SG Wealth Builder

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.

Is this the beginning of the end for DBS Group share? One of the biggest Singapore financial news that set tongues wagging should be the joint application of a digital bank license by Singtel and Grab. Many investors are wondering if digital banks could pose a serious threat to the incumbent banks in the long run.

In my point of view, the move by Grab should be a desperate bid to enhance bottom-line to pave the way for the coming Grab IPO in 2023. I honestly doubt that Grab or Singtel would want to compete directly with DBS Group because all three entities are backed by Temasek Holdings. It will not be the interest of the investment firm to see DBS Group share collapsing like StarHub.

Of course it is still early days for the digital banks but it will be too far-fetched to claim this could signal a slippery slope for DBS Group share price.

The key reason why Grab IPO is on the cards is due to the acquisition of Uber assets in Southeast Asia in 2018. According to Uber IPO prospectus, Grab paid Uber 409 million stocks issued at USD5.54 in exchange for the assets. One of the conditions, including the absence of Grab IPO, is that Uber is entitled to redeem the stocks in cash by 25 March 2023.

Lo and behold! Is this really the light at end of tunnel for SingPost share price? Investors got massively hyped up over announcement of bankruptcy protections for its ill-fated United States subsidiaries, Jagged Peak and TradeGlobal. Under the scheme, SingPost will no longer recognise profit or loss from the toxic subsidiaries. In view of this, is SingPost share price out of the woods?

The latest development marked the end of a dark chapter that started way back in December 2015. Jagged Peak and TradeGlobal were the two major assets acquired under former CEO Wolfgang’s tenure. Within months after the acquisitions, Wolfgang resigned. I do not know what transpired behind the scene. But since the acquisitions, the eCommerce segment had been consistently loss-making and the management struggled to turn the business unit. SingPost share price also plunged from a high of $2.00 to the current $0.93.

Of course, it is not fair to solely attribute the ailing SingPost share price to the two United States subsidiaries. There was also a special audit ordered by regulators in 2015 to look into a possible lack of interest disclosure by one of its former directors, Keith Tay. That saga concerned the acquisition of FS Mackenzie in 2014.

As 2019 draws to a close, it is timely to review the performance of the largest bank in Singapore – DBS Group. In a year which many analysts predicted to be a challenging year for DBS Group, the Singapore bank stunned many critics by posting a series of solid financial results. For nine months, net profit rose 13% to $4.88 billion. Total income grew 12% to $11.1 billion. Against this backdrop, DBS CEO can laugh all the way to the bank.

Piyush Gupta joined the bank in November 2009. In the blink of an eye, ten years had passed. Under the helm of the current DBS CEO, the Singapore bank has enjoyed a decade of tremendous growth.

Of course, there were challenges along the way, such as the European debt crisis (2011-2012), the oil slump (2014-2016) and the unfolding trade war between USA and China. Somehow, the DBS CEO managed to steer the bank to safe harbor and grew the bank to an even bigger scale than what it was ten years ago. Very impressive indeed.

According to SGX filing, DBS CEO Piyush Gupta held 1.84 million of DBS shares as at 25 February 2019. Most of the shares were awarded to him as part of his remuneration for being DBS CEO.

On 29 October 2018, I wrote that OUE share price plunged to a record 14-year low of $1.37. Since that fateful day, the counter confounded all critics by staging a magnificent run to reach a high of $1.80 on 12 April 2019. It certainly seemed like OUE share price is out to prove me wrong. Well, I have no problem with that as long as shareholders made money out of the rebound!

After that minor bull run, OUE share price tamed off quite a fair bit to reach the current level of $1.50. At current OUE share price, the Price/Book Value amounts to a mere 0.33. Is OUE share price undervalued or is it a value trap?

For sure, OUE is not in the league of CapitaLand, City Development or UOL. But this stock is no pushover either. With a market capitalization of $1.46 billion, OUE share is considered a large cap among SGX property counters. Furthermore, OUE boasts many premium grade assets under its stable, among them are OUE Bayfront, One Raffles Place, Lippo Plaza, Mandarin Orchard Singapore, Crowne Plaza Changi Airport, Marina Mandarin Singapore and Mandarin Gallery.

Given the pedigree of OUE, the Group is in strong position to weather the cyclical nature of the hospitality and real estate industry.

Can anything stop Mapletree Logistics Trust? Since my last coverage on this counter in September 2019, the unit price had been on an incredible bullish form. The surging unit price of Mapletree Logistics Trust had created plenty of wealth for unitholders. Christmas certainly comes early for these investors!

To be frank, I had underestimated the potential of this S-REIT. Amid the rally in the S-REIT sector, 2019 turns out to be a fantastic year for Mapletree Logistics Trust as its unit price rocketed from $1.30 in January to the current $1.68. The increase of almost 30% within a year is certainly very impressive for an S-REIT!

It appears to me that the management is riding on the current industry upturn and seizing opportunities in the Asia Pacific region. In November 2019, Mapletree Logistics Trust had raised $250 million through private placement of 154.6 million unit to fund the acquisition of 50% interest in four properties in China, 100% interest in two properties in Vietnam and 100% interest in one property in Malaysia.

Despite the equity financing, the unit price of Mapletree Logistics Trust remained resilient. Question now is: will this S-REIT takes its swashbuckling run right into 2020? On the basis of its current form, the sky is the limit for this S-REIT!

2019 come and go. In the blink of an eye, it has been 10 years since the Great Financial Crisis took place. As I look back, I can’t help but feel intrigued at the transformation of my wealth building journey. This blog was borne in an era of great financial upheaval and also at a time when I was struggling financially. Specifically, 2009-10 was the period in which I lost a substantial portion of my wedding expenses to the stock market.

The loss was attributed to a poor strategy executed for one of the penny stocks – China Enersave. I have always maintained that there is no good or bad stocks. In investing, there are only good or bad strategies. When the share price of a stock dived, you can always choose to cut loss or short-sell. In my case, I did neither. The loss of my wedding expenses culminated in one of the biggest challenges that I had to face in the course of my financial journey.

Losing money to the stock market is not the end of the world. But being on the receiving end, it did feel like the end of the world. This is especially so as I had lost my wedding expenses.

On 13 December, OCBC share price turned bullish upon the announcement of Bangkok Bank winning the bid for Bank Permata acquisition. Previously, it was reported that OCBC had mulled over the acquisition of the Indonesian bank. On the basis of the mild recovery of OCBC share price, it seems that shareholders are glad that OCBC pulled out of the deal.

Incidentally, the latest development came at a time when I opened my Supplementary Retirement Sum (SRS) and looking at investing in a blue chip to generate reasonable returns. After much consideration, I opted to invest in OCBC share. In this article, I will share my view on why I chose to enter at current OCBC share price.

Strictly speaking, my last stock investment was in 2010 when I bought K1 Venture, an investment holding company of Keppel Group. Back then, the intent was not really to grow wealth but to divert a portion of my CPF monies from the Ordinary Account before HDB wiped out the monies for the settlement of my HDB flat purchase. I wanted this investment to be a buffer in case I got retrenched from my job and still need to service my housing loan. In the blink of an eye, I have upgraded to Executive Condominium and now planning for my retirement.

How Gallant Venture had fallen. This listed company used to have a track record of making good profits and even counted Sembcorp Industries as one of its major shareholders. But in the aftermath of the Great Financial Crisis of 2009, Gallant Venture share price free fall from the sky to become a perennial penny stock. This counter would have been placed under SGX Watch List for failing to meet the Minimum Trading Price (MTP), if not for its $619 million market capitalization.

In the latest turn of events, investors of Gallant Venture should brace themselves for a roller coaster ride following the exit of Sembcorp Industries’ exit. On 11 June 2019, it was announced that Sembcorp Industries disposed its entire shareholdings in Gallant Venture and ceased to be a substantial shareholder.

Perhaps Sembcorp Industries had lost patience with Gallant Venture. For the past five years, revenue had declined from $2.33 billion in 2014 to $1.8 billion in 2018. Profits had become erratic and inconsistent as well. In 2014, full-year profit was $7.5 million while 2016 saw profit of $72 million. But in 2015, the Group suffered losses of $145 million. Subsequently, since 2017, Gallant Venture had been in the red.

With the exit of a strategic shareholder, the prospect for Gallant Venture appears to be grim.

Since my last coverage on 1^st October 2019, CapitaLand share price had turned on the style, surging from $3.40 to $3.70. The driving factors for the bullish form of CapitaLand share price stem from the recent asset recycling activities and sale of new launches.

As of 20 November 2019, CapitaLand had divested close to $5.7 billion worth of assets, exceeding their annual target divestment of $3 billion. The most notable recent divestment was the divestment of The Star Vista for $296 million to Rock Productions. According to the management, the deal is expected to yield net proceeds of about $145 million and a net gain of about $32 million. The slew of divestments had led to the buoyant CapitaLand share price in 2019.

Another catalyst for CapitaLand share price was the strong sale performance for its residential units in Singapore and China. One Pearl Bank has sold 235 of the 280 launched units while Sengkang Grand Residences sold 216 of the 280 available units. In China, the Group sold 3,694 units in the first nine months of 2019 with a value of RMB8.5 billion, and expects to launch an estimated further 1,700 units in 4QFY2019.

Against the backdrop of positive news, will CapitaLand share price continue to run going forward?

On 5 December, it was announced that Golden Agri share will be booted out of the prestigious Straits Times Index (STI). Taking over its place will be Mapletree Logistics Trust. With this latest development, I fear the worst for Golden Agri share price. In my previous article, I have mentioned that I am pretty bearish on Golden Agri share price in the medium term. This latest episode vindicated my point and also marked a sorry end to Golden Agri’s journey in the STI.

StarHub and SIAEC were booted out of STI in 2018 and 2017 respectively. Since then, the share prices of the two companies had plunged to abysmal levels. On this basis, I don’t see how Golden Agri share price can fight its destiny. Included in the STI since September 2008, Golden Agri share price had been in the limelight for the past decade and this counter enjoys much liquidity. The average three-month trading volume is actually 1.1 billion!

Since 2014, Golden Agri share price had plunged from $0.44 to the current $0.22, representing a massive decline of 50%. The huge fall of Golden Agri share price had caused much wealth destruction for shareholders. Thus, understandably, many shareholders must be unhappy over Golden Agri share price performance.

It seems that ThaiBev share price is going places. After announcing a stellar full-year financial results, ThaiBev share price is set for a bullish run after the management acknowledged in a SGX filing that they are currently “evaluating strategic proposals and opportunities, including but not limited to a potential listing of its beer business”.

The discussion is still at preliminary stage and there is no certainty that the potential listing may take place. However, this positive development had already sent ThaiBev share price hitting the sky. The recent performance of ThaiBev share price was in stark contrast in 2018, which was when the Thai government implemented the new Excise Tax Act. Effective from 26 January 2018, Thailand government mandated that all alcoholic beverages and tobacco products, both imported and domestically produced, to be charged an additional 2% of excise tax.

In face of the tax increase, the management had turned to merger and acquisition activities to bolster revenue. And the strategy worked like magic. Three major acquisitions helped to fuel revenue performance and turbocharged ThaiBev share price. Among the acquisitions was the successful bid for a 53.59% stake in Saigon Beer – Alcohol – Beverage Corporation (“Sabeco”). ThaiBev also expanded into the spirits business in Myanmar through the acquisition of a 75% stake in Grand Royal Group, the biggest player in Myanmar’s whisky market.

Crisis? What crisis? On 11 November 2019, DBS Group confounded investors by delivering a surprisingly better-than-expected 3^rd quarter financial results. Many investors had feared the worst for DBS Group share price due to the unfolding Hong Kong civil unrests, Singapore property cooling measures and the cuts in US Federal Reserves’ interest rates. Notwithstanding these challenges, the management navigated the storm relatively well and continued to post great results.

Question now is: will DBS Group share price recapture the height seen in 2018? Make no mistake, the slew of headwinds in 2019 had taken some shine off DBS Group share price as the market deals with the onslaught of uncertainties.

While DBS Group cannot control macro-economic conditions, the bank continued to power ahead with its business front. Compared to a year ago, total income for 3^rd quarter surged 13% to $3.82 billion while net profit stormed 15% to $1.63 billion. Interestingly, against the backdrop of declining US interest rates, DBS Group actually increased its Net Interest Margin (NIM) to 1.9% from 1.86% a year ago. Return on equity (ROE) also reached a high of 13.4%. Given such stellar results, where will DBS Group share price go from here?

Note that this is an opinion article and not meant to be a financial advice.