Author: Investment Income for Life

Will The Spread of The Wuhan Coronavirus Led to East Asia Recession Similar to SARS in 2003?

In 2003, the Severe Acute Respiratory Syndrome (SARS) coronavirus caused a substantial economic demand shock in East Asia particularly in Hong Kong, Singapore and China. The economic disruption caused much turmoil to the local economies of the affected countries where the outbreak occurred. Tourism industry then was hard hit by the nose-dive in tourists arrival and the hospitality industry was badly impacted. Other industries such as retail also suffered when people stayed indoors in order to avoid catching the virus. According to official estimates from the Economic Survey of Singapore, Third Quarter 2003, the local service industries such as...

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Elite Commercial REIT Singapore IPO- Did It Suay Suay Choose A Wrong Time? Or Is Elite Commercial REIT Immune To The Wuhan Pneumonia?

Elite Commercial Trust seems to have filed for IPO during a time of poor market sentiment over the increasing number of Wuhan pneumonia cases that seems to be spreading across China as well as other Asian countries. But I think it will perform well for the IPO as the public offer tranche is only a mere £3.3 Million or 3% of the total IPO offering as reported by the The Business Times. The bulk of the offering will go on to international investor outside the US of £63.2 Million to £74.3 Million. A third tranche of £52.9Mil (44.3%) of...

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Is Singapore Medical Group Still An Undervalued Gem? Or Trapped in Downward Spiral Bottomless Pit?

Singapore Medical Group (“SMG”) share price has been stuck in a whirlpool of S$0.300 range for many months ever since August 2019. It all started with an offer by the Korean Medical Group, CHA, to buy out substantial number of shares from Dr Beng and his management team at S$0.605 per share. To add insult to injury, while the share price was at a high of S$0.485 per share, SMG decided to place out to CHA a S$10Mil convertible loan with conversion rights at S$0.435. Many shareholders were outraged at the unfairness of no general offer being made to...

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Fu Yu Corporation- Super Hero Cash Cow New Growth Path- To Expand Operations Capability in Singapore

Share price of Fu Yu Corp has surged by 52% relative to one year ago. The main reason for the sudden spike in January 2020 was due to the announcement of the redevelopment of its 7 Tuas Drive premises. Fu Yu Corp is embarking on a drive to expand and improve its operations in Singapore through the construction of a larger building to house a factory, warehouse and office space. 1. Fu Yu Corp retained too much cash on its balance sheet which are none productive- Good and BadAs at 30 September 2019, total cash on the balance sheet was...

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SGX Drops Quarterly Reporting And The Irony Behind It.

With effect from 7 Feb 2020 (Friday), SGX will drop the quarterly reporting (“QR”) requirement for listed companies. QR was implemented in 2003 and applicable to companies with market capitalization over S$75Mil. The current need to do QR for listed company will be dependent on risk assessment basis. In place will be a risk focused governance regime based on continuous disclosure. Main reasons cited for change I was very disappointed by the announcement as quarterly release of financial results give retail investors like myself more timely visibility to the overall health of the business. Apparently, what triggered the downgrade in...

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Netlink Trust Finally Proved Itself- Free Cashflow Now Able to Sustain Dividends.

During my last review of Netlink Trust after its Q1 FY2020 results announcement (Netlink Trust- Stable Cash Cow Or Just Another Time Bomb Waiting To Explode?), I was disappointed that its free cashflow was insufficient to sustain dividends and seems to be using bank borrowings to fill the gap. But with the announcement of its Q2 FY2020 results, Netlink Trust has shown an amazing 17% increase in quarterly net profit relative to FY2019 on the back of the switch by many customers of Starhub from cable to fibre services. This is an awesome delivery of results considering the previous...

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Chinese Zodiac Fengshui Forecast Accurate A Not?

Lunar New Year is coming! Do you folks feel the CNY celebratory mood already? It is interesting that every year, many shopping malls start displaying giant Chinese Zodiac Fengshui Forecast stand. This year is no exception. I can see many shoppers gathered around them and reading them in full concentration. Sometimes, I wonder how accurate are these fortune telling forecasts which categorise the global population into 12 different types of destiny for the upcoming year. Only 12 scenarios to guide everyone…..whaha. May everyone prosper in your investments and HUAT...

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Perils of Leveraging Investment Portfolio Using Margin Financing- Understand The Key Facts Before Jumping Into The Quicksand

The dark side about investing and blogging (just like Star Wars Skywalker vs Palpatine- there will always be light and dark in the Force) is that there are some sinister folks lurking in some dark corner condemning your every investment action and then gloating if one’s investments started making losses albeit the fact that there are very few investors who strike gold with every investment decisions that they made without a single failure.  The topic that I am going to touch on today is on under-highlighted points to take note of using leverage through margin financing facility provided by...

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Investment Portfolio Updates for December 2019 and Singapore Press Holdings Looks Attractive Again With New Growth Path

There is not much changes since my last update except for paring down of stakes in SingMedical Group and taking up positions over 3 tranches into Eagle Hospitality Trust. I have also moved part of my cash investments into my margin portfolio. My own goal for FY2020 will be to further reduce the volatility of my margin portfolio in order to enhance the resiliency of the dividend/interest income stream against market downturn for this new investment approach. My current overall projected annual recurring income has increased by around 52% using this newly created investment portfolio.Singapore Press Holdings Looking Attractive...

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Eagle Hospitality Trust Continues To Be Haunted By The Ghosts Of Queen Mary

Eagle Hospitality Trust (“EHT”) continues to face woes on many fronts. On 6th December 2019, EHT announced the resignation of its Vice President of Finance, Mr Cheah Zhuo Ye. Mr Cheah apparently left for personal reasons. The thing that caught my eye was his date of appointment to EHT was 25 September 2018 while his date of effective cessation was 30 June 2019 hence he joined for less than 1 year. The other mind blogging issue was why EHT announced this only in December 2019 when the effective cessation was June 2019? 1. Implication of resignation of key finance...

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Strange Encounter on Pricing of Kaya Toast Set at HDB Kopi Tiam

Apparently, the Kaya Toast set is quite unique in Singapore and Malaysia. It consists of (i) 1 coffee or tea, (ii) Kaya Toast and (iii) Eggs (half boil/hard boil). I have an interesting story from a colleague who went on board Cruise ship for a short holiday. While doing breakfast in bed, he requested the kitchen to bring him toast and also half boiled eggs. When the room service staff delivered the breakfast set, he took out a small knife and cut the hard boiled egg into half. Then he said to my colleague: “Sir, please enjoy your half...

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Profiting from Pricing Abnormalities- Merger of Frasers Commercial Trust and Frasers Logistics & Industrial Trust

Ever since the announcement of the upcoming merger between Frasers Commercial Trust (“FCOT”) and Frasers Logistics & Industrial Trust (“FLT”), it gave rise to the strange situation of an arbitrage forming due to wide pricing fluctuation between the 2 REITs. Arbitrage is the process of exploiting differences in the price of an asset by simultaneously buying and selling it and in the process, the arbitrageur pockets an almost risk free return. For example,  On 3rd December 2019, the price of FCOT suddenly shot up to S$1.72 when the offered price for the merger exercise valued it at S$1.68.Extract of...

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Surprising Upcoming Merger between Frasers Commercial Trust and Frasers Logistics & Industrial Trust

In a surprising twist of fate, both Frasers Commercial Trust (“FCT”) and Frasers Logistics & Industrial Trust (“FLIT”) announced a trading halt. According to the Business Times, their ”secret sources” revealed that both REITs will be joined in holy matrimony and merged into one entity. The “secret sources” identity also cannot be revealed as the information is still private. As always, news seems to have leaked ahead of the trading suspension and the unit price of both REITs increased suddenly above their normal trading range for no apparent reason over the past few days. FCT and FLIT seems to...

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US Senate Unanimously Passes Hong Kong Human Rights And Democracy Bill- More Harm Than Good To Hong Kong

I was flabbergasted by some folks from Hong Kong who seem extremely pleased with the passing of the Hong Kong human rights bill by the US Senate. The bill if executed will be mostly detrimental to Hong Kong’s economy. It will lead to economic slowdown and also job losses for the Hong Kong people. Under this weird bill, the US Secretary of State would have to certify at least once a year that Hong Kong retains enough autonomy to qualify for special US trading consideration that bolsters the status of Hong Kong as a world financial centre. Losing the...

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Singtel Share Price Resilient In the Face of Billion Dollar Impairment and 2nd Quarter Losses of S$668Mil

Singtel is a very funny and weird stock. In late December 2018 to early Jan 2019, the share price dropped below S$3 per share when it was making quarterly profits of over S$680Mil. However, when it was announced recently that Singtel had made a huge loss of <S$668Mil> for its second quarter results, its share price dropped only slightly from S$3.30 to S$3.18 which is a mere decline of only <3.64%>.  I am not sure whether shareholders of Singtel recalled that in March 2019, Singtel had just subscribed to a rights issue of S$730Mil  worth of additional shares for...

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