Month: September 2021

LIFETIME MEMBERSHIP Can CEO Loh Boon Chye make Singapore Exchange great again? Since the onset of the pandemic, SGX share price (SGX: S68) rocketed from a low of $8.20 in July 2020 to a mighty high of $12.05 on 4 August 2021. The bubble finally burst for SGX share price (SGX: S68) when the bourse announced a full-year financial result that saw net profit dropping 6% on year-on-year basis. While the drop is not alarming, the market reacted – SGX share price (SGX: S68) crashed by a staggering 18% by the end of August from the high of $12.05.

To put things into perspective, SGX share price (SGX: S68) thrives on crisis. In fact, the previous record high of SGX share price (SGX: S68) was $15.90 recorded in October 2007. That was the period of the Great Financial Crisis. Back in 2007, the average daily trading value was $1.6 billion and there were 46 new equity listings. Fast forward 14 years later, the average daily trading value shrunk to $1.4 billion while there were only 10 equity listings.

Yet the most worrisome thing about SGX share price (SGX: S68) is not really the short-term volatility. Rather, it is the devastating long-term decline of SGX that gives investors the jitters. Being a financial hub, it is a given that Singapore has a vibrant stock exchange to stay competitive in the region. Yet the dearth of IPOs and the horrifying valuations of listed companies in Singapore led to a slew of delisting in SGX in recent years.

Although SGX’s decline has been on-going for a long time, the decline was notably significant since 2015, which coincided with the departure of the previous CEO Magnus Bocker. When CEO Loh Boon Chye took over the helm, SGX was already struggling to deal with the …

LIFETIME MEMBERSHIP When former Minister of Trade and Industry Chan Chun Sing visited AEM last year, it was a harbinger of things to come for AEM share price (SGX: AWX). With Temasek Holdings now officially onboard as the biggest shareholder of AEM, the narrative for AEM share price (SGX: AWX) has changed. For a Singaporean company to make it internationally, we need a Singapore Inc approach. After all, AEM is a home-grown company. The next step forward should be a Nasdaq IPO to enhance AEM’s visibility.

The entry of Temasek Holdings, coupled with the presence of institutional investors like Morgan Stanley, Aberdeen Standard Investment (Asia) and Malaysia Employees Provident Fund, also means that the stars are finally aligned for AEM to IPO in Nasdaq. If so, AEM could be the first homegrown company to be dual-listed in SGX and Nasdaq in recent years, thereby turbocharging AEM share price (SGX: AWX) to high heavens. Non-executive Chairman Loke Wai San, who had rescued AEM from collapse in 2012, should know that the support from Temasek Holdings will be helpful in the IPO journey.

Temasek’s investment comes at a time when Temasek, MAS, EDB and SGX recently announced initiatives to help high growth technology companies raise funds through dual-listing in overseas exchanges and SPACs. Ironically, the move to assist homegrown tech companies came after a number of Singaporean companies like Grab and Razer chose to list in overseas markets. Against this backdrop, my view is that a dual-listing for AEM should be imminent within the next six months, providing plenty of fireworks for AEM share price (SGX: AWX).

AEM share price rockets with Temasek Holdings!

AEM share price recovering from bloodbath

AEM share price dented my portfolio

Speculative rumours of a potential Nasdaq IPO had been ongoing for two years. The market rumours …

LIFETIME MEMBERSHIP Will SIA share price (SGX: C6L) do a Sembcorp Marine? The latter recently concluded a second billion dollars rights issue that took place less than a year, causing the share price to bomb out to less than $0.10. On 16 September 2021, SIA updated “that the remaining S$0.6 billion of the gross proceeds of S$8.8 billion raised from the 2020 Rights Issue has been applied towards aircraft and aircraft-related payments between 1 July 2021 and 1 September 2021”. Against this backdrop, investors must be wondering if another cash call is on the way.

In one year, SIA burnt through $9.3 billion of cash (including $500 million which had been used for the redemption of SIA’s 10-year Fixed Rate Notes on 9 July 2020). While there is more than sufficient cash for the airline to sustain till the end of this financial year, what will be the situation for the next financial year, which will begin in March 2022? Will there be another round of rights issue that rupture the form of SIA share price (SGX: C6L)?

SIA share price rises from ashes

SIA share price in explosive destiny

SIA share price smashed into rock

The hallmark of Singapore Inc is its ability to plan ahead. This is no different for SIA. Given that the new financial year is less than six months away, it is timely to ponder the prospect of another round of capital call by the management in 2022. You certainly don’t want to wait until the company faces a potential liquidity crunch then you start to initiate a rights issue. That would be a perfect recipe for disaster for SIA share price (SGX: C6L). In fact, this was what happened to Sembcorp Marine.

Looking back, it was really a “touch and go” situation for SIA …

LIFETIME MEMBERSHIP It could be an event that will move Heaven and Earth, at least for DBS Group Holdings share price (SGX:D05). In a bombshell revelation, DBS CEO Piyush Gupta mentioned in the transcript of DBS second quarter 2021 conference call that the bank is looking at unlocking one of its assets, Remit, through IPO for an eye-popping $10 billion. If the plan does materialize, it will be one of the largest IPOs to grace the Singapore stock market in recent years.

In 2019, I wrote that DBS Group Holdings share price (SGX: D05) will hit $50. Though that day has not arrived, I do think that it is only a matter of time that DBS Group Holdings share price (SGX: D05) reaches this incredible milestone. On 10 August 2021, DBS Group Holdings share price (SGX: D05) hit a record $31.70 after Monetary Authority of Singapore (MAS) lifted the dividend restrictions on local banks. On the basis of its current run, it is not impossible for the counter to hit $40 by year-end if the bank continues to deliver good financial results and lists its digital assets.

Question now is when will CEO Piyush Gupta set fire on DBS Group Holdings share price (SGX: D05) by unleashing the Remit $10 billion IPO? It is not CEO Piyush Gupta’s style to talk up prospect of his company nor do I think that he made that comment out of jest. Most Singaporeans know that Piyush Gupta puts his money where his mouth is. His purchase of 200,000 DBS shares for $2.8 million in February 2016 was driven by his conviction that the shares were grossly undervalued. Indeed, his move was later vindicated as the DBS Group Holdings share price (SGX: D05) climbed by 100% within two years.

DBS’ plan to list …

LIFETIME MEMBERSHIP For Sembcorp Marine share price (SGX: S51), is it a case of light at end of tunnel or light from an on-coming train? Given the devastating meltdown of Sembcorp Marine share price (SGX: S51), investors can ill-afford to ignore this rhetoric. The $1.5 billion announced on 24 June 2021 had erased more than 50% from Sembcorp Marine share price, causing the counter to plunge from $0.17 to $0.08. Question now: is there any value left in Sembcorp Marine share price? Make no mistake, sometimes cheap does not mean value.

Investors who had subscribed to the 2020 and 2021 rights issues should be betting on the recovery of Sembcorp Marine share price (SGX: S51). While that day may eventually come, it could be a long wait. To put things into perspective, the oil and gas industry suffered a severe downturn since 2015 due to the collapse of oil prices and emergence of US’ shale oil. The pandemic arrived to cause a protracted downturn for Sembcorp Marine. In addition, the long-term demand for crude oil is likely to drop as countries commit to the United Nations Framework Convention on Climate Change (UNFCCC) pact signed in 2015.

Looking at the financial track record, the road ahead will be challenging for Sembcorp Marine share price (SGX: S51). Due to the series of “unfortunate events” in recent years, the Group’s financial performance had been affected, resulting in pre-tax losses of $101 million in FY2018, $177 million in FY2019 and $671 million in FY2020. The Group also recorded a substantial net loss attributable to owners of the Company of $647 million for 1H2021. Barring a miracle turnaround, the loss for FY2021 should be double that of FY2020.

Needless to say, the crisis of confidence for Sembcorp Marine share price (SGX: S51) centred on the …

LIFETIME MEMBERSHIP It seems that OCBC share price has a strange affinity with Dr Mahathir. When Mahathir became the Prime Minister of Malaysia for the second time in May 2018, it promised to be a political fairy-tale that will be remembered for generations to come. But surely no one in his right mind could have predicted the kind of impact it would have on OCBC share price, which tumbled from a high of $13.65 in May 2018 to a low of $10.40 in October 2018.

Even more bizarrely, when Dr Mahathir announced his resignation on 24 February 2020, OCBC share price crashed from $11.00 in February 2020 to a low of $8.35 in March 2020. For unknown reasons, it appears to me that Dr Mahathir has that TVB drama “Ting Hai” stock market effect, at least for OCBC share price. Although I am not exactly sure about the correlation between OCBC share price and the venerable leader, one thing for sure is that Dr Mahathir’s B40 policy has a massive impact on OCBC’s Great Eastern Holdings.

When Dr Mahathir returned to power in 2018, one of his many initiatives was the B40 Health Protection Fund, which was meant to address social welfare protection coverage for the lower income group in Malaysia. Great Eastern Holdings, the crown jewel of OCBC Bank, was affected by this policy as the insurer was required to contribute a whopping RM2.0 billion in lieu of the local shareholder requirement imposed on its subsidiary, Great Eastern Life Assurance (Malaysia) Berhad.

In my view, it is not uncommon for Singaporean companies to “pay a price” for doing businesses in foreign countries. Singtel’s billion dollar fine by India Supreme Court in 2019 was a classic example. Nevertheless, the RM2.0 billion donation by Great Eastern had weighed on …

LIFETIME MEMBERSHIP Keppel DC REIT (SGX: AJBU)’s ascend to the Straits Times Index (STI) has been the stuff of legend in SGX mainboard. Debuted in SGX only in 2014, the data centre REIT knocked the former CapitaLand Mall Trust off the pedestal in October 2020. That spectacular feat sent Keppel DC REIT (SGX: AJBU) share price flying to a record high of $3.04. Since then, the stellar form appears to lose plenty of steam in recent months. What on earth has happened?

A Lifetime Member has written in to request for an explanation of the recent downtrend of Keppel DC REIT (SGX: AJBU) share price. If you are keen on coverage of other stocks, do sign up as member! For the longest time, I have been contemplating to invest in an S-REIT with special focus in data centres. Hence, I have been monitoring Keppel DC REIT and Mapletree Industrial Trust (MIT). Both counters are majority-owned by Temasek Holdings and listed in the Straits Times Index (STI). Between the two players, Keppel DC REIT stands out for being a “pure-play” data centre REIT but the acquisition of M1 started to complicate things.

Year-to-date, Keppel DC REIT (SGX: AJBU) share price has slumped by 9.32%. Comparatively, its peer Mapletree Industrial Trust share price increased 1.74% on a year-on-year basis. Indeed, the subpar form of Keppel DC REIT (SGX: AJBU) is a concern among many investors. But to be fair to the S-REIT, the counter is still trading at 25% above the levels of pre-pandemic. Looking back, the onset of pandemic has triggered a surge in e-commerce activities and digital transformation of businesses. As a result, Keppel DC REIT (SGX: AJBU) rocketed to high heavens in 2020.

Then again, I have always stressed that what goes up must surely come down. …

LIFETIME MEMBERSHIP In my last article on Wilmar share price (20 June), I wrote that this counter could face huge turmoil in the short-term. Indeed, Wilmar share price continued to meltdown since 20 June, falling from $4.55 to the current $4.16. At current trading level, Wilmar share price is 25% off the 5-year high of $5.57 seen in February. Should investors run for their lives?

A Lifetime Member has written in to request for an explanation of the downtrend Wilmar share price. If you are keen on coverage of other stocks, do sign up as member! In 2020, I invested in Wilmar and exited at a profit of $2,700 in early 2021. My lowest entry for Wilmar share price was $4.84 and I exited at $5.20. While I did not exit at the highest point of $5.60, I have no regrets selling my Wilmar stocks. In life, you can never sell at the highest price. I am happy as long as I made decent profits. Although I am not vested in this counter any more, I am still bullish about Wilmar share price in the long-run because of the business strategies undertaken by the management.

The current train-wreck for Wilmar share price may be puzzling and gut-wrenching for many retail investors. After all, the Group has just released a set of stellar 1HFY2021 that saw net profits rocketed 23% to US$751 million. It certainly seemed that nothing can go wrong with Wilmar share price. However, I have always cautioned that the big boys call the shots in Singapore stock market. This is especially so for Wilmar share price as the counter is one of the Straits Times Index (STI) components. Due to this, Wilmar share price is very sensitive to the movement of institutional fund flows.

According to data …