressured to put your entire life history either. If your gap in employment was recent, you probably do need to provide some sort of explanation on your resume. Let’s talk about how to do that without burning any bridges!

Hide small gaps by listing years instead of months.

If you only took a small gap in employment, you might be able to get away with just listing the years on your resume. There are no hard and fast rules for displaying employment dates

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New chapter for Pan-United Corp

It is a momentous year for Pan-United Corp as the group finally competed its de-merge of its port business which it started in 1997. Under Xinghua Port Holdings Ltd (“Xinghua”), the business was successfully listed on the Main Board of the Stock Exchange of Hong Kong on 12 February 2018.

The past year had been a revelation for Pan-United as the construction company restructured its businesses, implemented capital reduction, proposed distribution of 1-for-1 Xinghua shares to existing shareholders and completed a rights issue in 2017. In light of these major changes, what are the investment merits of Pan-United?

Business profile

Founded in 1958, Pan-United is essentially a home-grown enterprise that is family-controlled and family-managed. However, understanding Pan-United is not an easy feat because of its diversified business portfolio. It’s core competency is in the supply of concrete and cement business, with more than 40% and 34% market share in concrete and cement respectively. Pan-United is also one of the top two ready mixed concrete suppliers in Asia (ex-China), with an increasing footprint in Indonesia, Malaysia and Vietnam.

Besides the concrete and cement business, Pan-United operates a trading and port business in China, which it de-merged recently. Previously, it also had business activities in shipping line but it exited the business due to the downturn in the industry.

Pan-United

In 2016, Pan-United sold its entire equity stakes in two wholly owned subsidiaries, namely Pan-United Shipping Pte Ltd (“PUS”) and P.U. Vision Pte Ltd (“PUV”), collectively known as the “Tug and Barge Business”, for a cash consideration of $29,922,000.

The buyers of the shipping business were the founding Ng family. According to Pan-United, [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

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