OCBC share price faces lightning and thunder

Apparently, the management of OCBC Bank decided to press the panic button. On 10 May 2019, OCBC announced a set of pretty decent Q1FY2019 results that saw net profits rising 11% to $1.23 billion. Despite the rosy report card, dark clouds loom head for OCBC share price as chilling effect of the property cooling measures is starting to take effect. To rub salt to injury, the issue of the ailing oil and gas sector has returned to haunt OCBC share price yet again. Against this backdrop, management had decided to launch a rescue mission for OCBC share price.

To be fair to the management, OCBC had achieved a breakthrough in the latest quarter as net interest margin has increased to 1.76%, up from 1.67% in Q1FY18. Return on equity (ROE) for 1Q19 has also improved to 12.0%, as compared to 11.8% in 1Q18. In view of such impressive performance, OCBC share price should be bullish. Yet since the release of the latest financial results, OCBC share price had slumped from $11.40 to the current $10.95.

OCBC share price torpedoed by Great Eastern

OCBC share price at the threshold of an era

OCBC share price

In my view, the recent correction of OCBC share price is not unique to the bank alone. Both DBS and UOB suffered similar meltdowns due to market sentiments over the escalating trade war between United States and China. The fear is that the trade dispute could impact trade loans and lead to global economic downturn. In the last round of trade tariffs between the two countries, stock market had tanked and local bank stocks were not spared. Nonetheless, fear of a full scale economy downturn proved to be unfound. It seems that the trade disputes had mauled market sentiments but business fundamentals had not been disrupted, at least not …

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Genting Singapore share price hit by hurricane

Investors should brace for a wild ride as Genting Singapore share price looks set to come under severe pressure due to a series of unforeseen events. In early April 2019, the government of Singapore announced higher casino tax by 2022 and 50% increase in casino entry levies for Singaporeans and PRs effective 4 April 2019. Prior to this, Genting Singapore share price also come under heavy shelling due to sell-offs by major fund houses.

The impact of the tax hike cannot be underestimated. In late 2018, the Malaysia government implemented similar tax hike, causing Genting Berhad share price to tumble to a ten-year low. Although the Singapore casino tax hike will be implemented in three year time, the move will cast a dark shadow on Genting Singapore’s growth outlook and affect confidence in Genting Singapore share price. And confidence means everything in the stock market.

Genting Singapore share

As the saying goes, it never rains but pours. This is certainly the case for Genting Singapore as it shot itself in the foot by announcing a disappointing Q1FY2019 that saw revenue dropping 5% to $640 million and net profit declining 5% to $205 million. Against this backdrop, Genting Singapore share price went on bombshell meltdown, correcting from $1.07 in April to the current $0.88 level.

Genting Singapore share price stormed by casino raiders

Civil war at cash-rich Genting Group

Is this a good time to enter this counter and buy Genting Singapore share? It really depends who you choose to believe. On one hand, stock analysts like DBS Bank had been mightily bullish and set a target price of $1.20 for Genting Singapore share price. On the other hand, big boys had been selling off this counter since February. Should investors throw in the towel or hang on for their dear lives?

Genting Singapore

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SIA share price in moment of madness

It seems like SIA share price is destined for an apocalyptic correction. On 16 May 2019, Singapore Airlines reported a record annual revenue of $16.3 billion for FY2018/19. However, net profit collapsed 47.5% to $683 million. Since the announcement of the results, SIA share price went into an epic free-fall to reach the current low of $9.25.

On the basis of the current bearish run, it appears to me that SIA share price is likely to be bearish in the coming weeks. In my opinion, the correction of SIA share price could be an opportunity for long-term investors to accumulate this counter. The 5-year beta for SIA share price is only 0.43. This means that while in the short-term, SIA share price can be pretty volatile, in the long run, this counter is actually quite stable. The average 3-month volume is 23 million and Temasek Holdings shareholdings in SIA amounted to 54.9%. Based on this data, SIA should be a good stock to hold for the long-term.

SIA share price

The correction in SIA share price is attributed to the plunge in net profit. However, it is important to put things into context. SIA had an exceptionally good FY2017/18 because oil prices were trading at the range USD45 – 60 per barrel and total fuel costs amounted to $3.9 billion. Because of that, SIA was able to achieve a net profit of $1.345 billion for that year. Fast forward a year later, oil price has surged, thereby wrecking havocs to the bottom-line.

Notwithstanding the dismal net profit for FY2018/19, there is a silver lining from the latest financial performance. In my view, I do think that the coming months should see SIA share price facing plenty of headwinds. Then again, fortune favours the brave. Investors who set the right entry and exit price …

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Selling combs to monks

Whether you are an employee or entrepreneur, you must always strive to master the art of selling. As an employee, you are always selling your skill-sets to your employer and prospective customers. For a business owner, to be able to sell is a given. In this regard, I cannot emphasize enough how important it is to master the art of selling because it is considered the single most important factor that determines whether you can succeed in life.

In 2017, I wrote an article, “you can sell combs to monks”. Readers can subscribe as members to access the full article but I would like to succinctly use that article to expand on several learning points on how to be a successful wealth builder. In this blog, it is my desire to help people become successful in their wealth journey because it gives me joy to know that people have learned from my articles.

selling combs

In the story of selling combs to monks, three candidates were selected by a Singaporean merchant to sell combs to monks in China. We all know that monks do not need combs as they are bald, so selling combs to monks is like asking the candidates to do the impossible. Nevertheless, one of the candidates incredibly managed to sell 10,000 combs to a monk and eventually clinched the coveted job. The reason for his amazing success can be distilled in several points.

Sell what people want, not what they need

There is phrase that you must always remember in life: sell what people want, not what they need. What does it actually mean? I am sure most readers can differentiate between needs and wants. But from a marketing perspective, the difference may not be so straightforward.

In most cases, providing what people want will …

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Best World unleashed terror with stunning revelation

What a revelation! On 13 May 2019, after a probe by SGX RegCo, Best World finally revealed that Koh Kim Chuan, the legal representative and shareholder of Changsha Best, is the brother-in-law of the Group’s CEO and Managing Director.  Currently, Best World shares are suspended from trading and hapless investors are once again left high and dry.

In recent years, corporate governance issues had dogged numerous SGX-listed companies like Yuzoo, Noble Group, Midas and the likes. Even blue chips like Keppel Corporation are also not spared (Keppel was fined a whopping $560 million by US authorities in 2018 over corruption scandal). Against this backdrop, I am not surprised if Best World turns out to be yet another falling knife. It seems to be disaster after disaster for SGX-listed companies, to the extent that it is turning out to be a national disgrace. How can Singapore Exchange claim to be “Asian Gateway” when its listed companies keep making headline news for all the wrong reasons?

Best World

The meltdown of Best World followed swiftly after the resignation of its non-executive independent director, Chan Soo Sen, on 15 February 2019. To be factual, Best World share price started to spiral out of control on the day of Chan Soo Sen’s resignation announcement.

Best World and Chan Soo Sen

Chan Soo Sen was a former influential politician in Singapore. At one time, he was even a Singapore Minister of State for Trade and Industry. Chan Soo Sen was also non-executive independent director and member of audit committee with Midas since 2006. Incidentally, Chan Soo Sen held the same position as he did in Best World – non-executive independent director and member of audit committee. He joined Best World only in 2016. For the record, Midas was an S-chip company that was razed to the ground …

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Raffles Medical share price in state of emergency

Sometimes life is stranger than fiction. On paper, Raffles Medical share price should have risen steadily for the past 5 years because of increasing revenue and net profits. For most investors, that would be a reasonable assumption. In reality, Raffles Medical share price plummeted from $1.58 to the current $1.00 level. The massive correction of Raffles Medical share price represented a horrifying 37% decline within the span of three years. The unfolding meltdown of Raffles Medical share price must have scared the living daylight out of investors.

Can Raffles Medical share price ever rock again?

Perennial Real Estate Holdings versus Raffles Medical

My stock analysis of Raffles Medical Group

Sure, many analysts claim that the healthcare is an evergreen sector because of Singapore ageing population and that investors should stay calm. On this note, I do not disagree. In fact, revenue for Raffles Medical increased from $374million in FY2014 to $489million in FY2018. Net profits increased from $67million to $71million during this period. But against the backdrop of such consistently good financial performances, what were the intriguing dark forces behind the rupture of Raffles Medical share price?

Raffles Medical share price

Make no mistake, the devastating plunge of Raffles Medical share price would have wiped out whatever meagre dividends that investors collected for the past few years (assuming they had entered at the high of $1.58). Given the current Raffles Medical share price level, let’s examine whether the time is ripe to enter or avoid this counter.

Raffles Medical share price decline

First off, Standard Life Aberdeen stunned the market by selling 1.12 million shares on 26 February 2019. In the process, Standard Life Aberdeen ceased to be a substantial shareholder of Raffles Medical. That was a killer blow as Raffles Medical share price got bombed out, dropping from $1.10 and never looked back …

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Changing my CPF nomination

A couple of weeks ago, I changed my CPF nomination after an annual review with my spouse. Previously, I did not include my children in my CPF nomination. In doing so, we thought that this could be a risk in the event that both my spouse and I passed on at the same time. Thus, we made our way to the CPF office to change my CPF nomination. As usual, the process took only 5 minutes and the officer was very competent in answering our queries.

So in my case, what is the difference between nominating and not nominating CPF monies to include our children? Are there any benefits in doing so? Previously, I have nominated my spouse to receive 100% of my CPF monies should I passed on. That is a pretty straight-forward situation. But in the scenario of us passing on at the same time, how would my young kids receive the monies? Even if they do manage to take out the CPF monies, being kids, they will definitely lack the financial judgement to handle the monies. With these in mind, we thought it is important to amend my CPF nomination to ensure that our children will not face financial difficulties in the event of our deaths.

CPF nomination

The reason why I am sharing this article is because I hope Singaporeans can understand the implications of not making CPF nomination. There are many myths and misconceptions of CPF monies out there and I have read many sad cases of Singaporeans being left in the lurch after the sole-breadwinners died without making any CPF nomination. Then there were court cases involving family fights over CPF monies. Very often, family harmony is destroyed due to ambiguity over money legacy.

In this article, I will pen down my thoughts on the rationale …

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CapitaLand share price and the golden job

Like many of its peers, CapitaLand share price is volatile because of the cyclical nature of the real estate business. Arising from this, the 5-year beta for this counter is 1.11. In spite of this, I like this counter very much because of its unique business strategies and diversified asset portfolio. Under the founding CEO, Liew Mun Leong, CapitaLand had embarked on a “asset recycling” approach, resulting in the real estate giant deriving majority of its revenue from recurring sources like commercial, retail and serviced residence.

Indeed, CapitaLand investors may think that volatility is undesirable but I view it otherwise. You can make money out of the volatility  of CapitaLand share price, provided if you used the right strategies. Looking at the past four year data, there is a clear pattern concerning the movement of CapitaLand share price.

CapitaLand share price

Hit and run with CapitaLand share price

In October 2014, CapitaLand share price surged from $3.00 to reach a high of $3.75 in April 2015.Subsequently, the counter plunged to a low of $2.80 in September 2015. Following that, CapitaLand share price surge again to reach a high of $3.40 in December 2015. For most of 2016, the stock languished to a low of $3.00 in December 2016. And then following that, CapitaLand staged a might rebound to reach a high of $3.70 in March 2017.

The pattern for CapitaLand share price continued in 2018 and early 2019. Based on the data, it appears to me that the best time to enter CapitaLand is during the period September to October. This is the window whereby CapitaLand share price often starts to bottom and then likely to rally until the start of the next calendar year. The perennial bullish form during this window period may be attributed to the attraction of the annual …

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SPH share price prime for another devastating ride

The data certainly looks grim for SPH share price. 1HFY2019 results revealed that despite aggressive efforts to revive its fortune, SPH revenue and net profits continued to free fall like no tomorrow. This is indeed puzzling because the dismal financial performance came on the back of various recent acquisitions aimed at stimulating growth.

Figtree Grove (85% stake) Shopping Centre in Australia was acquired in December 2018 for A$175million. Then M1 was delisted following the successful acquisition of all the remaining shares from the open market through SPH joint venture with Keppel, Konnectivity. UK Student accommodation portfolio added 380 beds with 2 new acquisitions for $369million. Yet despite all these moves, revenue continued to slide, rupturing the form of SPH share price in the process.

SPH share price

It is really mind-blowing to note that total revenue for 1HFY2019 decreased 5.2% while net profit collapsed 32% to reach $33million. With such result, it takes an ardent fan to be convinced of SPH long-term growth prospect. The disruption of the traditional newsprint business is well-known and everybody knows that SPH had embarked on a transformational journey to digitize its businesses and diversify revenue sources through property investments. But it has been more than 5 years in the work, yet total revenue plunged from $1.2billion in FY2014 to $982million in FY2018. No wonder SPH share price spiralled out of control – falling from a high of $4.00 in 2016 to the current $2.40 level.

At this rate, full-year revenue could shrink to $930million for FY2019. Dividends are likely to continue to decline as well. Against this backdrop, SPH share price should come under pressure again in the coming months. Should SPH investors bite the bullet or throw in the towel?

SPH share price in disaster

The problem for SPH share price is that it is …

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StarHub share price to face $282million baptism of fire

It’s that “uh-oh” feeling for investors as StarHub share price faces another torrid run following the release of a terrible 1QFY2019 results that saw net profit plummeted by 23% on a year-by-year basis. Investors must be having that sinking feeling again and wondering when will StarHub share price ever see daylight again.

The problem for StarHub share price is that it tends to shoot itself in the foot. In February 2019, StarHub share price corrected from $1.94 to $1.610 following the release of a dismal FY2018 results and the cut in dividends for FY2019. Since then, StarHub share price had struggled to maintain its form. With the latest results, surely the counter will go into yet another tailspin.

StarHub share price

Given the latest financial performance, it takes an ardent fan of StarHub to have conviction in StarHub share price. Revenue for mobile, Pay TV and Broadband segments all declined. Cyber security services recorded an impressive 41.4% in revenue but suffered a whopping $11.4million losses in 1QFY2019. Sales from equipment was the only bright spot as revenue surged by 33.3% but the profit margin from this segment is razor thin, thus it cannot be the game-changer for StarHub.

Apart from the disappointing results, investors must be wondering if StarHub would fall into the abyss like Hyflux. This is because like Hyflux, StarHub had raised capital through a $200million subordinated perpetual bonds back in 2017. That exercise was meant to raise fund for the coming $282million 700 MHz spectrum which StarHub won in 2017. Let’s examine whether StarHub investors should run for their lives or buy on the dip.

StarHub share price and perpetual bonds

In my view, it is unlikely that StarHub share price will suffer a similar fate like Hyflux. With Temasek Holdings’ 56% stake in StarHub, I don’t expect the telco …

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Is NetLink NBN Trust a value trap?

Investors must be wondering if NetLink NBN Trust would do an Asian Pay TV Trust (APTT) or Hutchison Port Holdings (HPH) Trust. Both the unit prices of APTT and HPH suffered catastrophic meltdowns in recent years due to declining business fundamentals. Incidentally, Temasek Holdings is a major shareholder in all the three trusts.

Even though both APTT and HPH Trust are favoured by investors for their high yields, the plunge in their unit prices would have offset the returns. Thus, the important lesson for NetLink NBN Trust investors is never judge a trust by its yield. Always make the effort to understand the business fundamentals when investing in equities. While big boys like Temasek Holdings can afford to lose monies in their investments, retail investors surely don’t have such deep pockets.

NetLink NBN Trust

There are analysts who claimed that NetLink NBN Trust is a low risk counter. But the funny thing is, NetLink NBN Trust never made it to the top ten institutional net buy list for the past one year. This means that for some unknown reasons, fund houses had been giving this trust the cold shoulder. Obviously it is still early days to judge NetLink NBN Trust but let’s take a look at its investment moat and examine the underlying risks.

NetLink NBN Trust competitive advantage

NetLink NBN Trust designs, builds, owns and operates fibre network infrastructure of the Next Gen NBN. The company’ strategic advantage lies in its monopoly in the fibre network in the residential market. As of 31 December 2018, NetLink NBN Trust supports approximately 1.3 million residential end-user connections. The residential connections provide the basis for the strong cashflow because of the recurring fee business model.

The revenue sources primarily come from the one-off installation for each termination point (upon the initial connection) or service activation; …

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