SIA share price to endure another lost decade?

Singapore Airlines’ CEO Goh Choon Phong should be at a loss for words. Days after collecting the prestigious Skytrax’s World Best Airline Award for the fourth time, the CEO must be watching in horror as SIA share price plunged by as much as 5.5% on 27 July 2018, presumably due to the poor Q1FY18/19 financial results.

The poor financial results came on the back of announcements of integration of SIA Cargo and SilkAir into parent airline and merger of Tiger Airways and Scoot. Despite the extensive restructuring exercise among its subsidiaries, it certainly seems that there was not much improvement in resource synergies, revenue growth or even cost reduction. What a wasted effort indeed!

SIA share price

Wretched performance

As the saying goes, one man’s poison is another’s meat. While oil and gas companies like Keppel and Sembcorp had been struggling in the aftermath of the oil price’s collapse, SIA share price had been flying high, surging from $9.80 in early 2017 to as high as $11.56 in May this year. But the magical form of SIA share price is as good as it gets as recent uptick in crude oil prices returned to haunt the premium airline.

The reason for the gravity defying performance of SIA share price was because of low fuel cost in 2017. Fuel is always the highest expense component for the airlines. And SIA is no different. As there is no index for jet fuel, the price is directly pegged to crude oil. Therefore, rising crude oil price would inevitably hurt SIA’s bottom-line.

But what riled investors was really the much touted [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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OCBC share price on ice and fire!

From almost $14 in early May, OCBC share price rolled off the cliff to languish at $11.30 in July. The steep decline came on the back of an extraordinary bull run that saw OCBC share price surging from $7.90 in February 2016 to reach the giddy high of $14 this year. When a stock has this sort of ridiculous form, it is only fair to expect a healthy correction. After all, what goes up must surely come down.

But at the back of many investors’ mind must be who are the dark forces responsible for the recent meltdown of OCBC share price. As a retail investor, you must figure this out because you don’t want to be caught with your pants down when the big boys strike.

Based on the data collected, there were two groups of big boys influencing OCBC share price in the months of May, June and July 2018 – the short-sellers and institutional funds. Both groups combined to knock the wind out of OCBC share price.

Of course, OCBC shares wasn’t the only stock suffering from meltdown in recent months. DBS, UOB and SingTel shares also went through poor form lately. But against the backdrop of the big boys’ movements, what are the chances of OCBC share price regaining its mojo? Is current OCBC share price a value trap or opportunity buy? Would the upcoming asset divestments set OCBC share price on fire?

OCBC share price

Resistance is futile

Prior to the recent correction, OCBC share price had been on a mighty bullish run on the back of a record share buybacks programme. For FY2017, a staggering 20.5 million OCBC shares had been repurchased from the open market, the highest since 2013. The massive shares buyback probably fuelled the super bull run in OCBC share price and it certainly …

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SingTel share price destined to collapse after ex-dividend day?

26 July 2018 would be destiny day for SingTel share price as it will be ex-dividend day for shareholders to be entitled to the final dividend of $0.107. All eyes are on that day as shareholders brace themselves for a frightening roller-coaster ride of SingTel share price.

There had been much talks on the impending entry of the fourth telco, TPG Telecom and the emerging threats of Mobile Virtual Network Operators (MVNO). People are concerned that these threats would demolish SingTel share price and knock it off the cliff. But to be frank, the current bearish sentiments of SingTel share price should be due to the heightened competition in overseas markets, and not Singapore market. So investors should not make a mountain out of a mole.

Nonetheless, it is not going to be smooth sailing for SingTel and I anticipate a rough ride for this Singapore blue chip. In light of recent developments, this article will share the reasons for the decline of SingTel share price and why this counter could possibly correct to $2.60 by year end. In this article, I am also going to reveal how the big boys combined to wipe off billions from SingTel share price.

SingTel share price doomed to fall?

For context, it is not a matter of whether SingTel share price would drop but by how much it would plunge after ex-dividend day. Based on past years’ data, SingTel share price never fail to correct between late July to August, the traditional period for the issuance of SingTel final dividend.

Singtel share price

On 28 July 2017, SingTel share price collapsed from $4.00 to reach $3.68 in September 2017. Prior to that, SingTel share price fell from a high of $4.30 on 22 July 2016 to a bottom low of $3.65 on 31 December …

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DBS share price to storm back in style?

DBS share price to storm back in style or is it the start of a protracted nightmare? Under the frenzy attacks by short-sellers, DBS share price went into a tailspin, falling from a high of $30 in April to a low of $25.50 in July. The devastating decline prompted DBS to launch a rare shares buyback on 6 July 2018. For the record, the last shares buybacks by DBS was almost two years ago, in September 2016.

6 July 2018 would be remembered as Black Friday for local bank and property stocks as Singapore government sent the market into chaos with the announcement of additional property cooling measures. DBS stock retreated by 2.6% on that fateful day.

DBS share price is closely watched by many investors in Singapore because it is the biggest cap and is also the crown jewel of Temasek Holdings. Being the bellwether of the economy, bank stocks are typically sensitive to the economy and DBS share price would largely reflect market confidence of the state of Singapore’s economy.

After an incredible bull run that saw DBS share price smashing past the $30 mark, this counter is at a cross road with the recent onslaught of short-selling attacks and the stunning property cooling measures. The two events combined to punctuate the bullish form of DBS share price. Will DBS share price return to form or is it yet another value trap?

DBS share price

DBS share price

The stunning shares buyback halted the decline of DBS share price and helped to restore stability. Since then, DBS share price had stabilized at $26.30 level. A whopping 854,800 shares worth $21.6 million were purchased from the open market, presumably to provide much needed support against bearish sentiments.

The amount paid for the shares buyback was small change given that the short-sellers had …

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Investment verdict of NetLink NBN Trust

It was supposed to be an opportunity for NetLink NBN Trust to make a statement about its investment merits to Singapore investors. But unfortunately, NetLink NBN Trust messed it up by delivering a subpar revenue performance for FP2018 that was much lower than original forecast.

And investors did not take the above too kindly. Upon the release of the financial results, unit price of NetLink NBN Trust tumbled from $0.81 in May to $0.74 in July. The price correction led to dividend yield at an attractive level of 5.65%.

Against the current backdrop, is NetLink NBN Trust a value trap or dividend yield play? In this article, I will examine the competitive advantages and handicaps of NetLink NBN Trust.

Missed opportunity

Time really flies. It had been one year when NetLink NBN Trust debut in Singapore Exchange and I do think that it is timely for an update on this business trust. Dubbed as the biggest IPO since 2011, many investors have great expectation of NetLink NBN Trust. And rightly so. After all, it is the sole provider of residential fibre network in Singapore. Given such status, it is rightful to assume that NetLink NBN Trust enjoys an unassailable monopoly in the fibre network sector locally.

So it is indeed very surprising that FP2018 revenue was $228.6 million, 1.8% lower than forecast; while Q4FY2018 revenue was $80 million, 4.4% lower than forecast. To set the record straight, the overall financial results was pretty decent, but apparently not good enough to meet investors’ expectation. That was probably the basis for the minor correction in unit price of NetLink NBN Trust.

NetLink NBN

Knee-jerk reaction?

To be fair to NetLink NBN, net profit was $50 million, better than [This is a premium article. The rest of the content is blocked and can be accessible

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Noble Group to fall into abyss?

Since my last coverage on Noble Group in December 2017, things have taken a turn for the worse. In fact, the on-going drama is so bad that its good. Why is there any good out of this corporate tragedy if you may ask? In my opinion, there are plenty of hard lessons that investors can gain from the downfall of Noble Group.

From a former multi-billion blue chip darling as recent as 2015, Noble Group has shrunk to a mere $188 million listed company. Novice investors who are new to the game should avoid this counter if they are not unaware of the series of events that had unfolded on this counter. Indeed, there had been so many twists and turns to the Noble Group drama that one wonders if the latest alliance between Goldilocks and Noble Group is just another false dawn in the making.

Due to the volatility of Noble Group share price, existing shareholders should exercise caution on whether to dollar average their holdings or cut losses.  This article is only for information and not meant to induce or serve as a form of financial advice.

Noble Group

Holding shareholders to ransom?

In my last coverage, I highlighted the credit crunch that Noble Group was facing. As a commodity trader, having access to credit facility is vital to the company. Arising from this issue, Noble Group entered into a Restructuring Support Agreement (RSA) with senior creditors. The original plan was to move the assets into a new firm, with existing shareholders getting 10% stake in the restructured entity. The RSA would require approval from both creditors and shareholders.

While Noble Group had no problem garnering support from the creditors for its debt-for-equity scheme, shareholders were of course unhappy that if the shareholders voted against the proposal, the Group …

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Mapletree Logistics Trust knocked the wind out of Cache Logistics Trust

Amid the sea of red in the Singapore stock market, Mapletree Logistics Trust shares bucked the trend and stood out like a shining beacon. The bullish form of Mapletree Logistics Trust shares could be attributed to its recent $778 million acquisitions of five ramp-up logistics warehouses from CWT Pte Ltd.

The move by Mapletree Logistics Trust raised a lot of eyebrows because it was made against the backdrop of warehouses supply glut and falling rental prices in Singapore. According to 4Q2017 data released by JTC, the number of available warehouses increased quarterly by 2% to 10.4 million sqm while vacancy rate decreased slightly by 1.6%. Correspondingly, rental prices remained weak in 4Q2017, decreasing by 1.0%.

On the other hand, the mega deal also saw Mapletree Logistics Trust one-upped on local rival Cache Logistics Trust, a ramp-up logistics warehouse specialist. The latter’s competitive strength lies in ramp-up warehouses, which are limited in supply in Singapore because specialised planning and design specifications are required for such properties. The entry of Mapletree in this niche is an unwanted competition for Cache.

Mapletree Logistics Trust

Opportunistic acquisitions by Mapletree Logistics?

Investors of Cache Logistics Trust must have seen red with the acquisition. This is because all the five warehouses were previously under Cache’s Right of First Refusal granted by CWT. But then again, Cache Logistics Trust investors should have expected this coming their way when China’s HNA Group bought over its Sponsor CWT in late 2017.

Being debt-laden, HNA Group is reportedly in the midst of selling assets to pare down debts. And Temasek Holdings has wasted no time in snapping up the CWT properties in Singapore. Being 33.7% owned by Temasek Holdings, it is no surprising that Mapletree Logistic Trust would [This is a premium article. The rest of the content is blocked and can be

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Big boys targeting SingTel stock!

After suffering from heavy shelling for the past few weeks, SingTel stock recovered from multi-year low of $3.02 to climb to $3.24 on 10 July 2018. The latest technical rebound of SingTel stock must have left investors wondering if this blue chip has indeed bottomed out. Before rejoicing, it is important to note that the big boys, namely the institutional funds had been targeting SingTel stock for the past two months.

According to Singapore Exchange (SGX) Institutional Fund Flow Monthly report, the month of May saw institutional investors net sold an epic $1.10 billion worth of Singapore stocks.

I could be wrong but I do not recall the outflow of such magnitude from Singapore stock market in recent years, apart from the Great Financial Crisis in 2008. The net selling by institutional players continued through June, with institutional net selling $257 million worth of Singapore stocks.

A more chilling revelation in the reports is that SingTel had been targeted by the big boys as SingTel stock had consistently topped the net seller lists since December 2017. In this article, I am going to show you how the big boys play the game and why you must avoid collision path with the big boys because there can only be one outcome.

My job here is to share with you my insights and research of SingTel stock. Hope you find it useful and subscribe as member to gain a more holistic view of SingTel stock.

SingTel stock

SingTel stock became target board

When it comes to stocks, never just look at the business fundamentals. Of course the fundamentals are important, but you need to pay attention to the movement of fund flow as well because they are the movers and shakers. For SingTel stock, there were five “earthquakes” ignited by the big boys …

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UOB stock to pulverise with new property cooling measures?

Could it be the straw that broke the camel’s back? Despite the challenging operating conditions and the toxic loans from the ailing oil and gas industry, UOB stock had an enthralling fairy-tale run, surging from $17.20 in 2016 to $30 in 2018. It certainly seemed that nothing can stop the explosive form of UOB stock price, until the recent short-selling activities and property measures halted the majestic run.

Meltdown of UOB stock

6 July 2018 would be remembered as Black Friday for local bank and property stocks as Singapore government sent the market into a devastating tailspin with the announcement of additional property cooling measures. There was chaos in the stock market as bank and property stocks suffered from carnage. Among the three bank stocks, UOB stock fared the worst, plunging by as much as 3%. DBS stock retreated by 2.6% while OCBC shares fell by 2.2%.

UOB stock

On the basis of the underlying business structure, UOB stock looks set for a terrifying ride with the property cooling measures. Unlike DBS and OCBC, UOB stock is considered a major proxy for property play.

This is because in his heydays, UOB Chairman Emeritus Wee Cho Yaw had meticulously built a massive billion dollars property-cum-banking empire, through UOB, UOL, UIC and Haw Par Corporation. These businesses are famous blue chips in Singapore and help to cement a formidable investment fortress for UOB.

UOB is a major shareholder of UOL, with stake amounting to 7.13%. In turn, UIC is 50% owned by UOL. In addition, UOB Asset Management holds 9.83% in Haw Par Corporation.

But as the saying goes, what can float a boat can also sink it. UOB’s network of property businesses helped to diversify revenue and cushioned the volatility in the banking sector. But at the same time, they also expose the …

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Very scary truth of the new Loan-to-Value (LTV) limits

By now, most Singaporeans would be aware of the new property cooling measures implemented by government. While most attention is focused on the eye-popping Additional Buyer Stamp Duty (ABSD) of 12%, the more sinister aspect of the cooling measures for existing private property home owners should be the Loan-to-Value (LTV) limits. In the worst case scenario, existing home owners may be forced to do margin top ups if their property value plunged in the next few months.

Read on to find out why LTV can be so important to your home loan and why you should pay attention to this cute little rule because if property prices dropped in the coming months, you would likely to suffer refinancing nightmares. And I am not joking.

Many Singaporeans assume that property prices would keep rising. But this may not necessary be true. A lot of factors come into play but ultimately, supply and demand still play a major role. In this respect, the outlook for home prices is quite gloomy. And existing home owners may need to pay attention to the LTV ratios. Just picture the following.

LTV

Supply glut

According to URA, as at the end of 1st Quarter 2018, there was a total supply of 40,330 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals compared with the 36,029 units in the previous quarter. Of this number, 23,514 units remained unsold as at the end of 1st Quarter 2018, up from 18,891 units in the previous quarter. From the supply side, there would be a glut of private properties flooding the market in the next few years.

Demand destruction

From the demand side, many buyers would be deterred to enter the market because of the ABSD and also the LTV. Most Singaporeans are not cash rich and would …

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12% ABSD to rock the market?

It seems that the government had thrown yet another hand grenade to the private property market by announcing further housing cooling measures (ABSD) on 5 July 2018, after the closure of the stock market.

On hindsight, the government may be forced to implement new ABSD rates because developers had refused to lower the prices for private properties even after the Qualifying Certificate and Developer ABSD were implemented several years ago. As entities, developers are also subject to the ABSD rate of twenty-five percent, an increase from the previous fifteen percent. Developers may apply for remission of this 25% ABSD, subject to conditions (including completing and selling all units within the prescribed periods of 3 years or 5 years for non-licensed and licensed developers respectively).

Though I am not planning to buy a second property nor am I vested in any SGX stocks, the latest round of cooling measures certainly came as shocking to me. This is because the new cooling measures also targeted existing private property owners through the revised LTV ratios. Whether the new measures that included an increase of ABSD rates and lower LTV ratios would be effective or is well-intended is beside the point. The issue is the timing.

99-to-1 Tenancy in Common

The stunning new ABSD rates certainly roiled the stock market, with major property stocks like Oxley, Capitaland, UOL and City Development all suffering from meltdowns in share prices. Bank stocks like DBS and OCBC were not spared either as they are the market leaders for local home loans. It seems that the ones who got the last laugh are those who opted for 99-to-1 Tenancy-in-Common as no matter what the ABSD rates would be, they would be immune.

Previously, I have written an article on 99-to-1 Tenancy-in-Common. Those who have structured their Manner …

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DBS share price suffered from explosive meltdown

After leading DBS to achieve a record net profit of $1.52 billion for first-quarter 2018, CEO Piyush Gupta must be at a loss for words on the recent meltdown of DBS share price. From 30 April to 4 July, DBS share price plummeted from a record $31 to $26.38, a massive decline of 14.4%.

The sudden loss of form for DBS share price must have scared the living daylights out of shareholders. After all, DBS share price had been cruising along fine with its robust set of financial results. Nonetheless, the current performance of DBS share price is not reflective of underlying business fundamentals because as far as I understand, there are no business concerns for DBS at all. The culprit for the fall of DBS share price should be the work of the short-sellers.

Should shareholders run for their lives or keep faith with CEO Piyush Gupta?

DBS share price

Dance with the wolves

The current meltdown is one of the biggest declines in my recent memory of DBS share price. The last time that a correction of such magnitude was back in 2009, the dark days of the Great Financial Crisis and 2016, the peak of the oil slump affecting the banks. But hey, this is peace time we are talking about, aren’t we?

The recent sharp decline had unexpectedly pulled the brake on the surging run of DBS share price, which had been on course to tip the $50 mark, just in time to coincide with the 50th anniversary celebration of DBS.

With a market capitalization of $67 billion, DBS is Singapore’s largest cap stock, followed by SingTel and OCBC. All three counters suffered from sharp corrections simultaneously in recent weeks, presumably due to short-sellers’ attacks. Among the three counters, OCBC fared the worst, falling by as much as …

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OCBC share price to go berserk again?

Within two months, OCBC share price fell off the cliff, dropping from almost $14 to $11.50. Such correction is healthy as OCBC share price had been on a spellbinding berserk run since 2017. Thus, investors should not be alarmed by the recent decline in OCBC share price. But at the back of investors’ mind must be whether OCBC share price will return to form with the impending Great Eastern Malaysia divestment. Does the current OCBC share price represent value for money or is it another value trap?

In relation to a query from a reader, many investors may be interested to know the fair value of OCBC share price. To be honest, answering this question is never easy for OCBC shares because the bank holds numerous non-core bank assets that are yet to be, or may even not be, divested in the near future.

Furthermore, even if a counter is trading at its fair value, it may not represent a golden opportunity for investors to buy on the dip. For retail investors, they must be wary of the movement of the short-sellers. You certainly don’t want to be caught off-guarded by the flipping of the whales. In recent months, OCBC share price had been hurt by short-selling activities.

OCBC share price

Share buybacks

Prior to the recent correction, OCBC share price had been on a bullish run on the back of a record share buybacks programme. For FY2017, a staggering 20.5 million OCBC shares had been repurchased from the open market, the highest since 2013.

The share repurchased were used 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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