Gold price hit six-year high

As 2019 comes to an end, wealth builders will surely look back and marvel at how gold price had stormed back in style. Since the beginning of the year, gold price had surged 17% to reach a six-year high. The last time that gold price was in such bullish form was 2009 – 2011. That was the tumultuous period in the aftermath of the Great Financial Crisis and European debt crisis.

Since 2011, global loose monetary policies and low interest rate environment caused gold price to fall from a record high of USD1900 to a low of USD1068 per ounce in 2015. The crash of gold price was the result of recovering US economy and strengthening of US dollar.

gold price

Question now is whether gold price will reach another high in 2020? In this regard, I don’t see why not. This is because the world has not seen another alternative safe haven for financial assets. And gold has always been used as a form of hedge against uncertainties and volatility in the financial markets.

In 2016, the crash of China stock market, UK Brexit and the US Presidential Election saw gold price surging from USD1100 to USD1300 per ounce. Based on these events, my opinion is that gold price may stage another magnificent run in 2020 due to the following factors.

Forecast for gold price in 2020

Interest rate: One of driving factors for gold price in 2019 was the interest rates, which was cut three times by the US Federal Reserves. As gold does not yield interests, investors tend to switch to higher-yielding instruments like bonds when interest rates increased. Conversely, when interest rates dropped, investors are more likely to look at investing in gold.

Of course, one shouldn’t view interest rate as the sole function of gold price, which …

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SingPost share price see light at end of tunnel?

Lo and behold! Is this really the light at end of tunnel for SingPost share price? Investors got massively hyped up over announcement of bankruptcy protections for its ill-fated United States subsidiaries, Jagged Peak and TradeGlobal. Under the scheme, SingPost will no longer recognise profit or loss from the toxic subsidiaries. In view of this, is SingPost share price out of the woods?

The latest development marked the end of a dark chapter that started way back in December 2015. Jagged Peak and TradeGlobal were the two major assets acquired under former CEO Wolfgang’s tenure. Within months after the acquisitions, Wolfgang resigned. I do not know what transpired behind the scene. But since the acquisitions, the eCommerce segment had been consistently loss-making and the management struggled to turn the business unit. SingPost share price also plunged from a high of $2.00 to the current $0.93.

SingPost share price

Of course, it is not fair to solely attribute the ailing SingPost share price to the two United States subsidiaries. There was also a special audit ordered by regulators in 2015 to look into a possible lack of interest disclosure by one of its former directors, Keith Tay. That saga concerned the acquisition of FS Mackenzie in 2014. The scandal prompted a major management shakeup, forcing Singtel to intervene. SingTel’s Chairman, Simon Israel was swiftly installed as the new Chairman to restore order and to stabilize the situation. These events combined to knock the wind out of SingPost share price.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether SingPost share price will surge or collapse has no impact on …

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A Comprehensive Property Buying Checklist

Below is a guest post on property buying in Singapore. It is written by Stuart Chng, Senior Associate Executive Director of OrangeTee & Tie, a renowned leader, real estate broker and personality in the real estate industry.

He is a licensed real estate agent, team leader, industry trainer and speaker, columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 5, PropertyReport, PropertyGuru and other publications.

Throughout his career, he has also coached many top million dollar producing agents from different real estate agencies in Singapore. You can find out more about him at www.StuartChng.com.

A Comprehensive Property Buying Checklist

Congratulations on starting your search for a new home or investment property!

Whether you’re a soon-to-be parent, a first time property buyer or investing in your Xth property, it helps to have a comprehensive guide & checklist to follow when deciding on a property.

Apart from the criteria cited in my earlier article, Important Entry Signals for Property Investors, here’s a checklist of stuff you would do well to check for when committing to possibly the largest purchase in your lifetime!

Some are basics, some take a little more work.

Ready? Let’s dive in!

A Very Comprehensive Property Buying Checklist

 

A Guide When You’re Early In The Search Process

Is it for Investment or Own Stay Purposes?

Properties are mostly for investment purposes (Rental cash flow, capital growth play or both) or for your own occupation.

An investment home that’s smack in the Central Business District might not make the best home choice for everyone. Neither does a condominium in Sembawang make the best investment objective choice.

So make sure you have a conversation about what the family really wants with this purchase.

Affordability Check

Before you start searching …

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DBS CEO can still laugh his way to the bank

As 2019 draws to a close, it is timely to review the performance of the largest bank in Singapore – DBS Group. In a year which many analysts predicted to be a challenging year for DBS Group, the Singapore bank stunned many critics by posting a series of solid financial results. For nine months, net profit rose 13% to $4.88 billion. Total income grew 12% to $11.1 billion. Against this backdrop, DBS CEO can laugh all the way to the bank.

Piyush Gupta joined the bank in November 2009. In the blink of an eye, ten years had passed. Under the helm of the current DBS CEO, the Singapore bank has enjoyed a decade of tremendous growth.

Of course, there were challenges along the way, such as the European debt crisis (2011-2012), the oil slump (2014-2016) and the unfolding trade war between USA and China. Somehow, the DBS CEO managed to steer the bank to safe harbor and grew the bank to an even bigger scale than what it was ten years ago. Very impressive indeed.

DBS CEO

According to SGX filing, DBS CEO Piyush Gupta held 1.84 million of DBS shares as at 25 February 2019. Most of the shares were awarded to him as part of his remuneration for being DBS CEO. In 2016, at the peak of the oil slump, DBS CEO had purchased 200,000 DBS shares from the open market in a move widely seen as “putting his money where his mouth is”. Apart from the shares, the DBS CEO also held about 1.03 million options of DBS shares as at 25 November 2019.

In all fairness, I do think the DBS CEO deserves to be paid well as the bank enjoyed robust growth for the past five years. Net income surged from $4.05 billion in 2014 to …

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OUE share price emerged from nightmare

On 29 October 2018, I wrote that OUE share price plunged to a record 14-year low of $1.37. Since that fateful day, the counter confounded all critics by staging a magnificent run to reach a high of $1.80 on 12 April 2019. It certainly seemed like OUE share price is out to prove me wrong. Well, I have no problem with that as long as shareholders made money out of the rebound!

After that minor bull run, OUE share price tamed off quite a fair bit to reach the current level of $1.50. At current OUE share price, the Price/Book Value amounts to a mere 0.33. Is OUE share price undervalued or is it a value trap?

OUE share price

For sure, OUE is not in the league of CapitaLand, City Development or UOL. But this stock is no pushover either. With a market capitalization of $1.46 billion, OUE share is considered a large cap among SGX property counters. Furthermore, OUE boasts many premium grade assets under its stable, among them are OUE Bayfront, One Raffles Place, Lippo Plaza, Mandarin Orchard Singapore, Crowne Plaza Changi Airport, Marina Mandarin Singapore and Mandarin Gallery.

Given the pedigree of OUE, the Group is in strong position to weather the cyclical nature of the hospitality and real estate industry. Based on my review of the financial results, OUE share price could enter 2020 in bullish form.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether OUE share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of …

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Mapletree Logistics Trust in amazing form

Can anything stop Mapletree Logistics Trust? Since my last coverage on this counter in September 2019, the unit price had been on an incredible bullish form. The surging unit price of Mapletree Logistics Trust had created plenty of wealth for unitholders. Christmas certainly comes early for these investors!

To be frank, I had underestimated the potential of this S-REIT. Amid the rally in the S-REIT sector, 2019 turns out to be a fantastic year for Mapletree Logistics Trust as its unit price rocketed from $1.30 in January to the current $1.68. The increase of almost 30% within a year is certainly very impressive for an S-REIT!

Mapletree Logistics Trust

It appears to me that the management is riding on the current industry upturn and seizing opportunities in the Asia Pacific region. In November 2019, Mapletree Logistics Trust had raised $250 million through private placement of 154.6 million unit to fund the acquisition of 50% interest in four properties in China, 100% interest in two properties in Vietnam and 100% interest in one property in Malaysia.

Despite the equity financing, the unit price of Mapletree Logistics Trust remained resilient. Question now is: will this S-REIT takes its swashbuckling run right into 2020? On the basis of its current form, the sky is the limit for this S-REIT! In this article, I will share the positive catalysts that led to the buoyancy of Mapletree Logistics Trust unit price in recent months. I will also provide my view on the sustainability of the DPU.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether Mapletree Logistics Trust unit price will surge …

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Lost my wedding expenses to stock market

2019 come and go. In the blink of an eye, it has been 10 years since the Great Financial Crisis took place. As I look back, I can’t help but feel intrigued at the transformation of my wealth building journey. This blog was borne in an era of great financial upheaval and also at a time when I was struggling financially. Specifically, 2009-10 was the period in which I lost a substantial portion of my wedding expenses to the stock market.

The loss was attributed to a poor strategy executed for one of the penny stocks – China Enersave. I have always maintained that there is no good or bad stocks. In investing, there are only good or bad strategies. When the share price of a stock dived, you can always choose to cut loss or short-sell. In my case, I did neither. The loss of my wedding expenses culminated in one of the biggest challenges that I had to face in the course of my financial journey.

wedding expenses

Losing money to the stock market is not the end of the world. But being on the receiving end, it did feel like the end of the world. This is especially so as I had lost my wedding expenses. During that period, I was actually on a “winning form” due to a series of successful trades on penny stocks. But it took just one bad trade to set my wedding expenses by one-third. I was forced to either postpone my wedding or borrowed from family or relatives. In the end, I chose to borrow from my own insurance policies.

Losing money in stocks is not fun. It is also not a laughing matter. I remember losing plenty of sleep and being in a state of denial. Many times, I felt like punching …

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OCBC share price led to my first investment in decade

On 13 December, OCBC share price turned bullish upon the announcement of Bangkok Bank winning the bid for Bank Permata acquisition. Previously, it was reported that OCBC had mulled over the acquisition of the Indonesian bank. On the basis of the mild recovery of OCBC share price, it seems that shareholders are glad that OCBC pulled out of the deal.

Incidentally, the latest development came at a time when I opened my Supplementary Retirement Sum (SRS) and looking at investing in a blue chip to generate reasonable returns. After much consideration, I opted to invest in OCBC share. In this article, I will share my view on why I chose to enter at current OCBC share price.

OCBC share price

Strictly speaking, my last stock investment was in 2010 when I bought K1 Venture, an investment holding company of Keppel Group. Back then, the intent was not really to grow wealth but to divert a portion of my CPF monies from the Ordinary Account before HDB wiped out the monies for the settlement of my HDB flat purchase. I wanted this investment to be a buffer in case I got retrenched from my job and still need to service my housing loan. In the blink of an eye, I have upgraded to Executive Condominium and now planning for my retirement.

Before investing in OCBC share, I have thought of using my SRS monies to purchase Singapore Savings Bonds (SSB) but the latest issue offered average return over 10 years of merely 1.76%. Even though the SSB is risk free, the SSB interest rate is way too low for my liking. In this regard, I find OCBC share price appealing because the Price/Book is about 1 while the yield is about 4.4%.

Note that this is an opinion article and not meant to be …

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Gallant Venture transformed into fallen angel

How Gallant Venture had fallen. This listed company used to have a track record of making good profits and even counted Sembcorp Industries as one of its major shareholders. But in the aftermath of the Great Financial Crisis of 2009, Gallant Venture share price free fall from the sky to become a perennial penny stock. This counter would have been placed under SGX Watch List for failing to meet the Minimum Trading Price (MTP), if not for its $619 million market capitalization.

In the latest turn of events, investors of Gallant Venture should brace themselves for a roller coaster ride following the exit of Sembcorp Industries’ exit. On 11 June 2019, it was announced that Sembcorp Industries disposed its entire shareholdings in Gallant Venture and ceased to be a substantial shareholder.

Gallant Venture

Perhaps Sembcorp Industries had lost patience with Gallant Venture. For the past five years, revenue had declined from $2.33 billion in 2014 to $1.8 billion in 2018. Profits had become erratic and inconsistent as well. In 2014, full-year profit was $7.5 million while 2016 saw profit of $72 million. But in 2015, the Group suffered losses of $145 million. Subsequently, since 2017, Gallant Venture had been in the red.

With the exit of a strategic shareholder, the prospect for Gallant Venture appears to be grim. Whether the Group can recover from this setback remains to be seen. Inevitably, questions will be raised on whether management made the right call in venturing into automotive business in 2013. While the automotive business provides additional revenue source, this business segment comes with risks. Most importantly, the venture represents a massive change in business direction from its core businesses – operating business parks, utilities business, property development and resort business.

Note that this is an opinion article and not meant to be a …

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CapitaLand share price flying with Liang Court redevelopment

Since my last coverage on 1st October 2019, CapitaLand share price had turned on the style, surging from $3.40 to $3.70. The driving factors for the bullish form of CapitaLand share price stem from the recent asset recycling activities and sale of new launches.

As of 20 November 2019, CapitaLand had divested close to $5.7 billion worth of assets, exceeding their annual target divestment of $3 billion. The most notable recent divestment was the divestment of The Star Vista for $296 million to Rock Productions. According to the management, the deal is expected to yield net proceeds of about $145 million and a net gain of about $32 million. The slew of divestments had led to the buoyant CapitaLand share price in 2019.

CapitaLand share price

Another catalyst for CapitaLand share price was the strong sale performance for its residential units in Singapore and China. One Pearl Bank has sold 235 of the 280 launched units while Sengkang Grand Residences sold 216 of the 280 available units. In China, the Group sold 3,694 units in the first nine months of 2019 with a value of RMB8.5 billion, and expects to launch an estimated further 1,700 units in 4QFY2019.

Against the backdrop of positive news, will CapitaLand share price continue to run going forward? In my previous article on CapitaLand, I mentioned that the traditional best window to enter this counter is September to October. In view of this, has CapitaLand share price really bottomed out and should investors strike while the iron is hot now?

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether CapitaLand share …

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Golden Agri share price to lose shine after STI exit?

On 5 December, it was announced that Golden Agri share will be booted out of the prestigious Straits Times Index (STI). Taking over its place will be Mapletree Logistics Trust. With this latest development, I fear the worst for Golden Agri share price. In my previous article, I have mentioned that I am pretty bearish on Golden Agri share price in the medium term. This latest episode vindicated my point and also marked a sorry end to Golden Agri’s journey in the STI.

StarHub and SIAEC were booted out of STI in 2018 and 2017 respectively. Since then, the share prices of the two companies had plunged to abysmal levels. On this basis, I don’t see how Golden Agri share price can fight its destiny. Included in the STI since September 2008, Golden Agri share price had been in the limelight for the past decade and this counter enjoys much liquidity. The average three-month trading volume is actually 1.1 billion!

Goldern Agri share price

Since 2014, Golden Agri share price had plunged from $0.44 to the current $0.22, representing a massive decline of 50%. The huge fall of Golden Agri share price had caused much wealth destruction for shareholders. Thus, understandably, many shareholders must be unhappy over Golden Agri share price performance. It is important to note the performance of Golden Agri share price mirrored the business fundamentals – revenue fell from a high of USD7.62 billion to a low of USD7.1 billion. Profits also fell from USD117 million in 2014 to USD2 million in 2018.

Indeed, 2014 was a defining year for Golden Agri because of the drop in crude oil price, leading the crude palm oil (CPO) price to suffer a multi-years downward trend. To compound the matter, the 2015 haze had also caused Golden Agri to pour much resources in fire …

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ThaiBev share price in happy hour mood

It seems that ThaiBev share price is going places. After announcing a stellar full-year financial results, ThaiBev share price is set for a bullish run after the management acknowledged in a SGX filing that they are currently “evaluating strategic proposals and opportunities, including but not limited to a potential listing of its beer business”.

The discussion is still at preliminary stage and there is no certainty that the potential listing may take place. However, this positive development had already sent ThaiBev share price hitting the sky. The recent performance of ThaiBev share price was in stark contrast in 2018, which was when the Thai government implemented the new Excise Tax Act. Effective from 26 January 2018, Thailand government mandated that all alcoholic beverages and tobacco products, both imported and domestically produced, to be charged an additional 2% of excise tax.

ThaiBev share price

In face of the tax increase, the management had turned to merger and acquisition activities to bolster revenue. And the strategy worked like magic. Three major acquisitions helped to fuel revenue performance and turbocharged ThaiBev share price. Among the acquisitions was the successful bid for a 53.59% stake in Saigon Beer – Alcohol – Beverage Corporation (“Sabeco”). ThaiBev also expanded into the spirits business in Myanmar through the acquisition of a 75% stake in Grand Royal Group, the biggest player in Myanmar’s whisky market. Apart from the alcoholic business, ThaiBev also branched into food business significantly by acquiring the rights as a franchisee to operate KFC restaurants in Thailand.

Certainly, ThaiBev share price had stormed back in style. Question now is: will this momentum sustain in 2020? Fortune favours the brave. I have always maintained that this counter is an interesting growth story because of its charismatic founder – Charoen Sirivadhanabhakdi. In this article, I will share my view on …

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SRS withdrawal for retrenchment benefits?

During the National Day Rally 2019, Singapore government announced that retirement age will be raised to 65 by 2030. In addition, it was also announced that the proposed adjustments will not affect CPF withdrawal policies or age. The adjustments are necessary due to Singapore ageing workforce and the need to ensure that Singaporeans will be financially independent in their twilight years. Nonetheless, the increase in retirement age will impact the Supplementary Retirement Scheme (SRS) withdrawal age as it is pegged to the statutory retirement age.

In this article, I will share my view on how the increase in statutory retirement age will impact the SRS withdrawal. As usual, this article is not meant to be a form of financial advice. Please consult a financial advisor if you have doubts. I am writing this article because I am planning to open an SRS account and is sharing my research with readers. If there is any mistake contained within this article, please let me know.

SRS withdrawal

10-year SRS withdrawal period

Although both CPF and SRS serve to provide the retirement needs, there are major differences between the two schemes. CPF focused primarily in housing, medical, education and retirement needs. CPF monthly contribution is also compulsory. On the other hand, SRS contribution is voluntary and provides tax relief. Most importantly, there is more flexibility when it comes to SRS withdrawal.

Unlike CPF withdrawal, you can make SRS withdrawal anytime. However, if the SRS withdrawal is made before the statutory retirement age prevailing at the time of the first contribution, 100% of the sum withdrawn will be subject to tax. A 5% penalty for premature withdrawal will also be imposed.

But according to Inland Revenue of Singapore (IRAS), an interesting feature of SRS withdrawal is “If you have already opened an SRS account and made …

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DBS Group share price in path of glory

Crisis? What crisis? On 11 November 2019, DBS Group confounded investors by delivering a surprisingly better-than-expected 3rd quarter financial results. Many investors had feared the worst for DBS Group share price due to the unfolding Hong Kong civil unrests, Singapore property cooling measures and the cuts in US Federal Reserves’ interest rates. Notwithstanding these challenges, the management navigated the storm relatively well and continued to post great results.

Question now is: will DBS Group share price recapture the height seen in 2018? Make no mistake, the slew of headwinds in 2019 had taken some shine off DBS Group share price as the market deals with the onslaught of uncertainties.

DBS Group share price

While DBS Group cannot control macro-economic conditions, the bank continued to power ahead with its business front. Compared to a year ago, total income for 3rd quarter surged 13% to $3.82 billion while net profit stormed 15% to $1.63 billion. Interestingly, against the backdrop of declining US interest rates, DBS Group actually increased its Net Interest Margin (NIM) to 1.9% from 1.86% a year ago. Return on equity (ROE) also reached a high of 13.4%. Given such stellar results, where will DBS Group share price go from here?

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether DBS Group share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

DBS Group share price on ice and fire

According to a DBS Group article, Hong Kong millionaires are moving cash to Singapore. DBS private bankers were experiencing …

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Gold price in high heaven

As 2019 comes to an end, let’s take a look at how gold price has performed. Looking back, 2019 will be remembered for a year of great uncertainties. The protracted trade war between US and China continued to rattle global economy. Brexit continued to drag on at this point of writing. And then the civil unrests in Hong Kong exploded out of nowhere in the middle of the year.

Amid the turmoil, gold price went on a rampage to reach a euphoric high of USD1544 per ounce on 3 September 2019. This is a remarkable surge of 20% since January 2019. Of course, this was still way off the peak of USD1900 per ounce seen in 2011, but current form of gold price reflected the resilience of the yellow metal.

gold price

Since the high seen in September, gold price had cooled off quite a bit. But a few factors could provide critical support for gold price in the coming months.

Gold price rally to continue?

It remains to be seen whether the rally for gold price will continue right into 2020. But the macroeconomic condition certainly lend support for continued momentum in gold price. Global trade tensions have not reduced and there is not really light at end of tunnel in sight between US and China. Risk of no-deal Brexit remains a possibility while the chaos in Hong Kong will continue to fuel flight to safety among the wealthy in Hong Kong.

Although most people will agree that the current situation does not represent a recession, the global growth outlook remains pretty challenging. Because of this, the US Federal Reserve cut interest rates three times in 2019. On looking back, the cut in interest rates could have led to the surge in gold price in 2019. This is because gold does …

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Manulife US REIT (MUST) in explosive rally

With an acronym like MUST, it seems like investing in Manulife US REIT will not go wrong. Indeed, the unit price had been surging from USD0.80 since the start of the year to the current USD0.94. Listed in May 2016, this REIT has a strong sponsor in Manulife Insurance Company, a leading Canada-based financial services group. Despite having a strong pedigree, it has not always been a bed of rose for this REIT.

Like many of its peers, Manulife US REIT unit price had been lacklustre in the initial year of listing. Looking back, the counter had been trading below its offering price of US0.83 per for most of 2016 and 2017. Then the unit price took on a life of its own when Temasek Holdings, through DBS Bank, increased its stake from 3.78% to 5.49% in July 2017. Subsequently, Manulife US REIT unit price enjoyed a splendid run, surging from US0.80 in July 2017 to hit a high of almost USD1.00 in February 2018. The bull run in unit price created plenty of wealth for unitholders.

Manulife US REIT

However, in 2018, Manulife US REIT suffered a torrid run. This is because in that year, the US Federal Reserve raised interest rates by four times. Most REITs are heavily leveraged and Manulife US REIT is no exception. Therefore, the increase in interest rates meant higher interest expenses and affected the outlook for REITs’ growth. It didn’t help that the trade war between USA and China reached a peak in 2018. Being a pure-play US office REIT, Manulife US REIT was located at the epicentre and its unit price was hit left, right and centre.

To compound matters further, Manulife US REIT launched a preferential offering of USD0.865 per unit through issuance of 227,935,981 new units in June 2018. All these events combined …

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Singtel share price faces disaster

What a calamity. Singtel share price looks set for a roller-coaster ride following a shocking 2nd quarter loss amounting to $674 million. Yes, that’s right. It is net loss of $674 million, vis-à-vis $661 million of net profit recorded in 2QFY2019. The mind-blowing loss was attributed to Airtel’s exceptional item.

The latest result came on the back of an eighth consecutive quarter of declining profits/losses. Question now is: where would Singtel share price go from here?

I have been a big fan of Singtel for years but I could not recall the last time in which Singtel recorded such massive losses. To be honest I am totally speechless by the latest results. Given the latest development, there is a high possibility of Singtel share price reaching my entry price of $2.60 in the coming days.

Singtel share price

According to Singtel’s media release, the telco’s subsidiary, Airtel was hit by an adverse Indian court ruling in relation to definition of “adjusted gross revenue” (AGR) for the Indian telco industry. Singtel share of the provision amounted to a whopping pre-tax $1.93 billion. The explosive loss would surely cause confidence in Singtel share price to be shaken.

Apart from the Airtel’s exception item, operating revenue also fell to $4.15 billion in 2QFY2020 from $4.2 billion in 2QFY2019. This is definitely one of the worst Singtel quarterly results, if not the worst, I have ever seen. In view of this, expect plenty of volatility for Singtel share price in the coming weeks.

BullionStar

Singtel share price faces destiny

Could Airtel really be the last straw that broke the camel’s back? I don’t know. This is because in 2018, I wrote an article, “Will Singtel share price be rocked by commercial disputes?” In that article, I shared that Singtel’s overseas adventure came at a price …

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Sengkang Grand Residences a dream or nightmare for buyers?

When CapitaLand and City Development (CDL) teamed up to develop the 3.7 hectares residential site next to BuangKok MRT station in 2018, it promised to be a match made in heaven. Indeed, there was tremendous market hype as the two developers are the big boys in the real estate sector. The last time the two titans combined forces was in 2007 for the Botannia project in West Coast. Thus, it is not surprising that Sengkang Grand Residences became the best-selling integrated project in 2019.

But what raised plenty of eyebrows was the strong response shown during the launch day of Sengkang Grand Residences. 216 of the 280 units had been sold at an average price of $1,700 per square feet (psf). Prices for the integrated project start from $798,000 for a one-bedroom plus study unit, $998,000 for a two-bedroom, $1.498 million for a three-bedroom, and $2.1 million for a four-bedroom premium plus flexi. With such selling prices for Sengkang Grand Residences, one could be forgiven for thinking that it is a seller’s market now. But is it really so?

Sengkang Grand Residences

The selling prices of Sengkang Grand Residences are certainly mind-blowing. After all, the block-buster performance came against the backdrop of a slowing economy in Singapore. With retrenchments so rampant in Singapore, market sentiments had been extremely cautious for the past two years. But what made the launch performance of Sengkang Grand Residences standout was that 93% of the buyers are Singaporeans.

In my view, I suspect the strong buying support from Singapore buyers for Sengkang Grand Residences could come from a group of buyers – the en bloc beneficiaries. The period of 2016 – 2018 saw a slew of en bloc sales taking place in Singapore. Loaded with million-dollar windfalls, these group of people will need to look for replacement …

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OCBC share price won the battle but lost the war

It’s official. 3QFY2019 results for OCBC showed that the Hong Kong protests did not rupture its businesses nor impact its growth. On the contrary, OCBC Hong Kong actually reported an 11% increase in net profit on year-on-year basis. In this regard, many investors must be able to sleep better at night. But is OCBC share price really out of the woods?

Despite taming the menacing fallout from the Hong Kong protests, there are signs that OCBC share price have peaked. In today’s context, it is unlikely that OCBC share price will hit the giddy high of $13.80 in 2018. The latest financial results revealed some hits and misses for the venerable bank. In this article, lets delve into the quality of OCBC 3rd quarter earnings and the potential outlook for OCBC share price.

OCBC share price

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether OCBC share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

OCBC share price at cross-roads

In the stock market, confidence means everything. This is especially for bank stocks. In this regard, OCBC share price is currently facing headwinds caused by the cautious market sentiments and slowing Singapore economy.

While the unfolding Hong Kong protests had not inflicted any collateral damages to OCBC’s business momentum in Hong Kong, net profit declined 6% to $1.17 billion for 3QFY2019. The net profit was slightly higher than UOB’s $1.12 billion. But then again, OCBC had a lower net interest income of $1.6 billion and lower net interest

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Eagle Hospitality Trust to blow up in pieces?

Will unit price of Eagle Hospitality Trust blow up in pieces? Investors of Eagle Hospitality Trust look set for plenty of sleepless nights following more stunning revelations, which came straight after The Queen Mary fiasco. This time round, the management’s response to SGX queries on 1 November raised more concerns than assurance to investors. Why is that so?

Eagle Hospitality Trust initial asset portfolio consists of 18 properties, out of which 12 properties were owned by the Sponsor under its USHI Portfolio. The other 6 properties were from the ASAP6 Portfolio in which the properties were purchased from “third party ASAP6 Portfolio vendors”. The latest issue centred around the ASAP6 portfolio, and the information could provide a plausible rationale for the massive sell-offs by the big boys in recent months.

Eagle Hospitality Trust

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether Eagle Hospitality Trust unit price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

Eagle Hospitality Trust massive sell-downs explained

In the prospectus, the identity of the “third party ASAP6 Portfolio vendors” was not revealed. Following SGX’s query, it was revealed that Eagle Hospitality Trust acquired the “ASAP6 Portfolio from the Sponsor which had acquired the ASAP6 Portfolio from ASAP prior to the Listing Date”. Although ASAP is not related to the sponsor nor Eagle Hospitality Trust, the owners of ASAP emerged as the largest unitholders of Eagle Hospitality Trust after IPO.

While I can agree that there is 100% no potential conflict of interest between the related parties, the …

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UOB share price in royal rumble with DBS and OCBC

It is the 3Q financial reporting season for the banks again. Will UOB share price edge over DBS and OCBC? With only 3 branches in Hong Kong, UOB Group has significantly smaller exposure to the Hong Kong civil unrests as compared to DBS and OCBC. But this is not to say that it is going to be a jolly ride for UOB share price.

For UOB share price, the real battle to be fought is actually the home ground – Singapore. After all, Singapore market is responsible for more than half of its operating profit. With Singapore economy slowing down in 2019, the outlook for UOB seems to be challenging.

UOB share price

By and large, 9MFY2019 results reflected a resilient performance as net interest income and net profit grew 7% and 8% respectively on a year-on-year basis. The report suggests that the strategy by merger wizard, Wee Cho Yaw, to focus growth mainly in Singaporean and South East Asia region had been prudent. As a result, I do not see UOB share price being shattered by the on-going fallout from the Hong Kong protests. The situation is different for DBS and OCBC, which had extensive businesses in Hong Kong through Dao Heng and Wing Hang banks respectively.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether UOB share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

UOB share price fights gravity

The latest results revealed certain clues that could possibly shape UOB share price in the coming months. All …

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Eagle Hospitality Trust to sink or swim with Temasek Holdings?

What a bad start for a REIT that barely got listed for six months! Debut in SGX only in May 2019, US pure-play REIT is facing some sort of crisis lately. At the centre of the storm is an astonishing article by The Edge Singapore revealing toxic inspection reports and a letter from the City of Long Beach to Urban Commons, sponsor of Eagle Hospitality Trust. In that letter, it was alleged that Urban Commons failed to meet obligations under The Queen Mary ground lease to make certain repairs required under the lease agreement.

The Queen Mary is one of the 18 properties held by Eagle Hospitality Trust, with valuation of USD159.4 million. Only Holiday Inn Resort Orlando Suites Waterpark, with valuation of USD162.8 million, carries a higher valuation. In this regard, The Queen Mary is one of the key assets of Eagle Hospitality Trust and the loss of this asset would likely have significant impact to Eagle Hospitality Trust.

Eagle Hospitality Trust

Eagle Hospitality Trust in dark chapter

The 23 October article by The Edge Singapore spooked the hell out of investors and sent the unit price spiralling out of control. The counter fell from USD0.65 to USD0.55, prompting the manager to swiftly seek clarification with the sponsor. Subsequently, the latter confirmed that “they are not in default on The Queen Mary ground lease and that The Queen Mary remains safe and structurally sound”. It was also clarified that the letter from city of Long Beach is a formal request for information and not a notification for default.

On 28 October 2019, it was further confirmed that the total repair costs for The Queen Mary amounted to USD7 million and that Urban Commons will be responsible for costs involved. For sure, USD7 million is a small amount. Even if the sponsor is …

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Sembcorp Marine share price in final fantasy with Temasek Holdings

Since my last article on this counter, Sembcorp Marine share price rose from the grave to reach a high of $1.40 in recent days. The spectacular form of Sembcorp Marine share price was surely a welcome sight for investors. This is because this counter had been on a trashy form since its subsidiary in Brazil, Estaleiro Jurong Aracruz Ltda (“EJA”), had been stormed by the Brazilian authorities in early July 2019. The raid was in relation to a corruption probe, nicknamed “Operation Car Wash”.

Needless to say, the market went into overdrive after the announcement of the stunning partial offer by Temasek Holdings for Keppel shares. There were plenty of speculations that a merger between Keppel and Sembcorp Marine is finally on the cards. As a result, Sembcorp Marine share price is on fire.

Sembcorp Marine share price

But is it really the beginning of a much-anticipated recovery for Sembcorp Marine share price? Or yet another false dawn for investors? After all, the pre-conditions to the partial offer seem quite onerous to the extent that it seems like Temasek Holdings is buying an insurance for the deal.

One of the pre-conditions set by Temasek Holdings is that there must be no material adverse change to Keppel’s financial performance following the announcement for the next 12 months. This includes not having “a decrease of NAV of the Group by 10% or more”. And not having “a decrease of 20% or more from the cumulative profit after tax of the Group for the 12 months ended 30 September 2019 of $696 million”. With such pre-conditions for the partial offer, it is too premature to claim that the merger is a foregone conclusion. So expect much volatility for Sembcorp Marine share price in the next 12 months.

On the other hand, investors must be wary that …

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Keppel share price in winter wonderland with Temasek Holdings

What an explosive revelation. Keppel share price stormed to high heaven on the back of a shocking partial offer by parent company, Temasek Holdings. Will Temasek Holdings do a CapitaLand, which was formed through a merger between Pidemco and DBS Land in 2000? Incidentally, the stunning move came right after Keppel achieved a massive breakthrough with Sete Brasil, which was forced to declare bankrupt over a corruption scandal in Brazil. The corruption scandal had caused Keppel to be fined a whopping $570 million by authorities, rupturing Keppel share price in the process.

Indeed, Keppel investors had every reason to be angry with the corruption scandal. On looking back, Keppel share price was actually recovering since the outbreak of the oil slump in 2014. From a low of $5.00 in 2016, Keppel share price actually soared to a high of $8.70 in early 2018. The massive fine meted out had thrashed Keppel share price left, right, centre. Since then, this counter never really see daylight. If Sembcorp Marine is found guilty as well, then Temasek Holdings could be faced with a total fine of nearly $1 billion of fine (inclusive of Keppel’s fine).

Keppel share price

The partial offer of $7.35 by Temasek for each Keppel share is akin to offering a cup of hot milo to investors stranded in a protracted winter because it represents a premium of 25.86% to the last traded Keppel share price as of 18 October 2019. But should investors jump for joy or punch the wall at the perceived low-ball partial offer? After all, Keppel share price was trading at $8.70 only in January 2018. For those who had bought into that false dawn, it is unlikely that they find the offer appealing, much less accept the offer. But let’s delve into what Temasek Holdings may be up …

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SPH share price in Halloween nightmare

It is a battle that SPH can ill-afford to lose. SPH share price looks set for another horrifying meltdown following the release of a set of disappointing full-year results for FY2019. The latest results marked the fifth consecutive quarterly of decline. With such financial performance, investors should brace for yet another devastating run of SPH share price.

The declining business performance and ailing SPH share price come on the back of a change in readers’ lifestyle trend and reading habits. People are less likely to buy printed newspaper and prefer digital media for consumption of news. To make matter worse, Singapore is a small market for the Media segment to grow and I don’t foresee SPH embarking on overseas acquisitions to scale up its Media segment division.

SPH share price

In a bid to reposition itself in the era of digital age, the Group is undergoing a massive digital transformation and is retrenching 5% of its staff from the Media segment. The retrenchment will be the second exercise under the helm of CEO Ng Yat Chung. The last retrenchment exercise was also in October when the Group announced the FY2017 full-year results.

Interestingly, in FY2017, the net profit was $395 million, an increase of 29% as compared to FY2016. Two years after the fateful retrenchment in 2017, the net profit for full-year FY2019 collapsed to $260 million, underscoring the level of decline in its media business segment. Needless to say, SPH share price had been falling against such challenging backdrop. SPH share price would have suffered a worse fate if not for the aggressive shares buy backs conducted by the management. For the financial year, 3,947,600 shares were bought back, the second highest for the past 11 years. The share buy backs provided critical support for SPH share price.

Unlike the …

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Singtel share price to explode with data centre REIT?

Will the management drop the bombshell? Singtel share price became the talk of the town in recent days when DBS analysts claimed that Singtel may cut dividend payouts to $0.13 to $0.15 for FY2021 and had set target price of $3.12 for Singtel share price. On the other hand, there were market speculations that Singtel could possibly monetize its data centres through REIT, thereby unlocking value and freeing up cash flow for capital expenditure and dividends.

DBS’ argument is that results of Singtel’s regional associates will cause harm to Singtel’s bottom-line and roiled Singel share price in the process. To this end, I do not dismiss such a possibility. If investors looked back, share of pre-tax profits from regional associated reached an alarming 6-year low of $1.5 billion in FY2019, resulting in net profits to collapse to $3.1 billion. If the regional associates continued to underperform, things would surely spiral out of control.

Singtel share price

Then again, do you think Singtel management will leave it to fate? To be frank, I have never been a big fan of banks’ stock analyses, especially those generated by DBS. I always take their stock analyses with a pinch of salt because their target prices were often so off-tangent and out of touch with reality. Take for example, in November 2018, DBS suggested that there would be strong rebound for Starhub in FY2020 and had a BUY recommendation with target price of $2.45 for Starhub share price. Fast forward a year later, Starhub share price suffered a gut-wrenching meltdown to reach a low of $1.30. In this regard, I will share my insights on whether Singtel share price will sink or swim in the coming months, taking into the possibility of the listing of its data centres.

Note that this is an opinion article and …

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SIAEC share price and ST Engineering in bizarre tales

As an engineer working in the aviation industry for 15 years, I have seen the rise and fall of the sector. Inevitably, when we talk about the aviation industry, investors would likely to draw comparison between the two Singapore titans – SIAEC and ST Engineering. Between the two, SIAEC share price had lost considerably shine in recent years, making it one of the biggest falling stars in SGX mainboard. Will SIAEC share price ever see light at end of tunnel?

Both entities had dominated the local aviation industry for decades and are majority-owned by Temasek Holdings. Nonetheless, the similarities ended here as both companies took on entirely different destinies due to a series of unfortunate events and different business strategies. From the lens of investors, it seems that someone up there has decided to write intrigue scripts for SIAEC share price and ST Engineering share price.

SIAEC share price

Whilst SIAEC and ST Engineering had ruled the local aviation industry for decades, both are fundamentally very different companies with niche business models. The former is mainly engaged in the regional airlines maintenance and technical services businesses while the latter is engaged in the maintenance and  modification businesses, with special focus in the United States MRO market and passenger-to-freighter conversion capabilities.

In this article, I will share my insights on the unfolding narratives for both SIAEC share price and ST Engineering share price. Given a choice, I will pick ST Engineering as a long-term investment based on a few factors which I will reveal in the latter part of the article.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in SIAEC or ST …

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Hongkong Land share price to suffer Trojan Horse?

With a history of 130 years, Hongkong Land is certainly one of the most venerable listed companies in Singapore. Possibly, only Boustead, OCBC’s Great Eastern and UOB’s Haw Par Corp can match Hongkong Land in terms of pedigree and history. If you are talking about prestige, Hongkong Land is even more impressive as its parent company is none other than the famous Jardine Matheson Holdings. Together with Dairy Farm, Jardine C&C, Jardine Matheson Holdings and Jardine Strategic Holdings, Hongkong Land forms the “Hong Kong Five Tigers” that ruled Straits Times Index (STI) for many years.

The Hong Kong Five Tigers are all part of the Jardine Matheson Group and this network of companies established an impenetrable fortress in the SGX mainboard. Nonetheless, what can float a boat can also sink it. In this regard, will the unfolding Hong Kong protests be a Trojan Horse for Hongkong Land share price?

Hongkong Land

Hongkong Land share price in trouble

Troubles certainly come in troops for Hongkong Land share price. Indeed, since the start of the Hong Kong protests, Hongkong Land share price got bombed out, falling from USD6.60 to the current USD5.50.  However, investors who are planning to buy on the cheap and sell on the upside should be mindful of the business dynamics affecting Hongkong Land share price.

As a matter of fact, Hongkong Land had suffered two major corrections (2015 and 2018) prior to the Hong Kong protests. So to attribute the current bearish form of Hongkong Land share price entirely to the civil unrests would not be right. To complicate matters, Singapore government’s cooling measures actually had a hand behind the meltdown of Hongkong Land share price. Also, just like Singapore, the Hong Kong premium office market had just emerged from a supply overhang issue started in 2015, causing …

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Keppel REIT a time-bomb waiting to explode?

Amid the current rally in the S-REIT sector, Keppel REIT is one of the rare counters that is majority-owned by Temasek Holdings (49%) and at the same time, an S-REIT that remained elusively laggard thus far. The current Price/Book value stood at 0.875, indicating that Keppel REIT unit price is trading at an undervalued level.

With a strong sponsor in Keppel Land and a solid backer in Temasek Holdings, Keppel REIT can be considered a blue chip among the S-REIT community. Total market capitalization is about $4.2 billion. So the poor form of Keppel REIT unit price, against the backdrop of a powerful rally in the S-REIT sector, must have left investors singing the blue. Then again, unitholders must count their blessings. After all, Keppel REIT’s net income consistently fell for the past five years. It is a miracle that the unit price had not suffered a meltdown.

Keppel REIT

In my opinion, there are a few factors that attributed to the current form of Keppel REIT unit price. However, the investment merits will be highlighted as well so as to provide a balanced view of this counter. Fundamentally, Keppel REIT is not a company in crisis but there is a need to be mindful of the dark side. Recent developments suggested that all may not be well for Keppel REIT as it recently sold several assets to raise $1 billion cash.

One particular financial metric looks disturbing to me and it is something that investors should be aware of. Again, investors should do their due diligence and thread with caution before entering this counter.

Keppel REIT a golden goose for Keppel Corp

For the past few years, Keppel Corp’s business had been affected by the oil slump and the dearth of oil rig orders. Therefore, Keppel REIT provides a form …

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OCBC share price in for an explosive thrashing?

Will OCBC share price bomb out on 5 November 2019, which is the day it announces its third quarter financial results? In my view, investors should brace themselves for a wild ride as there are signs that point to OCBC share price breaching the critical support level of $10.00 in the coming weeks.

2019 had been such an intriguing year for OCBC share price. Despite posting good financial results for 1QFY2019 and 2QFY2019, OCBC share price tumbled after the announcement of the financial results. For example, on 10 May 2019, the bank achieved net profit of $1.23 billion for the first quarter of 2019, representing an increase of 11% to 1QFY2018. Yet in that month, OCBC share price plunged from $12.10 to a low of $11.00.

OCBC share price

Then on 2 August 2019, OCBC share price corrected from $11.40 to $10.50 on 26 August 2019. The decline was puzzling because 2QFY2019 results showed that net profit had increased by 1% to $1.22 billion from $1.21 billion reported a year ago. Although the data indicated that growth for OCBC is slowing, the bank is still making healthy level of profits. In this regard, will 3QFY2019 be the final straw that break the camel’s back?

Despite the anticipated volatility of OCBC share price in the coming weeks, investors should stay calm. This is because the management has a track record of buying back OCBC shares. For the last financial year, a whopping 15.83 million shares had been repurchased from the market. For this financial year, a total of 6.58 million shares had been repurchased. The series of shares buybacks provided much support for OCBC share price for the past few months.

In this article, I would provide my insight on the major factors that could shape OCBC share price in the coming weeks.

OCBC

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