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.

TPG, the upside

Facebook, Instagram, YouTube. There are plenty of bandwidth hungry apps that consume massive mobile data. It's pretty addictive. I guess it's a form of lifestyle inflation? Or is it a practical reality of digital norms, a sign of "progress"?

And so TPG (https://www.tpgmobile.sg/) appeared on the local scene, coming in as the 4th Telco. The net effect was that my Singtel shares went south, somewhat. Starhub is already struggling from their self-induced escalating impact of high dividend payout in the past. And M1 was taken private.

The saving grace is that TPG is offering a one year $0 plan as they aim to seize market share, even as they are gradually rolling out their network. Really, ZERO. Coverage is not great for now. But can't complain right? It is ZERO.

I signed up and got my hands on the TPG SIM. And voila, Samsung phones can take in two SIM cards! So I downgraded my current Telco plan (not ready to risk switching), and configured my mobile phone mobile data to feed off TPG's. Infinite data, infinite. To infinity and beyond! No need to hunt for a free Wifi and conserve usage. Yeah.

The trade offs? No coverage in underground buildings and MRT lines. Live with it.

Let's see what happens in a year's time. And hopefully I haven't become a bandwidth addict by then. Meantime, it's saving me cold hard cash every month.

Age of Disruptions

Nothing lasts forever when change is a constant. Oh wait, that's a lot of cliche in one sentence. Overdose of it perhaps? Getting back to the subject ...

ComfortDelgro is being disrupted by the likes of Uber and Grab.

SPH's print media is being disrupted by digital media, even as it plays catch up while diversifying into retail malls and community care facilities.

SingPost snail mail is being disrupted by e-mail, while its eCommerce offers patchy slivers of opportunities.

Singtel is shifting from a pure play telco into a digital technology company.

It's hard for an incumbent business to adopt digital technology as it has to be accompanied by new business models. It's not just about bringing the traditional medium to a digital platform. The shift is hard.

Plus, there will be a lot of irrelevant work force that is ill suited for the digital age. Does the company stick to the past, or build for the future? With the workforce that is being displaced, what should it do? Should it listen to the heart or listen to the mind? Is there a place where both can coincide? There is too much at stake.

Will traditional consumer staples remain relevant? Can companies like QAF maintain its relevance in food if there is a changing pattern in food consumption? The fight against diabetes could have repercussions.

Will retail malls remain relevant with the increasing shift to eCommerce? Do consumers still shop?

Marine, oil and gas industries need no saying. While some may argue it's all about what Saudi Arabia chooses to do and that it's cyclical, long as it may lasts, perhaps it's also about disruptions from renewable energy?

Disruptions all over. Kodak moments, if you are even old enough to still remember Kodak.

Traditional Blue Chips start to look pretty blue ...

But it is in times of doubts and uncertainties that opportunities exist. Who will survive?

Recollections of 'my' companies

It's the eve of X'mas 2011, and it's a good a time as any to take stock of events in the year that relates to companies I've taken a stake in.  It's been a horrible and unforgiving year - tsunami in Japan, massive floods in Thailand and Australia, financial crisis Part II in Europe, SMRT coming out like a disaster movie, repeated floods at various parts of Singapore, and the bird flu apparently making a come back in Hong Kong.

Adampak had one of its factory underwater in Thailand when the floods hit. 

Qian Hu is still fishing around and doing poorly this year after the European market tanked.  Fishy.

SPH failed to deliver my papers on a few occasions.  Not getting their basic service done is a bad sign.  And the long time Chairman of SPH has become the President of the Republic.

In contrast, SingPost has consistently delivered my posts.  But the amount of junk mails these days is simply amazing!  But if it keeps the postman busy, it's good?

Singtel phone bills continue to increase throughout the year as the number of handphones I owned have gone up.  How many handphones does one need?  I am still not subscribing to any M1 services.  What will LTE technology bring to their businesses?  More data traffic is the way to go, ever since the rise of the iPhone and iPad.  Long live Steve Jobs!

Still haven't bought anything from Aussino.  I think I'm still happy with my bedsheets.  The trouble is that these things can last quite a while.  I'm not hopeful about their business.

HourGlass appears to be doing decent business.  Lots of tourists visiting Singapore these days and hopefully there're there in the branded class that the newly rich patronise.

SMB United is in the midst of a takeover bid.  Remains to be seen what the outcome will be.

Global Logistics Properties has dived in on the Japanese property market in the months following the Japanese tsunami and nuclear disasters.  Looks like some smart moves.  It's going to be sometime before we see these pan out.  China and Japan are all about exports and emergent consumption.  And that means there is a logistics battle to be won.

On the property front, the cooling measures seem to be gradually taking effect.  Amazingly, the E-Condo I'm living in now appears to be going at twice the price I bought, and that was just 5 years ago.  In land scarce Singapore, this is one area where there is no room for abundance, unless technology breakthroughs bring new opportunities.  I'd stay away speculating the home properties given that these will likely continue to attract frequent policy interventions.  This is one unstable "C" among the infamous 5Cs.  But Capita-Commercial Trust and Mapletree Industrial Trust are alternatives in the commercial and industrial sectors (REITS) for a 'stable' income stream.  That's not a bad thing.

Singapore banks have stood the test of the last two rounds of financial crisis in the US and Europe.  OCBC remains healthy and I'm sure their OCC 3.93% NCPS will continue to pay out annually.  How does the future hold for SP Reinsurance and Sing Inv & Finance?  I'm living off their dividends.

Water is the business for Hyflux.  However, I certainly wouldn't hold my breadth on Hyflux itself. It had banked on the rich African market which was unfortunately aborted by the Arab Spring.  Perhaps the opportunity will present itself again.  It has tried to diversify into China and we shall see how that transpires.  But their overall business in water and waste should remain viable and hence Hyflux 6% CPS should remain ok for the steady income stream it produces.  We need to drink, and we certainly have to shit.  One can die from not being able to do either you know.

CSE Global seems to be having trouble making profits out of their software projects.  It didn't help to find their customers caught amidst the rising tide of the Arab Spring as well.

Ah China!  Who knows where things will go from here.  One can certainly see the throngs of newly rich everywhere.  And I mean everywhere.  So perhaps it's healthy to benefit from their retail growth story via Capita Retail China Trust.

Tat Hong's factory near my neighbourhood seems to have either moved, or else all their cranes have been rented.  Bad sign, good sign, depending which way it went. But they're likely benefiting from their business down in Australia.  It's a reconstruction and recovery story after the floods in Australia had receded.

When economic woes abound, and the price of oil climbs to ridiculous levels, airlines businesses are all downhill, including filings for Chapter 11 (US)!  But I believe SIA will recover and will do well again when things pick up.  But one wonders how the new management team is fairing? 

By a similar thread, SATS' future rests on the recovery of the air transportation business.  They have just secured a contract to operate the new Cruise passenger terminal.  That could perhaps help broaden their business to the sea business.  In any case, they continue to have the stable business of providing food for the SAF.  National Service is good for SATS.

Speaking of food, Brands products from CerebosPac is a must have booster for kids preparing for exams.  What a year of exams!  That's a lot of Brands Essence of Chicken.  It also appears to be one of those staple items for hospitalisation gifts as well.  Students and hospitals, it's all about people!

Kian Ann, Innotek, Teck Wah and Meiban Gp?  Waiting for the manufacturing and engineering to recover perhaps.

With Certificate of Entitlements rising to epic proportion, car ownership has become another that has gone beyond-the-line-of-sight "C" for followers of the 5Cs.  But they all need to go for annual inspections, and the number of cars aren't getting any less despite this.  VICOM for next buy?

Merry X'mas!