Singapore dollar at a relative strength – how to leverage

On world financial markets, 2020 has begun the same way 2019 ended. Its waters remain a wild place, one where its waves can capsize the unaware at a moment’s notice. Question now is: how will Singapore dollar perform in 2020?

For starters, a no-deal Brexit remains a frightening possibility. The Trump presidency continues to surprise, to say nothing of the prospect of a Sanders administration. Hong Kong continues to fall from grace, as Beijing tightens the chain around its throat.

Suffice to say, investors are fervently searching for a safe harbour. For many, the Singapore dollar (SGD) is the sturdy port they’ve been searching for. A politically stable crossroads of regional trade, Singapore has long been a favourite of those looking for security. In light of recent events, this city-state has never looked quite so attractive.

Singapore dollar

Is Singapore dollar a viable play? And if so, how can the resourceful investor play the Singapore dollar to their advantage? That’s the question we’ll explore in today’s blog.

The Singapore dollar: A Financial Lifeboat On The High Seas Of Finance?

The financial community had so much faith in BoJo. Get elected, even if that means making grandiose promises (e.g., Brexit means Brexit). But after the counters record the last ballot, default to reason. After all, there’s no way Boris thinks he can negotiate trade deals in a year, right?

Well, it appears Prime Minister Johnson wasn’t bluffing. Brexit does mean Brexit, regardless of whether the UK, the EU, or financial markets are ready for it. Slowly but surely, smart investors are slowly backing toward the exit, terrified of starting a stampede.

In the two weeks following the UK election, GBP/SGD slid 3.6% from 1.82195 on 13 December to 1.75573 on Christmas Eve.

The Euro isn’t faring much better. The bloc, which faces …

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SIA share price in crisis mode

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Fortune favours the brave. Should investors buy into SIA share now? Recently, SIA share price plunged to 10-year low as the unfolding Wuhan coronavirus threatens to derail global air travel growth. At the point of writing, thousands of people in China had been infected and death toll reached 106. In Singapore, there were five reported cases of people being infected.

Looking back, SIA share price had certainly come a long way since 2003. That was when the aviation world grappled with United States’ war with Iraq and the outbreak of SARS. In that episode, SIA had been significantly impacted but the business recovery had been unexpectedly swift. Thus, if this latest event turned out to be as serious as the 2003 version, there should be a V-shape turnaround in the carrier’s business.

SIA share price

Obviously, it is still early days and it is unknown whether the authorities will mete out further measures to strengthen the battle against the deadly virus. But one thing for sure is that it will be a challenging road ahead for SIA share price in the coming months.

2020 had barely started when Iran had a conflict with United States over the slaughter of an Iran top military personnel. The conflict led to a short spike in oil price, which surged to USD64 per barrel on 8 January 2020. As fuel price is the largest expense for aircraft operators, SIA’s bottom-line is likely to be hurt by increase in oil price. Due to this, SIA share turned bearish for January.

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 SIA before. Whether …

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Wilmar share price to hit the roof in 2020?

World-class investor, Jim Rogers, once remarked that “nobody wants to be farmers anymore” because of changing lifestyle and rapid affluence among agricultural countries. Due to this global trend, there is a market distortion in the commodity supply and demand. Against the backdrop of rising demand and decreasing supply, commodity stocks are expected to do well in the long-run. In view of this, will Wilmar share price hit the roof in 2020?

All eyes are on the upcoming mega listing of its Chinese subsidiary in China and this catalyst had led to a buoyant Wilmar share price for the past few months. Question now is: will Wilmar share price hit the peak of $7.00 in 2010? That was when crude palm oil price was peaking due to oil price hitting USD100 per barrel. Fast forward ten years later, Wilmar share price had lost plenty of steam due to the lacklustre crude palm oil price. But the listing of its Chinese unit could possibly shake things up.

Wilmar share price

Indeed, the reason for the business diversification in recent years is because Wilmar share price has always been proxy to the crude palm oil. However, as compared to Golden Agri share price, Wilmar share price had been more resilient and corrected by a much smaller extent.

The trend of Wilmar share price could be attributed to its “integrated agribusiness model” which includes the entire value chain of the agricultural commodity business. Wilmar’s business activities are also very diversified and included oil palm cultivation, oilseed crushing, edible oils refining, sugar milling and refining, manufacturing of consumer products, specialty fats, oleochemicals, biodiesel and fertilisers as well as rice and flour milling.

Despite the diversified and integrated business model, Wilmar share price is hardly considered defensive. The 5-year beta is 1.01. This means this counter is quite volatile …

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CPF accrued interest may lead to HDB negative sale?

In Singapore, many people use their CPF Ordinary Account (OA) savings to pay for their property loan instalments. Fundamentally, there is nothing wrong with this approach. I have been doing this since I bought my first property in 2010. Then again, it is important to be mindful of the amount of CPF accrued interest because it may lead to negative sale when you disposed your property.

Due to the HDB lease decay issue, the prospect of facing HDB negative sale is very real for some HDB owners in recent years. This is especially so for those who owned ageing HDB flats. What is HDB negative sale and how does CPF accrued interest play a part in it? In this article, I will explain why it is important to factor in the CPF accrued interest when you buy and sell properties.

CPF accrued interest

CPF accrued interest and its dark side

CPF’s rule is that whatever amount of CPF savings you take out for housing or education purposes, you must refund the amount with compound interest. The rationale is that our CPF savings is primarily meant to fund our retirement needs. This is akin to borrowing money from your own retirement fund and paying back yourself with interest. The accumulated interest is CPF accrued interest.

And what is exactly negative an HDB sale? It means that after you sold your HDB flat, the resale price is sufficient to pay off the outstanding HDB or bank loan but not enough to fully refund the CPF principal amount plus the CPF accrued interest. In this situation, besides having no cash proceeds from the transaction, you may even require to top up the shortfall in cash to your CPF account if your property is sold below market value.

BullionStar

According to CPF rule, there is also a difference …

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Singtel share price in double trouble

Toward the end of 2019, I was seriously contemplating to invest in Singtel share using my SRS fund. Eventually, I opted to invest in OCBC instead. Obviously, the Indian Supreme Court’s hefty fine on its associate (Airtel) played a part in my investment decision. To contain the fall out, Singtel had to set aside a staggering provision of $1.93 billion (pre-tax) for the mind-boggling penalty. In the process, Singtel share price shattered like falling glass.

The massive provision resulted in Singtel recording its first ever quarterly loss ($674 million). The latest result also came on the back of an eighth consecutive quarter of declining profits/losses. Against this backdrop, Singtel share price corrected to $3.18 and only climbed back to $3.30 level recently.

Singtel share price

Analysts had argued that the Airtel provision is likely to be ‘one-off’. To this, I do not disagree. But in my previous article, I have also highlighted that Singtel share price could be volatile due to its various legal disputes with foreign stakeholders. Apart from Airtel, the financial result also revealed that Singtel’s joint venture in Thailand, AIS, is locked in a legal dispute amounting to an estimated total of $7 billion.

It should also be highlighted that the Airtel liabilities only surfaced in the June 2019 financial report. Prior to that, investors had no inkling of this adverse court ruling coming Singtel’s way at all. Thus, for the case of AIS, I am inclined to fear the worst even though the management believes that the claims will be settled in favour of AIS. Given Singtel’ stake in AIS, the proportion of claim should be around $1.2 billion. In view of this, Singtel share price could be facing double trouble in the medium term.

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

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Parkway Life REIT walloped Raffles Medical share price

While Temasek-linked REITs had been hogging the limelight amid the current bull run in the sector, Parkway Life REIT had been under the radar of many investors. The 3-month average trading volume amounted to a mere 8.29mm! Despite the extremely poor liquidity, the unit price of Parkway Life REIT had been on a roll and even stormed to a record high of $3.36 recently.

The stunning form of Parkway Life REIT unit price completely knocked the wind out of Raffles Medical share price, which had been in goofy form in recent years. I know, I know. It is not fair to compare price performance of a REIT to a share. But let’s face it. Both Raffles Medical and Parkway Life REIT operate in the same sector (private hospital) and both entities share basically the same challenges. But their destinies are remarkably different.

Parkway Life REIT

With a market capitalization of $2 billion, Parkway Life REIT is the largest healthcare REIT in Singapore. The other healthcare REIT is First REIT, which pale in comparison to Parkway Life in terms of scale. The latter has a diversified healthcare businesses sprawling across Singapore (59.8%), Japan (39.8%) and Malaysia (0.4%).

Listed on SGX in 2007, Parkway Life REIT is 35% indirectly owned by Malaysia sovereign wealth fund, Khazanah Nasional Berhad. Since IPO, this counter has a solid track record of delivering value for unitholders. In fact, the DPU has grown steadily by 103.6% (till YTD Q42018) since IPO! But of course, investors should not invest in REITs merely based on the DPU track record. Thus, in this article, I am going to highlight the unique investment merits of Parkway Life REIT.

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 …

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My NTUC Incomeshield experience

A very belated Happy New Year to all readers! My family had a bad start for 2020 and things only settled down for the past few days. Now that things had pretty much gotten back to normal, I am taking this opportunity to pen down some thoughts and reflections about what had happened to my family. In addition, I have also decided to share my positive experiences with NTUC Incomeshield. Hopefully this sharing will benefit readers when crisis struck home.

For sure, nobody is ever prepared for crisis. But when disaster strikes, make sure you are ready.

This is the second time that my family had activated NTUC Incomeshield. In both instances, the claiming experiences were very positive. Many people like to joke that NTUC stands for “No Trouble Until Claim”. But our claiming experiences turned out to be otherwise!

NTUC Incomeshield

Note that this is not a sponsored post by NTUC Income nor am I promoting NTUC Incomeshield. In addition to this, the information contained in this article is not meant to be a form of financial advice. If you have any queries pertaining to NTUC Incomeshield, please seek financial advice from a licensed financial consultant.

Enhanced Incomeshield Preferred with Plus Rider

On 2 January 2020, my wife had a severe headache in the morning. It was the type of freakish headache which is like having a knife piercing through your head. She took several painkillers but the pain did not subside at all. By midnight, the headache still did not go away and my wife found the pain too unbearable to sleep.

That night, I was very worried that my wife might be suffering a stroke (incidentally both our late fathers had suffered from strokes). Due to this, we did not want to take chances. I wanted to …

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CapitaLand Commercial Trust (CCT share price) into the unknown

Amid the rally in the S-REIT sector, CapitaLand Commercial Trust share price is also enjoying a bullish run. The counter surged from $1.80 in January 2019 to a high of $2.30 in July 2019. Since then, CCT share price had cooled off a bit and maintained around the $2.00 level. Is the run of CCT share price sustainable?

Hands down, I like this counter and could not find any fault with the management. However, certain aspect of the Group’s financial cashflow made me wonder if the bullish run of CCT share price is sustainable in the long run.

CCT share price

Being Singapore’s first and largest listed commercial REIT, CCT is considered a blue chip among the S-REITs. Currently, the market capitalization stands at $7.8 billion. The portfolio consists of eight prime commercial properties in Singapore and two properties in Frankfurt, Germany. The assets are valued about $11.6 billion as of $11.6 billion. In addition to this, CCT also owns approximately 10.9% of MRCB-Quill REIT, a commercial real estate investment trust listed in Malaysia.

Despite the quality assets of CCT, the biggest concern of investors must be the seven-year lease, commencing in early 2Q 2021 with WeWork Singapore for the entire building of 21 Collyer Quay. As we all know, WeWork had become a fallen angel and collapsed into the abyss. It is unknown if its Singapore unit is affected or WeWork Singapore will cancel the lease agreement in light of the troubles faced by its parent company. But the uncertainty will surely weigh on investors’ mind. 21 Collyer Quay contributed 6% to the net property income for September 2019.

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 …

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Genting Singapore turns to Japan for royal flush

Will it be a royal flush or royal rumble for Genting Singapore? Investors’ patience are wearing thin as Genting Singapore continued its bid to enter the Japan market, one of the last untapped markets in the world. Considering the fact that Japan is the world’s third largest economy, the pay-off could be tremendous for Genting Singapore. In view of this, it is no wonder that investors are fervently hoping that management would hit the jackpot (no pun intended).

Currently, Genting Singapore is making two bids for integrated resorts in Japan – Osaka and Yokohama. What is the chance of Genting Singapore winning the bids? In my point of view, the Group stands a high chance of winning at least one bid. It is only a matter of when, and not if, that Genting Singapore win at least one of the Japan IR bids. In this article, I will share my views on this counter.

Genting Singapore

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 Genting Singapore share before. Whether Genting Singapore 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.

Genting Singapore becoming one-trick pony?

In the blink of an eye, the integrated resort of Genting Singapore is already 10 years old! Just like Japan, Singapore previously did not have casinos. In 2005, the government granted two casino licenses, one to Genting Singapore, and the other to Las Vegas Sands Corp. For Genting Singapore, its integrated resort boasts the Universal Studios Singapore, Adventure Cove Waterpark and the S.E.A Aquarium. These offerings made …

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DBS Group share to sink or swim with Grab IPO?

Is this the beginning of the end for DBS Group share? One of the biggest Singapore financial news that set tongues wagging should be the joint application of a digital bank license by Singtel and Grab. Many investors are wondering if digital banks could pose a serious threat to the incumbent banks in the long run.

In my point of view, the move by Grab should be a desperate bid to enhance bottom-line to pave the way for the coming Grab IPO in 2023. I honestly doubt that Grab or Singtel would want to compete directly with DBS Group because all three entities are backed by Temasek Holdings. It will not be the interest of the investment firm to see DBS Group share collapsing like StarHub.

DBS Group share

Of course it is still early days for the digital banks but it will be too far-fetched to claim this could signal a slippery slope for DBS Group share price.

The key reason why Grab IPO is on the cards is due to the acquisition of Uber assets in Southeast Asia in 2018. According to Uber IPO prospectus, Grab paid Uber 409 million stocks issued at USD5.54 in exchange for the assets. One of the conditions, including the absence of Grab IPO, is that Uber is entitled to redeem the stocks in cash by 25 March 2023. Given that Uber is currently making huge losses, it is likely that Uber make the cash call in 2023. Thus, an IPO for Grab is inevitable in 2023.

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 DBS Group share before. Whether DBS Group share price …

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