Author: sgwealthbuilder

Could Optus’s cybersecurity attack become another Bharti Airtel for Singtel? In November 2019, Singtel posted its first quarterly loss due to the $1.93 billion pre-tax share of Bharti Airtel’s one-off charge in India. That India saga saw Singtel share price (SGX: Z74) plunging from $3.40 in late 2019 to a low of $2.00 in October 2020. The turmoil also saw the departure of former CEO, Chua Sock Koong in December 2020. Against this backdrop, investors must be holding their breath on the unfolding class action suit against its wholly-owned subsidiary, Optus.

On 21 April 2023, Singtel announced that “a class action against six (6) Australian Optus entities was filed in the Federal Court of Australia”. According to a Straits Times article, it was alleged that more than 100,000 current and former customers had joined in the class action suit. In my opinion, given the severity of the incident and the scale of the cybersecurity victims, the potential costs and fines may be at least US$1 billion based on Bharti Airtel saga. Of course, this is just my personal opinion and I could be wrong.

Last year, several analysts had predicted that the data breach could cost Singtel hefty costs of about US$500 million, to which Singtel had rubbished as “speculative”.

From $3.00 on 29 March 2023, AEM share price (SGX: AWX) rocketed 10% to hit $3.30 in recent days. Given the global economic slowdown and continuing downturn in the semiconductor industry, what could have propelled AEM share price (SGX: AWX)?

The revival of AEM share price (SGX: AWX) should be due to the recent good news from its most important client – Intel, which provided its business update on 30 March 2023. After four delays over two years, Intel finally launches its much-anticipated 4^th generation Xeon processors, Sapphire Rapids for both laptops and servers. According to Intel, this is the highest quality data center CPU the company has ever delivered, and the ramp is continuing aggressively.

But what made the recent Intel’s announcement so special for AEM share price (SGX: AWX) was the series of upcoming product launches by Intel. Following Sapphire Rapids, hot on the heels will be the launch of Intel’s 5^th generation Xeon processors, Emerald Rapids in 4^th quarter 2023.

And that’s not all, Sierra Forest and Granite Rapids will be released by Intel in 2024. The series of product launches showed that Intel is determined to regain its market share in the data center CPU segment.

Amid the challenging operating environment, Mapletree Logistics Trust (SGX: M44U) bucked the trend and embarked on yet another round of asset acquisitions, acquiring new logistics assets in Japan, Australia, South Korea and China. Total cost of acquisitions came up to about $1.122 billion.

For a moment, my heart sunk upon seeing the announcement as the thought of another mega rights issue would be on the way crossed my mind. Thankfully, it turned out that the management has opted for a combination of private placement ($200 million) and bank loans ($746.8 million).

The private placement will see placement of between 121,285,000 and 124,223,000 new units at an issue price of between $1.610 and $1.649 per new unit. In connection to the private placement, a distributable income of 2.502 cents per unit will be paid to unitholders for the period from 1 January 2023 to the day immediately prior to the date on which the new units would be issued.

Year-to-date, Mapletree Logistics Trust (SGX: M44U) unit price increased by about 9.5%. The counter was featured in the February SGX Top Ten Institutional Net Buy Stocks, with net buying value of $14.3 million. Looking back, the past one year had been torrid for most S-REITs due to the relentless interest rate hikes by US Federal Reserves.

Troubles come in troops for DBS Group Holdings share price (SGX: D05). The recent online service outage caused an uproar in Singapore, with the Monetary Authority of Singapore (MAS) saying that the disruption was “unacceptable”. The MAS will also be taking actions against DBS after investigation is completed. In light of this mess, what will the implication be for DBS Group Holdings share price (SGX: D05) in the coming months?

For DBS Group Holdings, it is a case of lightning strikes thrice as the 29 March 2023 service outage was actually the third time for DBS. The previous incidents took place in November 2021 and July 2010. For the 2021 incident, the MAS has imposed an extra capital requirement of $930 million on DBS. This was four times higher than the amount imposed on the bank for the 2010 incident. Evidently, the extra capital requirements had not been effective as the latest outage took place just 16 months from the 2021 incident.

Will the MAS impose a significant civil penalty on DBS? It remains to be seen as analysts had claimed that the MAS is likely to impose another round of extra capital requirement on DBS, albeit at a much higher amount than the 2021 version.

In banks, things move at the speed of light. Within the span of just one week, three large US banks had failed – Silicon Valley Bank, Silvergate and Signature Bank. The collapses ignited global fear of contagion in the financial sector, leading to another massive financial crisis not seen since 2008. The fear is not unfound as Credit Suisse got rescued by Swiss National Bank with a US$54 billion loan while a consortium of US banks loaned First Republic a whopping US$30 billion to prevent a contagion from spreading in US. Against this backdrop, what is the implication for OCBC share price?

The narrative for OCBC share price had certainly turned scary in 2023. When I invested in OCBC in August 2021, my thesis was that bank stocks should perform well in high inflationary environment as high interest rates generally lead to higher net interest incomes for the banks. Back then, I had anticipated that US Federal Reserves would hike interest rates in 2022 and that Singapore bank stocks would be the biggest beneficiary from the rate hikes. However, it seems that the series of interest rate hikes by US Federal Reserve could be tipping global economy into a financial crisis instead.

What an ambush out of nowhere! It seems that I had grossly underestimated the impact of Optus cybersecurity attack on Singtel share price (SGX: Z74).

Six months had passed since the Australian unit of Singtel suffered the fateful cybersecurity attack but Singtel share price (SGX: Z74) continued to be in sluggish form. In fact, at current trading levels, Singtel share price has reverted to the previous low in the aftermath of the cybersecurity attack. When can the counter shake off the blues?

In my last article, I wrote that Singtel share price (SGX: Z74) might have turned the corner due to several strong financial performances in the past few quarters. However, in the stock market, sentiments often prevail. In this regard, clouds of uncertainty may engulf Singtel share price (SGX: Z74) in the coming months until the cybersecurity issue is fully addressed.

To recap, in 22 September 2022, Singtel revealed that its Optus customers’ data were leaked following a cybersecurity attack. Then in October 2022, the telco announced that about 1.2 million of the Australian customers were affected. Apparently, some of the customers’ passport numbers were exposed by the perpetrators. The incident led to fear that a massive class suit action could be coming Singtel’s way.

What an explosive free fall! AEM share price (SGX: AWX) plunged by nearly 15% within two days following the release of the full-year financial result for FY2022 on 24 February 2023. The trigger for the sell-offs was not attributed to the financial result, which was stellar by the way. Instead, investors were spooked by the revenue forecast for FY2023.

After achieving a record revenue of $870.5 million for FY2022, the management guided revenue of just $500 million for FY2023 “that may be revised as second half visibility becomes clearer”. The market wasted no time punishing AEM share price (SGX: AWX), sending the counter straight to the bottom.

Short-selling volume surged to a high of 2.8 million on 27 February and 1.67 million on 28 February. The daily short-selling volume on AEM was roughly about 200,000. So the recent spike in short-selling volume represented about 10-fold increase, leading to the short-term volatility in AEM share price (SGX: AWX).

In this blog, I have always maintained that on its day, AEM share price (SGX: AWX) can be unbeatable. Conversely, when the tide goes against AEM share price, the counter can spiral out of control. In view of this, this counter is really not for the faint-hearted.

Is it a healthy correction or the start of a slippery slope? After announcing a record net profit of $8.19 billion for FY2022, DBS Group Holdings share price stunned the market by falling from $36 on 10 February 2023 to $34.70 on 15 February 2023. The decline represented a 3.6% in DBS Group Holdings share price within a week.

The volatility of DBS Group Holdings share price should not be attributed to the financial result of FY2022. Rather, the market should be rattled by CEO Piyush Gupta’s revelation of DBS loan exposure of $1.3 billion to beleaguered Adani Group, which has been targeted by short seller Hindenburg Research. The Adani Group is alleged by Hindenburg Research for stock manipulation.

To be fair to Piyush Gupta, the amount of loan issued to Adani Group represented only 0.3% of the total loan portfolio of DBS Group. Thus, the collateral damage should not be significant even if the full amount of $1.3 billion is write-off. But of concerning to most investors is how many Adani will DBS Group face in 2023 against the backdrop of a possible global recession?

DBS Group emerged victorious from the devastating pandemic as DBS Group Holdings share price smashed a record high of $37.25 on 11 February 2022.

7^th March 2022 will be remembered as a memorable day for investors of Lenovo as the stock was included in the prestigious Hong Kong’s benchmark stock gauge – the Hang Seng Index. Consequently, Lenovo share price (HKEX: 992) rose steadily to a 52-week high of HK$9.00. The entry into Hang Seng Index capped a stunning turn of event as Lenovo scrapped its US$1.8 billion mega IPO in Shanghai Stock Market only in October 2021.

The bizarre withdrawal from Shanghai Stock Market had caused a temporary crisis of confidence for Lenovo share price as the counter dived 17%. But not for long as Lenovo share price (HKEX: 992) recovered swiftly from the crash following the inclusion into Hang Seng Index. In this regard, the volatility of Lenovo share price (HKEX: 992) is certainly not for the faint-hearted.

And that’s not all. Two weeks after Lenovo share price got included into Hang Seng Index, US Federal Reserves launched a series of interest rate hikes that rattled global stock market. During that period, Russia’s invasion of Ukraine added further turmoil to global financial market. These two events created uncertainties, causing sell-offs on growth stocks. Lenovo share price (HKEX: 992) was not spared from the carnage and the counter has been on a bearish run for pretty much of 2022.

Not even the lure of 500,000 free air tickets to Hong Kong could revive the ailing Cathay Pacific share price. The counter continued to be in sluggish form after the announcement by Hong Kong government. Year-to-date, Cathay Pacific share price fell by 6.89%.

The unprecedented disruption caused by COVID-19 to air travel will be remembered by many for generations. For Cathay Pacific, the past three years had been nothing short of a prolonged terrifying nightmare due to the travel restrictions and strict quarantine requirements for Hong Kong-based aircrew. No doubt about it, these measures inflicted substantial impact on Cathay Pacific’s business. Whilst most countries had reopened in 2022, Hong Kong closely followed China’s zero COVID policy, at a hefty price to the economy of Hong Kong.

Then, on 14 December 2022, the Asian financial hub stunned the world with the announcement of the lifting of all COVID-19 restrictions on travellers. Surely, the worst must be over for Hong Kong. Could this herald the bottom of Cathay Pacific share price?

According to IATA, the airline industry had been the most profitable for decades in the period from 2010 to 2019. Cumulatively, the combined profits of the airlines amounted to a staggering US$220 billion.

Is this really light at end of the tunnel for Sembcorp Marine share price? On 27 January 2023, SGX gave the green light for the acquisition of Keppel O&M by Sembcorp Marine through the issuance of 36.8 billion new Sembcorp Marines shares. The SGX nod was a major breakthrough for the merger between the oil-rig giants, heralding the end of a long running saga.

To be sure, the proposed merger is not a done deal yet as it is subjected to shareholders’ voting in an extraordinary meeting to be held on 16 February 2023. Sembcorp Marine must obtain more than 50% votes from its shareholders (excluding Temasek Holdings) in order for the acquisition to go through. Against this backdrop, investors should expect plenty of volatility for Sembcorp Marine share price in the coming weeks.

In the EGM circular, the Sembcorp Marine warned shareholders that there is “no assurance that as a standalone entity, the SCM Group will continue to receive the necessary support from its banks, financiers and significant shareholder, Temasek Holdings (Private) Limited”.

In my opinion, the caution is not warranted as its almost a certainty that shareholders would vote in favor for the merger. And it’s not so much of the expectations of a business turnaround.

What a disaster! A brutal winter beckons ahead for AEM share price following the release of the recent disastrous Intel’s 4^th quarter financial result. The day after the release of Intel’s financial result, AEM share price tumbled 3%.  It remains to be seen if this is the start of another slippery slope for AEM share price in the coming weeks as the full-year financial result for AEM will be released in February.

In October 2022, AEM share price had suffered a devastating meltdown of 25% within two weeks following reports that Intel is going to lay off workers amid steep decline for its core businesses – PC and Data Center. In this blog, I have always maintained that on its day, AEM share price can be unbeatable. Conversely, when the tide goes against AEM share price, the counter can spiral out of control. In view of this, this counter is really not for the faint-hearted.

The full-year financial result for AEM should be stellar based on the 9MFY2022 financial performance. This should provide a much-needed booster shot for AEM share price. However, investors must be wary of a bull trap as the market is bracing for a looming downturn. Intel had guided that revenue for 1QFY2023 would decline by a whopping 40% year-on-year while loss per share would be US$0.15.

It is a case of all hell broke loose. Comfort Delgro share price faces potential crisis as it plunged to a record low of $1.14 on 16 January 2023. What could have led to the gut-wrenching train wreck for Comfort Delgro share price? After all, we are only less than one month into 2023. The devastating meltdown of Comfort Delgro share price have prompted an SG Wealth Builder member to request for a write-up on this counter. Should investors sell everything and run for their lives?

Comfort Delgro is a transport company with a total fleet size of about 34,000 buses, taxis and rental vehicles. SBS Transit, a listed company, is a subsidiary. Vicom, another SGX-listed company, is another subsidiary. For the past decade, Comfort Delgro has spread its wings overseas, with operations in Australia, the United Kingdom, New Zealand, China, Ireland and Malaysia.

Although Comfort Delgro is widely perceived as a taxi company, the Group traditionally derived its main bulk of the revenue from the public transport services (bus and rail). In this context, several major changes in the rail-hailing and public transport from 2018 to 2019 had impacted Comfort’s businesses. Among them is the New Rail Financing Framework.

How will Wilmar share price unravel in 2023? In my previous article, I wrote that Wilmar share price fell from the sky and lost its way in 2022 following a series of unfortunate events. The roller coaster form of Wilmar share price had left many investors befuddled. After all, the Group had been consistently churning out good financial results in recent years. In this article, I will share my insights on the outlook of Wilmar share price in 2023.

First thing first. I must clarify that Wilmar is one of my favourite SGX stocks, so my views may be biased. In 2020, I had invested in Wilmar and exited at a profit of $2,700 in early 2021. My lowest entry of 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 point. Despite so, I would caution that due to the volatility of Wilmar share price, this stock is really not for the faint-hearted.

There are a few driving factors behind the volatility of Wilmar share price, and they are largely attributed to the core business in Indonesia – palm oil plantations.

Will iFAST share price enjoy another fairy-tale run in 2023? iFAST share price became stuff of legend in SGX Mainboard when the counter rocketed from $1.00 in 2020 to an incredible high of $10 in 2021. The meteoric rise of iFAST share price certainly created plenty of wealth for many iFAST investors.

For background, iFAST is an online platform company offering investment products to retail investors. At the same time, financial institutions and banks can distribute their investment products through iFAST’s platform. The supersonic boom of iFAST share price in recent years was due to iFAST winning the award of Hong Kong ePension scheme in early 2021.

Incidentally, iFAST share price was given a mighty booster shot by the pandemic due to the trading boom from 2020 to 2021. As many investors were working from home and unable to travel due to borders’ restrictions, there were plenty of opportunities for retail investors to capitalize on the market corrections during that period. As a result, iFAST’s Asset under Administration (AUA) rose from $14.45 billion in FY2020 to $19 billion in FY2021.

However, Man proposes, God disposes. The wheels came off the wagon for iFAST share price in 2022 as the series of interest rate hikes by US Federal Reserve and the Russia-Ukraine war combined to knock the wind out of global stock markets.

A new year, a new beginning! How will Keppel share price unravel in 2023? Time flies. It has been more than one and a half year since Keppel Corp entered into a non-binding MoU with Sembcorp Marine to combine Keppel Offshore & Marine (KOM) and Sembcorp Marine. Under the deal, KOM will be merged with Sembcorp Marine. In addition, Keppel will receive shares in the listed entity and a cash consideration of up to $500 million. Given the protracted negotiations, investors must be feeling impatient. Will the deal go through or not?

During this period, the oil and gas sector has seen a remarkable recovery as crude oil price smashed past US$120 per barrel in March 2022 with the onset of the Russia-Ukraine war. While oil prices had cooled down since then, the demand for oil-rigs had been healthy in 2022. Against this backdrop, investors must be wondering if Keppel Corp should continue with the merger. Notwithstanding this, Keppel Corp investors had voted in favour of the 2 resolutions during the extraordinary meeting held on 8 December 2022 (99.96%).

Even though Keppel investors had voted overwhelmingly for the merger, it is not a done deal yet. In life, never say never.

As we approach the end of the year, it is time to review the performance of Singtel share price. Year-to-date, Singtel share price rose by 10.30%. Whilst the increase was decent, the stock should have performed even better, if not for the prevailing bearish market sentiments. In fact, the stock was actually on a bullish form in the earlier part of the year, surging from $2.30 in January 2022 to a high of $2.80 in May 2022. Then the series of US Fed interest rates came along to douse the bullish form of Singtel share price.

Indeed, the series of interest rate hikes had rattled global stock markets. Singtel share price was not spared from the turbulence. From May to October 2022, Singtel share price had been in bearish form in the aftermath of the interest rate hikes. Despite so, my observation is that $2.60 is the support level for Singtel share price. Each time this level is reached, Singtel share price will somehow rebound.

It seems that Singtel share price enjoyed the support from institutional investors. In 2022, the counter was often ranked in the monthly Top Ten Institutional Net Buy Lists except for the months of June, May, March and January (December result is not compiled yet).

Lifetime Membership As we approach the end of 2022, it is time to review the performance of Wilmar share price. From a decade high of $5.60 in February 2021, Wilmar share price fell from the sky and lost its way. Looking back, the explosive form of Wilmar share price was largely due to the listing of its subsidiary, Yihai Kerry Arawana (YKA). Nonetheless, that form did not last somehow as the counter collapsed to $4.15 toward the end of 2021. What has gone wrong for this leading light of Straits Times Index (STI)?

To add to the intrigue, the implosion of Ukraine-Russia war in early 2022 led to a commodity boom. The unfolding event saw Wilmar share price recovering its form as the stock rose to a high of $4.90 in March 2022. Then again, Man proposes, God disposes. The month of March 2022 coincided with US Federal Reserve launching a series of interest rate hikes. Consequently, all hell broke loose for Wilmar share price. The roller coaster form of Wilmar share price must be gut-wrenching for investors.

In 2020, I invested in Wilmar and exited at a profit of $2,700 in early 2021. My lowest entry of Wilmar share price was $4.84 and I exited at $5.20.

Lifetime Membership As we approach the end of the year, it is time to review the performance of Sembcorp Industries share price. In July 2022, I made a forecast that Sembcorp Industries share price would fly after the Group issued a profit guidance that the “financial results for 1H2022 is expected to be materially higher than 1H2021”. Indeed, Sembcorp Industries share price had a fine run, surging from $3.00 on 22 July to hit a high of $3.50 on 6 September.

Year-to-date, Sembcorp Industries share price increased by an incredible 61.2%, making the counter one of the best performers (if not the best) in Straits Times Index (STI). It seems that not even the market turbulence brought forth by the US interest rate hikes could disrupt the bullish form of Sembcorp Industries share price in 2022. Question now is whether Sembcorp Industries share price can carry on its fine form in 2023?

Admittedly, I am a big fan of Sembcorp Industries as it was my best investment. I had clocked in a profit of $17,500 after cashing out in December 2020. Back then, I had predicted that Sembcorp Industries share price would continue to perform well in 2021, which it did.

Lifetime Membership As we approach the end of the year, it is time to review the performance of OCBC share price. I had bought 6000 OCBC shares in August 2021 but exited when OCBC share price was trading at $12.40. The key reason for my exit was the unpredictability of OCBC share price.

When I invested in OCBC in August 2021, my thesis was that bank stocks should perform well in high inflationary environment as high interest rates generally lead to higher net interest incomes for the banks. Back then, I had anticipated that US Federal Reserves would hike interest rates in 2022 and that Singapore bank stocks would be the biggest beneficiary from the rate hikes. However, OCBC share price had not taken off as I have envisioned it to be. And I was humbled.

Year-to-date, OCBC share price has risen by only about 8.3%. While this is a really decent performance, it should be highlighted that US Federal Reserve has hiked four consecutive 75 basis point of interest rates. Against this context, OCBC share price should have increased by a higher margin but have flattered to deceive so far. What could be the key factors?

The problem with OCBC share price is that it is vulnerable to short selling activities.

Lifetime Membership Hurry! The train is leaving! SIA share price (SGX:C6L) looks set for a supersonic run after the Group posted a record $1.23 billion half-year operating profit. The blow-out result came on the back of a surge in travel demand as Singapore fully opened its borders to vaccinated travellers since April 2022. To put the icing on the cake, the Group declared its first dividend in three years.

For sure, Christmas certainly comes early for SIA investors. The turnaround for the national carrier had taken longer than expected due to the protracted pandemic. Those who had given up on SIA share price (SGX: C6L) could be forgiven as there had been so many twists and turns. Nonetheless, the latest financial result would put to rest any lingering doubts that this is another false dawn for SIA share price (SGX:C6L).

The explosive pent-up demand for air travel led to revenue for 1HFY2022/23 surging almost 200% to hit $8.4 billion while net profit reached $927 million. During the first half, revenue from passenger segment rose nearly 700% year-on-year to nearly $6 billion. Traffic was a staggering 11-fold higher, underscoring the phenomenon of revenge leisure travel.

SIA share price in wheel of fortunes

SIA share price in baptism of fire!

Lifetime Membership In August 2022, I wrote that Mapletree Logistics Trust (SGX: M44U) returned from coma as the counter surged to a high of $1.81. Yet that bullish run did not last as the unit price bombed out to a low of $1.42 on 21 October. Whilst Mapletree Logistics Trust (SGX: M44U) had managed to climb back to $1.60 in November, the trashy form of the unit price certainly left a bitter taste in investors’ mouth.

Year-to-date, Mapletree Logistics Trust (SGX: M44U) declined by about 13%. The sluggish unit price of Mapletree Logistics Trust (SGX: M44U) was attributed to the lack of buying by institutional investors. For nearly 11 months, Mapletree Logistics Trust did not feature in the SGX Top Ten Institutional Net Buy Stocks.

To be fair to the S-REIT, 2022 has been a difficult year for most stocks as global stock markets suffered endless shelling from the US Federal Reserve’s aggressive interest rate hikes. Many S-REITs and technology stocks had been razed to the ground as investors fled for their lives due to concerns that the soaring interest rates would hurt bottom-line for companies operating in these sectors.

For S-REITS, falling unit price poses a tricky challenge because most of them tend to conduct equity funding to raise capital for acquisitions.

What a swashbuckling return! From a low of $3.08 on 21 October, AEM share price stormed back in style to hit a high of $3.47 in recent days. The recovery of AEM share price came on the back of a stellar 3^rd quarter financial result. In this blog, I have always maintained that on its day, AEM share price can be unbeatable. Conversely, when the tide goes against AEM share price, the counter can spiral out of control. In view of this, this counter is not for the faint-hearted.

The recent rout of AEM share price was attributed to the troubles faced by its key customer – Intel. Consequently, various analysts came out slashing their targets for AEM share price. Intel is struggling to turn around its business as it incurred loss of US$500 million in 2^nd quarter.

While 3^rd quarter saw Intel recording US$1 billion profit, the result still paled in comparison to the US$6.8 billion profit recorded in Q3FY2021. As the US chipmaker tried to revive its business, it announced cost reductions of US$3 billion in FY2023. Being a key supplier of back-end test equipment for Intel, AEM may be affected if Intel chooses to defer its test equipment orders from AEM.

Lifetime Membership From a low of $32.40, DBS Group Holdings share price shook off the blues of Black October to smash to a six-month high of $34.20. The return of DBS Group Holdings share price came on the back of a stellar 3^rd quarter financial result that saw the bank recording a record $2.24 billion net profit. But before investors had the chance to pop the champagne, US Federal Reserve decided to gate-crash and spoil the party.

DBS’ latest financial result was released a day after the Fed unleashed the fourth interest rate hike of 75 basis points in this year. At the same time, the Fed also hinted of further interest rate hike ahead, albeit at smaller increase, in its bid to fight inflation. The latest move by the Fed sent global stock markets into another tailspin. In the process, DBS Group Holdings share price was rattled as well.

By right, banks should be the biggest beneficiaries from the interest rate hikes because of the increase in their net interest incomes. Yet the concern right now is whether the aggressive interest rate hikes could tip global economy into a long recession. In the face of a potential Singapore’s economic downturn, local banks will be the first in the line of fire.