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personal finance

Devastating HDB Loan and CPF Accrued Interest

Be afraid. Be very afraid after reading this article. This is an article that all aspiring and existing home owners can ill-afford to miss. And I do mean it because you may live to regret for dismissing the message in this article. Today, I am going to share with readers the devastating effect of HDB Loan combined with CPF Accrued interest.

Many financial bloggers wrote about CPF accrued interest and HDB Loan. However, they may not have the real experience of purchasing an HDB flat or obtaining an HDB loan before. Most of them merely touched on the interest rate figures without providing much analysis on the bigger picture of the housing scheme framework in Singapore. In my perspective, this is dangerous as not knowing the full picture of the law can cost you an arm or leg.

However, I am different because in this article, I am going to provide some basic analysis and share with readers the frightening aspect of the HDB Loan and CPF Accrued interest. At the end of the day, I hope readers can avoid the financial pit-falls and grow wealth with me together. So, if you do find this article useful, please lend your support and subscribe to my blog.

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personal finance

Exemption from Home Protection Scheme (HPS)

One of my missions of starting this finance blog is to share with readers some useful tips on financial matters. In relation to one of my previous articles, a reader has raised a very good question on Home Protection Scheme (HPS). So today, I am going to share some information pertaining to how you can apply for exemption from HPS.

First of all, HPS is compulsory if you are using your CPF savings to pay your monthly housing loan installments on your HDB flat. Of course, there are some residents who are cash rich and do not use their CPF savings to pay their HDB mortgage payments. For this group of people, HPS is not compulsory.

But assuming you are using your CPF savings to service monthly HDB loan and would like to apply for exemption from HPS, then you may apply to CPF Board for exemption.

Most people thought that they should write to HDB when applying for exemption of HPS. The confusion is probably because when applying for coverage under HPS for HDB loan, you can apply for HPS cover at HDB Hub or any HDB branch office when you are applying to use your CPF for the monthly housing instalment.

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Stocks

Raffles Medical shares under siege!

Since 2008, the shares of home-grown healthcare provider, Raffles Medical Group, went on a rampage bull run, rising from $0.56 to almost $5.00 in 2015. The mighty surge in share price had created much wealth for many of its long-time investors. Recently, the shares came under siege and experienced a serious loss of form.

Against the above backdrop, several readers wrote in to discuss about the outlook for this SGX stock. In this article, I will share some of my views and insights on Raffles Medical.

“I like RMG but, like you, have resisted at prices say 1-2 months ago. It would be really valuable if you could share what you feel a fair value or target price might be?” – Georgie

“Wonderful article! Agree with your point of view on the soundness of Raffles Medical. With reference to your article, I have 2 questions.

  1. Is there any particular reason or calculation that led you to the specific target price of $0.80 (or $0.60 in your previous article)? Assuming a similar profit, the PE ratio would be around 20, which is quite low for a healthcare stock, especially for RMG considering its stable growth.
  2. Given that the overall global markets seem inflated, and may undergo a correction, would you recommend keeping RMG during the recession (as a defensive stock) or to pull out your investments altogether to hold in cash and bonds?”
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Property investment; Singapore market;

The Dark Side of CPF Housing Withdrawal Limit

This is an article that all existing and aspiring home-owners should never miss. And I do mean it. A few years ago, I wrote about a 54-year-old Singaporean lady who was left stranded after she was not allowed to use her CPF monies to finance her home. In her situation, she had to use cold hard cash to pay for her housing loan even though she still had savings in her CPF Ordinary Account (OA). Read on to find out how to avoid this devastating financial pit-fall created by CPF Housing Withdrawal Limit in your twilight years.

Before I proceed further, there are a few things you need to know about CPF Housing Withdrawal Limit. Specifically, they are Withdrawal Limit, Valuation Limit, HDB loan, type of property and lastly, bank loan. I will first discuss the merits and cons of HDB loan.

HDB Loan

Through the years, Singapore government has been packaging HDB loan as a form of “privilege” exclusive only to Singaporeans. To qualify for this “privilege”, you need to meet many eligibility conditions. Hence, this give Singaporeans the impression that getting an HDB loan is the best option when financing property. In my point of view, such thinking may not hold water.

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Stocks

The Outrageous Story of mm2 Asia

mm2 Asia is one of the most exciting prospects to grace Singapore stock market in many years. Within two years of listing in the Catalist, the entertainment outfit has witnessed such explosive growth that it ascended to the SGX mainboard on 7 August 2017. Along the way, it has also attracted investment from StarHub.

In 2014, when the company, through its IR agency, requested me to help them promote free tickets for their Jack Neo’s movie, “Ah Boys to Men”, I didn’t really take notice of this company. Fast forward three years later, the shares had been on a red hot bullish run since IPO.

On 19 May 2017, mm2 Asia announced that the company is in discussions with Village Cinemas Australia Pty Ltd (“Village Cinemas”) for the purchase by the Group of Village Cinemas’ entire stake in Dartina Development Limited, a company incorporated in Hong Kong which holds the Golden Village Cinema business in Singapore.

mm2 Asia

However, the transaction did not materialize. According to mm2 Asia, “Village Cinemas Australia was unable to procure fulfilment of certain conditions under the Shareholders Agreement entered into between Village Cinemas Australia and their existing coshareholder of Dartina Development Limited, and the deal could not be completed”.

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Property investment;

Deferred Resale Levy

According to Minister for National Development, Lawrence Wong, there were 7900 second-timer households who paid the required resale levy when buying second subsidized flat from the Housing and Development Board (HDB) from 2010 to 2015. Notwithstanding the figure, I suspect many people are not aware of the lurking dangers of deferred resale levy rule.

Not knowing the rule can cost you an arm or leg because without the knowledge, you are unable to strategize and do proper asset planning. In this article, I will share with readers how to exploit the deferred resale levy rule with the goal of building wealth with property.

Please note that I am not advocating anything illegal or sleazy. No, nothing of that sort. In fact, this information that you are going to read is something that you are not likely to find in most personal finance blogs. I learnt about this relatively unknown rule in the course of purchasing my third property and hope to share this really useful information with readers. Read on if you are interested.

Deferred Resale Levy

Second timer applicants

Most Singaporeans are aware that they are given two chances to purchase new subsidized flat from HDB. Hence, Singaporean couples can apply twice for Build-to-Order (BTO), Design, Build and Sell Scheme (DBSS) or Executive Condominium.

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Stocks

M1 shares suffering from massive bout of diarrhoea

Being M1 customer, I like its unlimited free calls to three M1 numbers to local voice calls. Because of this innovative product, I have been its customers for many years. This is the power of subscription for a telecommunication company. In fact, mobile subscription is considered the most important investment moat for a telecommunication company because the motivation to switch to another mobile phone carrier is low once a customer subscribed to its data plan. However, as an investor, I would never invest in M1 shares.

From almost $4.00 in 2015, M1’ share price plunged to $1.73 lately. Being the smallest player, M1 faces the biggest risk of shrinking market share with the entry of new competitor, TPG Telecom. To make matter worse, Singapore market is very small and saturated.

M1

According to Infocomm Media Development Authority (IMDA), the mobile penetration rate in Singapore is about 150%, making Singapore one of the most well-connected countries in the world. This means that some of the subscribers may be using more than one line. Being the smallest player, it is not surprising that outlook for M1 is worrying.

With falling share price, investors may be wondering if it is the right time to buy M1 shares on the cheap.

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Stocks

Nightmare of Noble Group continues

Can Noble Group turn the tide and weather the storm? The embattled commodity trader is currently fighting for its life as it faces an epic swim-or-sink battle. The latest financial results revealed that the nightmare, which started two years ago, is set to continue.

Once the brightest star in the Singapore stock market, Noble Group market capitalization was worth a mighty $10 billion. In its heyday, it reigned supremacy and was even regarded as the world’s top commodity trader, alongside rival Glencore. For Singapore Exchange (SGX), it was indeed an honor for Noble Group to be listed in Singapore, even though it is a Hong Kong-based company.

The nightmare

Those good old days must be dreamy for investors now as its market capitalization shrank to an alarming $460 million. The rot started two years ago when an unknown financial blogger, Iceberg Research, accused Noble Group of accounting malpractices. That astonishing allegation led to a series of vicious short-selling attacks and precipitated the start of the downfall of Noble Group.

Noble Group

Prior to the release of the latest quarterly results, management has [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only.

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Stocks

Can The Hour Glass roll back the time?

Once upon a time, there were three shining forces in Singapore stock market. Osim’s Ron Sim, Creative Technologies’ Sim Wong Hoo and The Hour Glass’ Jannie Chan used to dominate the entrepreneur scene. Together, the trio had won numerous awards for creating outstanding household brands. As a young boy, I have deep admiration for these business pioneers but Jannie Chan stood out among the three of them because of what she had done for The Hour Glass.

The Early Years

In the 80s and 90s, female entrepreneurs were almost unheard of, much less successful female entrepreneurs. The corporate and business community used to be dominated by males. Of course, there were female leaders but they were the exception rather than the norms.

Widely credited for co-founding The Hour Glass, Jannie Chan has been instrumental in building the luxury watch retailer into a SGX-listed company with international presence in Australia, Hong Kong, Japan, Thailand and Malaysia. Therefore, it pains me to read of her current plight because she had been my source of inspiration for several decades. Having achieved so much with The Hour Glass, I thought she deserved more during her twilight years.

In recent years, Jannie Chan had been involved in various legal disputes.

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Stocks

Raffles Medical share price

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Raffles Medical share price suffered a major correction which saw it dropped to a one-year low of $1.20. After reviewing the latest financial results, I don’t see any major concern on the healthcare provider’s performance. In fact, I think the correction is a healthy one and should not raise any red flag for investors.

The correction in the Raffles Medical Group share price is indeed puzzling given that the Group announced a record quarterly revenue of S$120.1 million in Q2 2017, a 1.0% increase from S$119.0 million in Q2 2016. Net profit after tax attributable to owners of the Company increased by 0.5% from S$16.8 million in Q2 2017 to S$16.7 million in Q2 2016.

Whilst the recent financial result is nothing to shout about, it should not warrant such drastic decline in Raffles Medical share price. The only major concern I can think of should be the high capital expenditure for the China hospital projects. Raffles Medical is building not one, but two hospitals, in China in a bid to expand its investment moat. Construction of the 700-bed RafflesHospital Chongqing and 400-bed RafflesHospital Shanghai is progressing well. These hospitals are targeted to be operational by second half 2018 and second half 2019 respectively.

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Stocks

Investing in SGX shares

Ex-CEO of SGX, Magnus Bocker passed away last week due to cancer. Bocker came to Singapore with a big reputation of being a dealmaker. Prior to heading SGX, he made his name for selling OMX to Nasdaq for USD4.9 billion. Bocker took over from outgoing CEO Hsieh Fu Hua in 2009 but left in 2015 when he decided not to renew his contract. In this article, l am sharing my views on whether it is worthwhile to invest in SGX shares.

Under Bocker’s tenure, SGX implemented various initiatives aimed at expanding SGX’s market share beyond the stock market. Notably, revenue from derivatives now formed 40% of the annual revenue.  As a dealmaker, he also tried to transfer his merger and acquisition experience to SGX and made a bid to merge with Australia’s ASX. That bid ended up in failure when the Australian government rejected the proposal.

Bocker’s reign also saw SGX introducing a slew of policies targeted at boosting market liquidity and protecting investor’s interest. In 2014, dynamic circuit breaker was introduced to guard against disorderly situations in the face of rapid and unchecked market movements. In light of the penny stock crash in 2013, Minimum Trading Price (MTP) was introduced by SGX to prevent speculation and market manipulation.

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Money management; personal finance; relationship

SGX Bull Charge 2017

Since young, running has been my passion. I developed this lifelong hobby when Dad brought me for a jog at the Bedok Reservoir more than 30 years ago. Hence, when SGX invited me to promote their charity run, SGX Bull Charge 2017, I was very keen and excited.

Although the jog occurred more than 30 years ago, I can still remember it vividly because Dad rarely spend time with the family. As a truck driver, he was always busy making money, even on weekends. So, when he brought my siblings and me to the reservoir for an outing, we were all thrilled.

That run had offered me a rare glimpse of Dad and gave me the opportunity to bond with him. Although it was a short run, we have the chance to have a shared journey, albeit a short one. At the end of the day, I really enjoyed myself even though it was just a simple run. In those days, life was really that simple.

SGX Bull Charge

My family’s journey

That run turned out to be the first and the last one I had with Dad. A few years down the road, Dad suffered from a debilitating stroke that caused him to be half-paralyzed.

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Stocks

Noble Group’s horror show

SGX-listed, Hong Kong-based Noble Group warned on Wednesday that it is set to post a devastating loss of USD1.8 billion for the second quarter. The shock loss surpassed the full-year loss of USD 1.6 billion back in 2015 and brought to light the significant challenges faced by the commodity trader.

The market reacted immediately on Thursday morning, with Noble Group share price plunging by as much as 49% to $0.295. The counter recovered to close at $0.395 at the end of the trading day.

Record loss

The amount certainly blew me off and made me blinked twice. USD1.8 billion is a colossal amount of money. We are talking about losing USD1,800 million for one single quarter. Translated into Singapore dollar, that would mean SGD2,400 million. Make no mistake, founder Richard Elman has previously warned that Noble Group is likely to suffer losses until 2019. But nobody could have foreseen losses of such magnitude.

Noble Group

Compared to the second quarter loss, the first quarter loss of USD130 million seemed like peanuts. But the announcement of that loss back in March had bombed out Noble Group stock price. With the gigantic loss in second quarter, the share price is likely to experience another bout of carnage. 

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Stocks

Three-way battle for SingTel, M1 and StarHub

It’s going to be a three-way battle for SingTel, M1 and StarHub as competition intensified with the entry of a new player in the telco industry. Against this backdrop, will SingTel acquire M1 or StarHub? Recent developments in Singapore’s telecommunication industry suggest that such consolidation is only a matter of time for the incumbent players.

With Australia’s TPG winning the fourth telco license in both Australia and Singapore, it is imperative that SingTel take decisive actions to defend market shares. It is now or never for SingTel.

The battle of the giants

With a gigantic market capitalization of $63 billion, SingTel is obviously the leader of the pack and is in pole position to gobble up either of the two smaller players. Among the three existing players, M1 has the smallest market capitalization – $1.75 billion. Since 2015, M1’ share price crashed from a high of $3.96 to $1.88 level. With the current form, M1 could easily fell prey to a hostile takeover.

Singtel

Incidentally, M1’s substantial shareholders, Keppel Corp and Singapore Press Holding (SPH) are going through hard times as well and they may be tempted to offload their shares in M1 to SingTel. Keppel Corp may want to sell its stakes in M1 and raise capital to focus its fight against the slump in the oil-rig industry.

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Stocks

OCBC shares worth $50?

Is OCBC shares worth $50? Maybe even more. Recently OCBC made waves when it announced the offload of its 33.5% shares in United Engineers (UE) to a consortium led by Yanlord Group and Perennial Real Estate Holdings. The block sale consisted of shares held under OCBC, Great Eastern Holdings and the founding Lee Family. News of the deal propelled OCBC share price to a 5-year high and triggered a mandatory takeover offer for the rest of United Engineers shares.

The United Engineers Deal

The offer price for the UE deal was $2.60 and represented a price-to-book value of about 0.88. The fact that OCBC sold its stake in UE at a price below book value reflected the poor market sentiments. After all, United Engineers is still making healthy profits and is not considered a distressed asset at all. For the record, UE made a profit of $7.1 million in 1Q2017, a decline of 25% from last year. Hence, in my point of view, the block shares sale should have fetched higher price.

For OCBC, the deal would unlock value for shareholders and made business sense as property development is not OCBC’s core business. The sale is worth an estimated $550 million and is a windfall for OCBC.

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Stocks

Is Old Chang Kee a value trap?

Since young, I have always enjoyed eating Old Chang Kee’s signature curry puffs. The history of Old Chang Kee, however, goes as far back as 1956 when it was just a small stall in a coffee shop outside former Rex cinema. In 1986, the current chairman, Han Keen Juan bought over the control of the company and subsequently transformed the stall into a listed company.

On looking back, Old Chang Kee is a story of coming of age and its brand is synonymous with Singapore food heritage. With a humble beginning, Han Keen Juan has certainly grown the Old Chang Kee into a household name.

When it was listed in Catalist in 2008, the IPO price was $0.139 and the shares were 111% over-subscribed. Now trading at $0.815, it is time to examine whether investing in the shares is worth the effort.

Old Chang Kee

Fourth quarter loss

The Group was cruising along finely when it was [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

Read my other articles on SGX stocks:

  1. Formidable Challenger for Challenger Technologies Limited
  2. The Hour Glass Limited
  3. Raffles Medical Group’s Return on Equity

Lost your Password?

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Stocks

Judgement day for SPH?

It certainly seems like Judgement Day for SPH as the media conglomerate’s shares plunged to an 8-year low. The share price free fell to $2.95 on 18 July 2017, below the $3.00 support level. During the dark days of the Great Financial Crisis, the lowest trading price was $2.40. But hey, we are not having a major market crisis now, aren’t we?

What’s going on and what’s wrong with SPH? Should investors run for their lives?

Like fellow SGX-listed SingPost, SPH belongs to the old economy. Both are struggling to adapt themselves in the new digital era. Technology has devastating impacts on their businesses as their models are being disrupted by consumers’ lifestyle changes.

For SingPost, most companies are switching to electronic statements instead of traditional postages. Hence, SingPost is now transforming itself into an eCommerce logistics by leveraging on its existing postal networks. Similarly, SPH is facing disruptions from technology as most people switch to digital instead of printed newspaper. This is understandable as who would want to read yesterday’s news when you can receive the latest updates on the breaking news from online or through social media?

SPH

But what is shocking for investors was the massive decline seen in SPH’s advertisement revenue.

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Property investment; Singapore market;

Understanding Joint Tenancy and Tenancy-in-Common

In my previous article, I shared the strategy of using 99-to-1 Tenancy-in-Common to avoid paying hefty Additional Buyer Stamp Duty (ABSD) for investors looking at buying second property. Some followers were skeptical while there are those who may not seem to grasp the concept. As such, this follow-up article will explain in more details on how the strategy works.

Before I proceed, readers must understand that 99-to-1 Tenancy-in-Common only works for Executive Condominiums (EC) and private properties. This is important to note because in April 2016, HDB has banned the transfer of HDB flat ownership among married couples. So now married couples cannot decouple their HDB flat. However, this new HDB rule is not applicable to private properties.

Tenancy-in-Common

When you buy your first property with your spouse/family, it is important to understand the implication of “Manner of Holding”, specifically the significance of Joint Tenancy and Tenancy-in-Common. This is because this relatively unknown term could have major impact on your future property investments and could even result in bitter court cases in the event of divorce cases or death.

No, I am not exaggerating. In my blog, several readers have written in to share their sad stories. This is real and I want you to fully comprehend this article before making judgement.

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Property investment; Singapore market;

99-to-1 Tenancy-in-Common

During the Singapore’s Budget this year, many Singaporean investors were disappointed that the government retained the current Additional Buyer Stamp Duty (ABSD). However, instead of wishing for the stamp duties to be reduced or removed, do you know you can actually beat the system without paying an arm or leg? In this article, I will share with readers on how to avoid paying the ABSD with Tenancy-in-Common.

Note that the strategy I am sharing here is not “decoupling” (Resale part-share) for HDB, a popular move which involves the transfer of HDB ownership between married couples. In any case, Singapore government has clamped down on decoupling and tightened the rules in April 2016 to ban the transfer of HDB flat ownership between married couples. However, private residential owners are not subject to this rule.

Tenancy-in-Common

Background of ABSD

ABSD was introduced by Singapore government among a slew of property cooling measures to stabilize market prices. It was revised upwards in 2013 in light of escalating housing prices. Under this rule, home owners are required to pay ABSD if they are buying second property or if they are not Singapore citizens.

Many property investors may have come across articles on property cooling measures in Singapore.

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Stocks

NetLink NBN Trust Biggest Risk

On 10 July 2017, NetLink NBN Trust registered its final prospectus with Monetary Authority of Singapore, paving the way for the biggest IPO of the year. The offering price is $0.81. Initially, the offering price was estimated by analysts to be between $0.81 and $0.93. The low-end of the offering price could be indication of weak demand from the big boys.

With net asset of $3.07 billion and total units of 3.02 billion, the Net Asset Value (NAV) is about $1.01. Given that the offering price is only $0.81, NetLink NBN Trust IPO is considered surprisingly under-valued. It should be noted that the majority of the assets is the network infrastructure, which are recognised initially at their fair value at the date of acquisition and then depreciated over their remaining useful lives. The estimated remaining useful life for the purposes of calculating depreciation for NLT’s network assets is between 25 and 50 years, depending on the type of assets.

As cited by several local investment bloggers. there are a few risks that investors need to note for NetLink NBN Trust.

NetLink NBN Trust

First, a few bloggers had mentioned that although NetLink NBN Trust has a monopoly in the residential fibre network, it is tightly regulated by IMDA.

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Stocks

United Overseas Bank (UOB)

Once upon a time in Singapore’s banking fraternity, there were four local “Heavenly Kings” – Development Bank of Singapore (DBS), United Overseas Bank (UOB), Overseas Union Bank (OUB) and Oversea-Chinese Banking Corporation. They are all household names and I believe most Singaporeans have experiences with their bank products or services.

On looking back, the devastating effect of the Asian Financial Crisis in the nineties and the industry liberalization brought forth by the new Monetary Authority of Singapore (MAS) regulations changed the banking landscape forever. Through the years, UOB has staved off these challenges and emerged as one of the most powerful forces among its peers.

Among the four “Heavenly Kings”, OUB was the smallest player and was founded by the late Lien Ying Chow. In the early 2000s, the local banks were under pressure by the government to consolidate. This was because Singapore government wanted to reduce the number of local banks to pave the way for bringing in more foreign banks.

UOB

The vision was to shape Singapore into a global financial centre with strong presence of international banks that can bring in investments and thus create high value banking jobs for Singaporeans.

Being the smallest bank, it was no surprise that OUB was the target of a bidding war between DBS and UOB.

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Stocks

Three things about NetLink Trust

The biggest IPO since 2011, NetLink Trust will be listed in SGX main board at offering price of between $0.80 and $0.93, raising between $2.3 billion and $2.7 billion.

When investing in stocks, always invest in companies in which you understand their business models, their products and services. It is also important to assess the companies’ competitors and financial performances. This article will share three things about NetLink Trust which I hope investors will find useful.

NetLink Trust background

Most Singaporeans may be more familiar with OpenNet, the predecessor of NetLink Trust. In 2008, OpenNet was owned by a consortium consisting of SingTel (30%), SP Telecommunications (15%), Singapore Press Holdings (25%) and Canada’s Axia NetMedia (30%). However, in 2014, SingTel, through NetLink Trust, bought over all the shares of OpenNet from the rest of the major shareholders.

On looking back, the 2014 consolidation should be part of the strategic plan to implement Singapore government’s Next Generation Nationwide Broadband Network (Next Gen NBN), which is a project under the Intelligent National 2015 (iN2015) masterplan seeking to transform Singapore into an intelligent nation and global city, powered by infocomm.

NetLink Trust

Next Gen NBN is Singapore’s ultra-high-speed broadband network capable of delivering speeds of 1Gbps and above, offering connectivity to homes, offices and schools in Singapore.

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Stocks

Raffles Medical Group Return on Equity

On 24 April 2017, Singapore’s leading private healthcare provider, Raffles Medical Group, announced that it is developing its second international tertiary hospital in China.

When completed in 2018, RafflesHospital Chongqing will be able to serve local and expatriate patients in the western part of China as well as foreign patients from Central Asian republics. Meanwhile, construction of RafflesHospital Shanghai has commenced and is proceeding smoothly.

For the past few years, Raffles Medical Group has been building its investment moat by increasing number of clinics, expanding its flagship hospital in Singapore, refurbishing existing clinics, acquiring overseas medical centres and developing new hospitals in China. Clearly, its intention is to grow into a regional healthcare player in order to capture market share.

Raffles Medical

Raffles Medical Group competitive advantage

Raffles Medical Group’s key competitive advantage is that its strong operating cashflow enabled the Group to support its various investments. This means that its existing operation activities are able to generate enough cash to fund business growth. For 1Q2017, the Group maintained its strong cashflow from operating activities of S$18.2 million in Q1 2017. This figure is more than sufficient to meet the investment and capital expenditure of $14.4 million in Q1 2017.

The need for overseas expansion is driven by the small market in Singapore.

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Stocks

The Day Creative Technology Ltd sued Apple Inc

In 2006, Singapore-based Creative Technology Ltd sued Apple Inc for patent infringement over a menu interface for an MP3 player. It was an epic corporate story of David versus Goliath and pitted Singapore entrepreneur, Sim Wong Hoo squarely against the late Steve Jobs.

But the outcome was beyond what most people had expected. In fact, Apple had actually agreed to pay Creative Technology Ltd a massive USD100 million to settle the suit.

The battle against Apple marked a turning point for Creative Technology, which at that point of time, had been searching for another holy grail to replace its blockbuster SoundBlaster audio systems. More than a decade has gone since the legal dispute, but Creative Technology is no longer the force it used to be. Although it has won the corporate battle, the business had declined to an almost unbelievable level.

Creative Technology

Sales for the fiscal year 2005 was at a peak of USD 1.2 billion but by fiscal 2016, the sales amounted to only a paltry of USD 84.5 million. That was a massive decline by any standard and something must [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only.

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Stocks

Noble Group new white knight?

Can founder Richard Elman save Singapore-listed, Hong Kong-based commodity trader, Noble Group? This is the most pressing concern for shareholders as the crisis-hit company battled crisis after crisis for over two years. The latest news on investments from a surprise Middle East investment group, Goldilocks Investment Company (GIC), must have brought a huge relief for shareholders.

While I certainly do not deem GIC as Noble Group’s new white knight, the latest investment is a sign of endorsement for Noble Group. GIC is part of Abu Dhabi Financial Group, a diversified global group with asset management of USD5 billion. The Middle East investor has a reputation of buying distressed companies.

According to the SGX filing on 22 June 2017, GIC purchased 50,546,000 ordinary shares in Noble Group. Taken together with GIC’s existing 15,454,000 ordinary shares it purchased on 19 June 2017, GIC became a substantial shareholder of NGL on 20 June 2017.

Noble Group

I am careful not to label Goldilock as a new white knight as the investment is not a form of cash injection in return for equity stake. It seems that the Middle East investment group bought the shares from open market and built up its stake within two days of the week.

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Stocks

Can SingTel fight gravity?

Hailed by many analysts as Asia top telecommunication company, SingTel is facing heightened competition from emerging players seeking to knock it from the perch. Australia’s TPG Telecom stunned the market by not only becoming Singapore’s 4th telecommunication player in late 2016, but also Australia’s 4th telecommunication player in early 2017. Given the increased competition in Singapore, Australia and India, can SingTel fight gravity?

To put things into perspective, SingTel did not sleep walk into the dominant position in Asia by chance. Listed in SGX main board back in 1993, the company embarked on a slew of overseas acquisitions spree, with backing from Singapore sovereign wealth fund, Temasek Holdings.

As a result, SingTel enjoyed a massive investment moat of 600 million mobile phone subscribers across South East Asia countries like India, Philippines, Thailand, Indonesia, Singapore and Australia. This is an impressive feat that took more than 24 years to establish. In this regard, it is unlikely that TPG Telecom’s entry would pose short-term threat to SingTel.

In Singapore, the telecom industry is regulated by IMDA. When the regulator announced that a fourth license would be issued a couple of years ago, many investors and industry players were puzzled. While consumers certainly wish for a price war in light of the increased competition, having four players in Singapore wireless market does not make sense.

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Stocks

Temasek Holdings’ Pre-IPO investment in HRnetGroup

On 16 June 2017, HRnetGroup’s IPO on the SGX Mainboard created much hype among retail investors and local finance bloggers. Many investors had wanted a slice of the IPO because of the excellent financial performance indicated in the prospectus. But many investors may not be aware of Temasek Holding’s Pre-IPO investment in HRnetGroup.

What is pre-IPO and does it matter to you from the perspective of a stock investor? Read on to find out how the big boys make money in this game.

HRnetGroup and the big boys

Fundamentally, how big boys like Temasek Holdings make money is very different from retail investors in the market. Most of us made money upon selling the shares allocated during IPO. But then again, there is no guarantee that you would be allocated the IPO shares because for the public, the shares are allocated through balloting. There is also no assurance that the share price would rise above the IPO offer price. In short, for the man in the street, it is like punting when it comes to IPO.

HRnetGroup

However, pre-IPO works in a different manner. Big boys like Temasek Holdings want certainty in their return of investments and they also want to win the game.

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Stocks

Retrenchments for Singapore Airlines?

After announcing a recent shock quarterly loss of $132 million, CEO Goh Choon Phong hinted that there could be retrenchments for Singapore Airlines (SIA). Arising from the first quarterly loss in five years, the premium airline has set up a Transformation Office to conduct a wide-ranging review, encompassing network and fleet, product and service, and organisational structure and processes.

Upon closer examination of the financial results, the explosive loss suffered by Singapore Airlines was largely due to the provision of $132 million for the EU court fine slapped on SIA Cargo. More than ten years ago, SIA Cargo was alleged to participate in an air cargo cartel with 10 other airlines. Due to this, the EU antitrust regulator fined the airlines a total of $1.2 billion.

Singapore Airlines

The massive fine incurred by SIA Cargo was a wake-up call and reflected the structural change in the air freight market over the years. This could explain the rationale for re-integrating SIA Cargo as a Division within SIA. The move is expected to be completed by first half of 2018 and aims to improve synergy and efficiency. However, the quarterly results indicated that SIA Cargo was one of the best performers within the SIA group.

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Stocks

Horror show of SingPost shares

SingPost shares took a hit as the company announced a stunning quarter loss of $65.2 million. The loss came about after SingPost decided to write off $185 million for the ill-fated TradeGlobal, S$20.5 million for Postea Inc., and S$9.3 million for an industrial property at 3B Toh Guan Road East.

The latest setback for Singapore’s postal service provider came at a time of transformation for the 150 years old institution. As more and more companies switch to electronic statements, SingPost is transforming its business to eCommerce logistic. At the centre of the storm was the significant impairment of TradeGlobal, which was only acquired by SingPost less than two years ago.

Many investors were shocked that SingPost decided to write off its investment in TradeGlobal so soon. Two years are considered a relatively short time frame to judge a company’s potential growth. One plausible factor could be that the management is not convinced of a turnaround for TradeGlobal and hence, made the decision to cut losses early. It was reported that instead of a projected profit of S$9.4 million for FY16/17, TradeGlobal incurred a significant loss of S$25.8 million.

Given the extent of the impairment to SingPost’s investment in TradeGlobal, SingPost also appointed FTI Consulting, an independent global business advisory firm, which has verified that the impairment provision was properly calculated following an appropriate review process and that the assumptions adopted were reasonable.

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Self improvement

A Better Florist Blooming Flower Business

If you’re someone who doesn’t like to spend a lot of time shopping online, scrolling through endless choices that force you to eventually give up, A Better Florist is the florist for you. They make your complete shopping experience a total breeze. Not only is it easy to shop via desktop or mobile, they offer high-class blooms at lowest prices.

florist

If you’re impressed by quality not quantity, this is the florist that is going to suit your taste. Their website isn’t overflowing with information. They know their clientele is there to purchase authentic, impressive blooms, and they are dedicated to giving you enough choices but not so much that you aren’t able to decide. At all times, you’re able to jump on their website, and choose one of the most popular bouquets, arrangements or bundles, that are always ready to go. Just click on your favourite, and your shopping experience may begin.

It’s my favourite cheap florist in Singapore, whose blooms impress me over and over again. Not only are they fresh, they are carefully and thoughtfully designed into a bundle that is sure to impress even the most avid flower connoisseurs.

They call themselves the bloomcrew, and their expertise definitely deserve even a higher title than just crew.

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