Author: Investment Income for Life

Investment Portfolio Updates- 18 April 2019 (Allocation of New Funds To More Defensive Investments)

Due to the US Federal Reserve keeping a dovish inflation outlook, interest rates have been maintained at the current level and no further interest rate hike is expected for 2019. This is actually a sign that the US macroeconomic condition is weak. But strangely, the stock market, in particularly, REITS rallied in valuation. However, my thoughts are that if one is investing mainly for income generation, then short term fluctuation does not have much meaning unless one is doing frequent buying and selling of stocks for allocation of funds to the most undervalued assets. One would need to overcome...

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First REIT- 5 Key Risk Factors

First REIT is currently trading below its NAV. It has fallen more than 40% from its peak of S$1.42 per unit. Even now, institutional investors and other retail investors have been busy selling of First REIT. From my analysis, the 5 key risk factors are as below: (i) The default risk for rental payment due to a liquidity crisis faced by its sponsor and main tenant, Lippo Karawaci; (ii) Non-renewal of master tenancy for some of the hospitals due in 2021; (iii) As alluded to (ii), even if master tenancy were renewed, it maybe on less favourable terms such...

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Rich Dad Poor Dad Story Fact or Fiction? Why Are So Many People Inspired By It?

Every once in a while, Robert Kiyosaki and “Rich Dad Poor Dad” will either get mentioned in my daily conversation topic with friends and relatives or emerge in some websites or blogs that I am reading.  Hence the purpose of this post is just to write down my own personal view. I first got introduced to the famous financial literacy book “Rich Dad Poor Dad: What The Rich Teach Their Kids That The Poor And Middle Class Do Not” by the great Robert Kiyosaki during my University days. My school mate from Indonesia asked me whether I got read “Rich...

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Singapore Press Holdings Transformation Into Property Giant Almost Completed

Singapore Press Holdings (SPH) recently announced its 1st half results and its property segment now contributes to almost two-third of SPH’s “Profit Before Taxation”. This is a significant contributor to operating profits and marks the close completion of its transformation from a Media Group into a Property Holdings Group. Nevertheless, from a revenue generation perspective, the Media segment is still bigger in size than the Property segment. Traditional Media remains profitable but is still declining and we just could not see any signs of the rock bottom being formed yet.  As such, traditional Media will most probably continue its...

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First REIT- Important Upcoming Events And Accumulation of Units (Will First REIT Soar Or Crash Further?)

3 key upcoming events to watch out for First REIT for this quarter. (1) The AGM for FY2018 will be held at Mandarin Orchard Hotel on 9th April 2019. There is a resolution tabled on top of other routine resolutions such as re-appointment of auditors. The additional resolution sought to change the Trust deed and proposed that the distribution payment period of First REIT be amended from 60 days to 90 days. (2) The other major event is the announcement of 1st quarter results on 10th April 2019. (3) The third event would be the AGM of Lippo Karawaci on...

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Hyflux Saga- PUB Turns Out To Be The Real White Knight

In an interesting turn of event, PUB- which I previously posted that it had single-handedly stopped the Salim Medco rescue package– turned out the be the real white knight because most stakeholders have mistaken its good intention. By taking away the loss-making Tuaspring desalination plant, PUB has let Hyflux off the hook on the business unit that is making its business bleed profusely. In addition, PUB added icing on the cake by further waiving off compensation claims for breach of contractual KPIs. What a dramatic week it turns out to be with the latest development.   Even though the...

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Is it time to buy into Industrial REIT? The Earnngs Resilency Of Mapletree Industrial Trust

In my last posting on whether is it time to buy into Industrial REIT, I have illustrated the poor rental charges of industrial properties using the JTC indexes from 2016 to 2018. All industrial property types pricing indexes with the exception of business parks have been in the doldrums. REITS with warehousing facilities such as Cache suffered the worst hit. The local warehousing space for logistics usage has not yet seen any significant recovery and prices still hover around S$1 per sqft in western Singapore relative to more than S$1.50 psf a few years back. The market climate remains...

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Hyflux Tuaspring Saga- White Knight Becomes Fleeting White Clouds

Since PUB served notice on Hyflux with regard to the defaults in the Water Purchase Agreement (“WPA”), it leads to more questions rather than answers.  If Hyflux does not cure all defaults by April 5, 2019, PUB can elect to terminate the WPA and take over the operations of the desalination plant. The white knight Salim Medco group, in turn, responded with a threat to walk out of the rescue deal if Hylfux management does not cure the operational and financial defaults of Tuaspring by April 1st, 2019. As we all know, Hyflux is already facing a “one leg in...

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Skills Future Credit Being Used to Eat Buffets At Hotels

The original goal of Skills Future Credit scheme aims to encourage individual ownership of skills development and lifelong learning. All Singaporeans aged 25 and above will receive S$500 credit each. Little did the government realize that some operators turned this life long learning scheme into the financing of “buffet lunch treats” for senior citizens. It is troubling to see that there seems to be an emerging trend of unscrupulous training centers targeting senior citizens to suck out the Skills Future Credit of S$500 granted. The modus operandi is to offer free hotel buffet lunch. The emphasis by the training centers...

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First REIT Q1 2019 Review: Sponsor Lippo Karawaci To Raise USD1 Billion in Funding

Since the last quarter of 2018, First REIT share price has languished and plunged more than 25% due to the Indonesian corruption probe involving its sponsor and main tenant Lippo Karawaci. At the lowest point, it dropped to S$0.92 per unit which is substantially lower from the S$1.30 per unit days. The concern over potential rental default by Lippo Karawaci over its worsening creditworthiness cast a dark cloud over First REIT. The market situation is further exacerbated by bad news that the upcoming renewal of master leases of the first few hospitals due in 2021 will be on new...

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Malaysia Keep Saying That Water Agreement Pricing Is “Morally Wrong”

I read with amusement that Mahathir and his other Malaysian officials are bashing up Singapore again. Whenever there are internal economic woes, Mahathir and his team will start chanting “bash Singapore” to distract the local population from the domestic problems back at their home in Malaysia.  Recently last week, Mohd Solihan Badri, Media director of Johor chapter of Mahathir”s Parti Pribumi Bersatu Malaysia appealed to Singaporeans to urge our government to review the prices of the water deal with Malaysia, reiterating that the agreement is “morally wrong”.  The water agreements are actually confirmed and guaranteed by both Singapore and...

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The Florence Residences Sold Only 54 Units On Launch- Sign of Slowdown in Singapore Property Market?

Since the official launch of The Florence Residences over the weekend on March 2nd, 2019, it sold only 54 units.  This represented 3.8% of total units of 1,410 being sold at this first-weekend launch. The developer’s version of the sales results is that close to 30% of units are being sold reason being that they only release 200 units. The average psf pricing is S$1,450 psf. Seems that sales results are not that ideal due to excess supply of other units launched from competitors. Riverfront Residences, Affinity at Serangoon and Garden Residences nearby also have many unsold units. Prospective buyers...

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Hyflux Impairment of S$916Mil for Tuaspring- Does it make sense?

I actually do not want to post any more topic on Hyflux as this subject has become very sensitive lately and stir up much negative feelings with the upcoming voting on creditor restructuring. But being an ex-auditor, I seriously think that our Singapore Authorities should re-look into the asset valuation framework and standard for all Singapore Companies listed on SGX so as to better protect retail investors.  In June 2018, Tuaspring carrying book value was SGD 1.47 Billion. This plummeted by SGD 916Mil within half a year for the results released as at 30 September 2018. The key question...

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Fu Yu Corp Super Hero Cash Generating Abiliites Strikes Again- Returns 100% Profits As Dividends to Loyal Shareholders

Fu Yu Corp has done it again and delivered another sterling results on its FY2018 financial performance with a 165% jump in net profit to S$11.88Mil. Just like Wolverine in X-Men with super healing, Fu Yu Corp has showcased its superpower in cash generation from its business operations. For FY2018, it has increased its dividend payout by 0.1 cents from 1.5 cents in FY2017 to 1.6cents in FY2018. This represents close to 100% of its net profit being given back to reward loyal shareholders. Based on the latest closing price of S$0.205, this is a 7.80% dividend yield for FY2018. Huge...

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Malaysia To Launch Prototype of Flying Car

Picture denotes the Thunder Hawk  flying car of a cartoon series known as Mask Malaysia has announced plans to build a flying car and launch a working prototype by end of the year using its own local technology. This is good news indeed. Earlier this month while I was in Malaysia for Lunar New Year, the trip from Yong Peng back to Singapore of typically 1.5hours ended up with 8.5 hours spent on the highway and Customs due to the severe traffic jam. With a flying car, this will beat the damn traffic jam. Militaries around the world should...

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