End of Suntec REIT stock rally?

From $2.25 in January 2018 to $1.66 in June 2018, Suntec REIT stock crashed in bizarre fashion and in the process, roasted many investors alive within the span of six months. The incredible rally of Suntec REIT stock started in 2016 and gained pace rapidly in 2017 on the back of market rumours of potential takeover by sponsor, ARA Asset Management. What on earth has happened? Is the sky falling for Suntec REIT stock or will it rise like phoenix from the ashes?

Market speculation on Suntec REIT being privatized peaked in late December 2017, a period of time when a slew of local homegrown companies were exiting Singapore Exchange bourse. Big names like Eu Yan Seng, Tiger Airways, SMRT, Popular Holdings and Keppel Land were just a few of many local stocks that had been delisted from SGX in the past two years, wiping off billions of liquidity from the stock bourse.

At a point of time, Suntec REIT seemed destined to be the next counter to be privatized. As a result, this sparked a frenzy rally in Suntec REIT stock price.

Suntec REIT

Well, I suppose in the stock market, the old saying of “Man proposes, God disposes” still holds true. The market rumours remained as market rumours after all and those who had bought at the peak of Suntec REIT stock price must be slapping their foreheads at their moment of madness.

However, if you have bought Suntec REIT at IPO price of $0.97 in 2004, you would have made a tidy profit from the price appreciation and DPUs. Thus far, Suntec REIT has a stellar track record of DPU, which totalled $1.26 per unit. All in all, the return would have been at a mighty 200% (with unit price increase factored in).

Suntec REIT stock rally a false

Read more

The Dark Side of Investment Linked Policy (ILP)

In relation to my previous article “My NTUC Income Life Insurance Policies”, a member requested for my opinion on investment linked policy (ILP). He also wrote that the investment linked policy that he had bought was not profitable. Is investment linked policy really that bad and is it worth your time and money?

In this article, I am going share my candid views on investment linked policy. Readers would know that I don’t mince my words, so I am going to pull no punches.

For a period of time, investment linked policy used to sell like hotcakes in Singapore because it has been marketed as a unique financial product that offers potentially high returns and insurance coverage. The commission fees for investment linked policy are usually very lucrative. Thus, obviously insurance agents would attempt to sell this type of insurance product in a bid to make more commission fees. But in my opinion, this is one of the worst insurance products for consumers and one should avoid buying it unless he is 100% sure of what he is buying into.

investment linked policy

As a matter of fact, I have examined this topic before in 2015 (Frightening Truth about Investment Linked Policy). But I don’t mind re-examining this financial product if it can benefit members of SG Wealth Builder. However, a word of caution is that I am not a licensed financial adviser, so it may be better to consult qualified financial practitioners for their professional opinions.

Personally, I had been approached by numerous insurance agents to buy investment linked policies but I had never purchased one because I don’t really understand the structure of such product until a chance meeting with Brendan Yong of BeMoneySavvyToday.com. During that meeting, I learnt much about the difference between traditional whole life insurance …

Read more

My NTUC Income life insurance policies

In life, disaster often strikes when you least expect it. Of course, no one is ever prepared for a disaster but having life insurance coverage would help to put your mind at ease that your financial losses are mitigated.

During the National Day week, my family bought two life insurance policies. One was NTUC Income Limited Pay Revosave and the other was AIA Triple Critical Cover. The decision to strengthen my family’s protection and savings arose after a strategic life insurance review with my wife.

As a finance blogger, I always advocate my readers to do annual review on their life insurance coverage. This is because family situations often change, so the most prudent approach is to do timely review to ensure that the interests of your family are well-taken care of.

life insurance

In 2016, I wrote that I upgraded my family health insurance to private ward class and also bought full riders for the whole family. Boy, am I glad that I did so. Because in March 2018, Singapore government mandated the removal of full riders for new applicants of private health shields. It really drives home the importance of proactively managing my life insurance portfolio.

There are many who questioned the role of whole life insurance and there are even finance bloggers who claimed that this financial product is a scam. In my view, this is definitely not true.

In 2011, I went through a financial challenging period and I would not have made it through without the help of my two whole life insurance policies. I guess sometimes you need to go through a major ordeal in life in order to appreciate the beauty of something. Whole life insurance is one of those things that you would take it for granted. All in all, it was truly a …

Read more

DBS share price lost gangbuster form

From $14 in February 2016, DBS share price went on a magnificent gangbuster form to hit a high of $31 in May 2018, representing an increase of more than 100% in two years. The berserk rise of DBS share price certainly created much wealth for shareholders. However, the bullish form was as good as it gets as DBS share price subsequently went through a correction since early May to reach a low of $24.90.

Has the bubble finally burst for DBS share price or should investors keep faith with Piyush Gupta’s team? At the big picture, the business fundamentals have not changed but market confidence have been shaken due to the trade wars currently taking place. Arising from this, data revealed that there were three waves of attacks on DBS share price in the past few months, leading to the loss of form for DBS shares. In this article, the investment merits of DBS are examined.

DBS share price in for a wild ride?

For sure, it had been a roller-coaster ride for shareholders. When you have the sort of volatility like DBS share price is currently having, you are unlikely to sleep well even if you are a long-term investor. But DBS management is not sitting back either.

The devastating decline prompted DBS to initiate a rare shares buyback on 6 July 2018. Prior to this, the last shares buybacks by DBS was almost two years ago, in September 2016. Following the July 2018 shares buyback, a series of shares buyback were done in August 2018. These actions provided critical support for DBS share price.

DBS share price

According to SGX filing, management bought back 900,000 shares on 10 August 2018, 750,000 shares on 13 August 2018, 650,000 shares on 16 August 2018 and 750,000 on 21 August 2018. In total, DBS …

Read more

SIA Engineering share price flying high no more

How low will it go? From a high of almost $5.12 in 2014, SIA Engineering share price crashed to a nine-year low of $2.93 on 30 July 2018. Needless to say, it had been a devastating spell of decline for SIA Engineering share price, creating tremendous heart pain for long time investors of SIA Engineering. For sure, SIA Engineering share price is flying high no more but who in his right mind could have predicted such an outrageous outcome for this blue chip?

Investors who bought when SIA Engineering share price peaked would have lost their pants by now. However, if you had invested in SIA Engineering since 2001, the long history of dividends paid out would have more than mitigated the paper losses. But this is not to say that investors had a jolly good ride. So should investors run for their lives or keep faith with the management?

SIA Engineering share price

Aberration in SIA Engineering share price

Perhaps the impact of being booted out of the prestigious Straits Times Index (STI) in September 2017 had caused SIA Engineering share price to lose its shine. Maybe confidence has been shaken terribly after big boy, JP Morgan, sold its entire stake in SIA Engineering. Whatever the case it may be, investors who had bought into SIA Engineering should brace for a terrifying ride.

Last year was an aberration for SIA Engineering share price because prior to the sell-down in the second half of the year, the counter was actually bullish in the first half of the year, presumably due to the divestment of its 10% stake in Hong Kong Aero Engine Services Ltd (“HAESL”) and divestment of HAESL’s 20% stake in Singapore Aero Engine Services Limited (“SAESL”). The divestments probably fuelled the surge in SIA Engineering share price. But that bullish form proved …

Read more

SingTel share price riding the storm

What a ride! In my previous article, I wrote that SingTel share price is in for a frightening roller-coaster ride after ex-dividend day. Indeed, SingTel share price plunged from $3.30 on 23 July to $3.06 on 13 August. It could have been worse if its not for the strong institutional support in July. SingTel topped the list of institutional net buy in July, with net buy of $49.4 million.

Riding the storm

SingTel share price has since recovered to the $3.10 level, probably because the intensity of the short-selling attacks had reduced and the strong support from institutional players. The less-than-glowing first quarter financial results for FY2019 could have triggered the recent correction in SingTel share price. Operating revenue dropped to $4.13 billion as compared to $4.16 billion in last year. Profit after tax sank to $826 million from $886 million recorded in last year.

Although the latest financial results had been less than stellar, there were bright spots as SingTel’s Optus powered ahead to capture market share in mobile market and recorded higher EBITDA. Regional associates like AIS, Intouch and Globe also recorded double digits growth for net profit. The upcoming IPO of its subsidiary, Airtel Africa, could be a positive catalyst to SingTel share price as well.

Singtel share price

The current bearish sentiments of SingTel share price should be due to the heightened competition in overseas markets, and not Singapore market. In this regard, the key battle to be fought is in overseas, and not in Singapore. Decline in net profits from major regional associates, Telkomsel and Airtel, continued to roil SingTel share price.

The volatility in SingTel share price means that investors must have a strategy of setting entry and exit levels. Although the long-term fundamentals of SingTel remain intact, the business headwinds could demolish prospects of …

Read more

OCBC share price ready to explode?

Despite being consistently ranked as one of the strongest banks in the world, OCBC’ stock is perennially the least expensive among the three local banks. However, like DBS and UOB, OCBC share price enjoyed a dizzy spell for the past two years, storming from $7.90 in February 2016 to reach the giddy high of $14 this year.

The key reason for the bullish run of the local bank stocks should be attributed to the improving economy condition in Singapore. However, recent government property curbs and short-selling activities had pulled the brake on the surging form of OCBC share price. Can OCBC share price regain its mojo and returns to form?

The recent correction in OCBC share price is considered healthy, so investors should not panic. In fact, 2QFY2018 results had been pretty strong. OCBC reported net profit after tax of $1.21 billion for the second quarter, climbing 16% from S$1.04 billion a year ago, and 9% from $1.11 billion in the previous quarter. The robust results provided the narrative for OCBC’s growth momentum.

Due to the volatility of bank stocks, the key to making money from this counter is to have a strategy of setting the right entry and exit price. On this note, I believe three factors could shape OCBC share price in the coming months.

OCBC share price

Divestment of non-core assets

Unlike DBS and UOB, OCBC has several major divestment of non-core assets on the card. The positive catalysts that could set OCBC share price on fire would be of course the divestments of stakes in Great Eastern Malaysia, Hong Kong Life and United Engineers. Collectively, the trio of divestments could yield potentially more than $1 billion for OCBC.

As of 30 June 2018, OCBC had an unrealized valuation surplus of $10.2 billion, an increase from last year’s $8.6 billion. …

Read more

Asian Pay TV Trust dances with the wolves?

From IPO price of $0.97 in 2013, Asian Pay TV unit price had plummeted over the years to reach the current dismal level of $0.38.  Investors who had bought into Asian Pay TV during the IPO days and held the units till now would have lost their pants even if the grand total of $0.41 distributions had been factored in.

Apart from punching the wall, investors of Asian Pay TV Trust should certainly do some soul-searching. Even the most ardent supporters of this counter must be having second thoughts and wonder if this business trust can ever stage a rebound. My guess is that shareholders should hope for the best but expect the worst.

When a business trust is trading at such abysmal level, the price level may not represent value. But what is more galling for unitholders of Asian Pay TV Trust is that despite trading at such cheap level, the management did not even bother to carry out any unit repurchases from the market. The lack of action on the management’s part is obviously not inspiring, at least from the perspective of the investors.

Asian Pay TV

However, Asian Pay TV Trust is not a lost cause yet,  because it is backed by the big boys. Temasek Holdings is the biggest shareholder, with 7.93% stake. With such strong backer, it is difficult to imagine Asian Pay TV Trust going down in flames. The key to making money out of this counter is actually to determine the right entry level to minimize the downside risks.

Falling knife?

The purpose of this article is definitely not to throw mud at Asian Pay TV Trust, but to provide a balanced and holistic view of the risks and investment merits of this counter. As usual, this is an opinion article and the information expressed …

Read more

UOB share price on red hot form!

Crisis? What crisis? UOB share price tore apart the form book by going on an explosive run following the release of an excellent set of first half results. Many investors and analysts were also stunned by the news that 70% of new launch condominium, The Tre Ver, was sold during Phase 1.

The Tre Ver was developed by UOL, an affiliated company of UOB. Previously, many investors feared the worst for UOB share price following the introduction of new property cooling measures by Singapore government.

The buoyant first half results certainly set UOB share price on fire, making it the most expensive bank stock in Singapore. Within the span of a week, UOB share price surged from $27 to $28 level. On the basis of the current bull form of UOB share price, shareholders should have that feel good feeling.

UOB share price

However, I do think that investors are throwing caution to the wind as the surge in UOB share price may not be justified. To put things into perspective, UOB is still struggling with toxic loans as a result of the exposure to the ailing oil and gas industry. As of June 2018, non-performing loans stood at $4.2 billion (1.7%), a significant increase from last year’s $3.5 billion (1.5%). In this regard, is the current UOB share price a value trap or value buy?

In this article, I would share my views on why UOB share price is consistently been traded at higher level than DBS share price, despite the former being Singapore’s smallest lender. I would also analyse whether big boys are targeting this counter currently and if UOB shares are worth investing.

UOB share price on red hot form

It seems that nothing can stop the property market now. However, it may be too early to pop the champagne …

Read more

CapitaLand share price ready to rocket!

Since early May, CapitaLand share price experienced some form of bearish correction. But the stunning announcement of the retirement of CEO Lim Ming Yan on 1 June 2018 really knocked the wind out of CapitaLand share price, which collapsed from a high of almost $3.80 to $2.99 at one point. CapitaLand share price has since recovered to $3.15 level but remained under pressure.

With Price/Book Value of just 0.692 and P/E ratio of merely 9.7, CapitaLand share price is currently considered very undervalued among the blue chips. In fact, most investors perennially misunderstood this stock and thought that the property cooling measures would wallop CapitaLand share price upside down. But they don’t realize that the battle to be fought for CapitaLand is not in Singapore.

Since the Great Financial Crisis, CapitaLand share price had been languishing between $2.00 to $3.00 bandwidth in recent years, a shadow of its former self when it was trading at $8.00 in the heydays of 2007. The recent carnage in CapitaLand share price even triggered a massive shares buyback by management, which bought back $209 million worth of CapitaLand shares. The intervention managed to prevent a massive decline in CapitaLand share price and provided a critical support for CapitaLand share price.

CapitaLand share price

Perhaps a victim of its own success, most investors may prefer to invest in CapitaLand’s Reits than the parent company shares because the former offer higher yields and are relatively less expensive than CapitaLand share price. In this regard, does CapitaLand share price currently offer value for money or is it a value trap? In this article, I will share my views on the factors that may cause CapitaLand share price to rocket in the coming months.

CapitaLand share price to fall or rise?

At the centre of the storm is the stepping …

Read more

DBS share price and that “uh-oh” feeling

It is that “uh-oh” feeling for DBS share price all over again as the counter got bombed-out after the release of 2nd quarter earnings report. There were claims that DBS share price came under heavy shelling because the Singaporean bank missed analysts’ forecast. Should shareholders be punching the wall?

From my perspective, the notion that DBS share price fell because of missed estimates by market analysts is complete nonsense because I never believe in what the analysts said. And for sure, market analysts never have any swaying power over share prices.

So what could be the root cause for the correction in DBS share price? After all, net profit in second quarter earnings actually surged 20% to $1.37 billion, as compared to $1.14 billion last year. Under the current challenging operating environment, to be able to deliver such a mighty result is indeed impressive. So there is no basis to claim that DBS share price tanked over poor financial performance.

In my point of view, dark forces could be behind the slump in DBS share price as 2.56 million DBS shares worth $67.5 million were shorted on 2 August 2018. In terms of short sale value, this is the highest among all the SGX counter for that day. Always remember that the big whales dictate the market movement, not the analysts. This is the number one golden rule in the stock market that you must remember.

DBS share price

Short-selling activities

It would be a mistake for investors to merely look at business fundamentals and price trends when assessing whether to buy or sell stocks. I used to make this sort of amateur mistake when I started my investment journey. But through the years, I realize that as retail investors, you must watch out for the movements of the whales as …

Read more

Starhub share price enjoying sunshine after the rain?

Is it sunshine after the rain for Starhub share price or is it yet another false dawn in the making? From a high of $4.20 in 2015, Starhub share price went on a devastating run to languish at current $1.70 level. Only the recent appointment of new CEO, Peter Kaliaropoulos halted the stunning decline of Starhub share price.

The collapse of StarHub share price certainly caused 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.

The carnage of StarHub share price is attributed to the triple whammies of StarHub losing popular channel for its Pay TV, fierce competition from NetFlix and entry of new MVNO players. And to top it off, the fourth telco player, TPG Telecom, has not even started business yet. No wonder investors are spooked by the prospect of Starhub.

StarHub share price

Given the current StarHub share price, the dividend yield is at an alluring 9.36%. In view of this, is StarHub shares a value trap or dividend gem? Are there any dark forces behind the meltdown of StarHub share price?

Crisis in the making?

From a high of 3600 in April 2018, STI Index had retreated to the current 3300 level. Similarly, Starhub share price declined from $2.30 to $1.70 within the same period. With a decline of such magnitude, even if annual dividends are factored in, those who bought at the peak of StarHub share price would have lost their pants.

In June 2018, StarHub share price crashed when the telco announced [This is a premium article. The rest of the content is blocked and can be accessible

Read more