A sea of red once again. It's not every day that we see stocks like CSE Global dropping 13%, or the likes of OCBC, SATS and QAF by more than 6% IN A SINGLE DAY?
STI is now at 2782, a far cry from 3,300 plus at a recent peak.
For somebody holding a portfolio of $10,000, a 20% drop is $2,000 difference. If you have a portfolio of $1,000,000, that 20% is $200,000. 100x difference. Bearable?
Now's where the rubber hit the tarmac. For those who say they can tolerate a 40% drop and will not sell down in panic, here's validation time.
What's your reaction like so far? Are you flinching yet? A twitch maybe?
And by the way, it's tax season. Have you filed your Income Tax yet?
Investment through the ages, from cradle to grave.
Showing posts with label OCBC. Show all posts
Showing posts with label OCBC. Show all posts
09 March 2020
26 February 2020
China has a Flu and the Whole World Gets Sick
Taxi drivers are complaining about low pick up rate and are suffering from massive income cut. SMRT and Comfort Delgro will suffer.
Tourists are not coming to Singapore. So the likes of Gentings and Straco are suffering from zilch revenue.
Tourists are staying away from flying into Singapore given the number of cases. Singaporeans are also worried about flying out. So SIA will suffer, and the effect will cascade to SATS. SIA has already cut large number of flights in the months ahead and staff are surplus a plenty.
No tourists, no major events, the MICE sector also suffers. So Kingsmen will suffer.
Trade grinding to a halt because China factories are only slowly trying to resume amidst their lockdowns and containment. So all the industrial and shipping side are facing slowdowns. I think Yangzijiang and industrial REITs will suffer.
Malls are pretty empty these days. All staying home to avoid crowded places. So REITs like Suntec REIT will suffer.
Who gains in times like this? Maybe the likes of TopGlove and Riverstone, and hospitals (Raffles Medical, First REIT). Maybe the supermarket chains too, if they have a strong Internet ordering front with home delivery service.
Banks are going to suffer from increasing bad loans and slow down in loans for business. OCBC, UOB, DBS will suffer.
Will the Telcos (Singtel, Starhub) do better as there could be more Internet traffic? But the margins are poor, and if the traffic are largely generated while at home with their existing broadbands, the effect is likely neutral.
Capitaland and even Temasek Holdings are tightening their belts and freezing pay. They are trying their best not to retrench the workforce.
Meantime, Breadtalk is being taken private. Alas.
All in, a bleak picture of downtrend in the months ahead. Another Black Swan event as nature rears its head. Definitely BUY opportunities if they survive this. Only a question of when?
I pity the graduating students from all walks joining the workforce this year.
Tourists are not coming to Singapore. So the likes of Gentings and Straco are suffering from zilch revenue.
Tourists are staying away from flying into Singapore given the number of cases. Singaporeans are also worried about flying out. So SIA will suffer, and the effect will cascade to SATS. SIA has already cut large number of flights in the months ahead and staff are surplus a plenty.
No tourists, no major events, the MICE sector also suffers. So Kingsmen will suffer.
Trade grinding to a halt because China factories are only slowly trying to resume amidst their lockdowns and containment. So all the industrial and shipping side are facing slowdowns. I think Yangzijiang and industrial REITs will suffer.
Malls are pretty empty these days. All staying home to avoid crowded places. So REITs like Suntec REIT will suffer.
Who gains in times like this? Maybe the likes of TopGlove and Riverstone, and hospitals (Raffles Medical, First REIT). Maybe the supermarket chains too, if they have a strong Internet ordering front with home delivery service.
Banks are going to suffer from increasing bad loans and slow down in loans for business. OCBC, UOB, DBS will suffer.
Will the Telcos (Singtel, Starhub) do better as there could be more Internet traffic? But the margins are poor, and if the traffic are largely generated while at home with their existing broadbands, the effect is likely neutral.
Capitaland and even Temasek Holdings are tightening their belts and freezing pay. They are trying their best not to retrench the workforce.
Meantime, Breadtalk is being taken private. Alas.
All in, a bleak picture of downtrend in the months ahead. Another Black Swan event as nature rears its head. Definitely BUY opportunities if they survive this. Only a question of when?
I pity the graduating students from all walks joining the workforce this year.
03 October 2016
Portfolio of 8 Singapore Stocks - Oct 2016
It's been over a year since I started a Portfolio of 8 Singapore Stocks on 28 Aug 2015 for fun. How has that theoretical $100,000 portfolio fared after all the gyrations of 2016?
Stock
|
No. of
Shares |
28 Aug 15
|
3 Oct 16
|
Value
|
| OCBC |
1,300
|
$9.280
|
$8.650
|
$11,245
|
| Keppel |
1,700
|
$7.200
|
$5.300
|
$9,010
|
| M1 |
4,200
|
$2.920
|
$2.440
|
$10,248
|
| Boustead |
14,600
|
$0.855
|
$0.815
|
$11,899
|
| Kingsmen |
15,200
|
$0.820
|
$0.650
|
$9,880
|
| VICOM |
2,100
|
$6.000
|
$5.720
|
$12,012
|
| HourGlass |
17,000
|
$0.735
|
$0.650
|
$11,050
|
| GKGoh |
14,900
|
$0.840
|
$0.810
|
$12,740
|
The portfolio is now $88,084 (dividends not considered) and completely red. It's been a complete wash-out. I guess if I am a fund manager, I'm pretty much out of a job by now.
Disclaimer: I have not bought such a portfolio on those dates. I am only doing this exploration for fun. But it is true that I do have all these stocks in my holdings and did buy more of some of them during Aug-Sep 2015. And I am certainly not clairvoyant, so I can't predict the future!
Related:
Portfolio of 8 Singapore Stocks - 31 Dec 2015
At the start of the year, I had stretched my neck out with a prediction that the portfolio would be positive by the end of 2016. Looks like I have stuck my neck out a tad? It's been a fairly horrible year.
With only two months till the end of the year, is there still hope yet? Perhaps a bridge too far? Time to recall the 1st British Airborne Division from Arnhem. The ghosts of Operation Market-Garden beckons.
Related:
Portfolio of 8 Singapore Stocks - 31 Dec 2015
08 January 2016
The Market is a Bloody Mess!
So the headlines are now all gloom and doom.
What is Yuan may not be round
China devalues its Yuan and the rest of the world suffers a cold. As if Winter isn't cold enough for them. They need to export their cold to the rest of the world too.
Does it mean the Sing dollar will strengthen against the regional dollars? If so, then it's a good time to exploit the stronger exchange rate to go on holidays. I know, I know. Holidays are expenses. But what's life if we can't spend on gaining positive experiences discovering the wider world beyond our 700 sq km? Within limits of course.
At the same time, it's going to be bad for most local business as Singapore companies are often dependent on exports (Qian Hu). So that end of it doesn't look bright. I'd hate to be an exporter right now. Worse if you're an employee in a shaky company. Thy job is at stake too. Troubling.
What is zero can only go up
US Fed interest rate hike has taken the first step uphill and I'm sure the rest of the world will gradually follow suit. With interest rates going up, that means new bonds issues will be pegged at higher interest rates too? Sounds exciting for new bonds issue, especially since new rules are expected to be introduced soon to ease the issue of "seasoned" retail bonds in Singapore. I look forward to subscribing to new retail bonds.
The banks (OCBC, UOB, DBS) are suffering from heart attacks and are at incredulously low Price-Earning (PE) ratios. Is that a Big Singapore Sale going on here? Or are there more heart attacks to come? I think they are worth a close look. Very close. I'm suffering from irregular heartbeats from excitement.
What is going down must hit a bottom somewhere
The oil and gas, and consequently the marine industry (Keppel, SembCorp) have yet to pan out. The price of oil is now at a historical low. But the Saudi strategy of creating a glut to kill off its competition seems to be a long drawn process. It's bleeding oil until a turning point can be reached. The Saudis are patient people. Guess they have a lot of oil to spill.
How come the air tickets are still so expensive, and likewise the price of petrol at the petrol kiosks!? There's a de-sync somewhere. Somebody is making the money. And it ain't the consumer who are benefiting from the low price of oil (ExxonMobil, Chevron).
What is shiny may yet shine brighter
Amidst all these, we have a friend who has significantly faded in recent years - Gold. Is it now glittering brighter yet again? I'm not betting on it, but will keep watch. I might yet be blinded. Eventually.
Overall, as the Brits might say, "It's a bloody mess!"
What is Yuan may not be round
China devalues its Yuan and the rest of the world suffers a cold. As if Winter isn't cold enough for them. They need to export their cold to the rest of the world too.
Does it mean the Sing dollar will strengthen against the regional dollars? If so, then it's a good time to exploit the stronger exchange rate to go on holidays. I know, I know. Holidays are expenses. But what's life if we can't spend on gaining positive experiences discovering the wider world beyond our 700 sq km? Within limits of course.
At the same time, it's going to be bad for most local business as Singapore companies are often dependent on exports (Qian Hu). So that end of it doesn't look bright. I'd hate to be an exporter right now. Worse if you're an employee in a shaky company. Thy job is at stake too. Troubling.
What is zero can only go up
US Fed interest rate hike has taken the first step uphill and I'm sure the rest of the world will gradually follow suit. With interest rates going up, that means new bonds issues will be pegged at higher interest rates too? Sounds exciting for new bonds issue, especially since new rules are expected to be introduced soon to ease the issue of "seasoned" retail bonds in Singapore. I look forward to subscribing to new retail bonds.
The banks (OCBC, UOB, DBS) are suffering from heart attacks and are at incredulously low Price-Earning (PE) ratios. Is that a Big Singapore Sale going on here? Or are there more heart attacks to come? I think they are worth a close look. Very close. I'm suffering from irregular heartbeats from excitement.
What is going down must hit a bottom somewhere
The oil and gas, and consequently the marine industry (Keppel, SembCorp) have yet to pan out. The price of oil is now at a historical low. But the Saudi strategy of creating a glut to kill off its competition seems to be a long drawn process. It's bleeding oil until a turning point can be reached. The Saudis are patient people. Guess they have a lot of oil to spill.
How come the air tickets are still so expensive, and likewise the price of petrol at the petrol kiosks!? There's a de-sync somewhere. Somebody is making the money. And it ain't the consumer who are benefiting from the low price of oil (ExxonMobil, Chevron).
What is shiny may yet shine brighter
Amidst all these, we have a friend who has significantly faded in recent years - Gold. Is it now glittering brighter yet again? I'm not betting on it, but will keep watch. I might yet be blinded. Eventually.
Overall, as the Brits might say, "It's a bloody mess!"
06 January 2016
Portfolio of 8 Singapore Stocks - 31 Dec 2015
On 28 Aug 2015, I started exploring a portfolio of 8 Singapore stocks with a value of ~$100,000 (Portfolio of 8 Singapore Stocks). Although the actual value would have been $99,126, I am assuming for simplicity it would be $100,000 after accounting for transaction costs.
How has it fared? It's been four months and here's how it looked like on 31 Dec 2015:
How has it fared? It's been four months and here's how it looked like on 31 Dec 2015:
Stock
|
No. of
Shares |
28 Aug 2015
|
31 Dec 2015
|
Value
|
| OCBC |
1,300
|
$9.280
|
$8.800
|
$11,440
|
| Keppel |
1,700
|
$7.200
|
$6.510
|
$11,067
|
| M1 |
4,200
|
$2.920
|
$2.720
|
$11,424
|
| Boustead |
14,600
|
$0.855
|
$0.835
|
$12,191
|
| Kingsmen |
15,200
|
$0.820
|
$0.670
|
$10,184
|
| VICOM |
2,100
|
$6.000
|
$6.020
|
$12,642
|
| HourGlass |
17,000
|
$0.735
|
$0.785
|
$13,345
|
| GKGoh |
14,900
|
$0.840
|
$0.810
|
$12,069
|
The portfolio is now $94,362 (dividends not considered) and overall deeply in the red after 4 months. Obviously not making any money. The split is now 2-6 in favour of the losers. HourGlass continues to hold the fort positively alongside VICOM. But everyone else is underwater.
Market sentiments continue to be bleak, so I don't think it's going to see daylight anytime soon. But perhaps it is a good time for more fishing when pessimism is most severe?
Disclaimer: I have not bought such a portfolio on those dates. I am only doing this exploration for fun. But it is true that I do have all these stocks in my holdings and did buy more of some of them during Aug-Sep 2015. And I am certainly not clairvoyant, so I can't predict the future!
Related:
8 SGX Companies to Keep Watch On
Market sentiments continue to be bleak, so I don't think it's going to see daylight anytime soon. But perhaps it is a good time for more fishing when pessimism is most severe?
It is the new year. So I'll stretch my neck out with a prediction: that the portfolio will be positive by the end of 2016.
Disclaimer: I have not bought such a portfolio on those dates. I am only doing this exploration for fun. But it is true that I do have all these stocks in my holdings and did buy more of some of them during Aug-Sep 2015. And I am certainly not clairvoyant, so I can't predict the future!
Related:
8 SGX Companies to Keep Watch On
31 December 2015
A Review of Investments for 2015
2015 has actually turned out to be a horrendous year, or a wonderful year, depending on how you look at it as an investor. Checking against the STI, I realised it has actually suffered a -14.3% dropped compared to this time last year. Taking into account 3% of dividends which the STI index would not have accounted for, that would actually be -11.3% net in terms of total returns.
So if you're sitting on a 11.3% loss, you're pretty much doing market normal. You're normal. On the other hand, if you've been buying throughout the year when the market dropped, it's probably going to turn out great in the longer run. That is, provided you didn't buy a bunch of junk! You had a lot of guts and I wish you success! You're probably abnormal.
So if you're sitting on a 11.3% loss, you're pretty much doing market normal. You're normal. On the other hand, if you've been buying throughout the year when the market dropped, it's probably going to turn out great in the longer run. That is, provided you didn't buy a bunch of junk! You had a lot of guts and I wish you success! You're probably abnormal.
My stock investment has returned an IRR of -1.2% for 2015 inclusive dividends reinvested into the portfolio. So I guess I should take some satisfaction that I have outperformed the market for the 6th year running. Can I gloat somewhat?
However, my long term IRR has continued to slide: from ~20% (2012-13, 4-5 years), to 17.3% (2014, 6 years), and now ~12% (2015, 7 years). A case of reversion to mean? Still, 12% over 7 years is not a bad long term performance. I'm consoling myself.
The shares portfolio is taking on a more global outlook as I've started investing into other regional ETFs (esp. Europe, Asia-Pac and Japan) on top of my current holdings of Singapore and US shares. If this was a fund management company, I should probably use some other global benchmarks. But I'm not, so I will continue to reference STI as my benchmark, because that's what my opportunity cost is. I'm only accountable to myself.
Bought:
Anheuser Busch (US)
However, my long term IRR has continued to slide: from ~20% (2012-13, 4-5 years), to 17.3% (2014, 6 years), and now ~12% (2015, 7 years). A case of reversion to mean? Still, 12% over 7 years is not a bad long term performance. I'm consoling myself.
The shares portfolio is taking on a more global outlook as I've started investing into other regional ETFs (esp. Europe, Asia-Pac and Japan) on top of my current holdings of Singapore and US shares. If this was a fund management company, I should probably use some other global benchmarks. But I'm not, so I will continue to reference STI as my benchmark, because that's what my opportunity cost is. I'm only accountable to myself.
Bought:
Anheuser Busch (US)
ARA Asset Mgt
Aspial (bonds)
Boustead
Capitacom Trust
Capitaland
CIMB Asiapac Div ETF
Exxon Mobil (US)
Global Logistic
HongKong Land
JMH
Keppel
Lyxor Europe10 ETF
Lyxor Japan10 ETF
M1
OCBC
Second Chance
The Hour Glass
Union Pacific
YZG
Zagro Asia
Rights Issues Subscribed:
ARA Asset Mgt
Sold:
nothing!
Lots of buying, not much selling. To be precise, I've sold nothing throughout the year. I've been a stooge. Gave nothing away.
Aspial (bonds)
Boustead
Capitacom Trust
Capitaland
CIMB Asiapac Div ETF
Exxon Mobil (US)
Global Logistic
HongKong Land
JMH
Keppel
Lyxor Europe10 ETF
Lyxor Japan10 ETF
M1
OCBC
Second Chance
The Hour Glass
Union Pacific
YZG
Zagro Asia
Rights Issues Subscribed:
ARA Asset Mgt
nothing!
Lots of buying, not much selling. To be precise, I've sold nothing throughout the year. I've been a stooge. Gave nothing away.
Dividend income grew marginally to $11,168 for 2015. This would have been higher of course, except that I chose to accept all options offered in the form of scrip dividends (i.e. additional shares in lieu of cash) as per previous year. I'm too lazy to figure out what the exact dividend amount would have been. But I estimate it would likely be in the region of $14,000 for the shares portfolio. That's not enough to live off my lifestyle on, yet.
But from an overall perspective, the total portfolio of shares, unit trust, investment-linked and cash/bonds has finally breached the 7-figure zone. The journey is progressing well. The point of "inflexion" (a.k.a. financial independence) is coming.
Despite a tumultuous 2015, here's wishing you a wonderful 2016 next. Happy New Year!
31 October 2015
Portfolio of 8 Singapore Stocks - 28 Oct 2015 [updated to correct error]
On 28 Aug 2015, I started exploring a portfolio of 8 Singapore stocks with a value of ~$100,000 (Portfolio of 8 Singapore Stocks). Although the actual value would have been $99,126 (without considering transaction costs), I am assuming $100,000 for simplicity. You could think of the difference as the transaction costs.
How has it fared since? In truth, two months is way too short a time to be meaningful. Nonetheless, here's how it looks:
Thanks to CSCCC who highlighted that I had made a mistake with M1's price on 28 Aug 2015, I have adjusted the error as indicated in yellow highlights above.
How has it fared since? In truth, two months is way too short a time to be meaningful. Nonetheless, here's how it looks:
Stock
|
No. of
Shares |
28 Aug 2015
|
28 Oct 2015
|
Value
|
| OCBC |
1,300
|
$9.280
|
$9.200
|
$11,960
|
| Keppel |
1,700
|
$7.200
|
$7.160
|
$12,172
|
| M1 |
4,200
|
$2.92
|
$2.870
|
$12,054
|
| Boustead |
14,600
|
$0.855
|
$0.955
|
$13,943
|
| Kingsmen |
15,200
|
$0.820
|
$0.780
|
$11,856
|
| VICOM |
2,100
|
$6.000
|
$6.150
|
$12,915
|
| HourGlass |
17,000
|
$0.735
|
$0.740
|
$12,580
|
| GKGoh |
14,900
|
$0.840
|
$0.825
|
$12,293
|
Thanks to CSCCC who highlighted that I had made a mistake with M1's price on 28 Aug 2015, I have adjusted the error as indicated in yellow highlights above.
The portfolio is now $99,723, so it really hasn't moved the needle over the two elapsed months. This valuation does not take into account any dividends. The split is 3-5 between the winners and losers (as indicated in red above). The only significant winner has been Kingsmen. So it looks pretty flat-line for now and in need of some resuscitation.
Disclaimer: I have not bought such a portfolio on those dates. I am only doing this exploration for fun. But it is true that I do have all these stocks in my holdings and did buy more of some of them during Aug-Sep 2015.
Related:
8 SGX Companies to Keep Watch On
Disclaimer: I have not bought such a portfolio on those dates. I am only doing this exploration for fun. But it is true that I do have all these stocks in my holdings and did buy more of some of them during Aug-Sep 2015.
Related:
8 SGX Companies to Keep Watch On
28 August 2015
Portfolio of 8 Singapore Stocks - Aug 2015 [updated 31 Oct 2015]
On 14 Aug 2015, as the Singapore market trended down, I highlighted 8 Singapore companies to keep watch on. I figured that an opportunity would come soon if the downwards trend continued. Indeed, it came pretty suddenly on 24 Aug 2015 (see Playing with the bears of 2015).
While the STI never quite hit the official 20% bear territory, it was pretty close, reaching -19.9%? A 0.1% difference is perhaps just a technicality. Many stocks reached their low point that day.
I thought it might be interesting to see how a portfolio made up of these 8 stocks would fare over time. I assumed that a reasonable investor wouldn't have caught the lowest point to buy, but would have delayed a few days to watch how things unfolded before jumping in.
So, taking reference from the prices a few days later on 28 Aug 2015, here's how a $100,000 portfolio would look like for this portfolio of 8. No REITs nor business trusts. But the 8 are broadly diversified.
While the STI never quite hit the official 20% bear territory, it was pretty close, reaching -19.9%? A 0.1% difference is perhaps just a technicality. Many stocks reached their low point that day.
I thought it might be interesting to see how a portfolio made up of these 8 stocks would fare over time. I assumed that a reasonable investor wouldn't have caught the lowest point to buy, but would have delayed a few days to watch how things unfolded before jumping in.
So, taking reference from the prices a few days later on 28 Aug 2015, here's how a $100,000 portfolio would look like for this portfolio of 8. No REITs nor business trusts. But the 8 are broadly diversified.
Stock
|
Number of Shares
|
28 Aug 2015
|
Dividend Yield
|
Price to Book ratio
|
| OCBC |
1,300
|
$9.280
|
4.03%
|
1.1
|
| Keppel |
1,700
|
$7.200
|
7.02%
|
1.15
|
| M1 |
4,200
|
$2.920
|
6.43%
|
7.08
|
| Boustead |
14,600
|
$0.855
|
4.73%
|
1.46
|
| Kingsmen |
15,200
|
$0.820
|
4.43%
|
1.59
|
| VICOM |
2,100
|
$6.000
|
2.93%
|
3.82
|
| HourGlass |
17,000
|
$0.735
|
3.06%
|
1.23
|
| GKGoh |
14,900
|
$0.840
|
4.73%
|
0.73
|
In working out the above, I did not take into account transaction fees. The number of shares were based on approximately $12,500 for each stock, rounded to the minimum lot size of 100. With that, the whole portfolio would have cost $99,126. I guess if transaction costs had been factored in, it would have come close to $100,000 anyway.
Let's see how this fares over the next few years with a buy and hold strategy.
--
1 Sep 2015 ...
I forgot to indicate the dividend yield and their price-to-book (P/B) ratio of the stock previously. So I have updated into the above table, but these are based on the data on 1 Sep 2015.
These are all dividend yielding stocks, and mostly with P/B below 2.0. The exceptions were M1 and VICOM which had much higher P/B. These probably reflect the premium that M1 commands as a Telco and likewise VICOM in their vehicle inspection role.
I'm drawing inspiration from Teh Hooi Ling's article where she mentioned a finding from historical analysis that stocks with a healthy dividend yield over P/B ratio tended to perform better over time.
--
31 Oct 2015 ...
The data for M1 was amended due to earlier error. Changes are highlighted in yellow.
Let's see how this fares over the next few years with a buy and hold strategy.
--
1 Sep 2015 ...
I forgot to indicate the dividend yield and their price-to-book (P/B) ratio of the stock previously. So I have updated into the above table, but these are based on the data on 1 Sep 2015.
These are all dividend yielding stocks, and mostly with P/B below 2.0. The exceptions were M1 and VICOM which had much higher P/B. These probably reflect the premium that M1 commands as a Telco and likewise VICOM in their vehicle inspection role.
I'm drawing inspiration from Teh Hooi Ling's article where she mentioned a finding from historical analysis that stocks with a healthy dividend yield over P/B ratio tended to perform better over time.
--
31 Oct 2015 ...
The data for M1 was amended due to earlier error. Changes are highlighted in yellow.
14 August 2015
8 SGX Companies to Keep Watch On
In my recent interview by Giraffe, I mentioned several stocks that I felt may be worth keeping a close watch on due to various challenges that they are facing. So I thought I may elaborate a bit further on these.
OCBC. They have certain exposure to China and is hoping to grow its market there. With China experiencing some slow down, it will be affected. But my view is that a slow down does not mean that China will come to a halt. Business will continue to ebb and grow. It is a huge emerging market that is hard to ignore. And they will need capital (loans) to support business operations. Cash is king.
Keppel. A significant part of Keppel's business is in the marine sector which is facing challenges from the declining price of oil. Much of the oil around the world are moved by maritime shipping. There has been few new orders, although it does have a sizeable order book to carry it forward. If the situation persists, painful layoffs may well be necessary. Such layoffs could result in some loss of capabilities for the future. Since Choo Chiau Beng stepped down as its CEO, the new management team has had much to deal with.
M1. M1 is largely dependent on the domestic market telco market, unlike Singtel which has an international market for diversification. With a 4th entrant coming into the local telco scene, it would face cannibalisation from the competition. But the question is, will the 4th player survive? M1 has also been the first off the block to introduce new service schemes (innovation?) to try to take the market in the meantime.
Boustead. A part of its business comes from the oil and gas, as well as property development. Both of which are facing difficulties. The oil and gas challenge is similar to Keppel's problem. With a slowdown in population growth, the need for housing in land-limited Singapore is going to slow down. There is also a lot of competition from the many companies in Singapore. They are experiencing forex downside given the extensive business operations in Malaysia (rapidly depreciating M$) and Australia (A$ is almost the same as S$ now).
Kingsmen. If there is slow down in regional economies, resulting in less business shop upgrades and MICE events, then they are likely to experience difficulties in growing their revenue. But they seem to have a strong reputation. Good branding. The emergence of more and more theme parks in the region, as well as upgrades at existing ones, are continued business opportunities for Kingsmen.
VICOM. There are some on the shrinkage of car population with many cars due to replace those at the end of 10 years. As car owners replace with new cars, they will not need to go to VICOM that soon. Maybe there will be near term shrinkage in revenue. But VICOM is dominant and car inspections are legally required. All VICOM need to do is to just raise its charges?
HourGlass. Luxury goods would most certainly benefit from a large newly rich Chinese market, hungry for symbolism. But the stamp down on corruption in China has made many self-conscious, and an economic slow down would likely create further reason for pause and caution. The company is also in the midst of transition from its founders to the next generation.
GKGoh. It's businesses operations in Europe and Australia would probably be affected by the foreign exchange rates when translated into the S$ currency. Its Boardroom subsidiary (itself a SGX stock) seems to dominate in providing services to many SGX companies, providing a stable revenue stream.
But all the above are likely things that will blow over as things reach equilibrium with time (reversion to mean?). Demand for the goods and services will still be there to provide growth. Ultimately, the businesses will thrive, so long as they are not experiencing the "Kodak moment" and continue to be led by responsible management teams that do not engage in any shenanigan.
This week in particular has been an "excitable" week, with the market in a sea of red for a couple of days. Looks like a ship full of bears. But I'm a contrarian. The market goes down, I'm excited. So I'm buying. Gradually. Because I can't be sure the market wouldn't go down even further.
Disclaimer: Do conduct your own research and make your own decisions. I do not possess any all-seeing eye that claims to predict the future. So I am not a clairvoyant. Above is just a personal view of things.
OCBC. They have certain exposure to China and is hoping to grow its market there. With China experiencing some slow down, it will be affected. But my view is that a slow down does not mean that China will come to a halt. Business will continue to ebb and grow. It is a huge emerging market that is hard to ignore. And they will need capital (loans) to support business operations. Cash is king.
Keppel. A significant part of Keppel's business is in the marine sector which is facing challenges from the declining price of oil. Much of the oil around the world are moved by maritime shipping. There has been few new orders, although it does have a sizeable order book to carry it forward. If the situation persists, painful layoffs may well be necessary. Such layoffs could result in some loss of capabilities for the future. Since Choo Chiau Beng stepped down as its CEO, the new management team has had much to deal with.
M1. M1 is largely dependent on the domestic market telco market, unlike Singtel which has an international market for diversification. With a 4th entrant coming into the local telco scene, it would face cannibalisation from the competition. But the question is, will the 4th player survive? M1 has also been the first off the block to introduce new service schemes (innovation?) to try to take the market in the meantime.
Boustead. A part of its business comes from the oil and gas, as well as property development. Both of which are facing difficulties. The oil and gas challenge is similar to Keppel's problem. With a slowdown in population growth, the need for housing in land-limited Singapore is going to slow down. There is also a lot of competition from the many companies in Singapore. They are experiencing forex downside given the extensive business operations in Malaysia (rapidly depreciating M$) and Australia (A$ is almost the same as S$ now).
Kingsmen. If there is slow down in regional economies, resulting in less business shop upgrades and MICE events, then they are likely to experience difficulties in growing their revenue. But they seem to have a strong reputation. Good branding. The emergence of more and more theme parks in the region, as well as upgrades at existing ones, are continued business opportunities for Kingsmen.
VICOM. There are some on the shrinkage of car population with many cars due to replace those at the end of 10 years. As car owners replace with new cars, they will not need to go to VICOM that soon. Maybe there will be near term shrinkage in revenue. But VICOM is dominant and car inspections are legally required. All VICOM need to do is to just raise its charges?
HourGlass. Luxury goods would most certainly benefit from a large newly rich Chinese market, hungry for symbolism. But the stamp down on corruption in China has made many self-conscious, and an economic slow down would likely create further reason for pause and caution. The company is also in the midst of transition from its founders to the next generation.
GKGoh. It's businesses operations in Europe and Australia would probably be affected by the foreign exchange rates when translated into the S$ currency. Its Boardroom subsidiary (itself a SGX stock) seems to dominate in providing services to many SGX companies, providing a stable revenue stream.
But all the above are likely things that will blow over as things reach equilibrium with time (reversion to mean?). Demand for the goods and services will still be there to provide growth. Ultimately, the businesses will thrive, so long as they are not experiencing the "Kodak moment" and continue to be led by responsible management teams that do not engage in any shenanigan.
A ship full of bears
This week in particular has been an "excitable" week, with the market in a sea of red for a couple of days. Looks like a ship full of bears. But I'm a contrarian. The market goes down, I'm excited. So I'm buying. Gradually. Because I can't be sure the market wouldn't go down even further.
Disclaimer: Do conduct your own research and make your own decisions. I do not possess any all-seeing eye that claims to predict the future. So I am not a clairvoyant. Above is just a personal view of things.
05 January 2015
When Lots Reduce from 1,000 to 100 - 19 Jan 2015
19 Jan 2015 is a date to watch for on the Singapore Stock Exchange. Lot sizes for shares will be relaxed from 1,000 shares down to 100 shares. Those very high valued shares that had been pretty much out of reach for many retail investors will start to look attractive.
A share that cost $10 per share at 1,000 shares used to require $10,000 to gain share ownership. But at 100 shares, it will only require an outlay of $1,000.
The bank stocks (OCBC, UOB, DBS), and the Jardine family (JMH, JSH, Dairy Farm, Hong Kong Land, etc) will be within reach for a lot more people. Will a mad rush on 19 Jan drive up their prices in the initial scramble? Any short term adrenaline rush will however likely taper off back to "value" over time.
For the retail value investor, 2015 will be the year where these 'costly' shares start to appear in their portfolio. I hope.
Previously:
2 Great News from Changes to the SGX Stock Market
A share that cost $10 per share at 1,000 shares used to require $10,000 to gain share ownership. But at 100 shares, it will only require an outlay of $1,000.
The bank stocks (OCBC, UOB, DBS), and the Jardine family (JMH, JSH, Dairy Farm, Hong Kong Land, etc) will be within reach for a lot more people. Will a mad rush on 19 Jan drive up their prices in the initial scramble? Any short term adrenaline rush will however likely taper off back to "value" over time.
For the retail value investor, 2015 will be the year where these 'costly' shares start to appear in their portfolio. I hope.
Previously:
2 Great News from Changes to the SGX Stock Market
23 June 2014
My World Cup Team (of Dividend Value Stocks)
Warren Buffet in several of his talks cited a hypothetical situation for the audience to consider. If you only have a ticket on which you can only punch 10 holes, and each of these holes represent one stock you could invest in, and you can never change your mind thereafter for the rest of your life, what would you choose?
[You can find some of these videos of the talks on YouTube.]
Well, it's the World Cup season right now, so in the spirit of this global event taking place in Brazil, I shall extend that to a fantasy soccer team of 11 first team players. What would my first 11 be for a team of largely dividend-yielding samba stocks?
I am going with a conservative and defensive oriented 4-4-2 formation.
Goalkeeper
There can only be one goalkeeper. This guy has to ensure that the opponents would not score and is the last man. For this, I would go with (1) OCBC. A big strong and friendly bank to hold the last line.
Defenders
For my defenders, I'm going with the two things that are the cause of lots of heartburn - property and cars. The main reasons for our high headline inflation. Defensive stocks with high yields.
For property, I'm going with a couple of REITS, namely, (2) Capita Commercial Trust, (3) Capita Retail China Trust and (4) Mapletree Industrial Trust. So that gives me 3 REITs covering commercial, retail and industrial properties.
To round off the fourth player, I would go with (5) Vicom, a proxy play for car ownership.
Midfielders
Midfielders need to control the play. They have to create opportunities for offensives, and at times have to roll back to the defensive. For this, I would go with (6) Boustead, (7) Hour Glass, (8) Kingsmen Creative and (9) SATS.
Strikers
For the offensive play, I am looking for potential value-growth players that may not be as yet high yielding but have the potential to go far. For this, I pick (10) Global Logistic Properties and (11) Yangzijiang. Exposure to China, Japan and interestingly Brazil.
It's pretty much a 80-20 rule. So that rounds up my first 11. What's yours?
[Disclaimer: I hold all the above stocks. But this is not a recommendation to buy any of these. Do make your own assessment before investing, always.]
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