Eagle Hospitality Trust become another Hyflux?

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The unfolding coronavirus is a complete disaster out of nowhere. Not only has the virus rocked the global markets, it has also brought the entire aviation, hospitality and tourism sectors to a complete standstill. Being a player in the US hospitality sector, Eagle Hospitality Trust is not spared from the carnage. But what made the crisis at Eagle Hospitality Trust so extraordinary is that within a year of listing in SGX mainboard, this REIT had been dogged by various negative publicity.

Eagle Hospitality Trust to blow up in pieces?

Eagle Hospitality Trust to swim or sink with Temasek Holdings?

Eagle Hospitality Trust

In November 2019, The Edge Singapore revealed 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.

Since that episode, the unit price of Eagle Hospitality Trust spiralled out of control, falling from USD0.70 to USD0.50. Amid the outbreak of the coronavirus, the unit price got bombed out to reach the abysmal level of USD0.14. But this is not all.

On 19 March 2020, the REIT announced trading halt and revealed that it has received a notice of default from Bank of America, who is acting as the administrative agent for the lenders under the Facilities Agreement. Is this the beginning of the end for Eagle Hospitality Trust?

Investors must be worried whether Eagle Hospitality Trust will become another Hyflux. Ironically, when people invest in REITs, the expectation is that REITs provide a steady income source. Never in their wildest dreams are they expecting to lose their entire investment capital. In my assessment, I doubt Eagle Hospitality Trust …

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SIA share price to rock or melt with Special Share?

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The once-in-a-century pandemic crisis has sparked a meltdown in SIA share price. Over the decades, SIA share price had endured the threats from Asia Financial Crisis (1997), 9/11 terrorist attacks (2001), SARS (2003) and the Great Financial Crisis of 2008). But the current COVID-19 crisis is unprecedented and provide a formidable challenge for the national carrier.

SIA share price crashed into wall

SIA share price nearing 20-year low

SIA share price in crisis mode

It seems that SIA share price is forced into a corner as various countries imposed travel restrictions and lockdowns to curb the spread of the virus. On 22 March 2020, Singapore government barred all short-term visitors from entering or transiting through Singapore. The latest measure will be the final nail in the coffin for SIA share price.

The slew of border control restrictions had led to SIA cutting flight capacity. At this point of writing, SIA Group had slashed 96% of its capacity till end April and grounded 138 of its parent and SilkAir aircraft. The latest development is pushing SIA share price to the edge of the cliff.

Given the grim outlook for SIA share price, will Singapore government intervene? Being the pride of our nation, Singapore Airlines is definitely a strategic asset that we cannot afford to lose. Apart from being a national icon, Singapore Airlines and it supply chain also employ hundred of thousands of people. The collapse of the airline will surely lead to a massive retrenchment in Singapore.

Question now is: will SIA invoke the one Special Share that is held by the Ministry of Finance. In the past 20 years, SIA had sought billion dollars bailouts from Singapore government on several occasions. Incidentally, the last time that SIA invoked this Special Share was during …

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SIA share price crashed into wall

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Is this the beginning of the end for SIA share price? Amid the global coronavirus outbreak, SIA share price plummeted to new lows not seen even during the SARS period in 2003. During the SARS period, SIA had also cut flight capacity and put staff on no-pay leave. Even so, SIA share price did not drop below $8.00. Given that the number of Covid-19 infections have yet to peak, how low will SIA share price go?

In a reminder of how dreadful the situation is, Singapore budget airline, Jetstar Asia had grounded its entire fleet while Singapore Airlines cuts capacity by half. At Price/Book Value of just 0.65, SIA share price is currently trading way below its book value. But before you go bargain hunting, beware of catching a falling knife.

SIA share price nearing 20-year low

SIA share price in crisis mode

SIA share price

Amazingly, during the SARS of 2003, SIA still managed to clock in a decent amount of profits. But this time round, I expect SIA to book its first ever annual loss due to the rapid shut down of every major market by governments in a bid to stop the infection spread. Thus, expect a massive bout of meltdown in SIA share price, possibly to $2.00 in the coming days.

The problem for SIA share price is that the current crisis is made worse by the plunge in oil price. Typically, a drop in fuel price bodes well for airlines because this component make up the second largest expense for airlines. However, SIA has a practice of hedging oil price to provide stability to fuel costs. For FY2020/21, the Group has hedged 51% in MOPS and 22% in Brent at weighted average prices of USD74 and USD58 per barrel respectively. If oil price …

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Singtel share price in nuclear meltdown

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In my whole life, I have never seen such chaos in the financial market. No, not even during the Great Financial Crisis of 2008. In 2020, Dow Jones had collapsed from a high of almost 30,000 points to a low of 20,000 points within the span of only a month. Sure, Dow Jones had also collapsed by 7000 points but that was over a period of 16 months (from October 2007 to February 2009). Given the speed and magnitude of the correction, the current crisis of confidence is unprecedented. Against this background, even Singtel share price suffered nuclear meltdown.

Singtel share price to swim or sink with coronavirus?

Singtel share price in double trouble

Year-to-date, Singtel share price had tanked 25%. In fact, Singtel share price has reached my previous target entry price of $2.60. However, my view is that the market has not reached a bottom yet. With the unraveling virus outbreak, there is too much market fear at the moment. In this regard, there is high possibility that Singtel share price may even breach the $2.00 support level and reach a low of $1.50.

Singtel share price

Of course, it will be a real nightmare if Singtel share price really plunge to $1.50 because that will wipe off billion dollar worth of valuation from Singtel share price. Temasek Holdings has a stake of 50% while CPF Board holds 5% in this counter. Thus, I doubt the government will let this happen. Then again, when there is a market crash of this scale, Singtel share price is not alone in suffering. Most of the STI constituents are affected as well.

Question now is: how low will Singtel share price go? The latest headwind came on the back of a bitter telco war for its associates in India …

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UOB share price hammered by coronavirus

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On 15 March 2020, US Federal Reserves held a second emergency meeting to slash interest rates to near zero and announced quantitative easing measures to contain the fallout from the coronavirus.  The stunning move is expected to impact local bank stocks like UOB share price in the coming days.

All hell broke loose for all three local bank stocks as COVID-19 unleashed the biggest financial storm in more than a decade. As one of the Strait Times Index (STI) heavyweights, UOB share price is not spared from the bloodbath carnage. At the point of writing, UOB share price had plunged by a staggering 26% while DBS stock slipped 27% and OCBC shed 20% year-to-date.

UOB share price in royal rumble with DBS and OCBC

UOB share price fought back after bizarre plunge

UOB share price

Being the only family-owned and family-managed bank in Singapore, UOB is controlled by the Wee family. During the financial pandemic of Great Financial Crisis 2009, veteran banker Wee Cho Yaw was still at the helm. Now, his eldest son, Wee Ee Cheong is holding the fort. Will UOB share price be able to fight against the gravitational pull of the virus pandemic?

Amid the unfolding coronavirus, UOB management decided to press the panic button by launching a series of shares buyback activities. The last time UOB repurchased its shares was way back in December 2018. Within two weeks in March 2020, the bank repurchased 432,000 of its shares. Without this support, UOB share price would have corrected at a more significant level.

Question now is: has UOB share price really reached the bottom? With Price/Book value of just 0.85 and dividend yield of 5.5%, UOB share price is trading at a very attractive level. Yet the biggest worry among investors must be catching …

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DBS Group Holdings share in explosive meltdown

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2020 will go down in history as one of the most terrifying years for investors as the stock markets plunged into total chaos amid the coronavirus outbreak. DBS is the largest lender in Singapore, so investors will always examine DBS Group Holdings share price to gauge the health of the economy. But question now is: will the second stimulus package from Singapore government be timely enough to salvage the situation?

DBS Group share price in dark chapter with virus

DBS Group Holdings share price ambushed by coronavirus?

DBS Group Holding share

At the point of writing (12 March 2020), DBS Group Holdings share price had tumbled 23%, much higher than the 17% correction for OCBC share price. The huge correction of DBS Group Holdings provided clear signal that recession should be on the way for Singapore.

But of more chilling revelation is the stunning oil price war. As the biggest lender in Singapore, DBS bank has substantial exposure to the oil and gas sector. Due to this, DBS Group Holdings share price had plunged from a high of $21 in 2015 to an abysmal low of $13 in 2016, the peak of the oil slump.

Certainly, the operating climate had turned massively dark and sombre as World Health Organization finally declared coronavirus as pandemic on 12 March 2020. On the same day, US President Donald Trump announced travel suspension from Europe (with exception of United Kingdom). Given the rapid development of events, many people had appeared to underestimate the devastating effects of the virus. How will DBS Group Holdings share navigate through this perfect storm?

The “feel good” factor due to the stellar full-year FY2019 had evaporated in a matter of week as DBS Group Holdings share price hit the skid. The bank is facing three main headwinds …

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OCBC share price in devastating bloodbath

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9 March 2020 would be remembered as one of the darkest days in financial world as global stock markets plunged into chaos following Saudi Arabia’s oil price war against Russia. Being one of the leading lights of Straits Times Index (STI), OCBC share price was not spared from the carnage.

OCBC share price collapsed following the epic announcement of the oil fall-out, breaching the support level of $10.00. Prior to the correction, OCBC share price had been hovering between $10.50 to $11.00. As one of the largest lenders to the oil and gas companies in Singapore, the latest blow from the oil saga knocked the wind out of OCBC share price.

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OCBC share price

Question now is whether OCBC share price will fall to $7.00? The last time that OCBC was trading at $7.00 was only in 2016, the peak of the oil price slump of 2014. So the nightmare scenario of OCBC share price free falling to $7.00 could be a possibility in the coming months. This is especially so given that the latest oil price war came on the back of the unfolding coronavirus outbreak.

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. In addition, I am vested in this counter (holding 1300 OCBC shares at $11.00).

OCBC share price faces chaotic world

With Dow Jones plunging to 2000 points, the biggest single-day drop since 2008, the operating climate had certainly turned very dark and depressing. To make matter worse, the US Federal Reserves made an emergency rate cut on 3 March 2020. An interest rate …

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KIT share price in safe haven from virus?

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The coronavirus outbreak has roiled the stock market as investors run for their lives. For sure, numerous countries all over the world are facing the real prospect of drastic economy slow-down. Retrenchments will surge and consumer spending will turn cautious. Yet despite all these, people still need water and electricity to carry on their daily lives. Being the largest infrastructure business trust in Singapore, is Keppel Infrastructure Trust (KIT share price) immune to the virus?

Before investors get carried away and buy into KIT share price, it is important to understand the business fundamentals of the company first. As a matter of fact, KIT share price had been very resilient despite the wave of challenges it encountered in recent years. But investing in business trust requires a different approach as compared to buying shares. Beside entering at the right KIT share price, you need to assess the factors that may affect the distributions.

KIT share price

In 2018, KIT share price had been affected by the challenging electricity market and a dispute of its subsidiary, Basslink, with the Australian government agency Hydro Tasmania over a 2015 power outage. There were also much uncertainties relating to the operational performance at SingSpring Desalination Plant because of the developments at embattled Hyflux.

While the virus is unlikely to affect KIT’s businesses, the crash of oil price on 9 March 2020 is likely to sting KIT share price. Keppel Infrastructure Trust owns one power-plant, Keppel Merlimau Cogen (KMC) Plant, which has been making huge losses since the start of the oil slump in 2014. For full-year 2019, losses before tax for KMC amounted to $40 million, an increase from $33.6 million in last year.

Note that this is an opinion article and not meant to be a financial advice. Please do your …

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SIA share price nearing 20-year low

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What a perfect storm for SIA share price! Amid the coronavirus outbreak, SIA share price plunged to $8.00, a level not seen during the dark days of the Great Financial Crisis in 2009. To put things into perspective, even during the SARS in 2003, the lowest point for SIA share price was $8.30. And that was 2003. If you factor in the inflation rate, the present SIA price reflected how badly the national carrier had been hit by this black swan event.

SIA share price in crisis mode

SIA share price in moment of madness

SIA share price

Will SIA share price plummet to $7.50, the level it was trading in 2001? That was the period when US suffered the 9/11 terrorism attacks. On the basis of the current run of SIA share price, it seems like so. The reason for the difference between 2003 and the current situation is that the China traveller market had become a major revenue contributor for the SIA Group. Given that China is at the epicentre of the outbreak, SIA’s business is impacted for sure.

Another reason why SIA share price is in for a huge bout of volatility is the fact that the coronavirus is much more infectious than SARS. Besides China, countries like South Korea, Italy and Iran are also hit significantly by the virus. Globally, the virus has also spread to many countries, resulting in plenty of travel restrictions imposed by various governments. Being an airline operating in an aviation hub, the latest development is certainly bad.

Question now is: is it the right time and right place to buy SIA share? With a Price/Book Value of 0.787, SIA share price is currently trading below its book value. P/E ratio of 13% is also very attractive. With Temasek Holdings …

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CAO share price riding the storm

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Having worked in the aviation sector for 15 years, I have covered many aviation companies listed in SGX extensively. The only exception is China Aviation Oil (CAO). This S-chip made the headlines for all the wrong reasons in 2004 when the former CEO made a stunning USD550 million loss in derivatives trading. Time flies. China Aviation Oil had recovered from that dark chapter and CAO share price went from strength to strength.

Not many S-chips were able to bounce back from corporate governance scandal on such scale. So investors must be counting their blessings that CAO share price did not fall into the abyss. Currently, China Aviation Oil even boasts former Minister of State, Teo Ser Luck, as one of its board members.

CAO share price

The reason for the swift recovery of CAO share price over the years was due to strong support from both China and Singapore government. CAO is Asia-Pacific’s largest physical jet fuel trader and commands a monopoly in imported jet fuel for China’s civil aviation industry. Because of this, a collapse of China Aviation Oil would be disruptive to China’s airline operations. In addition to this, Temasek Holdings had also shown support through an equity stake to halt the meltdown of CAO share price back then.

The 2004 incident led to a major revamp in the core businesses of China Aviation Oil. Indeed, subsequent measures carried out by the new management restored law and order to CAO share price. Now, the core businesses comprise of jet fuel supply and trading; trading of other oil products and investments in oil-related assets. Oil giant BP, was brought in as strategic investor (with stake of 20%) to lend risk management expertise to CAO. Its parent company, China National Aviation Fuel Group Corporation Limited, holds …

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Genting Singapore share stung by virus

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In the final week of February 2020, Genting Singapore share price finally caved in, falling from $0.87 to $0.82. The reason for the fall was of course due to the horror plunge of Dow Jones in that week. Being part of the STI, it is no surprise that Genting Singapore share price turned bearish. But what is astonishing to me is that this counter had remained quite resilient in the face of the numerous headwinds the company faced.

Prior to the outbreak of the coronavirus, Genting Singapore share price had been grappling with the surprise increase in higher casino tax by 2022 and 50% increase in casino entry levies for Singaporeans and PRs effective 4 April 2019.

Genting Singapore share

It didn’t help that the trade war between US and China had lasted longer than expected. The fallout from the bitter war is the possibility of Chinese high-rollers unable to repay their gambling debts. As a result of the above two major headwinds, Genting Singapore share price fell from a high of $1.40 in late 2017 to the current $0.82 level. Despite the challenges, it appears to me that Genting Singapore share has found a strong support level at $0.80.

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.

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