Author: sgwealthbuilder

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?

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.

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.

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

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.

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.

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.

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

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.

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?

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.

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.

OCBC share price to increase three-fold in decade?

OCBC share price led to my first investment in decade

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.

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.

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.

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

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.

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.

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.

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.

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.

Looking back, OCBC share price had risen more than two-fold since 2009. But a series of unfortunate events had combined to knock the wind out of OCBC share price. Will the coronavirus prolong the suffering of investors? In my frank opinion, whilst there are significant challenges in the short-term, the long-term outlook for OCBC is still good.

As a bank stock, I have always maintained that OCBC share price is volatile even in peace times. So it is important for investors to set an entry and exit price. Previously, I have shared that I entered this counter at $11.00. Obviously with the onset of the virus, OCBC share price had turned bearish. But I am not losing sleep because I am convinced that I am investing in a great piece of business at a reasonable market price.

On 21 February 2020, the management released a set of excellent results for full year 2019. Net profit rose to a record of $4.87 billion. Net interest income increased 7% to a new high of $6.33 billion while net interest margin (NIM) rose to 1.77%. Return on equity (“ROE”) of 11.4% for FY19 was marginally below 11.5% in FY18.

Virus? What virus? Sheng Siong share price shrugged off all talks of coronavirus impacts on its stock by staging one of the most powerful rally in years. It certain seems that the sky is the limit for Sheng Siong share price.  The initial onset of the coronavirus saw Singaporeans scrambling and hoarding food items at supermarkets. The mad scramble sent Sheng Siong share price soaring like crazy. As of 20 February 2020, Sheng Siong share price smashed a record high of $1.32.

Given the bullish form of Sheng Siong share price, investors must be smiling to themselves. Since IPO in 2011, Sheng Siong share price had stormed from $0.33 to the current $1.30 level. Investors should be laughing all the way to the bank because of the huge capital appreciation and the consistent dividend pay outs.

Sheng Siong share price on super bull run!

Rampant Sheng Siong share price on magical run

To be frank, the supreme form of Sheng Siong share price confounded me. Previously, I had some reservations about investing in this counter because it was listed only in 2011 – the post Great Financial Crisis era. Due to this, there is a lack of track record on how Sheng Siong share price will perform during crisis times.

Is this the beginning of the end for DBS Group share price? On 13 February 2020, DBS Group finally unveiled it’s much anticipated fourth quarter results. Being the largest bank in Singapore, investors look to the bank’s FY2019 performance to gauge the outlook for DBS Group share price in FY2020. Many investors are also concerned whether the coronavirus outbreak will cast a dark shadow on DBS Group share price.

As the saying goes, past performance is not an indicator for the future. This is especially so, given that the latest financial result covers the performance of DBS Group until 31 December 2019 (the first reported case of coronavirus in Singapore was 23 January 2020). So investors will not be able to assess the impact of the coronavirus on DBS Group share price based on the latest financial result.

Good financial result for FY2019

In spite of the above, DBS Group recorded yet another stellar financial performance – full year net profit rose 14% to a record $6.39 billion. To celebrate the achievement, DBS Group proposed a final dividend of $0.33 per share. The annualised dividend will be $1.32 per share, representing an increase of 10%. The good news gave investors something to cheer about and lifted up the mood for DBS Group share price, which increased from $25.25 to $25.50.

With the onset of the coronavirus, many analysts claim that Singtel share is a defensive play because Singaporeans are likely to stay indoors and use data for communications. To this end, I do not dispute. However, as the saga unfolds, my opinion is that this virus could cause more harm than good for Singtel share price. The latest financial result appears to vindicate my thesis.

The third quarter result is bad. Revenue tanked to $4.3 billion from last year’s $4.6 billion while net profit declined 24% to $627 million. Although the result is disappointing, investors must have heaved a sigh of relief after the horror second quarter in which Singtel recorded its first ever quarterly loss because of the Indian Supreme Court’s hefty fine on its associate (Airtel). Singtel share price had slumped to $3.18 at one point but managed to recover much grounds in recent weeks.

The reason for the recovery of Singtel share price could be attributed to tariff hike by Airtel effective 1 December 2019. That move signalled the end of bitter mobile telco price war in India. Following that announcement, Singtel share price surged to stunning high of $3.46 on 2 December 2019.

What a calamity out of nowhere! DBS Group Holdings share price looks set for another bout of volatility with the unfolding coronavirus saga. Investors could be forgiven for punching the wall as this counter had barely emerged from the persistent Hong Kong riots when the coronavirus took the world by storm. Will the upcoming financial result be a cup of hot milo in the winter for investors?

As the bellwether of the economy, the banking sector is very susceptible to economy condition. It is still too early to judge whether this coronavirus will pose a short or long-term challenge for Singapore economy. But one thing for sure is that DBS Group Holdings share price will come under pressure in the coming months because of its significant exposure to the Hong Kong market, which had been roiled by the civil unrests, recession and the coronavirus.

In recent years, Hong Kong had emerged to be an important market for Singapore banks, particularly DBS Group and OCBC. The start of the Hong Kong protests in July 2019 saw DBS Group Holdings share price correcting to $24 by end of August 2019. Since then, DBS Group holdings recovered to rise to $26 in January 2020.

Crisis? What crisis? Keppel DC REIT share price shrugged off all talks of impending economic meltdown in Singapore to smash a high of $2.33. Since my last coverage in October 2019, Keppel DC REIT had a great run, surging from $2.00 to the current $2.33. Will this counter be another fairy-tale among the SGX stocks?

Amid the sea of red, Keppel DC REIT share price stood out from the rest of the pack and continued to be mightily bullish. In fact, Keppel DC REIT share price increased from $2.11 on 3 January 2020 to the current $2.33. It appears that not even a black swan event like the Wuhan virus can bring down Keppel DC REIT share price.

The shining Keppel DC REIT share price came on the back of an aggressive expansion of its portfolio assets. In 2019, the additions of Keppel DC Singapore 4 and DC1 increased the REIT’s assets under management to about $2.6 billion, an increase from $2.0 billion as at end-2018. Then in December 2019, Keppel DC REIT announced the acquisition of Kelsterbach Data Centre, which will be the REIT’s second data centre in Germany.

To be frank, the bullish form of Keppel DC REIT share price confounded me.

Is it really the right place and right time for Elite Commercial REIT? At a time when the whole world is firmly gripped by fear because of the Wuhan coronavirus, Elite Commercial REIT braved the storm to seek a listing on SGX mainboard. Notably, this IPO came after a slew of S-REIT listings in 2019, which included ARA US Hospitality, Eagle Hospitality Trust and Prime US REIT. Those were primarily US assets but Elite Commercial REIT differentiates itself as the first UK-focused S-REIT.

It seems that the management is determined to make the IPO a success. The public offering constitutes only 5,734,300 units while there is international placement of 108,981,000 units. In addition, 77,827,900 units are allocated to cornerstone investors. Understandably, given the current climate, such tactical allotment is needed to ensure that a successful IPO subscription.

The distribution yield is a mouth-watering 7.1% but whether this sort of distribution yield is sustainable is one big question mark given that the forecast is based on merely 15 months of financial results. The private trust investors were “unwilling to provide representations and warranties” for the latest three financial years of Elite Commercial Trust and had sought exemption from SGX.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.