DBS Group Holdings share price ready to hit $50?

What a fine performance! DBS Group Holdings share price looks set for another rally following the announcement of a solid Q1FY2019 financial performance. On 22 February 2019, I predicted that DBS Group Holdings share price would be on form because of the strong Net Interest Margin (NIM) performance. Since then, the counter surged from $25 to the current $28.

On the basis of the healthy business momentum, DBS Group Holdings share price is likely to continue its dazzling run, perhaps even reaching the $50 mark. Last year’s remarkable run of DBS Group Holdings share price was punctuated by the shock announcement of the tightening of Additional Buyer Stamp Duty (ABSD) and Loan-to-Value (LTV) ratio on residential property purchases. Nonetheless, it appears to me that DBS had managed to shake off the blues and resume its story.

DBS Group Holdings share price

Another reason for the bullish form of DBS Group Holdings share price is the reduction of allowances and non-performing assets (NPA). This is one major downside risk for DBS Group in recent years because of the ailing oil and gas sector. For Q1FY2019, the allowances was halved, dropping from $164million in Q1FY2018 to $76million FY2019. NPA also decreased from $5.8billion to $5.6billion.

Looking at the latest financial results, I could not find any fault with DBS Group Holdings’ performance. But what is surprising is that the management decided to put the icing on the cake by paying dividends four times a year, instead of two times. This would provide shareholders a regular income stream. Given the buoyant feeling, DBS Group Holdings share price is anticipated to go on a rampant bull run.

DBS Group Holdings share price on fire

In this blog, I have mentioned many times that DBS Group Holdings share price is very prone to volatility because of its sensitiveness to the …

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Best World share price in horrendous meltdown

Will Best World do a Hyflux? Investors of Best World must be horrified as the counter collapsed from a high of $3.30 in February 2019 to the current $1.62. Within the span of two months, Best World share price plunged by more than 50%. Both Best World and Hyflux were founded by female business leaders, namely Doreen Tan and Olivia Lum respectively. Incidentally both are home-grown companies facing some sort of troubles lately. Nonetheless, the similarities ended there. Let’s take a look whether Best World is a falling knife in the making.

Best World

For the records, Best World is a Singaporean company that specializes in direct selling and franchising of premium skincare, personal care, nutritional and wellness products. It is definitely not an S-chip company awaiting to implode. Many investors may have this wrong perception probably because of its recent China misadventure. More on that later. What I am emphasizing here is that it is important for investors to have a basic understanding of Best World’s business profile, the unique business model and its competitive edge before making judgements.

What is direct selling and is it considered multi-level marketing (MLM) or pyramid marketing, both of which are illegal in Singapore and China? But if MLM is really illegal, why is it that Best World can do business here and even got listed in SGX? In this article, I will share the legal framework for multi-level marketing and how it affects Best World business model. I suspect many people don’t really understand much about such marketing strategy, thus giving rise to the confusion over the recent China sales issue.

On the other hand, investors must be aware that big boys (fund houses and short sellers) are punting this counter. This explains the volatility of Best World share price. However, this does …

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Hyflux in dark final chapter

White knight? What white knight? Dark days loom ahead for Singapore investment community as Hyflux enters its final chapter of its protracted restructuring process. On 17 April, I wrote that Hyflux is on course for a horror finale. That fateful day, PUB issued a 30-day notice to Tuaspring Pte Ltd (TPL) to terminate the Water Purchase Agreement (WPA) and take over the Tuaspring Desalination Plant (TSDP).

Hyflux saga is so bad its good

Does Hyflux deserve a comeback like OSIM?

SembCorp Industries should invest in Hyflux

The holy water of Hyflux Perpetual Securities

Hyflux

When Hyflux sought bankruptcy protection from the High Court back in February 2018, nobody could have imagined the outcome of today. There were plenty of high hopes as former white knight, SM Investments, had emerged out of nowhere to dangle a $530million rescue mission in late last year. But more than a year later, Hyflux appears to be on course for liquidation following the collapse of the rescue package. It must have been a devastating roller-coaster ride for Hyflux investors.

Hyflux going down in flames?

Evidently, PUB only intended to take over only the desalination plant of Tuaspring. On the other hand, the latest development triggered its largest creditor, Maybank, to terminate the Collaboration Agreement and take over the power plant. Although the latest move meant that Hyflux had finally disposed the ill-fated Tuaspring Integrated Plant, investors must not rejoice yet. This is because without Tuaspring, a big question mark would center around Hyflux’s ability to settle its mountain of debts. Without a major asset sale like Tuaspring, it remains to be seen how Hyflux could avoid an explosive liquidation. As of 30 September 2018, the loan and borrowings amounted to a whopping $1.56billion.

To add to the shambolic mess, Hyflux is slugging it out …

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Tips for trading online in an economic slowdown

In 2008, the world experienced the worst financial crisis since the depression of the 1930s. In response to the decline, the central banks lowered interest rates to stimulate lending, and started printing money in the form of quantitative easing program. These measures helped the economies of the developed countries to grow and in response, global stocks rose. In fact, all the major indices in Asia, Europe, and United States rose by triple digits.

However, markets do not go up forever. There is recent evidence that points to slowing economies. This year, central banks and leading organizations like the International Monetary Fund and the World Bank have lowered their economic forecasts.

trading

By looking at the economic calendar, there is evidence that a slow growth environment is the ‘new normal’. The global manufacturing PMI has declined to almost 50 while inflation remains significantly lower. In China, exports have shrunk while the Q4 growth was 6.3%. In the US, the economy is expected to grow by slightly over 2.0% this year after growing by 4.2% in the second quarter of 2018. The same trend will be seen in Europe, where Italy is currently in a recession.

As a trader, this should not worry you. This is because, unlike long-term investors, you are not fully invested in the market. Instead, you observe the market, open trades in either direction and exit when you make a profit. For long-term investors, a slowdown could mean losses for their portfolio. In other words, the volatility that comes during economic slowdowns is viewed favorably by short term traders. So if you’re trading online, how can you take advantage of these conditions?

First, you need to pay close attention to market volatility, using the CBOE volatility index, often known as the fear index. In good times, the index is …

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Hyflux on course for horror finale

What a finale. What a finale. On 3 April, I wrote that Hyflux saga is so bad that its good. The following day, Olivia Lum confounded investors by announcing the termination of a key restructuring plan with white knight, Salim-Medco consortium SM Investments. Prior to this latest turn of event, Hyflux investors had staged a public protest and planned to vote against the proposed rescue plan. But as the saying goes, Man proposes, God disposes. Apparently, Olivia had the last laugh.

Hyflux in doomsday path?

The latest twist is indeed stunning because Hyflux claimed that it has no confidence in SM Investments in completing the rescue deal and is currently seeking other potential investors. But what is even more bizarre is that Hyflux claimed that PUB’s intention of taking over Tuaspring Desalination Plant without seeking compensation would enable the firm to reach out to a “wider pool of investors”.

Does Hyflux deserve a comeback like OSIM?

SembCorp Industries should invest in Hyflux

The holy water of Hyflux Perpetual Securities

Hyflux

Make no mistake, Tuasping is an integrated plant consisting of both water desalination and gas turbine power plants. Obviously, it makes sense for PUB to take back the Tuaspring Desalination Plant from Hyflux because of water security purposes. As water is a strategic resource, Singapore will not want Tuaspring to fall into the hands of a foreign entity.

But it does not make sense to me when Hyflux claimed that potential investors would be more interested in investing in Hyflux now. After all, if PUB really did take back the desalination plant, who would want to invest in the loss-making power plant of Tuaspring? The key culprit for landing the water treatment firm in such a terrible state was the collapse of the oil price, which led to depressed …

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The best and worst SGX stocks

What is a growth stock, a dividend stock and a defensive stock? These terms had often been used in various online articles and can be quite intimidating to investors. Understanding these terms is essential because you may want to buy stocks that fit into your investment strategies and temperament. In this article, I will attempt to explain these terms and use some SGX stocks as examples.

Best SGX stock research campaign

SGX stocks

Many Singaporean investors will agree with me that investing in SGX stocks is not a walk in the park. Quite a number of local investors had lost their pants investing in Hyflux, Noble and Midas stocks. Then there were those investors who had lost their monies investing in oil and gas companies facing liquidation issues due to the meltdown of oil prices. And don’t even get me started on the thrashy S-chips that had caused plenty of heart pains for investors. On looking back, the past decade was certainly disaster after disaster for SGX stocks.

Given the spate of investment misadventures, investors can be forgiven for thinking that SGX stocks tend to generate poor returns. To this end, I beg to differ. Stock picking is both an art and science. Inevitably, you need to suffer losses before gaining enlightenment. SGX stocks offer plenty of opportunities to make money (and lose money), and it is only a matter of identifying the right stocks that suit your investment strategies. With this in mind, let’s take a look at some of the best and worst SGX stocks.

Roller coaster rides of growth stocks

Growth stocks are those which investors deem to have potential revenue or earning growth. Typically, the management of these companies will place revenue or earning growth as priority. Thus, growth stocks give little or no dividends because the management …

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Supplementary Retirement Scheme (SRS) strategies

Supplementary Retirement Scheme (SRS) is part of Singapore government’s effort to address the retirement needs of Singaporeans and is meant to complement Central Provident Fund (CPF).

Over the years, SRS had grown in popularity in Singapore as contributions surged from $0.16billion in 2001 to an explosive $8billion in 2017. During this period, the number of account holders also increased 10 fold, surging from 11,890 to 140,695. Given that so many people had jumped into the bandwagon, it is worthwhile to examine the merits of the supplementary retirement scheme.

While both SRS and CPF are retirement schemes, they work differently and address different financial needs. CPF focuses on housing, healthcare and retirement needs while SRS is a scheme that provides tax relief, investment and saving opportunities.

SRS

Generally speaking, SRS is a scheme that Singaporeans and foreigners should consider in the early years of their careers because it comes with many benefits and flexibility. In this article, I will share my strategies and insights on how to leverage SRS to boost your retirement income. I would also highlight the best possible way to exit the fund.

SRS for retrenchment hedge

Firstly, contributions to CPF is mandatory while SRS is purely voluntary. You can choose to contribute to your SRS anytime and as often as you like. For Singaporeans, you may choose to contribute up to $15,300 to your SRS account while the maximum limit for foreigners is $35,700. In addition, contributions to SRS qualify you for dollar-for-dollar tax relief. But note that there is a $80,000 personal income tax relief. So if the total personal income tax relief have already exceeded this cap limit, your contributions would not entitle you to more tax relief.

Unlike CPF, one of the best things about SRS is its flexibility. You can only withdraw …

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ThaiBev share price in explosive form

In September 2018, I wrote that ThaiBev share price was trading at attractive levels and that represented a good opportunity for accumulation. Since then, ThaiBev share price went on a rampant bull run, surging from $0.60 to the current $0.85. The powerful run represented a whopping 42% increase for ThaiBev share price.

Devastating crash of ThaiBev share price

Given the giddy form of ThaiBev share price, should investors take profit and cash in or hold on with the expectation of further hike in ThaiBev share price? To answer this question, it really depends on your entry and exit levels. If I had entered this counter at $0.60, I would cash in now.

ThaiBev share price

Some readers may say that I have short-term mentality but I don’t really care. A dollar gained is a dollar earned. There are not many SGX-listed stocks that appreciated in value in such short-time, so investors should strive not to be greedy in this sort of market condition. Fundamentally, this counter is a growth stock and therefore, ThaiBev share price is sensitive to its revenue performance.

Certainly, it had been a bitter-sweet journey for ThaiBev investors as ThaiBev share price plummeted following the implementation of a new Excise Tax Act in 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. As a result, ThaiBev share price turned bearish and started rolling downhill.

ThaiBev share price in stunning form

But investors were stunned by ThaiBev share price swift turnaround in 2019, following the release of a series of solid financial results. On looking back, it is not difficult to determine the driving factors behind ThaiBev share price for the past few months. The stellar financial results of Q1FY19 were due to …

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Hyflux saga is so bad its good

The unfolding Hyflux saga is like a cheesy Taiwanese drama series – so bad that its good. Why is that so, if you may ask? After all, 34,000 investors had lost their life savings investing in Hyflux preference shares and perpetual securities. In my opinion, there are plenty of important lessons to be learned out of this fiasco. And Hyflux investors had better learn from this episode or it would be like throwing good money after bad.

Does Hyflux deserve a comeback like OSIM?

SembCorp Industries should invest in Hyflux

The holy water of Hyflux Perpetual Securities

From the implosion of Lehman Brothers’ Minibonds in 2009 to the toxic gold buy-back schemes to the outrageous Swiber junk bond defaults, Singapore had witnessed numerous investment tragedies. Some of the investment schemes were so downright ridiculous that you would be surprised many Singaporeans actually bought into them. For sure, Hyflux saga is not the first, but it will not be the last as well. What made this Hyflux saga so intriguing is that investors had not learned the lessons through the years. Many of the Hyflux investors were also previously investors of Minibonds, gold buy-back schemes or Swiber corporate bonds.

Hyflux saga

To make matters worse, trading of Hyflux shares were halted since last year, giving shareholders no way of running for their lives. No wonder investors are angry with founder Olivia Lum. She simply gives them no way out. If Hyflux shares were not suspended, at least share investors can short-sell shares and claw back some losses through short-term trading.

Hyflux saga stems from crisis of confidence

Indeed, the whole Hyflux saga is nothing short of shambolic. You have Public Utilities Board (PUB) announcing its rights to take its key asset – Tuaspring desalination plant – at zero dollar if Hyflux’s default issues …

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Creative share price in sanity intervals

Is it another false dawn in the making or a case of the return of the prodigy? Earlier last year, Creative share price revived from a multi-year deep coma, surging from $1 to an explosive $9 within a week upon the release of its award-winning audio product – Super X-Fi. The resurgent Creative share price indicated a possible comeback for Singapore legendary entrepreneur, Sim Wong Hoo.

Can Creative Technology conquer the world again?

Creative Technology staged “mission impossible” comeback

Recently, my wife bought me a Super X-Fi headphone and I was totally blown away by the technology. Using a sophisticated head and ear-mapping process, Super X-Fi did bring out the 3D audio effects when I used it to play online music from my Samsung mobile phone. The quality of music did feel like I was listening to music from a studio. For the record, this is an honest review and I am not paid to write this review nor am I vested in this counter. In addition, whether Creative share price will rise because of Super X-Fi will have no impact on me.

Creative share price

Despite the tremendous hype over Super X-Fi, it is still early days to hail it as a game-changer that would re-ignite Creative share price. Indeed, it has been bitter-sweet journey for investors of this venerable technology company. Creative share price had plummeted from $60 in 2000 to an abysmal $1 as recent as 2017. Many long-term investors could be forgiven for giving up on this counter. But is it really the end of the road for Creative share price?

Creative share price in royal rumble

The unusual Creative share price movement even prompted queries from SGX on 27 December 2018. To this end, Creative management responded that “they are not aware of any material information concerning the …

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