StarHub retrenchment underscores dark chapter of telco industry

I can imagine SingTel CEO Chua Sock Koong rubbing her hands in glee as she read news of how arch rival StarHub struggles amid the unprecedent shake-up in the telco industry. Just months after StarHub failed to renegotiate contract with popular Discovery Channel, SingTel snagged the rights to broadcast the channels in October 2018. SingTel victory must be bitter to StarHub as the latter also lost the English Premier League broadcast to the leading telco more than ten years ago. Then, there is the StarHub retrenchment.

In my previous article, “StarHub share price to plunge after being booted out of STI”,  I have highlighted how StarHub share price is expected to face destiny after being demoted from the prestigious Straits Times Index.

But the announcement of the StarHub retrenchment was a bomb-shell and illustrated a dark chapter of the local telco industry. Perennially seen as one of the top dividend stocks in Singapore Exchange, should StarHub investors throw in the towel?

StarHub massacre

News of StarHub retrenchment raised eyebrows because of the sheer number of culling cited. According to the company’s press release, 300 full-time employees will be axed no later than the end of October 2018. The StarHub retrenchment is part of a so-called “strategic transformation programme”, which is expected to realise $210 million in savings over a three-year period from 2019.

For sure, the substantial cost savings would be of cold comfort to StarHub employees but investors bought into the news and sent the share price roaring to $1.95, the highest in four months.

The biggest victims of the telco battle are definitely StarHub’s employees. Laying off staff is obviously the easiest way for management to trim costs and improve earning margins. But what is galling is that the situation for StarHub has not even reached …

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Top 5 dividend stocks with excellent ROE

In Singapore, dividend investing has been gaining popularity among wealth builders seeking yield for their investment capital. However, dividend investing may not be so straightforward because there are many factors to consider when investing in stocks. This means that there is a need to delve deeper into a company business fundamentals instead of just using a screener to come out with a list of top dividend stocks to invest in.

In my previous articles, I have shared my insights on the top three dividend stocks in Singapore: Asian Pay TV Trust (dividend yield: 19.4% – 26%), Lippo Malls Indonesia Retail Trust (dividend yield: 9.9% – 12.9%) and HPH Trust (9.8% – 12.8%). In those articles, I have highlighted that although these counters offer mind-boggling high yields, there are risks involved as well.

In this article, I will share my research on the top 5 dividend stocks with excellent Return on Equity (ROE). The criteria used are minimum of 5% dividend yield for the past 5 years and minimum of 10% achieved for the past 5 years. The reason why I decided to refine the search is because I believe management’s efficiency in growing a company is important as well. A company that consistently has high dividend pay outs may not be sustainable if its growth lacks resilient in the context of a competitive market.

King of dividend stocks

The search for the best dividend stocks is quite interesting and threw up some outrageous observations.

Hafary Holdings Limited, a supplier of premium tiles, wood flooring and sanitary ware came out top of the list for top dividend stocks. With a market capitalization of only $71 million, Hafary is considered a very small cap. It made its way into SGX Mainboard after an upgrade from the Catalist in 2013.

dividend stocks

Although Hafary lacks …

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Nightmare of Lippo Malls Indonesia Retail Trust

Dividend investing offers investors an opportunity of building wealth through passive income derived from periodic dividends. In recent years, real estate investment trusts (REITs) had emerged as a favourite among investors hungry for yields. However, simply looking at a stock or REIT from the perspective of dividend yield without gaining a deeper understanding of the business fundamentals can be dangerous. In this article, we will examine whether Lippo Malls Indonesia Retail Trust is a value trap.

As the adage goes, high returns comes with high risks. There are REITs like Lippo Malls Indonesia Retail Trust that offer yields above 5%. But whether such pay outs are sustainable is another issue. You also need to pay attention to other factors like the debts, growth momentum, management efficiency and tenancy profile. Sometimes macroeconomic plays a part too.

Lippo Malls Indonesia

Since the Great Financial Crisis in 2008, the quantitative easing by United States led to a slew of hot money flowing to emerging markets like Thailand and Indonesia. The aim of these hot funds had been to seek high yields that these emerging markets offered. Time flies and now the United States’ economy is improving. As a result, the Federal Reserves is deleveraging balance sheet, causing funds to flow back to United States.

Indonesia is one of the emerging markets currently struggling against this wave of capital flight as rupiah weakened in recent years.

Profile of Lippo Malls Indonesia Retail Trust

Lippo Malls Indonesia Retail Trust debut in SGX mainboard in November 2007 with IPO price of $0.80. With market capitalization of only $769 million, this is one of the smallest S-REITs. This REIT started off with a portfolio of only seven malls in Indonesia with a net lettable area of 219,382 sq m. As at 30 June 2018, LMIR Trust’s property portfolio has grown …

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Bonds to the rescue for SGX share price

It is the right time to invest in SGX? Share price has fallen from a high of $8.50 in January 2018 to the current $7.30 level. The volatility in the share price is not surprising given that the financial market is very sensitive to the economy condition.

Over the years, I have seen SGX become more business-friendly vis-à-vis the antagonistic approach taken by the previous CEO, Magnus Bocker. The recent new rule on the dual-class listing of shares and the resumption of midday break in the securities market are just some of the examples of SGX trying to improve its corporate image. I am also excited over its on-going consultation to reduce the settlement cycle and streamlining of quarterly reporting. These changes would go a long way in making the investment community a progressive one in the long-term.

With dividend yield of 4.1%, I do think that current valuation may represent good opportunity to buy and hold the shares for the long-term. But do you know that apart from a leading regional stock bourse, SGX is also the largest exchange in Asia for the listing of international bonds?

SGX

Volatility is good for SGX

If investors look back, they would realize that the net profit for FY2008 was at $478 million, much higher than FY2018’s $363 million. Ten years ago, the Great Financial Crisis had ravaged the stock market, wiping off billions of market capitalization. And the share price was not spared either.

However, the business actually thrives on volatility in the stock market because the bourse operator charges clearing fees for both buying and selling of equities. Due to this factor, SGX recorded a massive net profit and benefit much from the upheaval in the local stock market in 2008.

SGX

Source: SGX

Arguably, the best performance of the bourse …

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Dark side of Ascott REIT

As a hospitality S-Reit heavyweight, Ascott REIT offers a form of passive income stream and exposure to a geographically diversified portfolio. Henceforth, for a period of time, I was very tempted to invest in this REIT supremo as revenue for Ascott REIT surged from $357 million in FY2014 to $496 million. Net income powered from $122 million to $214 million in the same period.

Indeed, it appears to me that investing Ascott REIT is an absolute safe bet. But certain aspect of its business strategies made me changed my mind. In this article, I will share my insights on Ascott REIT.

Profile of Ascott REIT

Since its establishment in 2006, Ascott REIT has grown into a top S-Reit with market capitalization of $2.33 billion and total assets worth a cool $5.3 billion. As a leading serviced residence player, its investment moat lies in having 11,430 apartment units across 37 cities.

Part of the reason for the success story of Ascott REIT is its unique business model of maintaining a balanced “stable income” and “growth income” management contracts for its property portfolio. I also love its growth strategies of acquisitions from its Sponsor (20 pipeline properties via ROFR) and the continuous asset enhancement initiatives to increase the market value of its properties.

On the surface, the financial performance of Ascott REIT would surely made a compelling investment case. However, the showstopper for this counter has to be the relentless rights issues and private placements. The thirst for capital resulted in depressed yield, Return on Equity (ROE) and slump in unit price.

Ascott REIT

On 20 September 2018, Ascott REIT announced its first development project with acquisition of a Singapore prime site, Nepal Hill, for $62.4 million. While this is not really a colossus sum of money, investors may be left wondering if it …

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DBS stock rallied on issuing of $1billion perpetual securities

It is the return of DBS stock. On 21 September 2018, DBS stock surged to a month’s high to reach $26. The performance of DBS stock is remarkable, given that the counter rose by 7% within 10 days. The rally followed the recent issuance of $1billion perpetual securities.

While DBS stock is still some way off the record high of $31 seen on 31 April 2018, recent data suggested that DBS stock may have been oversold. It is still too early to suggest that DBS stock price is poised for another bull run but recent recovery was supported by several factors.

As the bellwether of the economy, DBS stock price is obviously very volatile and sensitive to market conditions. Thus, I view DBS stock more of a growth stock instead of looking at it from a dividend stock perspective. In this regard, my opinion is that this counter is good to invest, but not ideal to invest and hold. Due to the volatility of bank stocks, the key to making money out of DBS stock is to set appropriate entry and exit strategies.

DBS stock

Then again, there are many critics who may argue that I should not advocate short-term investing or even trading. Well, to each his own. As far as I am concerned, the golden rule when it comes to investing in stocks is don’t lose money. There are numerous investors who chose to buy and hold stocks but ended up catching a falling knife.

$227 million shares buyback

In my previous article, “DBS share price lost gangbuster form” I wrote that it is not the style of DBS management to resort to shares buyback to prop up share price. Prior to the recent correction, the bullish form of DBS share price in the past two …

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Crazy Rich Mapletree Logistics Trust

From a high of $1.36 in January 2018, unit price of Mapletree Logisitics Trust plunged to the current $1.24 level. The correction must have caused much agony for investors even if the DPU of $0.06 issued in 2018 had been factored in. In my humble opinion, the fall of Mapletree Logistics Trust unit price could be attributed to the equity fund-raising exercises in recent months.

Private Placements

On 19 September 2019, Mapletree Logistics Trust launched yet another private placement to raise estimated proceeds of about $475 million to fund the acquisition of the 5 logistics properties from CWT International Limited. A total of 309,917,000 New Units will be issued pursuant to the Private Placement, at discounted price between $1.196 and $1.234 per new unit.

This is the third private placement by Mapletree Logistics Trust in a row since August 2017. In May 2018, Mapletree Logistics Trusts launched a $220 million private placement to fund the acquisition of a 50.0% interest in each of 11 Hong Kong special purpose vehicles. Prior to that, in August 2017, a massive equity fund-raising consisting of private placement and preferential offering of $670 million was launched to fund the acquisition of Mapletree Logistics Hub Tsing Yi, located at 30 Tsing Yi Road, Hong Kong.

Mapletree Logistics Trust

It certainly seems that Mapletree Logistics Trust has no problem attracting investors because each of the three private placements was oversubscribed and saw strong participation from institutional, accredited and other investors. Presumably, this was due to the strong support from major shareholder, Temasek Holdings.

In the latest private placement, Temasek Holdings, through DBS, subscribed 1.8 million new units. The May 2018 exercise saw Temasek Holdings accumulating only 417,000 new units while the August 2017 exercise saw Temasek Holdings snapping up 7.5 million new units.

Valuation of Mapletree Logistics Trust

With a …

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StarHub share price to plunge after being boot out of STI?

Can it get any worse for StarHub? On 6 September, FTSE announced that Starhub will be booted out of Straits Times Index (STI) on 24 September. With this latest development, I fear the worst for StarHub share price.

In recent years, there had been a few cases of local blue chips suffering from terrible fate after being booted out of the prestigious STI. Examples are SIA Engineering and Noble Group. In this regard, is StarHub share price poised for another major correction? Should investors sell everything and run for their lives?

In this article, the dynamics of the local telco industry are examined and the outlook for StarHub share price is discussed.

StarHub share price

Another wild ride for StarHub share price?

Drawing from recent cases, shareholders should brace themselves for another roller-coaster ride of StarHub share price. Shares of aviation heavyweight, SIA Engineering, went on a tailspin after being kicked out of the STI, dropping from $3.50 in September 2017 to the current $2.90. And let’s not even talk about Noble Group. After bowing out of STI in 2016, Noble Group had been in financial wilderness, going from crisis after crisis. Currently, Noble Group’s shares are almost worthless.

According to Infocomm Media Development Authority (IMDA), the mobile penetration rate in Singapore is about 150%, making Singapore one of the most well-connected countries in the world. This means that some of the subscribers may be using more than one line. For a telco that focuses its growth solely in Singapore, the outlook is indeed worrying for Starhub. Indeed, Starhub share price plunged from $3.90 in 2016 to the current $1.67 after news of fourth telco broke out two years ago.

Since 2005, the total dividends dished out by StarHub is a staggering $2.40, making StarHub one of the best dividend stocks in the …

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mm2 Asia to self-destruct or win big?

In 2014, mm2 Asia debut in Singapore Catalist with minimal fanfare. But in 2017, the share price went on an unstoppable bull run when the share price increased 7 fold in value, creating immense wealth for shareholders. To top it off, it also got upgraded to the SGX Mainboard list, an impressive feat for a company that just got listed in Catalist in two years. For a penny stock, mm2 Asia is certainly a very interesting stock but in recent months, the share price got bombed out.

What on earth has happened? Is it the end of the party for mm2 Asia?

In my previous article, “The Outrageous Story of mm2 Asia“, I wrote that I would enter this counter at $0.35. On the basis of the current form, the share price of mm2 Asia seems likely to reach this price level soon. However, I have decided to stick to my strategy of not investing in a stock which IPO within 5 years. There are three reasons which I would like to share in this article.

mm2 Asia

Pre-IPO investors

Being a TV and film production company, mm2 Asia occupies a very niche area in Singapore stock market. As a content producer, I like mm2 Asia’s business model because this is an evergreen field that can never be made obsolete by technology. mm2 Asia also owns animation company, Vividthree Productions (which is going to IPO) and also event and concert company, UnUsuaL (which had been listed).

Through mmCineplexes, mm2 has its own cinema chain in Malaysia. And not to mention the $230 million acquisition of Cathay Cineplexes which was completed in May 2018.

When it got initially listed in Catalist, mm2 Asia had a group of pre-IPO investors, consisting of PAPOF (16.1 million shares), Wong Li Foon (880,000), Cornerstone Pictures …

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Devastating crash of ThaiBev share price

In the good old days, it was considered to be prestigious for a listed company to join the Straits Times Index (STI). It still is. But nowadays, it seems that being in the local benchmark index carries the unwelcome added risk of being prime target for short-selling attacks. Many components of STI had a torrid run so far this year. ThaiBev share price is no exception.

But is short-selling attacks the real culprit for the devastating fall of ThaiBev share price? I honestly doubt so.

In this article, I will share my perspective on the key reason behind the meltdown of ThaiBev share price and also explain why the current price level may represent a good window of opportunity for investors to accumulate ThaiBev shares on the cheap.

Currently trading at dividend yield of 4.12% and Price/Book Value of 3.03, ThaiBev share price may seem attractive for investors seeking yield. But then again, I view ThaiBev more of a growth stock, rather than a dividend counter. In this regard, I feel investors should have a strategy of setting the appropriate entry level and aim instead for capital appreciation.

The message I am putting across is that there would be pocket of opportunities for investors to make money out of the ThaiBev share price volatility.

ThaiBev share price

ThaiBev profile

Although ThaiBev’s business is concentrated in Thailand, it may be a mistake to think that this SGX mainboard-listed company’s growth focus is limited to Thailand. The founder of Thaibev, Charoen Sirivadhanabhakdi, signalled his ambition to build the largest F&B empire in South-East Asia when he conquered Singapore’s 100 year-old F&N back in 2013. The stunning takeover of F&N means that ThaiBev is an exciting long-term Pan-Asia project and investors must adopt the right strategy to make money out of this counter.

Listed on SGX …

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SingTel share price on course for explosive meltdown?

For the past two weeks, SingTel investors must be feeling wretched as SingTel share price free fall from $3.26 on 30 August to $3.10 on 11 September. The shares had not reverted to the dismal 6-year low witnessed on 3 July 2018 yet. But given the bearish trend, I will not be surprised if SingTel share price experienced yet another explosive meltdown and crashed to below the $3.00 mark in no time.

Although SingTel is the second largest cap in Singapore stock market, investing in this leading light of STI is not easy because this counter is susceptible to short-selling attacks. Unlike local banks, it is also not Temasek Holdings’ style to defend SingTel share price through aggressive shares buyback. Instead, it appears to me that the management of SingTel prefers to let the financial results of the company do the talking. Due to these factors, SingTel share price is expected to experience much volatility in the coming months and investors must have the stomach to withstand the roller coaster ride.

SingTel share price

Seeking the truth from facts

In my previous article (24 July), I wrote that “SingTel share price destined to collapse after ex-dividend day”. In that article, I shared that 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 in the second half of the year, the traditional period after the issuance of SingTel final dividends.

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 2016. The year 2015 was another …

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OCBC share price encountered “earthquake”

From a high of $14 in May, OCBC share price suffered a major “earthquake” and corrected 25% to reach a dismal level of $11.10 on 6 September. The plunge in OCBC share price also led to the dividend yield to reach the alluring level of 3.51%. Incidentally, OCBC issued a SGD1 billion perpetual securities with coupon rate of 4% in August. In the past, OCBC had also issued preference shares as well.

OCBC perpetual securities was issued at a time when investors were hungry for yield in a highly volatile environment. Being ranked senior than ordinary shares, perpetual securities are usually considered to be a safer investment product as compared to the shares of the same company. But it is interesting to note that the coupon rate of OCBC perpetual securities is 4%, slightly higher than the dividend yield of 3.51%. If OCBC share price drops further, the dividend yield will increase further.

As a bank stock, OCBC share price is obviously very volatile because banks are the bellwether of the economy. Thus, like DBS and UOB, OCBC share price is very sensitive to the changes to geopolitical and global financial health. In this regard, it may not be appropriate to view OCBC stock as a dividend counter. Also, using dividend metric as a valuation tool for OCBC shares may not be sound.

OCBC perpetual securities

In the investment world, I know it is important to compare apple to apple. Fundamentally, it may be flawed to compare the dividend yield of a stock to the coupon of perpetual securities issued for the same issuer. Both are different asset classes that come with different risk-return profiles. But if given a choice, I will still prefer to invest in OCBC shares, which is more liquid. Furthermore, besides receiving dividends, shareholders of OCBC …

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Can Raffles Medical share price ever rock again?

From a high of $1.50 in 2016, Raffles Medical share price plunged to a low of $0.99 on 6 July 2018. What a horror ride! Previously in 2017, I have written a few articles highlighting that the time was not ripe to invest in Raffles Medical shares. Also, I had set a personal entry level between $0.60 to $0.80 for Raffles Medical share price, which many investors scoffed at.

Can the embattled Raffles Medical share price rise from the ashes like a phoenix or should investors run for their lives before the Raffles Medical share price got bombed out again?

Raffles Medical share price in limbo?

My views had, at that point of time, touched on many readers’ raw nerves and might have riled many investors. There are also quite a number of readers who dismissed my strategy and claimed that my valuation of Raffles Medical share price was flawed. But I guess the performance of Raffles Medical share price in the past two years vindicated my viewpoints.

Those who had bought at the high side of $1.50 would be staring at massive paper losses now. Of course there is no point in crying over spilled milk but there are important lessons to be learned for those who suffered losses from this counter.

The intriguing meltdown of Raffles Medical share price is indeed puzzling because it happened against the backdrop of increasing revenue and net profits in recent years. However, the plunge in Raffles Medical share price could be attributed to falling Return-on-Equity (ROE), which had plummeted from 13.4 in FY2014 to a dismal 9.6 in FY2017. Why is ROE a key factor in the movement of Raffles Medical share price, if you may ask? Read on if you are interested to know whether Raffles Medical is a value trap …

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Perfect storm for StarHub share price

Nowadays, investors of StarHub cannot sleep well. From a high of almost $4.40 in 2015, StarHub share price crashed like a fallen star to reach the abysmal level of $1.64. The stunning decline of StarHub share price caught many investors off-guarded and caused much wealth destruction to many long-term investors. At the rate of decline, StarHub share price is definitely spiralling out of control. How low will it go?

On looking back, StarHub has managed to punch above its weight since it was launched in 2000. With share capital of only $300 million, this telco has managed to generate amazing Return-on-Equity (ROE) in the past. Henceforth, given its track record, it may be too early to dismiss the long-term potential of StarHub share price.

StarHub share price

StarHub share price lost form

The intriguing meltdown of StarHub share price must have left investors slapping their foreheads in astonishment. It seems so surreal as investors reminisce those good old days when StarHub was one of the leading lights of SGX.

Of course, nobody in his right mind would have predicted Starhub share price to suffer such a devastating run. This counter is, after all, considered one of the brightest blue chips that has consistently paid out handsome dividends. Against the backdrop of plunging StarHub share price, is it time for investors to cut losses and run for their lives?

The strategy for making money out of the volatile StarHub share price should be setting appropriate entry and exit levels. This is of course the sensible thing to do. Nonetheless, there are wealth builders who may advocate buying on the dip and accumulating the shares for purposes of dividend. Such an approach may not be flawed but it is built on the premise that StarHub share price will turn. However, there is no guarantee that …

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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

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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 …

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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 …

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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 …

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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 …

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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 …

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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. …

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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 …

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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 …

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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 …

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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 …

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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

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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.]

Sign up as …

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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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