Month: February 2021

Sembcorp (SGX: U96) share price worth $4?

Sembcorp Marine share price

In my last article, I wrote that I have exited Sembcorp (U96) at $1.85 in December 2020. Indeed, the stock never really hit above $1.85 since my exit. But on 23 Feb, both Sembcorp (U96) and Sembcorp Marine (S51) share prices unexpectedly stirred back to life to increase marginally upon the release of full-year financial results for FY2020. What on earth has happened?

Given that Sembcorp (U96) suffered almost $1 billion of losses, a member of SG Wealth Builder wrote in to enquire why Sembcorp (U96) did not suffer a catastrophic meltdown but rose slightly instead. I will share my view on Sembcorp Marine briefly and then provide an in-depth analysis on Sembcorp (U96).

Sembcorp U96

In my opinion, it is within expectation that Sembcorp Marine would incur heavy losses for FY2020 as COVID-19 led to various project stoppages and delays. Certainly, it is not light at end of tunnel yet. But the $2.1 billion rights issue had provided a crucial lifeline to Sembcorp Marine. In addition, Sembcorp Marine is also pivoting its business to green energy as the Group is actively tendering for more than 10 projects in Renewable Energy and Gas Solutions. These are …

US stocks in lost decade?

AEM share price

Recently, one of the members of SG Wealth Builder wrote in to seek my opinion on the outlook for US stocks. Apparently, there is a lot of literature floating around stating that US stocks are in for a “lost decade”. As a matter of fact, even veteran investor, Charlie Munger, has weighed in and mentioned something to that effect.

How does a lost decade for US stocks affect retail investors and what sort of actions should we undertake against such backdrop?

US stocks

This is not the first time that someone suggested that US stocks are poised to suffer a massive correction in 2021. In fact, a few members had expressed concerns that a “holocaust” for US stocks could be looming given the recent record highs of Dow Jones, S&P 500 and NASDAQ. Should investors run for their lives?

Obviously, no one can predict the future and trying to predict the future directions of US stocks is getting difficult nowadays with so much volatility ongoing in the market. Nonetheless, in this article, I will share a balanced and pragmatic outlook of US stocks.

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

DBS share price (SGX: D05) bottomed out?

DBS Group Holdings share price D05

Many investors claim that the best time to buy a stock is when the price has reached bottom. After all, when one reaches the bottom of the cliff, the only way to go is upwards. In this regard, has DBS share price (SGX: D05) bottomed out or has it gotten ahead of its business fundamentals?

Being one of the leading lights of SGX, DBS share price (SGX: D05) is considered a key barometer of local stock market performance. Amid the disruptions caused by COVID-19 pandemic, many investors scrutinize DBS share price (SGX: D05) for signs of economic recovery.

DBS share price D05

For sure, 2020 had been such a horrible year for everyone with the implosion of COVID-19 pandemic. Despite the devastating economic impacts of coronavirus, it took only nine months for DBS share price (SGX: D05) to stage a U-shape recovery. By December, the stock has recovered back to the pre COVID-19 levels (the stock was trading around $25 in the latter half of 2019).

DBS Group Holdings riding the storm

DBS Group Holdings share price & Piyush Gupta

In all honesty, the performance of DBS share price (SGX: D05) in the past six months had exceeded my …

Parkway Life REIT to hit $5?

Parkway Life REIT

How high will Parkway Life REIT go? Amid the COVID-19 pandemic, the hospital S-REIT acquired another nursing home in Japan, divested a non-core property in Japan and also delivered an impressive set of full-year financial result. These events helped to turbo-charge the unit price of Parkway Life REIT to wonderland. At the going rate, this counter is behaving more like a growth stock instead of a REIT.

Parkway Life REIT

The interesting thing about Parkway Life REIT is that the counter is not just performing like a growth stock, it also has an impressive 13-year track record of DPU growth since IPO. Indeed, this sounds incredible as there are not many such stocks in Singapore Exchange. But I am not joking. The graph below depicts the kind of growth for Parkway Life REIT.

Source: Parkway Life REIT

Question now is: will Parkway Life REIT hit $5 in 2021? On the basis of the current form, hitting $5 is not considered to be “mission impossible”. Frankly, I have been a long-time admirer of Parkway Life REIT. But if the counter really reached such a level, does it represent any value for money for investors to enter? In this article, …

Alibaba (HKG: 9988) to surge 10-fold in value?

Alibaba 9988

The last time that I covered Alibaba was in January 2019. Back then, Alibaba had not yet launched a secondary listing in Hong Kong and the former British colony was in complete turmoil with the unrelenting civil protests. To make matters worse, the company’s US stock was reeling from the devastating fallout from the US-China trade war. Since then, Alibaba (HKG: 9988) was listed in Hong Kong but the landscape has turned significantly darker with the onset of COVID-19 pandemic. And then, there is the Ant Group IPO fiasco.

Given the series of unfortunate events, is it the right time to invest in Alibaba (9988) now?

Alibaba share price in wonderland with Temasek Holdings

Dark side of Alibaba Group

Alibaba 9988

Recently, a member wrote in to ask for my insights on the leading Chinese e-commerce giant. Indeed, investing in Alibaba (9988) has not been easy because of the unfolding events. But if investors are willing to invest in this stock for the long-term, Alibaba (9988) could be a good match for Amazon stock, which surged 10-fold in value from 2015 to 2021.

The enduring form of Amazon proved that e-commerce is here to stay. In my …

OCBC share price in new dawn

OCBC share price

What a way for OCBC share to start the year. On 8 January 2021, OCBC stunned investors by announcing the retirement of former CEO Samuel Tsien. Prior to this, there was no hint of succession planning for the CEO position. Nonetheless, the market cheered the news and sent OCBC share price surging 7%, rising from $10.10 to a high of $10.80 on 8 January 2021. Will the new CEO, Ms Helen Wong, ignited sparks for OCBC share price?

Hands on heart, I have nothing against Samuel Tsien. In fact, I quite like him. Over the past decade, OCBC has emerged as the number two bank in Singapore, much thanks to the acquisitions of Hong Kong’s Wing Hang Bank, Barclays Wealth and Investment businesses in Singapore and Australia and National Australia’s Wealth and Investment businesses in Singapore and Australia. These mergers and acquisitions led to rising OCBC share price during Samuel Tsien’s tenure.

OCBC share price

Although Samuel Tsien’s tenure in OCBC had been defined by successful merger and acquisitions, the final lap of his helm saw OCBC share price losing form due to the 2019’s US-China trade war and the 2020’s COVID-19 pandemic. Admittedly, I had lost patience …

GameStop share price could lead to global market crash?

GameStop

Could this be the beginning of the end? The recent GameStop share price saga has upended the conventional wisdom in stock markets. For centuries, the big boys had always ruled the financial markets. Based on my knowledge, there was no precedent in which retail investors win the big boys. But in the last week of January 2021, the world has witnessed an extra-ordinary event in which the big boys of Wall Street was thrashed by the retail investors.

In late January 2021, there were reports of US hedge funds losing billions in assets after retail traders drove up prices of shares that were being heavily shorted by the big boys. GameStop share price, a loss-making video game retailer in US, had become a key battleground between the retail investors and the hedge funds.

Without taking sides, I am more worried about the implications out of this saga. When the big boys need to cover their short selling losses, they would have to deleverage and sell their liquid assets, namely the blue chips. As Dow Jones is dominated by thirty blue chips, the sell-offs by the big boys had caused the index to plunge 600 points …