Month: February 2021

Sign up for only $19.99! 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).

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 certainly encouraging news for Sembcorp Marine investors.

Sembcorp Industries share price gave me 37% return!

Sembcorp share price dances with potential Indian IPO?

Sembcorp Industries share price will hit $3.00

Nonetheless, it is important to call a spade a spade. Even though Sembcorp Marine has diversified into renewable energy, its core businesses are still in the offshore marine and oil rig building segments. Post-COVID, oil prices may recover but the demand for oil rigs will remain soft for the foreseeable future with the stiff competition from US shale oil players. Against this backdrop, the prospect for Sembcorp Marine is dim. …

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?

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 diligence or engage financial advisors before investing in US stocks. Thus, this article is not meant to induce readers to make any form of investment decisions.

US stocks to reset for new order?

To put things into perspective, the US is the world’s biggest economy, with GDP of USD21.4 trillion in 2019. In view of this, a downturn for the US financial markets would likely have a significant impact on global economy. Following the Great Financial Crisis (GFC) in 2009, the past decade had been relatively “uneventful” for US stocks, until COVID-19 struck in 2020. This is unlike the decade …

Sign up for only $19.99! 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.

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 expectations. In my previous articles, my forecast was that the counter should be trading at the bandwidth between $23 to $25. Unexpectedly, DBS share price (SGX: D05) begun to surge in last November, following news of COVID-19 vaccine deployment and Joe Biden being elected as the new USA President.

The buoyant form of DBS share price (SGX: D05) saw the counter hitting as high as $27.40 in early January 2021. In view of a slew of MAS measures which restricted local banks to do shares buybacks and capping of dividends, the bullish form of DBS share price (SGX: D05) confounded …

Sign up for only $19.99! 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.

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, I will share my analysis of the impact of COVID-19 on the financial performance of Parkway Life REIT. I will also reveal why the distribution for Parkway Life REIT in FY2020 increased 4.5% year-on-year despite the global disaster of COVID-19.

Most investors assume that REITs are low-risk investments ideal for dividend play. Actually, this may not be necessary true. The downfalls of Eagle Hospitality Trust and First REIT illustrate the potential risks involved when investing in REITs. In view of this, investors should not judge REITs based solely on their distribution yields. It is really important to pay attention on …

Sign up for only $19.99! 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

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 opinion, this sector will only keep growing exponentially due to lifestyle trending and global digitization. For Alibaba (9988), the upside potential is even much bigger with Chinese PRC market as the hinterland.

Despite the solid business outlook for Alibaba (9988), we could see the online retailing company embroiled in significant regulatory headwinds in the short term. On the flipside, these downsides could provide the golden opportunities for investors to accumulate Alibaba (9988) on the cheap.

Indeed, it is the perfect storm for Alibaba (9988). In the past few months, Alibaba found itself in big trouble with the Chinese regulators after …

Sign up for only $19.99! 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.

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 with this counter. My entry for OCBC share price was $11.00 per share in late 2019. By December 2020, I had decided to divest all my OCBC shares after dollar averaging at $9.95. Overall, I sustained $100 losses (after offsetting total dividends collected) in OCBC but reinvested the proceeds in Wilmar, which generated $1,480 of profit.

Do I have regrets investing in OCBC? To be frank, hindsight is always hundred percent. Nobody in his right mind could have predicted COVID-19 in December 2019 (that was when I decided to invest in OCBC share). When it comes to investing, there is …

Sign up for only $19.99! 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 on 30 January 2021. It is unknown when the tug of war between GameStop share price and the hedge funds will cease. But if the vicious cycles continue, the stock market could reach a turning point.

After messing around with the stock market, GameStop investors then shifted their attention to silver as the precious metal prices shot up to an 8-year high on 1 February 2021. In view of the extreme demand for silver bullion, Singapore’s BullionStar introduces a minimum order amount of $499.

Will this headwind blow over to SGX? Frankly speaking, I don’t know but I am not …