Month: February 2019

OCBC share price torpedoed by Great Eastern

CapitaLand share price

What a downer! In a month in which most investors expect local banks to announce rosy financial results, OCBC dropped the bombshell of a less-than-flattering Q4 performance. In a twist of event, OCBC share price got bombed out after delivering a lower Q4 net profit of 11% at $926 million. The surprise culprit for the disastrous performance was OCBC’s flagship subsidiary – Great Eastern Holdings, which announced a stunning 30% drop in net profit.

Of course, one quarterly result does not define OCBC share price but OCBC management team was left absolutely red-faced as DBS and UOB both announced increasing profits of 8% and 7% respectively for the fourth quarter. Certainly, investors wasted no time in punishing OCBC share price. OCBC share price went into goofy mode, falling from $11.60 on 21 February 2019 to $11.30 on 25 February 2019.

OCBC share price

While OCBC share price got walloped by lower contributions from its insurance subsidiary, its core banking operations delivered a robust performance which saw it growing 22% from a year ago to $817 million. Net interest income increased 9% year-on-year to $5.89 billion from $5.42 billion in FY17. Customer loans grew 9% to S$258 billion across all key markets. Based on …

DBS Group Holdings share price set for magical run with Temasek Holdings?

DBS Group share price

Crisis? What crisis? DBS Group Holdings rubbished all talks of impending economic crisis by staging yet another blockbuster performance – net profit surged 28% to a record $5.63 billion. Total income increased 11% to $13.2 billion from loan and fee income growth. Despite the continued business momentum, DBS Group Holdings share price suffered an embarrassing loss of form throughout 2018. On this note, would DBS Group Holdings return to winning form in 2019?

Return of DBS Group Holdings share price

From a high of $30.80 in May 2018, DBS Group Holdings share price suffered a stunning meltdown to a low of $22.80 in October 2018. Following that 26% correction, DBS Group Holdings share price never really recovered. Many investors may be waiting at the sidelines and adopting a wait-and-see approach as a result of the shares volatility.

DBS Group Holdings

Notwithstanding the volatility in the share price, it certainly seemed that the strong US market blew away any lingering doubts on the growth prospect of DBS Group Holdings, which had seized the opportunity to grow its loans to 6% to $345 billion against the backdrop of rising interest rate hikes. Net interest margin increased 10 basis points to 1.85% with higher interest rates …

StarHub share price trashed to 14-year low

SGX stocks

StarHub CEO, Peter Kaliaropoulos must be feeling the heat again. On 18 February 2019, StarHub share price plunged to a 14-year low of $1.61. The last time that StarHub share price was trading at such disgraceful level was in 2005. The trigger for the massive sell-offs was obviously the dismal Q4FY2018. Following the announcement, investors wasted no time in punishing this counter, sending StarHub share price to rock bottom.

It seems that honeymoon period is over for the StarHub CEO. Following his appointment on 9 July 2018, StarHub share price enjoyed a brief respite and even managed to halt its horrendous slump. Then the announcement of Keppel and SPH buy-over of M1 shares had led to a resurgent StarHub share price in September 2018. Investors had speculated that a potential privatization of M1 could lead to lower competition for StarHub.

StarHub share price

But reality started to sink in and investors soon realize that the previous rebound of StarHub share price was a mere false dawn in the making. The headwinds remained the same while business fundamentals continued to decline. In fact, full-year results for FY2018 saw StarHub reporting the worst revenue and net income in five years – $2.36 billion and $201 …

Singtel share price in for terrifying ride

Singtel share price

What a perfect storm for Singtel share price. Singtel share price is set to face reality once more as the telco announced a set of disastrous Q3FY2019 financial results which saw most business units reporting declining profits. Net profit declined 14% to $823 million due to increased competition in India. In my last article on Singtel share price, I predicted that this counter would enter 2019 in bad shape. Indeed, Singtel share price plunged to $2.86 on 3 January 2019 and only recently recovered to the $3.00 level. However, the recent financial results would likely roil Singtel share price again.

It appears to me that Singtel share price is set for a roller coaster ride as the Q3FY2019 results fell short of many analyst estimates. Most business units reported declining profits on year-on-year basis. To make matters worse, the latest results marked the fifth consecutive quarter of declining profits. The last time that Singtel recorded an improving quarter of profit was when it sold off majority stake in NetLink Trust. And that was in 2017.

Singtel share price

Investors would note that Singtel share price has been bearish in recent months. Nonetheless, the M1 general offer had led to a mini-recovery for Singtel …

mm2 share price in song and dance with Temasek Holdings

mm2 share price

Has mm2 share price lost its magic? Like many homegrown listed companies, mm2 share price suffered from unjustified poor valuations in recent years despite clocking in decent business performances. Perhaps it is a case of being listed in the wrong place and wrong time, resulting in mm2 share price being grossly misunderstood by many investors. It also doesn’t help that most Singaporean investors tend to invest in dividend stocks or REITs, leading to the pervasive lack of interest in growth stocks like mm2.

As a Singaporean, I am always supportive of homegrown companies, especially the small and medium ones. Secondly, as a content producer, mm2’s business model resonates with my blog, SG Wealth Builder. But I reckon the impetus for this equity research is my fear that mm2 may be on the verge of throwing in the towel and potentially privatize to seek a foreign listing, like what Osim did in 2017. Such drastic approach is understandable because even though mm2 Asia’s business results had been consistently robust, mm2 share price performance turned out to be a disgrace.

mm2 share price

In September 2018, mm2 announced a strategic review with the aim of enhancing its corporate profile in North Asia markets and to …

SIAEC share price in bloodbath with Temasek Holdings

SIA share price

The sky is falling for SIA Engineering Company as SIAEC share price crashed to $2.21, a 10-year low on 26 December 2018. The correction of SIAEC share price could be due to market anticipation of a set of poor third quarter FY2018/19 results. Following the release of the results, SIAEC share price recovered to the $2.50 bandwidth but started falling again in early 2019. On the basis of the recent volatility, I smell blood for SIAEC share price and investors should brace themselves for a roller-coaster ride.

Investing in SIAEC is not fun. If investors look back, SIAEC share price has suffered a horrendous bloodbath, falling from $5.00 in 2013 to the current $2.40. The drop of 50% in SIAEC share price within 6 years make this counter an awful falling star. Should investors hang on for their dear lives or hope for a privatization offer from parent company, Singapore Airlines? SIAEC share price SIAEC share price in destructive mood

It had been woes after woes for investors as the dismal SIAEC share price performance saw it being booted out of the prestigious STI benchmark in 2017. Following that, SIAEC share price tanked after a surprise block sale by JP Morgan. SIAEC share …

CapitaLand Mall Trust unit price in explosive form

CapitaLand Mall Trust

What a breath-taking form! For the past one year, numerous blue chips in Singapore Exchange suffered from a terrible loss of form, causing many wealth builders to lose their pants. Many REITs were not spared from the rout either. CapitaLand Mall Trust unit price is one of the rarest of rare counters to buck the trend to enjoy a magnificent rally. The gravity-defying form of CapitaLand Mall Trust unit price is certainly intriguing as the unit price remained bullish even after a massive $277.6 million private placement exercise in November 2018.

With distribution yield of 4.8% and Price/Book Value of 1.19 as of 11 February 2018, current CapitaLand Mall Trust unit price is indeed attractive. The top three major shareholders are CapitaLand Limited (27.12%), BlackRock (7%) and NTUC Enterprise Co-operative (3.93%). With such a stellar group of institutional investors, investing in CapitaLand Mall Trust seems like absolute no-brainer. Interestingly, NTUC used to be a substantial shareholder with 5% stake. However, since September 2018, NTUC had quietly pared down its stake in CapitaLand Mall Trust to the current 3.93%.

CapitaLand Mall Trust

In this equity research article, I will share my insights on what are the factors that I would look out for when …

Can Keppel share price meet the great expectations of Temasek Holdings?

HPH Trust

It is that sinking feeling all over again for Keppel share price. And it appears to me that investors are not convinced of a turnaround of Keppel share price. Following the release of a strong full-year 2018 financial result on 24 January 2019, Keppel share price keeps falling instead of rising. Management must be rubbing their eyes and wondering what on earth could have happened to Keppel share price.

With a stake amounting to 20.54%, Temasek Holdings is currently the largest shareholder of Keppel. The burning question among investors must be: how would Temasek Holdings fight its way out with Keppel? Should Temasek Holdings go for a “big bang” merger between Keppel and Sembcorp Marine to revive the ailing Keppel share price or continue to let Keppel share price spiral out of control? An overhaul in the corporate identity of Keppel may not be a bad thing considering the corruption scandal of FY2017 could have somewhat dented the reputation of the world leading oil rig builder.

Keppel share price

But then again, it is not all doom and gloom for Keppel share price as the company struck gold with its golden goose – Keppel Land, which recorded a net profit of $938 million

Singapore finance blogs and the story of the three thirsty monks

SG Wealth Builder

Yet another Singapore finance blog bites the dust. SG Young Investment is the latest local finance blogger to take a hiatus. This followed hot on heels the announcements from 15HWW and  Cheerful Egg, who are taking a long break from blogging.

Whenever such depressing news surfaced, I am always affected emotionally, spiritually and mentally. This is because when you have people leaving the scene, it is never a good thing. How can we build a vibrant ecosystem when you have players exiting one by one? And we are talking about good players, not mediocre ones.

Finance blogs

Although the exodus of finance blogs is not new, it highlights the fragility of the finance blog fraternity. Over time, if we are not careful about it, the community of finance blogs may become a thing of the past. Is this what Singaporeans want? I always believe the sum of parts is greater than the strength of a person. In this regard, I would like to share the story of the three thirsty monks.

The three thirsty monks

Once upon a time in China, there lived a young monk who lived in a temple high up on a mountain. Every dawn, he had to …

Asian Pay TV Trust unit price left Temasek Holdings red faced

Sembcorp Marine share price

What an absolute nightmare it is for investors. The disastrous collapse of Asian Pay TV Trust unit price is something that I have never seen for a business trust. Since its IPO in 2013, the performance of APTT unit price is nothing short of shambolic. From IPO price of $0.97, APTT unit price suffered an incredible meltdown within six years as the unit price slumped to the current abysmal level of $0.13. In fact, investors never had a good sleep with this counter as APTT unit price never exceed the IPO price level after its much-hyped listing.

Of course, die-hard fans of Asian Pay TV Trust would argue that this trust is one of the best yield counters in Singapore Exchange. In fact, over 43 cents per unit in distributions had been declared since IPO (including Q3 2018 distribution). But given the explosive free-fall of APTT unit price, long-term investors would still lose their pants even if all the distributions have been factored in.

Asian Pay TV Trust

Obviously, there are plenty of hard lessons to be learned for long-term investors and it is important that this group of people wise-up or else it would be like throwing good money after bad. How well …