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As expected, September 2010 was a very quiet month with hardly any corporate announcements from the companies in my portfolio. This was to be expected as September has traditionally been a very quiet month, and I have confidence that the businesses I own are slowly but surely building up their competencies and capabilities to tackle the new challenges ahead.
This month was one of quiet reflection over the business aspects of the companies I own, as well as a little more delving into SIA Engineering Company, which was an investment I had acquired in early August 2010. As can be seen, most of my posts have been on property, investing and SIA Engineering. Moving forward, my thoughts are focusing more on personal finance areas and also on the latest news on Singapore Airlines (SIA) issuing corporate bonds for retail investors. This is a very interesting development as corporate bonds had never been available to retail investors before; previously they were issued to either institutions or sophisticated investors (accredited high net-worth investors). SIA will be issuing S$300 million worth of bonds at a yield of 2.15% per annum, coupon to be paid annually (the announcement did not say otherwise). Suffice to say that the yield is really pretty dismal, considering one can get yields of at least 3-5% in equity markets right now. However, in the current low interest rate environment, getting a coupon rate of 2.15% is still significantly better than the abysmal 0.125% which is being paid by most savings accounts. Of course, one has to also consider the fact that SIA is one of the well-run and well-established airline companies in the world; hence the risk of default will be low, which is why the bonds are paying such a low interest rate. Another advantage of bonds is that they rank above equities in terms of payment should anything untoward happen to the Company, although they rank behind secured debt. It will be interesting to see the general public’s response to this bond offering, and also observe how the media covers this and “plays it up”.
On the economic news front, USA is obviously undecided whether it will have a double dip, with most economists and “experts” trying (in vain) to second-guess one another. Obviously, the one who happened to get it right will be lauded as the new “soothsayer of the year” and enjoy a reputation akin to what Nouriel Roubini is currently enjoying. Such is the strangeness of this world, where people constantly try to predict that which cannot be predicted, only to have to “revise their forecasts” constantly. I still think economists have the best job in the world because they can always afford to be wrong yet still retain their jobs. Imagine if that were to happen in the engineering field - a suspension bridge is calibrated wrongly and collapses. Someone would lose their life, and not just their job. Read more...[caption id="attachment_2604" align="alignright" width="150" caption="Photo by Hythe Eye"][/caption]
As expected, September 2010 was a very quiet month with hardly any corporate announcements from the companies in my portfolio. This was to be expected as September has traditionally been a very quiet month, and I have confidence that the businesses I own are slowly but surely building up their competencies and capabilities to tackle the new challenges ahead.
This month was one of quiet reflection over the business aspects of the companies I own, as well as a little more delving into SIA Engineering Company, which was an investment I had acquired in early August 2010. As can be seen, most of my posts have been on property, investing and SIA Engineering. Moving forward, my thoughts are focusing more on personal finance areas and also on the latest news on Singapore Airlines (SIA) issuing corporate bonds for retail investors. This is a very interesting development as corporate bonds had never been available to retail investors before; previously they were issued to either institutions or sophisticated investors (accredited high net-worth investors). SIA will be issuing S$300 million worth of bonds at a yield of 2.15% per annum, coupon to be paid annually (the announcement did not say otherwise). Suffice to say that the yield is really pretty dismal, considering one can get yields of at least 3-5% in equity markets right now. However, in the current low interest rate environment, getting a coupon rate of 2.15% is still significantly better than the abysmal 0.125% which is being paid by most savings accounts. Of course, one has to also consider the fact that SIA is one of the well-run and well-established airline companies in the world; hence the risk of default will be low, which is why the bonds are paying such a low interest rate. Another advantage of bonds is that they rank above equities in terms of payment should anything untoward happen to the Company, although they rank behind secured debt. It will be interesting to see the general public’s response to this bond offering, and also observe how the media covers this and “plays it up”.
On the economic news front, USA is obviously undecided whether it will have a double dip, with most economists and “experts” trying (in vain) to second-guess one another. Obviously, the one who happened to get it right will be lauded as the new “soothsayer of the year” and enjoy a reputation akin to what Nouriel Roubini is currently enjoying. Such is the strangeness of this world, where people constantly try to predict that which cannot be predicted, only to have to “revise their forecasts” constantly. I still think economists have the best job in the world because they can always afford to be wrong yet still retain their jobs. Imagine if that were to happen in the engineering field - a suspension bridge is calibrated wrongly and collapses. Someone would lose their life, and not just their job. Read more...
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As expected, September 2010 was a very quiet month with hardly any corporate announcements from the companies in my portfolio. This was to be expected as September has traditionally been a very quiet month, and I have confidence that the businesses I own are slowly but surely building up their competencies and capabilities to tackle the new challenges ahead.
This month was one of quiet reflection over the business aspects of the companies I own, as well as a little more delving into SIA Engineering Company, which was an investment I had acquired in early August 2010. As can be seen, most of my posts have been on property, investing and SIA Engineering. Moving forward, my thoughts are focusing more on personal finance areas and also on the latest news on Singapore Airlines (SIA) issuing corporate bonds for retail investors. This is a very interesting development as corporate bonds had never been available to retail investors before; previously they were issued to either institutions or sophisticated investors (accredited high net-worth investors). SIA will be issuing S$300 million worth of bonds at a yield of 2.15% per annum, coupon to be paid annually (the announcement did not say otherwise). Suffice to say that the yield is really pretty dismal, considering one can get yields of at least 3-5% in equity markets right now. However, in the current low interest rate environment, getting a coupon rate of 2.15% is still significantly better than the abysmal 0.125% which is being paid by most savings accounts. Of course, one has to also consider the fact that SIA is one of the well-run and well-established airline companies in the world; hence the risk of default will be low, which is why the bonds are paying such a low interest rate. Another advantage of bonds is that they rank above equities in terms of payment should anything untoward happen to the Company, although they rank behind secured debt. It will be interesting to see the general public’s response to this bond offering, and also observe how the media covers this and “plays it up”.
On the economic news front, USA is obviously undecided whether it will have a double dip, with most economists and “experts” trying (in vain) to second-guess one another. Obviously, the one who happened to get it right will be lauded as the new “soothsayer of the year” and enjoy a reputation akin to what Nouriel Roubini is currently enjoying. Such is the strangeness of this world, where people constantly try to predict that which cannot be predicted, only to have to “revise their forecasts” constantly. I still think economists have the best job in the world because they can always afford to be wrong yet still retain their jobs. Imagine if that were to happen in the engineering field - a suspension bridge is calibrated wrongly and collapses. Someone would lose their life, and not just their job. Read more...
