SG Wealth Builder

You’ll Never Walk Alone with Central Provident Fund

June 24, 2016 sgwealthbuilder 1039 Views 0 Comments

For many football fans, the song “You’ll Never Walk Alone” is synonymous with English football club, Liverpool. The song is the anthem of Liverpool and has inspired many great comebacks for the football club. Although glory days are clearly over for Liverpool, many fans still adore the club because of its great tradition and core values.

Indeed, values define who we are and guide us through good times and bad times. The Central Provident Fund (CPF) was implemented in 1955 by the British authorities with the aim of abolishing the pension schemes in Singapore and introducing a national saving scheme. The scheme requires employers and employees to contribute a portion of the employee’s monthly salary into their CPF accounts.

The intent of the CPF scheme was to instill among Singaporeans the value of hard work and saving for retirement. Each of us is responsible for growing our wealth and save for rainy days.

Over the years, the CPF scheme had gone through significant changes, especially during the eighties, when the late Mr Lee Kuan Yew was at the peak of his power. These changes were needed to cater for the growing aspirations of Singaporeans. As a result, CPF was expanded to include healthcare, housing and investment purposes.

Gold; portfolio management

How safe is your money in Singapore banks?

June 22, 2016 sgwealthbuilder 1089 Views 0 Comments

No bank is too big to fail and one question that every depositor may ask is how safe is our money in Singapore banks. During the Great Financial Crisis, Citigroup was on the brink of collapse before being rescued by the U.S government, which had to guarantee losses on more than US$300 billion worth of assets and injected US$20 billion into the troubled company. At that point of time, Citigroup’s share price was trading less than US$1, which was the historical record low for the bank.

Money Crisis

Fast forward today, Citigroup recovered from the crisis but is no longer the world’s largest bank in terms of assets. However, its share price has surged to close to US$50. Investors who bought the shares back then and held it till today would have made a fortune. But the point that I want to reiterate is that Citigroup was very close to being made bankrupt in 2008 and savers who put all their hard-earned savings in banks may have lost their monies overnight if the renowned bank collapsed unexpectedly.

Singapore Banks

In the aftermath of the financial crisis, people start to realize that the prospects of bank failures are real even in Singapore.

Stocks

SGX Hall of Shame

June 19, 2016 sgwealthbuilder 1143 Views 0 Comments

On 3 March 2016, Singapore bourse operator, SGX, included 41 listed companies into its infamous watch-list due to the implementation of the 20-cent Minimum Trading Price (MTP) rule. In all, there were 76 companies under the SGX watch-list, which was like the Hall of Shame.

To be part of this watch-list can be very embarrassing because it means that affected companies have to buck up and improve their financial performances. Otherwise, they may face the prospect of being delisted from the stock exchange.

The expansion of the watch-list to include companies failing to comply with the MTP rule had riled market players because this move essentially blurs the distinction between market quality and business fundamentals.

To be fair, even though a company’s share price is trading below 20 cents, it does not mean that the company has shaky business fundamentals. So to put those failing to meet the MTP with those companies with financial problems is deemed by many to be onerous.

To put things into perspective, the MTP rule was introduced in the aftermath of the penny stock crash in 2013. Many retail investors lost their pants after dabbling in Blumont, LionGold and Asiasons Capital. The three penny stocks surged to incredible levels within a short period of time and then dived spectacularly, prompting rumours of market manipulations by the Big Boys.

Career management

Record retrenchments in Singapore

June 17, 2016 sgwealthbuilder 911 Views 1 Comment

On 13 June 2016, the Ministry of Manpower (MOM) announced a surge in the number of workers being made redundant. Overall, 4,710 workers were retrenched by their companies, representing a record level of retrenchments in Singapore for first quarter layoffs since 2009.

The MOM data is not surprising as it tallies with the ground situation for the employment landscape. In fact, there are many recent articles of Singaporeans struggling to find work after being given the retrenchment notices by their employers. Many of them are actually qualified professionals with many years of relevant working experiences in their industries. Hence, it is understandable that they feel bitter and resentful.

Being fired or retrenched from the workplace can be the worst thing that can happen to an employee, possibly even worse than been passed by for promotion. This is because losing your job is more than just losing your income, it can be extremely damaging to your self-worth and ego. Understandably, you may feel emotional and victimized. The “why me?” will definitely pop up in your head and you start to demonize your ex-bosses or colleagues. But as a wealth builder, you must pick yourself up quickly and move on from the self-pity stage.

Stocks

Neptune Orient Lines: End of another Singapore icon

June 15, 2016 sgwealthbuilder 1079 Views 0 Comments

In a month in which SGX-listed Haw Par Corp announced the closing of the Underwater World Singapore, Temasek Holdings tendered all their shares and paved the way for French giant, CMA CGM to take Neptune Orient Lines (NOL) private. This marked the end of another Singapore icon and highlighted how fragile the economy is right now.

The take-over offer for NOL is $1.30 and it is unconditional. According to the listing rule, NOL can be delisted once it obtains more than 90% of the shares. The offer is deemed by many to be fair given that NOL has been bleeding for several years due to the collapse of the Baltic Dry Index (BDI). Temasek Holdings had been looking for a white knight for NOL for quite some time and CMA CGM came to the rescue.

The downturn in the shipping industry took many players by surprise. After all, the BDI stormed to 11,000 level in 2007 and subsequent crashed to near 700 level with the arrival of the Great Financial Crisis. Nevertheless, the downturn turned out to be much longer than expected and its seems that Temasek Holdings, which is the parent company of NOL, decided to throw in the towel.

Money management; personal finance; relationship Parenting

Stroke of Calamity

June 9, 2016 sgwealthbuilder 830 Views 0 Comments

Since 2013, I have written articles paying tribute to my late father during Father’s Day. This year will be no exception. Dad passed away at home after 20 years of struggle with a major stroke that resulted in him being half-paralysed. It was really a stroke of calamity for our family and the last 20 years were like “lost decades” for us. Dad had played a major role in shaping my values, character and life’s perspectives. I cannot claim to remember everything that he said but most of his important teachings still live in my heart. I hope that by walking down this memory lane, my children will appreciate and learn from his legacy.

As a child, I had very little opportunities to spend time with Dad because he was always working. In fact, he even worked on weekends because in the late 80s, there was a huge construction boom in Singapore. Dad was a self-employed lorry driver and business was thriving back then. He was a typical baby-boomer – hardworking, thrifty and disciplined. Every morning at six, he would wake up and had quick shower and breakfast. Then he would do some quick calculations using the Chinese abacus and then promptly left for work.

Gold; silver

Buy and store bullion in Singapore

June 7, 2016 sgwealthbuilder 961 Views 4 Comments

Below is an email from one of my readers. I feel obliged to reply him because it is the first time that I received queries that touched on precious metals, a topic that I have a lot of interest in and am still learning. Through this sharing, I hope that there is a better understanding of precious metals among Singaporean investors.

Dear SG Wealth Builder,

I came cross your blog and enjoyed reading the articles. I am considering to buy gold and silver bars from dealers and also like to rent their vault storage facilities in Singapore. As such, I will be very grateful if you could help me by answering my questions stated below.

1. Do you have the list of licensed bullion dealers in Singapore?

To the best of my knowledge, based on information gathered from IE Singapore, there is no licensing requirements for the import and export of precious metals in Singapore. IE Singapore is the lead agency tasked to grow Singapore into a precious metal trading hub. Thus, this policy of not regulating bullion dealers make sense because Singapore government’s objective is to ensure a free flow of precious metals through Singapore without any hassle.

Actually, until a few years ago, I also shared the same thoughts that bullion dealers are regulated by Monetary Authority of Singapore until BullionStar revealed to me that bullion dealers don’t actually need a license to trade in Singapore.

Stocks

Mayday for Noble Group!

June 6, 2016 sgwealthbuilder 1181 Views 0 Comments

In the world of aviation, one of the most dreadful radio distress signals is “Mayday!”. When the pilot-in-command made this signal, he would be facing some emergency situations that might be potentially life threatening. On 4 June 2016, it certainly was Mayday for Noble Group when the company’ share price tumbled to its lowest since 2003 after the announcements of a rights issue to raise $500 million and the shock resignation of founder, Richard Elman. This latest episode marks another embarrassing chapter for Noble Group after it was kicked out of the benchmark Straits Times Index in March 2016.

Today, Noble Group’s share price tanked further when the commodity trader announced that the proceeds for the rights issue will be used for working capital instead of paying down its massive debt. Obviously, investors are not happy with the management’s move given that only 20% of the proceeds from rights issue will be used to pay for the net debt of $3.7 billion. Furthermore, the price of the rights issue is at a huge discount of 63% to its price of $0.30 at the date of announcement. As a result, many traders punished the share price and sent it tumbling by 13%.

Self improvement

The winning formula

June 3, 2016 sgwealthbuilder 901 Views 0 Comments

Our ability to excel in life lies on whether we can constantly re-invent ourselves to continue playing the game. To achieve this, we need to keep learning new skills and knowledge in this new economy in order to position ourselves for success. Obviously to a certain extent, most of us yearn for career success but how many of us are willing to learn and earn? There is no secret winning formula as everyone has a different life path. But then again, successful wealth builders almost certainly share some common traits.

Receptive to new ideas

Even though you may be very experienced or have deep expertise in your job, you should always stay curious and be receptive to new ideas. In my job journey, I have come across many colleagues who are afraid of experimenting different approaches to resolve issues because they only believe in tried-and-tested methods. Because of their rigid mindsets, work productivity were often affected.

A few years ago when Singapore exempted Goods and Services Tax (GST) for investment-grade bullion, I asked a few fellow investment bloggers their main reasons for not buying gold and silver in Singapore. Most of them shared that they don’t believe in diversifying their wealth in gold and prefer to focus on Singapore shares.

Gold; silver

Record demand for silver in 2015

May 31, 2016 sgwealthbuilder 1177 Views 0 Comments

According to The Silver Institute, the silver market posted record demand in 2015, driven by new highs from demand of jewelry, coins and bars. Last year also saw the third consecutive annual silver market deficit of 129.8 million ounces, reflecting the continued strength in silver demand.

The data from The Silver Institute reveals a couple important trends that wealth builders should take note. Firstly, unlike gold, silver has very wide industrial applications. Thus, the majority of silver demand come from industrial fabrications for electronic devices, photography, solar and brazing alloys. In 2015, due to the weak global demand, the overall industrial demand declined from 611.2 million ounces in 2014 to 588.7 million ounces last year.

Interestingly, the data on investment demand for silver bars and coins reflected a contrasting picture in 2015. Silver coin and bar investment surged 24% to reach a feverish high of 292.3 million ounces as investors took the opportunity to buy silver on the cheap in the midst of market correction. This was the highest demand on record and overtook the previous high in 2013. The explosive demand from investors was a result of lower average annual silver price of USD15.68 per ounce. The low price of silver in 2015 was due to the slowdown of China and strengthening of US dollars.

Self improvement Trading

Falling from the peak

May 30, 2016 sgwealthbuilder 813 Views 0 Comments

Borrowing a phrase from the Taiwanese, the late Mr Lee Kuan Yew described those Singaporeans born from the eighties onward as “The Strawberry Generation” because of the perceived lack of resilience. Indeed, compare to him, many Singaporeans don’t have the experience of living in the World War II period and thus do not understand what hardship really means. Due to this, we often lose the fighting spirit of our fore-fathers in overcoming life obstacles. This is especially so when we start falling from the peak of our lives.

Contrary to what most people thought, the difficult part of mountain climbing is not the ascending phase. It is actually the descending that is more treacherous because after reaching the top of the mountain, the climber would have expended all his energy and fatigue began to set in. He would not have put much thinking on the journey downward and because of this, he become complacent, which led to his downfall literally. In fact, statistics have shown that most climbers die on their way down the mountain, rather than on the way up.

Similar to our education system, you need years of training to build up your body stamina and fitness in order to scale the highest mountain.

Stocks

Falling knife for EZRA investors?

May 28, 2016 sgwealthbuilder 842 Views 0 Comments

One of the victims of the global oil crisis, EZRA Holdings announced a set of terrible 2^nd quarter financial results on 14 April 2016. Losses after tax came in at USD282.6 million for 2^nd quarter and USD336.4 million for the first half of the financial year. This is a massive financial loss and there are not many companies in Singapore which can withstand this sort of impact. If EZRA investors are thinking of dollar-cost averaging and buying EZRA shares on the cheap, they need to be careful of catching a falling knife.

The company is actually biting the bullet for 2QFY2016 and realized the impairment losses from all front – loss-making joint ventures, losses on fixed assets and bad-debts. Given the depressing market conditions for the oil and gas industry, it is still unknown whether there is any more impairment to be made for EZRA Holdings further down the road.

Many investors thought that dollar-cost averaging is a good strategy to buy more shares at a lower price. But many of them don’t understand the difference between price and value. This technique, if applied wrongly, can cause massive wealth destruction to an investor’s portfolio, especially if the business fundamentals of the company are shaky.

Gold; currency

Record Negative Inflation for Singapore

May 26, 2016 sgwealthbuilder 833 Views 0 Comments

On 23 May 2016, Singapore smashed the record for the longest streak of negative inflation, recording a stunning 18 consecutive months of declining Consumer Price Index CPI (all items). On a year-on-year basis, CPI (all items) for February 2016 was -0.8%. Is this a good development for Singapore and should wealth builders pop the champagne because things are going to be cheaper? This is certainly not the case because the data is disturbing and reveals dark sides of the economy that every Singaporean should take note.

The statistics on consumer price development track three data, namely CPI (all items), CPI-OOA which excludes rental from owner-occupied accommodation and MAS Core Inflation, which excludes the cost of accommodation and private transport costs. The top reasons for the negative CPI (all items) are due to declining housing prices, weaker Certificate of Entitlement (COE) premiums and slump in global oil prices. Together, these three factors drove CPI (all items) to 18 months of downward trend. The negative trend is expected to continue as Monetary Authority of Singapore (MAS) forecasted that CPI (all items) is projected to average -1.0 to 0.0% for the whole year.

On the other hand, MAS Core Inflation rose to 0.5% in February due to higher food inflation.

Property investment; Singapore market;

The Terrace Executive Condominium

May 24, 2016 sgwealthbuilder 752 Views 0 Comments

Prior to our purchase, one of the questions that my wife and I had been thinking over and over again is whether it is worth buying The Terrace Executive Condominium (EC). We are certainly not buying for investment purposes but then again, as a wealth builder, you would want a home with potential to appreciate in value significantly over the long run. In Punggol and Sengkang residential areas, we shortlisted three ECs for consideration and they are The Vales, Bellewaters and The Terrace EC, which is known famously as “Venice of Punggol”.

In terms of location, The Vales is considered the best among the three because it is located within walking distance to the SengKang MRT. However, as an upgrader, we need to pay the resale levy for The Vales, hence this project is not an option for us. Then again, we also noted that virtually most of the good-facing units have been sold. Those remaining unsold are either road-facing or facing the nearby SengKang Hospital. To make things worse, the recently launched EC, Treasure Crest is located just beside The Vales. Thus, the residents of The Vales will have to put up with the incessant noise and dust pollutions for at least 3 years after moving into their new homes.

Stocks

SGX-listed stocks lack quality?

May 22, 2016 sgwealthbuilder 1221 Views 0 Comments

Almost a year ago, the Straits Times Index tanked from almost 3500 points to the current 2760 points. The fall in the Singapore stock market benchmark index reflects the challenging economic conditions and those who invested in SGX-listed stocks would have suffered from a certain level of wealth destruction. Incidentally, the market correction started since the previous SGX CEO, Magnus Bocker, was replaced by the current Loh Boon Chye. But the rot probably started during Bocker’s time and it would not be fair to blame the current CEO for this mess.

One thing for sure is that Bocker was highly unpopular during his helm as SGX’s chief because of his slew of projects that did not yield much improvements to Singapore market. The biggest flop definitely had to be the introduction of a new $250 million trading engine that promised to propel Singapore into Asia’s top trading centre. Instead, a massive technical fault in 2014 caused SGX to stop trading for at least 3 hours and left SGX red-faced. To make things worse, this embarrassing incident came after SGX tried to restore confidence following the penny stock crashes involving Blumont, LionGold and Asiasons.

The penny stock crashes in 2013 probably summed up the lack of quality in SGX-listed stocks.

Gold; portfolio management

Buy Gold, Now or Never?

May 21, 2016 sgwealthbuilder 827 Views 0 Comments

When it comes to investing in gold, there is a need to understand the fundamentals and study the long term trend of the gold spot price movements. According to BullionStar, the global daily amount of gold mined is only 9 tonnes, yet the daily trading volume in London amounts to 5,500 tonnes. Why is this so and how does this affect the price of gold? Should wealth builders buy gold, now or never?

London is the heart of all the gold trading activities and is regarded as the world’s largest gold market. The market in London set the price for spot gold for the rest of the world to follow and London is also the home of London Bullion Market Association (LBMA), a renowned trade association known for setting the refining standards, trading documents and trading practices. Henceforth, the data concerning gold trading activities in London will provide insights on the value of gold moving forward.

Generally speaking, the supply and demand rule is not strictly applicable to physical gold. In fact, the total amount of gold mined will have limited effect on the price movements of gold because 95% of the gold traded in London is actually unallocated. This means that the trading instruments for gold in the London market are mostly not backed by physical gold.

Property investment; Singapore market;

Build wealth with property

May 18, 2016 sgwealthbuilder 1176 Views 0 Comments

There are a lot of online debates on how to build wealth with property. In my humble view, there is no absolute right or wrong answer for this topic because whether property is a wealth enhancer or value trap really depends on how you play the game. If you play your cards right, there is no doubt that property investment is one of your best tickets to financial freedom. However, if you don’t have a clear strategy on playing the property game, it can be your greatest financial nightmare.

One thing that readers must be clear is that property investment may not be suitable for everyone because every wealth builder’s financial needs, goals and profiles are different. As such, when it comes to building wealth from property, it is not possible for Singaporeans to adopt a blanket approach. The conventional wisdom is to wait for a financial crisis and expect housing prices to drop and then you go in for the kill as a bargain hunter. However, in today’s context, things are not so straightforward anymore.

To illustrate my point, I shall use my family’s real estate strategy and compare it with a working couple. Let’s assume that both my family and the working couple are presently living in a 3-room HDB flat and planning to purchase the next property.

Property investment; Singapore market;

The Terrace Executive Condominium (EC)

May 16, 2016 sgwealthbuilder 1201 Views 1 Comment

In one of my previous posts, I updated that I have recently purchased an Executive Condominium (EC), which is actually The Terrace at Edgedale Plains, Punggol Drive. In this article, I will touch on the motivating factors for my family’s purchase and also share with readers the buyer referral scheme offered by the developer of The Terrace Executive Condominium (EC).

HDB Resale Levy

In 2013, HDB announced that second-timers must pay a resale levy for new ECs launched on or after 9 December 2013. However, for land sale before 9 December 2013, applicants need not pay the resale levy. There is a list of ECs that HDB upgraders need not pay resale levy and it is found here. One of the motivating factors of my purchase of The Terrace EC is that this project is exempted from resale levy, which in my case, amounted to $45,000. If you have previously bought a new Design, Build and Sell Scheme (DBSS) or received a CPF Housing Grant, then you need to pay a resale levy when you purchase your next home.

Due to the fact that my family’s first subsidised flat was a 5-room flat, so we need to pay $45,000 for projects that come with resale levy.

Gold

Gold demand ignites price rally

May 13, 2016 sgwealthbuilder 1045 Views 0 Comments

According to World Gold Council, global demand for gold grew 21% to 1289.8 tonnes, the strongest Q1 on record. As gold demand ignites price rally, many investors are caught by surprise at the yellow metal best performance in 30 years.

The sudden change in the global economic and financial landscape has certainly caused investors to flee for security. Significant uncertainties stem from the sluggish economic growth and the Negative Interest Rate Policies (NIRP) implemented by Japan and European countries. Against this backdrop, many analysts anticipate that the pace of US interest rate increases is expected to slow down significantly. These factors combined to send gold price to rally by 17%, making gold one of the best performing assets in Q12016.

Among the key engine of growth is the astonishing come-back of gold-backed Exchange Traded Funds (ETFs), which saw an increase of 300% this quarter. This is indeed a revelation as it comes about after three years of straight outflow. While this type of scale is unlikely to be sustained for gold ETFs going forward, this trend reflects an improved outlook for gold.

Interestingly, the trend of gold bar and coins followed closely to that of the ETF market in Q1. Demand for bullion shot up by 55% year-on-year from 11.8 tonnes to 18.3 tonnes, representing 11% increase over 5 year average.

Money management; personal finance; relationship

Dying for retirement savings

May 12, 2016 sgwealthbuilder 1134 Views 0 Comments

In facing death, is retirement savings still important? During the recent Parliament sitting held on 9 May 2016, the Worker’s Party raised the possibility of increasing the $5000 cap on CPF Medical Grounds Scheme due to rising cost of living in Singapore. The Minister of Manpower Lim Swee Say rejected the proposal and claimed that he was “hesitant about introducing such a move”. I was truly disappointed with his response and felt that he totally missed the point.

Withdrawal of CPF based on Medical Grounds

You can apply to withdraw your CPF savings on medical grounds if you

are suffering from an illness which renders you permanently unfit from ever continuing in any employment; or
have a severely reduced lifespan; or
lack capacity within the meaning of Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or
are terminally ill.

You will be able to withdraw from your Ordinary, Special and Retirement Accounts, the higher of $5000 or savings after setting aside a reduced Retirement Sum in your Retirement Account. Minister Lim clarified in Parliament that the reduced retirement sum has been set at $40,300, which is half of the current basic retirement sum.

Property investment; Singapore market;

Right time to buy private properties now?

May 9, 2016 sgwealthbuilder 986 Views 1 Comment

I just bought my first Executive Condominium (EC) last month. On looking back, it was truly an enlightening experience because I have learned a lot on the housing regulations and CPF-related ruling. Prior to this, my wife and I had visited many projects for the past 2 years and we were fairly clear on what we are getting. But what we didn’t expect was the whole slew of housing regulations that not many Singaporeans are aware of. In the next few articles, I will touch on regulatory matters relating to private properties. In this article, I will instead share my views on whether it is the right time to buy private property now.

According to data from URA, for the whole of 2015, prices for private residential properties fell by 3.7%, compared with 4.0% decline in 2014. Credit to the Singapore government, the Property Price Index witnessed a soft landing since 2013. Despite various cooling measures firmly entrenched, the property market did not crash but nonetheless, prices have declined from the stratospheric levels seen in the last few years.

Source: URA

One important trend to note for 2015 was the record vacancy rate of 8.0% since 2011. This trend is expected to continue given the huge supply glut of private residential properties for the next three years.

Stocks

Sheng Siong’ share price is rock solid

May 7, 2016 sgwealthbuilder 1042 Views 0 Comments

Sheng Siong Group announced its 1Q2016 results on 27 April 2016. Revenue increased 5.1% year-on-year to $208.5 million while net profit increased 16.8% year-on year to $16.4 million. Given that many SGX stocks had been heavily sold down since the start of the year, Sheng Siong’ share price remains rock solid in the face of poor market sentiments.

Under the current challenging business climate and government’s restriction on foreign labor employment, Sheng Siong’s latest results are impressive as they reflect management’s ability to control cost and improve margins.

I continue to like Sheng Siong for its debt free status and strong cash position. The group currently has cash pile of $113.9 million and operating cash flow remains healthy at positive $5.23 million, which is significantly lower than previous year of $12.8 million. This is because of the acquisition of property, plant and machinery.

In terms of growth expansion, the group is opening 4 new stores in 2Q2016. In addition, Sheng Siong had exercised the option to purchase premises at Block 209 New Upper Changi Road, for consideration of $53 million. I am pretty excited about this project because the traffic at Bedok interchange is very high, thus this store is very likely to increase revenue substantially for Sheng Siong.

Stocks

Epic fall of LionGold shares from $1.70 to $0.003

May 6, 2016 sgwealthbuilder 738 Views 0 Comments

If you are one of those retail investors who had bought LionGold shares at the dizzying height of $1.70 per share and still holding on to them, you might as well write off the investments. After all, the shares are worth nothing and is now trading at $0.003. The epic fall of LionGold shares from $1.70 to $0.003 represented one of the most dramatic penny stock crashes in Singapore stock market.

LionGold, together with Asiasons and Blumont, were penny stocks but rose spectacularly to new highs from 2012 to 2013. The trio of stocks then went into a free fall at the same time, causing many retail investors to lose huge amount of monies. The huge swings of these stocks had led to speculations of foul plays. SGX, which takes on the role of both regulator and operator, was also blasted for late intervention and lax enforcement.

LionGold is a gold mining company with primary concessions in Australia and Ghana. Investors need to understand that investing in gold mining stocks is different to buying physical gold because the risks involved are inherently very different. Investors who bought LionGold shares and subsequently lost a fortune must have learnt this lesson a painful way.

personal finance

My dream for fellow Singaporeans

May 3, 2016 sgwealthbuilder 1210 Views 0 Comments

As SG Wealth Builder, my dream is for fellow Singaporeans to have an equal opportunity to build wealth. That is why I chose this name for my blog. Even though I don’t work in the financial sector, through my articles, I hope that readers can gain valuable insights and learn from my investment mistakes.

Building wealth is a journey and requires a person to have a correct mindset. There are finance bloggers out there who wrote that more money cannot buy you happiness. I certainly don’t dispute this wisdom but then again, being poor in Singapore will certainly make you unhappy and miserable. If you belonged to the lower income bracket, it is understandable that you feel stressed out and insecure just trying to make a reasonable standard of living here. I have being through that phase in life and can certainly relate to this sort of feeling.

One thing that I must qualify is that I have not achieved financial freedom, nor am I trying to preach to readers on how to live a life. In fact, I am still a struggling middle-class income earner. But I feel that if Singaporeans can step out and share our investment or financial mistakes, collectively, we can become a better wealth builders.

Stocks

Blockbuster dividend from K1 Ventures

May 1, 2016 sgwealthbuilder 847 Views 0 Comments

While parent company Keppel Corp suffered from another week of attacks by short-sellers, its subsidiary K1 Ventures announced yet another blockbuster dividend of $0.09 per share to be paid out on 18 May 2016. In total, K1 Ventures has given out $0.30 per share dividends this year.

K1 Ventures is one of my favorite SGX stocks which I have been tracking for more than 10 years. It is the investment arm of Keppel Corp and its business objective is to invest in US companies with potential and hidden values. Over the years, it had made many notable exits like Helm Holding, MMR and China Auto Grand. From these divestment, K1 Ventures had rewarded shareholders with hundred of millions of dividend payouts. In fact, based on its dividend track records, K1 Ventures should be the best dividend stock in SGX.

I had made thousands of profits from investing in K1 Ventures but had recently sold off all my shares to purchase my new matrimonial home. Nonetheless, I hope readers can benefit from reading my blog and thus, is sharing my analysis on K1 Ventures (again).

Following an unsuccessful management buy-out in 2013, K1 Ventures has committed to managing its existing investments for eventual exits and returning the excess cash back to shareholders.

Gold; portfolio management

Start of a bull run for gold?

April 29, 2016 sgwealthbuilder 941 Views 0 Comments

Since the beginning of 2016, gold price had seen a meteoric rise of 21%. It rose from USD1061 to USD1292 per troy ounce at this point of writing, representing an incredible come-back by the yellow precious metal. Is this the start of a bull run for gold?

Traditionally seen as a safe asset class, the surge in gold price is due to the poor economic climate. The combination of oil crisis, China stock market crashes, negative interest rate policy by Bank of Japan and weak global growth currently make gold an attractive commodity for investors to hold. After all, it has been regarded as a safe haven for decades during economic downturns and sky-high inflation.

If you are one of those who think that the current market climate is doing “fairly okay”, then perhaps you have not been following the news or you must be an extremely optimistic person. The matter of fact is that many businesses are finding it challenging to operate under the current climate and the global market is basically waiting for a Black Swan event to implode. By then, it will be too late for you to liquidate your stocks and transfer the fund to gold because very often, the stock market moves very swiftly.

Career management

A better tomorrow for Singapore engineers

April 26, 2016 sgwealthbuilder 860 Views 0 Comments

After a trip to California’s Silicon Valley, Singapore Prime Minister Lee Hsien Loong called for better recognition and prospects for Singapore engineers. It was as if the government has just awoke from a deep sleep and suddenly found that local born and bred engineers have been given the raw deal all this while. With a magic wand, PM Lee magically revitalized the outlook for engineers and give this profession a steroid injection, in terms of salaries and career progression.

To be honest, I have been an engineer for 11 years and my starting pay was $2,600. It took me 5 years of working experiences to crawl to the $4,000 level. Now, fresh graduate with no working experience can command $4,000 level. Effectively, given the new salaries regime, fresh graduates have 5 years of head-start than me. The quantum increase is quite a huge jump and I wonder whether SMEs can afford to pay such premium for fresh engineering graduates.

It may be the case that the government is struggling to find local computer engineers with cyber security skills. Or maybe there is a dearth of software engineers to support the growth of local fintech industry. Whatever the real reason it may be, the sudden government’s push to groom local engineers is long overdue.

Stocks

Contra trading to be phased out?

April 25, 2016 sgwealthbuilder 786 Views 0 Comments

On 22 April 2016, Singapore central bank and white-collar police raided 4 local brokerages for possible breaches of securities law. It was reported that one remisier each from OCBC Securities and DBS Vickers were taken for questioning by the authorities. When this news broke, it took the market by storm and left investors wondering which stock counters had been involved.

This latest episode reveals another dark chapter in Singapore stock market following the epic penny stock crashes of Asiasons, Blumont and Liongold in 2013. Back then, the authorities investigated the three companies for possible insider trading or market manipulations after $8 billion dollars were wiped out in two days of trading. The scandal in 2013 led SGX to implement a number of market reforms to safeguard investors’ interests.

Among the new measures implemented were minimum trading price of $0.20, daily short-selling reporting and new reporting requirement of shares transactions by major shareholders. It was also proposed that by mid-2016, contra trading will be phased out. I personally feel that the removal of contra trading is too draconian because fundamentally, there is nothing wrong with contra trading. This activity, although speculative in nature, allows flexibility and market liquidity. Of course, like all things in life, there will always be black sheep who attempt to abuse the system.

Career management

Retrenchments in Singapore

April 24, 2016 sgwealthbuilder 749 Views 0 Comments

According to the latest Ministry of Manpower (MOM)’s data on the employment landscape in Singapore, more workers were retrenched in 2015. A total number of 13,440 workers were laid off, the highest since 2008-09, which of course was the Great Financial Crisis period. The spike in retrenchments in Singapore reflected the gloomy economic outlook and challenging times ahead.

As a wealth builder, my mantra is to work hard for money and also ensure that my money works hard for me. Being gainfully employed and having a good income is important in order for me to lay down a strong financial foundation for the family. Henceforth, the data on retrenchment is useful because they provide useful information on the impact of economic downturn and allow Singaporeans to identify which industry sectors are ailing.

The latest data from MOM is indeed worrying and I am thankful that I have a job. Sometimes, in the midst of our busy schedules, we tend to take things for granted and expect every day is Sunday in office. What we don’t realize that Singapore is rapidly losing its competitive edge because of high business costs. Many MNCs realize that the so-called talents in Singapore are not so highly skilled or possess niche knowledge that cannot be found in cheaper locations.

Stocks

OCBC share price skyrocketed

April 19, 2016 sgwealthbuilder 1027 Views 0 Comments

On 7 April 2016, local bank OCBC announced the acquisition of Barclays Asia wealth management business in Singapore and Hong Kong through its private banking arm, Bank of Singapore for $430 million. The transaction is still subject to approval by Singapore’s High Court but is expected to be completed by end of this year. Nevertheless, investors have given their nod of approvals and pushed OCBC share price up by $0.60 within the past week.

Since last year, OCBC share price performance had not been doing well partly because of its loan exposure to the oil and gas industry. The non-performing loan (NPL) has increased to $1.97 billion in FY15 from $1.28 billion the previous year, due to the “classification of a few large corporate accounts associated with the oil and gas services sector”. As a result, the share price had tumbled from $10.89 in 2015 to a low of $7.46 in February 2016. So the recent share performance must have given OCBC investors something to cheer about.

Smart traders who bought OCBC shares at $7.46 this year would be sitting on massive paper gains by now. Personally, I knew a wealth builder who invested $70,000 at that price range. I guess he must be laughing all the way to the bank now, if he decided to cash in.

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