Author Archive

Posted on March 3, 2010 - by Martin Lee

Existing Medical Insurance Cover and She Didn’t Know

The other day, I was referred to someone who wanted to get some health (or medical) insurance. According to her, she didn’t have any medical insurance cover and wanted to use some of her Medisave to get an appropriate cover.

This was a fairly straightforward transaction but usually, what I will do is to double check whether that person has any existing medical insurance in place first. This of course includes the integrated shield plans.

One way of checking this would be to check that person’s CPF yearly statement (either hardcopy or online). See the example below which shows a person having a medical plan with Aviva.

Read more…

Posted on January 27, 2010 - by Martin Lee

COV for HDB Flats Hit Sky High

Fresh data from the Housing Board (HDB) showed that the median cash over valuation (COV) for HDB resale units rose to $24,000 in the fourth quarter of 2009. That is double the $12,000 median in the previous three months and breaks the COV record of $22,000 achieved in the fourth quarter of 2007.

The top three towns had medians of $50k, $50k and $38k for executive units; $40k, $33k and $31.5k for 5-room units; and $35k, $35k and $30k for 4-room units respectively.

There was even a 5 room resale HDB unit sold for $730,000 with a whopping COV of $85,000.

For those who did not study statistics, median is defined as the numerical value separating the higher half of a sample from the lower half. Read more…

Posted on January 7, 2010 - by Martin Lee

The Year Ahead in 2010

What a difference a year has made.

At the start of 2009, all was dark and gloomy amidst the greatest financial crisis the world has seen.

Now, in 2010, there seemed to be a lot of optimism, at least among the people I spoke to who are starting to invest into stocks again.

Ironically, those who have made the most money would be those who have invested in the depth of the crisis and held on to their holdings.

The stock market is driven largely by sentiment and if sentiments change, the direction of the market can also change.

What are some factors that can threaten to trigger a change in sentiment?

Unwinding of US Dollar Carry Trade

The US dollar, forsaken just a few weeks ago, has staged a remarkable rebound since the starting of December 2009. Nearly everyone was bearish on the USD back then and it has appreciated nearly 5% against both the euro and the Japanese yen. Read more…

Posted on January 5, 2010 - by Martin Lee

2009 in Review

Another year has passed us by and it’s time to recap some major events that has happened both locally and globally in the past year.

1) Barack Obama gets inaugurated in January as the 44th president of the United States in the middle of one of the worse financial crisis in the world. He goes on to win the Nobel peace price in October.

2) Temasek Holdings announces in February that its CEO, Ho Ching, will step down and replaced by Charles ‘Chip’ Goodyear. This appointment was subsequently cancelled in July. Temasek also issued Singapore dollar denominated bonds for the first time.

3) Global stock markets bottomed in March and went on a massive recovery rally for the rest of the year. Sentiment improved significantly with investors no longer pricing in “depression” levels for risk assets. Read more…

Posted on December 10, 2009 - by Martin Lee

Sino Environment News

Sino Environment Technology is a S-Chip whose trading has been suspended since September this year.

I seldom write about Singapore listed China stocks as I don’t have any personal interest in them. The Confession of a S-Chip CEO email that I read the other day rekindled my interest in this topic so I thought I will post some updates of the latest S-Chip scandal that is going on involving Sino Environment.

Signs of irregularities for Sino Environment first appeared in March this year when it was discovered that their CEO, Sun Jiangrong, had defaulted on his personal loan of S$120 million. This would usually not be a direct problem of the company, but the CEO in this case had pledged his own shares in Sino Environment as collateral for the personal loan.

This was actually a smart way of monetizing one’s own shares without actually selling them. Yet, no disclosure of the pledge of shares was needed to be made to SGX at the point when the loan was taken. Read more…

Posted on December 8, 2009 - by Martin Lee

Temasek S$ Bonds Starts Trading Today

Temasek Financial has completed its maiden offering of Singdollar denominated 20 and 30-year bond notes worth S$600 million to Singapore based institutional investors.

The S$300-million, 2029 bond has a coupon rate of four per cent, while the S$300 million 2039 bond carries a coupon rate of 4.2 per cent.

The Notes will be listed and quoted in the Bonds Market with effect from 9.00 a.m. today. The Notes are in denomination of S$250,000 each and the will be traded in minimum board lot size of S$250,000 each.

The Notes will be quoted and traded in Singapore Dollars. The Notes are in denomination of S$250,000 each and the Notes will be traded in minimum board lot size of S$250,000 each. Read more…

Posted on November 26, 2009 - by Martin Lee

MI-REIT EGM Showdown with Unitholders

The past week saw a tussle going on between the managers of Macarthurcook Industrial Trust and Cambridge Industrial Trust (CIT) as MI-REIT proposed a recapitalization exercise which was firmly rejected by Cambridge Industrial Trust Management (CITM) publicly. CIT had bought close to 10% of MI-REIT after the capitalization plan was announced and they proceeded to gather support from other shareholders to oppose the plan.

Even though CITM originally had something in mind, their plans were disrupted when MAS stepped in to announce that it was not possible for CIT manager’s to manage two different REITs as it might lead to conflict of interests. To add a twist to the story, the current CEO of CITM, Chris Calvert, was the ex-CEO of MI-REIT.

With uncertainty facing MI-REIT unitholders with no viable alternatives in sight, there was expected to be a large turnout at the EGM for investors to clear their doubts on this issue. Read more…

Posted on November 4, 2009 - by Martin Lee

CIT Group Files for Bankruptcy

I was interrupted yesterday morning with news that CIT Group, a commercial lender to hundreds of thousands of small and medium-sized businesses in the US, filed for bankruptcy (Note CIT is not the same entity as CitiGroup) on Sunday.

CITCIT’s bankruptcy has been partially expected as they have been repeatably trying to raise more and more capital for the past few months without much success. With a default rate in excess of 10% in their current loan portfolio, it appears that SMEs are still in pretty much of a struggle, never mind what the economic numbers say.

While this seems like just another bank failure out of the 115 that have failed in US so far this year, note that this is the fifth largest bankruptcy in US history, behind Lehman Brothers, Washington Mutual, WorldCom and General Motors. Read more…

Posted on September 25, 2009 - by Martin Lee

Is Property in Singapore Affordable?

There has been a recent spate of news and articles to the Straits Times forum regarding the current state of property prices in Singapore. While the government has acknowledged that private property prices are starting to show signs of a bubble by a series of changes announced last week, they have maintained that public housing remains affordable by and large to the general population.

The criteria that they used as affordability is that a household should not spend more than 30% of their income on their property.

I would actually argue that housing has actually become less affordable (even if the above definition is met) compared to 30 years ago. While housing prices has increased more than 5-10 fold over the last 30 years, that certainly cannot be said of our income levels.

If the public housing today is affordable, then they would be super affordable 30 years ago. Read more…

Posted on September 15, 2009 - by Martin Lee

Changes to Insurance Nomination Act and How it Affects You

The Insurance Nomination Law recently came into effect on 1st September 2009.

Before this law, there were a couple of problems with nomination of beneficiaries for your insurance policies, namely:

(this applies to all policies bought except those from NTUC Income which falls under a separate Act)

1) Nomination of spouse and children created an irrevocable trust. This means that policyholder no longer has beneficial ownership of the policy and cannot change nominees or cash out the proceeds without the consent of all the nominees.

2) Nomination of other people like parents, siblings, etc had no legal effect.

Under the new law (which does not apply retrospectively), those who take up insurance policies will have the option of creating either a revocable or trust (irrevocable) nomination. Read more…