Stocks

What a breath-taking form! For the past one year, numerous blue chips in Singapore Exchange suffered from a terrible loss of form, causing many wealth builders to lose their pants. Many REITs were not spared from the rout either. CapitaLand Mall Trust unit price is one of the rarest of rare counters to buck the trend to enjoy a magnificent rally. The gravity-defying form of CapitaLand Mall Trust unit price is certainly intriguing as the unit price remained bullish even after a massive $277.6 million private placement exercise in November 2018.

With distribution yield of 4.8% and Price/Book Value of 1.19 as of 11 February 2018, current CapitaLand Mall Trust unit price is indeed attractive. The top three major shareholders are CapitaLand Limited (27.12%), BlackRock (7%) and NTUC Enterprise Co-operative (3.93%). With such a stellar group of institutional investors, investing in CapitaLand Mall Trust seems like absolute no-brainer. Interestingly, NTUC used to be a substantial shareholder with 5% stake. However, since September 2018, NTUC had quietly pared down its stake in CapitaLand Mall Trust to the current 3.93%.

In this equity research article, I will share my insights on what are the factors that I would look out for when selecting the REITs to invest in.

It is that sinking feeling all over again for Keppel share price. And it appears to me that investors are not convinced of a turnaround of Keppel share price. Following the release of a strong full-year 2018 financial result on 24 January 2019, Keppel share price keeps falling instead of rising. Management must be rubbing their eyes and wondering what on earth could have happened to Keppel share price.

With a stake amounting to 20.54%, Temasek Holdings is currently the largest shareholder of Keppel. The burning question among investors must be: how would Temasek Holdings fight its way out with Keppel? Should Temasek Holdings go for a “big bang” merger between Keppel and Sembcorp Marine to revive the ailing Keppel share price or continue to let Keppel share price spiral out of control? An overhaul in the corporate identity of Keppel may not be a bad thing considering the corruption scandal of FY2017 could have somewhat dented the reputation of the world leading oil rig builder.

But then again, it is not all doom and gloom for Keppel share price as the company struck gold with its golden goose – Keppel Land, which recorded a net profit of $938 million for 2018, up 44% from S$650 million a year ago.

What an absolute nightmare it is for investors. The disastrous collapse of Asian Pay TV Trust unit price is something that I have never seen for a business trust. Since its IPO in 2013, the performance of APTT unit price is nothing short of shambolic. From IPO price of $0.97, APTT unit price suffered an incredible meltdown within six years as the unit price slumped to the current abysmal level of $0.13. In fact, investors never had a good sleep with this counter as APTT unit price never exceed the IPO price level after its much-hyped listing.

Of course, die-hard fans of Asian Pay TV Trust would argue that this trust is one of the best yield counters in Singapore Exchange. In fact, over 43 cents per unit in distributions had been declared since IPO (including Q3 2018 distribution). But given the explosive free-fall of APTT unit price, long-term investors would still lose their pants even if all the distributions have been factored in.

Obviously, there are plenty of hard lessons to be learned for long-term investors and it is important that this group of people wise-up or else it would be like throwing good money after bad. How well does investors know about the Taiwanese Pay TV market?

On 24 January 2019, it was reported that Microsoft’s search engine, Bing, was temporary inaccessible. There were market speculations that Bing might have been blocked by China’s Great Firewall, presumably due to the strict Chinese authorities censorship over online content. The latest development came after Google’s exit in 2010 and blockage of other US social media such as Facebook and Twitter. The ban of foreign search engines gave Baidu the golden opportunity to further entrench its market leadership in the China’ search engine space. But will Baidu share price continue to bask in the blaze of glory?

According to data from Analysys, Baidu’ search business represents 71% of China’s internet search market share as of December 2015. With Google exit from China, Baidu had apparently ruled the Chinese search engine market with no worthy competitor in sight. As a result, Baidu share price stormed from USD40 in 2010 to US263 in 2018. That was a mighty six-fold increase of Baidu share price within 8 years.

However, like many technology stocks, Baidu share price suffered a devastating rout since middle of 2018. Obviously, the unfolding trade war between US and China had rattled Baidu share price. Indeed, for the past six months, Baidu investors cannot sleep well as Baidu share price collapsed from USD263 to USD163.

Since my last article, “CapitaLand share price ready to rocket”, this counter took on a life of its own. For the longest time, CapitaLand was a forgotten stock in SGX but trading volume hit the roof on 15 January 2019 following announcement of the $11 billion acquisition of Ascendas Singbridge from Temasek Holdings. Is this the dawn of a new era for CapitaLand share price?

Post transaction, CapitaLand will become the largest diversified real estate group in Asia, with combined assets under management (AUM) exceeding $116 billion. Given the mind-boggling deal size, one would wonder the impact to CapitaLand share price in the short-term and the implications to the REITs under both entities.

Many analysts and financial bloggers have pointed out that the major impetus for this mega deal is all about scaling to achieve bigger things for CapitaLand. Of course, scaling is important for a real estate company. In recent years, CapitaLand share price had become stagnant and was consistently traded at prices below Net Asset Value (NAV). So it makes sense for a mega merger and acquisition deal to “stimulate” CapitaLand share price and drives returns for shareholders. As Temasek Holdings is the parent company of both entities, it is obvious that the state-linked firm orchestrated this merger.

The bloodbath of Tencent share price must have rattled numerous investors. Since early 2018, Tencent share price free fell after the Chinese authorities’ criticism on the addictive effect of mobile games on children. Following that, Tencent started to implement self-imposed limitations on games for minors. In August 2018, it didn’t help that the group announced its first quarter profit drop in 13 years. The slew of bad news created the perfect storm for Tencent share price.

So did the meltdown of Tencent share price injure Temasek Holdings? From a high of HK471 to a low of HK260, Tencent share price suffered a massive correction in 2018, making it one of the worst performing stocks globally.

Temasek Holdings hold a small stake of less than 1% in the Chinese internet firm as at 31 March 2018. While Tencent share price crashed in the past one year, Temasek Holdings  can still laugh all the way to the bank despite the meltdown in Tencent share price. Why is this so? Tencent share price hit the skids

It appears to me that Temasek Holdings invested USD98 million in Tencent since 2015 because the investment shown up in the FY2015 financial report. Assuming that Temasek Holdings entered when Tencent share price was trading at the range HK130 to HK160, the state-linked firm will still be sitting on a paper profit of 100%.

Many people view inheritance property as a windfall. In my point of view, this may not necessary be true. When crafting a will, you have to put in thoughts and make the effort to consider important areas like applicable taxes ABSD (Additional Buyer Stamp Duty) and SSD (Seller Stamp Duty). Otherwise, you may end up causing more harm than good to your beneficiaries.

Recently, a member wrote in to enquire about the applicable taxes on inheritance property. I thought they were very good questions because he had raised concerns on areas that I have never considered before. So, I put forward his questions to Inland Revenue Authority of Singapore (IRAS) for an official reply. This is one of the merits of being SG Wealth Builder member – the opportunity to solicit official responses from government agencies concerning important financial issues.

The reply from IRAS revealed some dark sides that may lead to potential traps for beneficiaries of an inheritance property. And there are even serious implications if you are not careful about it. Thus, I am sharing this article to raise financial awareness.

Basically everyone can craft his own will without the aid of legal advisors. There are even free digital platforms that allow people to craft their wills.

With the onslaught of the unfolding trade war between United States and China, the past six months had been a dark chapter for Alibaba share price. From USD208 in June 2018 to a low of USD132 in December 2018, Alibaba share price had experienced a terrifying loss of form. When will Alibaba share price rise from the ashes or has the bubble really burst for this iconic e-commerce giant?

To put things into perspective, Alibaba share price had increased substantially since the company got listed in 2014. Within a short span of time, Alibaba surged from IPO price of USD68 to a record USD208 in June 2018. But this is not to say that investors had a jolly good ride as the increase of Alibaba share price was nether linear nor exponential. As a matter of fact, Alibaba share price had gone through a period of soft landing, falling to a low of USD59 in 2015. However, the stunning entry of big boys from Singapore changed the dynamic of Alibaba share price forever.

Read my other articles on Alibaba share price: Dark Side of Alibaba Group.

Fairytale run of Alibaba share price

Singapore’s Temasek Holdings was an early investor of Alibaba and is currently the 5^th largest shareholder.

UOB Chairman Emeritus Wee Cho Yaw is certainly larger than life. At the age of 16, I had a brief encounter with him when I received a school award from the banking legend (Mr Wee is an old boy of Chung Cheng High School (Main)). Back then, he was already very well-known, and I was totally overwhelmed by his aura. Indeed, Wee Cho Yaw is synonymous with UOB, the third largest Singapore bank. For the longest time, UOB share price has been running neck-and-neck with DBS share price.

Like DBS and OCBC, UOB share price had a mixed form in 2018. But on the business fronts, it has been a fantastic year for all three banks as earnings surged as a result of interest rate hikes. In this regard, will UOB share price rock or roil the market?

Rally of UOB share price halted

Since October 2016, UOB share price went on a berserk run, surging from $18.40 to reach the incredible height of $30 in May 2018. The dazzling run of UOB share price was certainly intriguing as it occurred at a time when the banking sector was struggling with toxic loans issued to the ailing oil and gas sector.

Being the oldest bank in Singapore, OCBC was born out of the Great Depression through the consolidation of three banks in 1932 – the Chinese Commercial Bank Limited, the Ho Hong Bank Limited and the Oversea-Chinese Bank Limited. Through the decades, OCBC had weathered numerous storms and went on to become one of the largest banks in Southeast Asia. In May 2018, OCBC share price even hit a sensational high of $14. The powerful surge of OCBC share price created much wealth for wealth builders.

Will OCBC share price recapture its magical form again? A lot will depend on the management long-term strategies. Indeed, OCBC has a rich heritage as its founding father is Lee Kong Chian, the son-in-law of Mr Tan Kah Kee. Former Singapore President, Dr Tony Tan, also used to be OCBC Chairman and CEO in the early nineties. The uncle of Tony Tan was the late Tan Chin Tuan, the man responsible for the numerous investments of OCBC such as Fraser & Neave, Raffles Hotel, Robinson, Straits Trading, Wearnes and Great Eastern Life.

Under Lee Kong Chian’s leadership, OCBC embarked on overseas expansion since 1950s, opening branches in China and Malaysia. The early days’ overseas adventure helped OCBC to become one of the largest listed banks in Southeast Asia by market capitalisation. 

For many Singaporean investors, the New Year resolution must be to avoid losses in the stock market at all costs. Indeed, 2018 had been a terrifying year as numerous blue chips got thumped. DBS share price is no exception. Being one of the leading lights of Straits Times Index (STI), DBS endured a challenging year which saw new property cooling measures and global trade tensions roiling DBS share price.

On a brighter note, 2018 had been a milestone year for DBS as the bank celebrated its 50^th anniversary. To put the icing on the cake, DBS had a better-than-expected financial results in 2018 as it emerged victorious from a devastating war against toxic loans farmed to the ailing oil and gas industry. On the basis of the 9MFY2018 results, full year net profit is very likely to exceed that of FY2017. Thus there is a strong possibility of DBS share price staging a magnificent come-back in the coming weeks.

DBS share price pulled back

Obviously, many investors would complain that DBS share price dropped like flies from a record high of $31 in April 2018 to the current low of $23.75. But if you look back, DBS share price was traded at $26 mark in January 2018.

From hero to zero. Investment guru Warren Buffett recently saw his wealth eroded by billions of dollars after Apple share price plunged in value.

Widely regarded as the Godfather of Investments, Warren Buffett is revered by numerous global investors for his god-like investment acumen. Being a value investor, Warren Buffett showed the way how to make money from stock market through value investing. In short, he is not afraid of going against the herd when it comes to investing.

However, Warren Buffett’s shock purchase of Apple shares, through Berkshire Hathaway, is considered bizarre because it ran against his contrarian principle. Where is the safety margin and mitigations for downside risks that our guru always preach?

Over the years, Warren Buffett had made a number of poor investment judgements that proved costly to Berkshire Hathaway investors. Among the worst mistakes should be funding the acquisition of General Re through issuance of Berkshire Hathaway shares. That was a whopping USD 70 billion misjudgement.

In this regard, it should be noted that Warren Buffett do make major mistakes. Thus, investors should not blindly follow what he invests in. Always remember that as a retail investor, you are not in the same league as the big whales.

Being one of the tech heavy-weights of Nasdaq, Apple share price had taken a severe beating in recent months after a magnificent run that saw Apple becoming the first USD 1 trillion company in United States. Shortly after that impressive feat, Apple share price lost steam unexpectedly as the stock plunged from a high of USD 230 in October 2018 to USD 145 recently.

Would Apple share price strike back in style or continue to spiral out of control? 2018 turned out to be a revelation for Apple share price as it hit the skid shortly after reaching the epic high in October. The roller coaster ride of Apple share price must be giving investors plenty of sleepless nights.

Man proposes, God disposes

It doesn’t help that Apple got off to a poor start when CEO Tim Cook announced it would lower revenue guidance for Q1FY2019 on the first working day of 2019. Following the shock announcement, Apple share price got roiled.

Among the biggest institutional investors is Warren Buffett, whose Berkshire Hathaway owned 252,478,779 of Apple shares. The roil in Apple share price caused billion of dollars of capital loss for Warren Buffett. Ouch!

Although investors are sweating over the volatility of Apple share price, the management appeared to shrug off the upheavals in the stock market as it continued to launch a slew of new products in 2018 that saw the company breaking new grounds.

Can SingPost share be your ticket to financial freedom or is it a value trap in the making? Perennially seen as a dividend counter, SingPost stock should have many supporters. But reality started to sink in for investors as SingPost share price plunged to a 10-year low recently.

On 28 December 2018, SingPost share price was trading at the level of $0.90, a complete disaster as the counter saw a massive correction of almost 30% since the start of the year. Indeed, the devastating spell of run for SingPost share price must be giving investors plenty of sleepless nights.

Defending SingPost share price

A reassuring note to SingPost investors is that the management religiously conduct share buy-backs throughout the year. Since January 2018, a series of share buy-backs saw the treasury shares rising from 9.3 million to 21 million in December 2018. The share buy-backs had provided much support for SingPost share price, which could have suffered a worse form if not for the share repurchases. Obviously, the case for SingPost share price is not unique as numerous counters were affected by the recent market sell-offs. But for SingPost, the correction started long time ago. In January 2015, the shares were trading at a sky-high of $2.14.

On 26 December 2018, SPH share price plunged to a record low of $2.33, a terrifying level not seen even during the dark days of The Great Financial Crisis in 2009. Given the devastating spell of run, investors must be sweating whether to run for their lives or buy on the dip.

And then there may be investors who are tempted to enter this counter on the premise that this could be a value stock in the making. For this group of investors, they must realize that fundamentally, SPH don’t make money from selling newspapers.

Traditionally, the media giant derives its revenue from selling advertising spaces. In this regard, the emerging challenges posed by social media and digital platforms are giving SPH a serious run for its monies. For SPH, revenue from print advertisements had been declining for the last few years. On this basis, whether SPH can stay relevant in this new digital economy would really depend on management’s execution in transforming its businesses to embrace digitisation. It is now or never. For sure, the management is not fighting fire with fire. Rather, the strategy is to diversify revenue sources, with a focus in property investments. I guess as an institution, SPH carries the burden of promoting literacy among Singaporeans.

Apparently, the fierce winter has lasted longer than expected as SingTel share price hit the skids. On 17 December 2018, SingTel share price plunged to an outrageous 7-year low. The last time that SingTel shares were trading at such price level was in 2011.

In my previous article on this counter, I predicted SingTel share price to nose-dive to $2.60. While this nightmare scenario has not materialized (yet), the current SingTel share price bring little cheers for investors.

It has been an awful year for investors as SingTel share price suffered an explosive 19% correction since the start of the year. The rapid decline caught many analysts and investors by surprise. On the basis of the current run, it seems certain that this counter would enter 2019 in bad shape.

SingTel share price see red!

All hell broke loose for SingTel share price after the announcement of 1H results which saw SingTel recording a massive drop of 60% in net profits. Excluding the divestment of NetLink Trust in 2017, underlying net profit fell 21%, due mainly to lower contributions from Airtel and Telkomsel, and a stronger Singapore dollar against the regional and Australian currencies. With such a report card, investors wasted no time in punishing the stock.

When Alibaba Group got listed in NYSE in 2014, the IPO was considered an earth-shattering event among investment community. At that point, the market valued the e-commerce conglomerate at a staggering USD231 billion. While many investors salivated at the massive prospect of Alibaba Group, it is important to pay attention to the downside risks as well.

With a name based on legendary folklore, Alibaba Group’s rise to global prominence is nothing short of fairy-tale. Widely touted as the China’s answer to Amazon, can Jack Ma’s team fulfil their destiny?

A whole new world

Indeed, Alibaba Group share price didn’t fail to live up to its initial hype, surging from strength to strength to reach the incredible height of USD210 in June 2018. Back then, the sky is really the limit for this e-commerce giant as investors cheered the berserk run of Alibaba Group share price. Immense wealth has been created and many people became insanely rich overnight as Alibaba Group share price stormed to unchartered waters.

The recent trade war between United States and China has installed some form of sanity on Alibaba Group share price. But then again, will this trade dispute be able to hold the leash on the charging form of Alibaba Group share price for long?

Investors of City Developments Limited (CDL) can be forgiven for punching the wall. From a high of $13.50 in March 2018, CDL share price collapsed to the current dismal level of $8.23. Out of nowhere, CDL share price suffered a devastating train wreck, causing many investors to lose their pants. What has gone wrong with this leading light of SGX?

As one of the biggest real estate developers in Singapore, CDL share price has withstood the test of time and has weathered numerous property cycles through the decades. This time, I am absolutely convinced it will be no different. With market capitalization of $7.6 billion, CDL is certainly one of the largest components among the prestigious Straits Times Index (STI). This means that CDL share price is extremely prone to fluctuations because short-sellers are likely to target the shares when Singapore property outlook turns sour. The 5-year beta of 1.125 vindicates CDL share price volatility. Of course, you can make money out of this stock but in my opinion, CDL share price remains an enigma to me.

If you look back, CDL share price went on a spell-binding bull run in 2017, surging from $8.30 in January 2017 to almost $13.00 in December 2017.

It is a battle that Facebook chief executive Mark Zuckerberg can ill-afford to lose. In July 2018, Facebook share price suffered a brutal decline, falling from USD218 to USD172. The devastating plunge of Facebook share price wiped out at least USD140 billion market capitalization from Facebook’s valuation. The frightening meltdown was largely attributed to its poor Q2 earnings and also a series of bad news. Since then, Facebook share price never looked back, continuing to roll down the slope.

For a social media giant like Facebook, its stock performance will always be measured by revenue growth. Indeed, for Q2’18, the revenue was an impressive 43% increase year-on-year. Thus, widespread concerns over its slowing growth had been grossly misplaced and blown out of proportion. For Q3’18, Facebook continued to achieve great revenue growth, recording 33% increase year-on-year.

Apart from its outstanding earning performance, another significant investment merit of Facebook is that it has zero long-term debts. For a technology company, this is indeed a very unique advantage because it does not need to leverage to fund its growth and investors do not need to worry about insolvency issues for Facebook. To put the icing on the cake, Facebook’s business is also very cash generative, with free cash flow (FCF) of USD 4.1 billion and cash and cash equivalent of USD 9.6 billion in Q3’18.

Crisis? What crisis? In a year in which numerous SGX blue chips retreated to multi-year lows, Sheng Siong share price defied gravity and went on a rampant bullish form. The surprise form of Sheng Siong share price confounded many critics, including myself. How did the management achieve such feat against the backdrop of market correction?

Since IPO price of $0.33 in 2011, Sheng Siong share price had been surging in recent years and even smashed a record high of $1.18 in August 2018. The selling point for Sheng Siong is that it does not have any debts and the business model generates much cash flow. These drivers caused Sheng Siong share price to be immune to market uncertainties. Given the bullish form, should investors enter this counter or is it a value trap to avoid?

In response to my previous article, “From pork seller to CEO of Sheng Siong”, a member wrote an insightful view of Sheng Siong. I found his perspective refreshing and therefore decided to publish his reply (with his consent). In this article, I will also provide some updates and views in relation to the member’s reply.

Member’s view on Sheng Siong share price

Would it be the case that NTUC Fairprice and Dairy Farm are pricing their products at a premium increasingly and Sheng Siong seems to be more “co-operative”?

As the year-end festive season approaches, investors of Singapore Airlines (SIA) have little to cheer about as SIA share price plunged to epic low of $9.17 on 30 October 2018. The last times that SIA share price was traded at such abysmal level were during the 2001’s terrorist attacks in United States and 2003’s SARS outbreak. Both events were black swan events that affected the industry immensely and changed the aviation landscape forever. But hey we are not having any crisis now, aren’t we?

As one of the major components among the prestigious Straits Times Index (STI), SIA is one of the biggest blue chips in the stock market. But investing in this leading light of SGX is not so straightforward as challenging operating environment and industry shifts make this stock highly unpredictable.

Given that SIA is the pride of our nation, can investors really sleep well with its stock? Are there any dark forces behind the recent meltdown of SIA share price? In this article, I will share my insights on the prospects for SIA share price and also explain why the ROE has always been terribly low.

Big boys fled SIA shares?

A review of market data on institutional funds revealed an ominous trend for SIA share price.

On 4 December 2018, Dow Jones crashed 800 points due to concerns over the intriguing trade wars between United States and China. The devastating decline in Dow Jones wiped off billion of dollars from the stock market as investors ran for their lives. Evidently, the spectre of a recession looms large, casting a dark shadow on Wall Street as investors are not convinced of the trade tariffs ceasefire.

The latest stock market rout came as Dow Jones emerged from a black October in 2018 which saw Dow Jones plummeted from 26,800 to 24,400. The massive decline of Dow Jones must have freaked out investors new to the game. But then again, it is important to note that Dow Jones had one of the longest bull runs in stock market history, surging from 7,000 points in 2009 to a high of 26,600 in January 2018.

Obviously, what goes up must come down. Investors must brace themselves for such corrections and avoid making rash moves that could result in losses. Indeed, it turns out that 2018 is a year of revelation as Dow Jones had experienced serious bouts of corrections.

On 5 February 2018, US Dow Jones plunged nearly 1,200 points, the biggest single-day decline on record.

Is this the best window of opportunity to enter First REIT? The unit price of the health-care service provider had taken a severe knock after crashing 16% from 15 to 20 November 2018. Such devastating decline is unheard of among S-REITs and perhaps, illustrated a strange dark chapter for First REIT.

For sure, First REIT is widely regarded as one of the most established S-REITs and possesses a proven track record of solid distributions. First REIT was listed on the SGX mainboard on 11 December 2006. Since IPO, the unit price of First REIT had experienced an explosive bull run, surging from an IPO price of $0.53 to a peak of $1.47 in 2015.

Even with the recent correction, long-term investors should be laughing all the way to the bank because of the mighty unit price appreciation and the long history of distributions paid out.

Notwithstanding the above, many investors should be having difficulty sleeping well at night as unfolding events threaten to derail the growth prospects for First REIT. Out of nowhere, First REIT unit price suffered an unexpected train wreck. Should investors start running for their lives? Or should investors stay put and hope for a windfall from a potential fire sale by major shareholder, Lippo Karawaci?

Despite being hailed as the world largest listed rubber supply chain manager, Halcyon Agri is ironically seldom covered by stock analysts in Singapore. In recent years, the company had experienced quite a massive transformation that saw them being acquired by China big boy, Sinochem. As a result, total revenue rocketed from $635 million in FY2014 to an amazing $2.66 billion in FY2017. Nonetheless, Halcyon Agri share price suffered a serious loss of form recently. What on earth has happened?

In investing, the key to winning is investing in companies with top market positions because you would want to invest in companies with competitive advantages and investment moats. Halcyon Agri has certainly positioned itself well by becoming the biggest listed rubber supply chain manager. But this does not mean that this counter is low-risk. On the contrary, the volatility of Halcyon Agri share price had been giving investors plenty of sleepless nights in 2018.

As a commodity supply chain player, Halcyon Agri share price can be vulnerable to the volatility of commodity prices. What this means is that market timing is important. So, you must set appropriate entry and exit strategies to avoid losing your pants.

Profile of Halcyon Agri

Halcyon Agri’s business model is unique because it not only procures raw natural rubber from smallholders to feed their processing facilities, the company also owns about 122,000 hectares of rubber plantations in West Africa and Malaysia.

From a high of $1.86 in early 2018, PRC-based Yanlord share price suffered a severe decline to reach a startling low of $1.29. The crash of Yanlord share price is particularly mystifying given that it came on the back of a consistently solid financial results over the last 5 years.

Is the current Yanlord share price reflecting the true value of the real estate company or is the God of Wealth playing a trick on investors? To be frank, the issue facing Yanlord is not company-specific. Rather, the whole S-chip industry is currently suffering from a crisis of confidence among investors.

Loss of faith in S-chips

The lack of confidence in S-chips is not new and has been a well-known recurring problem in Singapore stock market for the past decade. It had been a devastating period of time as investors had lost much wealth when errant S-chips either went into financial difficulties or were “creative” in their accounting. As a matter of fact, the SGX Watch-list is littered with so many dead S-chips while there were cases of S-chips embroiled in corporate scandals.

Recent move by SGX regulators to require new S-chips to have cornerstone investors or state-owned enterprise brings cold comfort to investors as well.

Golden Agri Resources holds a special place in my heart. This is the only blue chip which I tried to trade and subsequently lost $1200 in a single day more than 10 years ago. I can still remember that raw feeling when cutting losses on this counter. At the end of the day, I knew that I had made a mistake and decided to move on. Incidentally, Golden Agri Resources share price hit a low of 10 year recently. So I decided to initiate a review on this palm oil producer.

On looking back, losing money in stocks is never a good feeling but I had gained a lot of valuable lessons. Firstly, I had mentioned that there is no such a thing as good or bad stocks because in life, there are only flawed or right strategies.

At that point of time, I suffered losses on Golden Agri Resources because I had not done sufficient homework. I had failed to see that Golden Agri Resources operate in a cyclical industry and the shares are therefore prone to volatility. If I had held on the stock for a few more years, I would have enjoyed substantial capital gain because Golden Agri Resources share price had ridden on the wave of high crude oil prices and surged to new highs.

Call it sheer madness or whatsoever. Within the span of two days, Asian Pay Television Trust (APTT) share price plunged by nearly 50%. Investors with weaker hearts might have suffered serious heart attacks watching in horror at the meltdown of Asian Pay Television (APTT) share price. After all, you don’t often get to see value of business trusts being eroded by so much in a matter of days. Well, that’s investing in SGX stocks for you.

In my previous article, Asian Pay Television Trust dances with the wolves, I wrote that investors should “hope for the best but expect the worst”. I was also bearish on this counter as I was not convinced that the management had the ability to turn around the trust. My view was that the unit price would come under further pressure. Recent Asian Pay Television Trust (APTT) share price vindicated my thesis.

As the saying goes, cheap things don’t come good and good things don’t come cheap. When a business trust is trading at such abysmal level, the price level may not represent value. There are investors who insisted on accumulating more units of Asian Pay Television Trust instead of cutting losses. Well, they had better be sure of what they are buying into.

Another day, another market correction. The recent stock market performance must have freaked out many investors new to the game. Long-term investors and financial bloggers should be having great difficulties sleeping well at night as their stock portfolio plunged in value. Should stock investors run for their lives and turn to bonds like Frasers Property Bond and CapitaMall Bond?

In the pursuit of investment returns, many had ignored the age-old wisdom of wealth diversification. In this article, the investment merits of retail bonds (Frasers Property Bond and CapitaMall Bond) and government-linked bonds are discussed.

Dark side of bonds

Most wealth builders dismiss bond investing because of the perceived low yields and illiquidity. Furthermore, investing in bonds is less exciting than stocks, which is comparatively more dynamic. In my perspective, I am not a big fan of bonds either because I am currently at the asset accumulation life-stage. However, as a fixed-income asset, bonds could offer a viable form of financial instrument, especially for retirement planning purposes.

In 2018, Temasek Holdings decided to join in the fun by offering the Astrea IV Private Equity Bond (4.35%) and the Temasek Retail Bond with 2.7% interest. The difference between the two is that the former is not guaranteed by Temasek Holdings or its subsidiaries while the latter is guaranteed by Temasek Holdings.

The past is history and the future remain a mystery. Would Sembcorp Marine continue to fulfil its destiny as the world no.2 oil rig builder or would it collapse in style? Sembcorp Marine share price is set for a roller-coaster ride as the company faces yet another explosive full-year loss for FY2018. The last time Sembcorp Marine reported an annual loss was in FY2015, which saw it recording a massive loss of $289 million.

For sure, the winter had lasted longer than expected. It has been four years since Sembcorp Marine share price was trading at $4.00. Currently trading at $1.66, Sembcorp Marine share price is a shadow of its former self.

Although Sembcorp Marine is operating in a cyclical industry, there is no guarantee that the share price would restore to its heyday form. Should investors throw in the towel or keep faith with the management? In my view, I fear the worst for Sembcorp Marine share price if things do not improve in the coming quarters because of its grim financial data. In this regard, investors should brace themselves for a potential meltdown of Sembcorp Marine share price.

A whole new world

On looking back, 2018 has proven to be another false dawn for Sembcorp Marine as recovering oil price has not revived the global demand for new oil rigs.

Since my last coverage on 28 March 2018, OUE share price had a devastating spell of run. Share price nose-dived from $1.80 to a shocking low of $1.37. After being walloped left, right, centre, OUE share is currently trading at a stunning 14-year low. Even during the dark days of The Great Financial Crisis, OUE share price had never crashed to such abysmal level. What could have happened?

A quick look at OUE shares revealed that the average 3-month volume stood at a mere 0.33mm. This means that OUE shares are thinly traded and may present some form of liquidity issue for long-term investors. In addition, despite having a market capitalization of $1.23 billion, this counter is seldom heavily shorted over the past three months. This means that even the big boys cannot be bothered with this real estate giant. Is OUE a value trap for retail investors?

Troubles come in troops

In all respect, 2018 has proven to be a mighty difficult year for most real estate developers in Singapore. The increase of Additional Buyer Stamp Duty (ABSD) to 12% and the tightening of loan limits had dampened demand for investment properties.  Of course, the unexpected cooling measures knocked the wind out of many listed property developers’ share price.