25 April 2011

Credit Cooperatives

There seems to be a number of Credit Cooperatives in Singapore.  These typically involve membership with regular payments (investment?) that pays out dividends in the magnitude of 3-5%.  What's the catch?  Is this a good avenue for wealth management?

22 April 2011

Death of INVEST

Yet another local investment/wealth-management magazine bites the dust.  The latest issue of "INVEST" is its last.  Over the past few years, one magazine after another have shutdown - Q, PULSES and now INVEST.  It's tough to get circulation in print media going for a small market (population) when information are available real time.

FUNDSUPERMART while still alive, has reduced its frequency of circulation.

Seems the only ones still going strong are THE EDGE (weekly) and SHARES (fortnightly).

15 April 2011

Non-Convertible Preference Shares (NCPS) II

[This is an update of a previous post.]

Traded on the SGX, NCPS are traded like shares (which means the bid-ask price fluctuates), but gives out dividend/coupon payments like bonds.  There aren't that many such NCPS, and they're most likely from the 3 big banks in Singapore. So long as the issuers don't call back their NCPS, they will continue to pay out the dividends at the stated rate.  However, some of these have 'maturity' dates where the coupon rate reverts to a floating rate thereafter.  Prior to the maturity date, the bank cannot call back the NCPS.

The risk of failure stems from the issuing company going down under (you lose your pants!), or when it fails to pay out any dividends for their standard shares resulting in no dividend payout for their NCPS as well. However, the likelihood of these negative events appear slim given the strong historical performance of these Singapore banks.  But then again, we've seen also big banks in the US going down under in recent history!

If one is not worried about the fluctuations of the "capital", and is happy with the dividend/coupon payout, NCPS may not be a bad option for building a "cashflow" stream.  So long as the issuer doesn't call back the NCPS, you will get the annual payout (usually half-yearly or quarterly) perpetually.  If they do call back the NCPS, you will get back the par value anyway.

Below are the respective NCPS.  Read as such:
[Date of maturity] @ [Rate] ([Dividend/Coupon payout date])
Hyflux 6.0% - Cumulative NCPS
- 25 Apr 2018 @ 6% (25 Apr, 25 Oct)
- Thereafter @ 8% (25 Apr, 25 Oct)

DBS 6.0%
- 15 May 2011 @ 6% (15 May, 15 Nov)
- Thereafter @ 3-mth SOR + 2.28% (15 Feb, 15 May, 15 Aug, 15 Nov)
DBS has announced that they are calling back this NCPS on 16 May 2011.

UOB 5.05%
- 15 Sep 2013 @ 5.05% (15 Mar, 15 Sep)
- 15 Sep 2018 @ as above [2nd maturity date]

OCC 5.1%
- 20 Sep 2018 @ 5.1% (20 Mar, 20 Sep)
- Thereafter @ 3-mth SOR + 2.5% (20 Mar, 20 Jun, 20 Sep, 20 Dec)

OCC 3.93%
- 20 Mar 2015 @ 3.93% (20 Mar, 20 Sep)
- Thereafter @ 3-mth SOR + 1.85% (20 Mar, 20 Jun, 20 Sep, 20 Dec)

OCBC 5.1%
- 29 Mar 2013 @ 5.1% (20 Jun, 20 Dec)

OCBC 4.5%
- 28 Jan 2013 @ 4.5% (20 Jun, 20 Dec)

OCBC 4.2%
- 14 Jan 2013 @ 4.2% (20 Jun, 20 Dec)

SOR refers to the Swap Offer Rate.

04 April 2011

SRS Adjustments

From 1 Jan 2011, the Supplementary Retirement Scheme (SRS) contribution limit would be raised to $12,750 from the current level of $11,475.

See: Elaboration on SRS by IRAS