TheFinance.sg » SGDividends

The disconnect between asset prices and fundamentals

SGDividends — Thu, 02 Feb 2012 03:43:00 +0000

It is weird how asset prices can be so disconnected from the current state of the world economy. If one is to look at the Baltic Dry Index (BDI) which is a good reflection of 2 factors: supply of ships and state of economy ( hence the demand of ships), it is amazing to see how shipping counters like NOL, Cosco, YangZiJiang e.t.c has been rallying like crazy while the BDI has been plummenting like crazy at about the same time. To borrow jargon from the technical analyst’s vocabulary there is currently a complete divergence between the BDI and the shipping counters. The current BDI is at 662 and note that this is even lower than it’s 5 year low of 663.

Five year Baltic Dry Index Chart

NOL 1 year chart

I still do not believe that this is a real rally but i will be happy if i am proven wrong …

Thoughts On Current Environment

SGDividends — Thu, 08 Dec 2011 03:18:00 +0000

It is quite expected of the government to come up with additional property cooling measures as i have said before that property is a public goodand any additional meaningful upside in price will be capped. I must say that this recent measure of taxing foreigners the additional 10% stamp duty is a very good and well thought of move by the government. I applaud them and must say they are really responding well to the recent results of the general election. I feel that this move tackles both the issues of foreign competition and also the laments of the young generation of aspiring homeowners. Good Job. So how well will property fare in the coming years?

In my opinion, property will go down in prices and volume but i won’t know by how much. Singaporeans have strong holding power from what i observe ( I used to say that …

Discipline to keep one’s emotions at bay

SGDividends — Fri, 26 Aug 2011 01:50:00 +0000

Currently, my percentage of cash comprises 35% of my portfolio with 65% fully invested in equities. At present, my portfolio in terms of paper profits is still yielding a positive return even after the market sell down. ( I have not included the dividends i have received over time.) Having said that, i did consider liquidating some of my equities when the 50 EMA crossed the 200EMA from above but alas, i am not disciplined. I find difficulty in selling some of my equities after a sell down. It is emotional for me and i think i need to improve on this.

Having said that, another factor why im not selling is because my companies are still fundamentally strong and yielding at least 6% -7%dividends based on my buy price. When i include the lending fees which i receive when i let people short my shares through SGX, my returns …

About the Japan Crisis and What to do?

SGDividends — Fri, 18 Mar 2011 04:06:00 +0000

Firstly, i pray that the Japanese disaster will end immediately and that the nuclear situation be kept well under control and a heavy rain cloud will just suddenly appear over the reactors and pour out godzillion tons of water at the fuel rods. My heartfelt condolences!

There has been rife talk about the next time bomb which is the Japan Sovereign debt. Let’s begin the bad news.Japan’s public debt is reaching 225% of GDP. Japan needs to spend more to rebuilt which will result in even more debt. Japan’s aging population will result in less tax revenues which will increase the debt. S&P has recently cut Japan’s sovereign debt rating for the first time since 2002.Moody says it might follow suit. If these bad news is not enough to send a chill up your spine, why not some pictures to add to the gloom….

From the picture, it …

Why property is no longer an excellent Investment-Part 2 ( Continued)

SGDividends — Mon, 07 Feb 2011 10:00:00 +0000

This post is a continuation of part 1.Please read the link first. Based on the parameters and the given scenario ( Price stagnates, no capital appreciation) , below is the layout of the spreadsheet.

Sold within 1 year of purchase

By the end of the 1st month, if the property is sold, the percentage loss is 42.85%. When this loss is annualised, the percentage loss is 514% per annum.
By the end of the 12th month, if the property is sold, the percentage loss is 37.80%. When this loss is annualised, the percentage loss is 37.80% per annum.
The above is due to the horrific 16% stamp duty.

Sold after 1 year of purchase but within 2 years

By the end of the 24th month, if the property is sold, the percentage loss is 22.73%. When this loss is annualised, the percentage loss is 11.36% per …

Why property is no longer an excellent investment (Part 1-to be continued)

SGDividends — Sun, 06 Feb 2011 03:31:00 +0000

Been debating with a friend on whether property is a good investment for ages!The problem with this debate is both of us just throw out qualitative statements about the good and bad of it. I gave up. Took out a spreadsheet and did a property calculator. Let this spreadsheet be the end of such meaningless debate. I have inputted the new rules implemented this January 2011. The following parameters are what have been placed into the model. I would like to add that this model serves as the best case scenario for residential private property investment. Therefore, one would very likely get less than the returns stated.

Parameters based on government rules
- 40% downpayment is needed.
This is because we are looking at property as an investment and very likely this investor has an outstanding home loan already.
- Seller stamp duty (SSD) of 16%, 12%, 8%,4% in the …

The happy problem of excess cash

SGDividends — Fri, 04 Feb 2011 05:33:00 +0000

With not much value left to be found in the stock markets and possible risks including stagflation(inflation coupled with anaemic economic growth in developed countries), increase in oil prices or food prices hurting corporate profitability (thereby reducing general stock market upside due to an already large profit base reported), very possible continued increase in interest rates to stem inflation, the wild card in middle eastern unrest and the general optimistic mood of ” uncle and aunties” …its wise to store up some cash for a possible correction. The stock market could possibly go higher due to ample liquidity, yet it also serves to heighten the danger of a reverse of liquidity back to developed nations…..risks is greater than reward.

Given the above backdrop, i am at my wits end to place this excess cash i have. I did explore Traded Endowment Policies (TEPs) but at 4%-8% per annum returns …

Private Shield – is it worth a buy?

SGDividends — Sun, 28 Nov 2010 05:12:00 +0000

Let’s talk about the single most important thing in one’s personal finance, Hospitalisation and Surgical Insurance. Read this and this and that on such H&S insurance matters.

Having read the articles above, i somehow had this impression that Medishield gives more value to those Private Shield plans. (Note, i use the word value, not cheap and i use the word impression , so it is just my opinion. Just for the record, I am an absolute newbie in insurance,

Prices

Comments
I have used Enhanced Income Shield (BASIC) insurance as comparison as it’s the most ” apple to apple” .
Medishield covers grade B2/C wards. Incomeshield covers B2/C wards AND B1 wards.
85 years above is not covered under Medishield. Honestly, i have damn good genes…and i think i will live till above that age, barring any suay events like slashing or stabbing incidents by the 369 gang or ang soon tong …

Private Shield – is it worth a buy?

SGDividends — Sun, 28 Nov 2010 05:12:00 +0000

Let’s talk about the single most important thing in one’s personal finance, Hospitalisation and Surgical Insurance. Read this and this and that on such H&S insurance matters.

Prices

Sabana Reit and Mapletree Industrial Trust

SGDividends — Tue, 23 Nov 2010 18:09:00 +0000

Lockup period
Sabana Reit-Period of 180 days from listing date. Thereafter, 50% will be locked up for the following 360 days from the end of the 1st lock up period.
MIT – Period of 180 days from listing date.

Gearing/Leverage
Sabana Reit – 26.5%
MIT-38.5%

Performance fee Paid to manager
Sabana Reit – 0.5% per annum on Net Property Income if DPU grows at least 10%
MIT-3.6% per annum on Net Property Income

Sabana Reit’s Alignment with Unitholders
The Manager has elected to receive 80.0% of the base fee in the form of Units for the Forecast Year 2011 and the Projection Year 2012 and (if payable) 80.0% of the performance fee in the form of Units for the Projection Year 2012, except that where the issue price (which is equal to the Market Price (as defined herein) of each Unit) …

Sabana Reit and Mapletree Industrial Trust

SGDividends — Tue, 23 Nov 2010 18:09:00 +0000

Gearing/Leverage
Sabana Reit – 26.5%
MIT-38.5%

Performance fee Paid to manager
Sabana Reit – 0.5% per annum on Net Property Income if DPU grows at least 10%
MIT-3.6% per annum on Net Property Income

Which bank will benefit the most from a rise in SIBOR?

SGDividends — Wed, 17 Nov 2010 16:31:00 +0000

A wrong move made!And another wrong move!Its so hard to find good investment opportunities these days. Anyway, with all the talk about how interest rates are so low now and the only way forward is for it to move up gradually, let us try to position ourselves for this expectation shall we?

SIBOR stands for Singapore Interbank Offer Rate – simply put,interest rates for deposits,loan e.t.c rise if SIBOR rises.

NIM stands for Net Interest Margin which is measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders(for example, deposits), relative to the amount of their (interest-earning) assets. )

Development Bank of Singapore (DBS)
See how it correlates with the SIBOR……when sibor goes up, DBS NIM ( net interest margin goes up)

United Overseas Bank ( UOB)

Hmmph, NIM seem to be negatively correlated with …

A Little Spare Cash, Unattractive Stock Valuations, Low interest Rates. What to do?

SGDividends — Thu, 07 Oct 2010 07:58:00 +0000

September went by without any correction in the stock market. Boring!Hopefully October gets more interesting. We recently sold the Taisin shares we bought on 7 September 2010 and lock in a gain of about 22% in 1 month. The run up in it’s share price on 5th and 6th of October was unexpected and we decided to sell it instead of being too greedy.We don’t know why it went up, but who cares…seriously as long as money is made. We still like the company due to it being shareholder oriented BUT their recent offer of a scrip dividend scheme, we dont really like.

So, with a little cash, what do we do with it? Stocks are abit overvalued, interest on bank deposits are low, property rental yields are low at 4-5%? Processing…….

The Small Caps Stock Adventure

SGDividends — Tue, 07 Sep 2010 15:01:00 +0000

No investment has been done since the beginning of 2010 till today 7 September 2010. Stocks, especially blue chips ones, have been running up like crazy. We missed an opportunity last week to load some more Singpost due to trying to gain a 0.01 cent advantage…damn it! See how far it rose from $1.13 to $1.23 within 1 week!!!Arrgh. I spotted the aggressive quantity of share buybacks of Singpost, whenever it touches $1.12 or $1.13 and therefore entered with CONVICTION but missed just cos i queued at $1.12.”%%$#*@&@^!%@#$@%@”. But its alright..hehe..another one will come as always and i have vested in it last year, so nothing to complain. Just for your information on the performance of Singpost, up up and away!

Having about 90% of my portfolio vested in blue chip stocks during the crisis,the valuation of such …

Keeping an Open Mind to Opportunities

SGDividends — Wed, 09 Dec 2009 03:55:00 +0000

Talking to some people can be really exasperating. When one explains a sure-win strategy to make money to them with absolutely zero risk and no commission earned whatsoever, they will first ask, sure or not. They will then close their minds and the idea is dismissed. To be fair, i agree that when things are too good to be true, they probably are, BUT , i still stick to the philosophy that NOTHING OR NO IDEA should be dismissed without exploring or investigating first. Taking a phrase from the bible( Dont mistake me for a holy cow cos i am definitely not, neither am i evangelising, its just something which has been sticking in my head recently, dont know why….)
” A farmer went to sow his seed, some fell along the path;it was trampled on and the birds ate it up. Some fell on rock, and when it …

Playing It Safe.Growing it Slowly But Surely With a Peace of Mind.

SGDividends — Sat, 03 Oct 2009 04:00:24 +0000

Photo by rpongsaj

Looking at the Baltic Dry Index which according to Wilkepedia is :
“An assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Handymax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.” It has been going down since June 09 and some stocks are being squeezed into a tight consolidated range between the bollinger bands which classically signifies a impending move.Besides it well know that in Sep and Oct stocks do dip statistically.

But oh heck with it. We just bought some SIA Engineering and SMRT shares recently and yes we are impatient and thats bad …really bad..illogical and unwise.Simply put…stupid.Anyway, as fundamental investors, we dont try to catch the bottom nor the top. We just wanna catch NEAR the LOCAL bottom or LOCAL top and we are in heaven. Hope nothing unforseen happens!So why these seemingly boring stocks. SMRT..what the heck! Read more…

Playing It Safe.Growing it Slowly But Surely With a Peace of Mind.

SGDividends — Thu, 01 Oct 2009 14:39:00 +0000

Ok yeah we haven’t been updating for soooo long but well…we needed a break. Anyway the meteoric rise of the stock market makes us sick in the belly as we just didnt have any bullets left to pump in. Haizz…just spraying some water guns here and there..pathetic!!!!!Well guess there is a season for everything and we should be thankful. Anyway, now we have got some money and October does seem to be a potential month where stocks are likely to go down after the euphoria. Why do we say this?
Looking at the Baltic Dry Index which according to Wilkepedia is :
“An assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Handymax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore …

Stock Market Manipulation – US Markets and elsewhere

SGDividends — Sat, 02 May 2009 04:15:56 +0000

Photo by erix!

Retail brokerage customers generally never learn that they paid money for something that failed to be delivered to their accounts. That is because retail customers’ brokerage account statements do not reveal whether delivery takes place; even when no shares are delivered at settlement, share entitlements are still credited to the buyer’s account. Those credited share entitlements then trade in the market as if they were real shares issued by the company. – WorldAffairsJournal Regulation (Spring 2008)

Huh? What’s the above about? It’s about the practice of selling shares without owning any shares, also called “Naked Shorting” and then failing to deliver the shares. In the US market, they use the term “Failure to Deliver” to describe it. The consequence of this act is to increase the number of outstanding shares of a company and basic economics of demand and supply states that when the supply increases, price goes down.

So, let’s say Company A issued 1000 shares. Anyone who owns 1000 of these shares own 100% of company. Let’s say a hedge fund “naked short” another 1000 shares and “fails to deliver” it. These 1000 “naked short” shares are credited as electronic digits into the buyer’s online brokerage account and are paid for by the buyer. The total number of shares appearing as electronic digits are now 2000 shares, but the number of shares legally issued is only 1000…so what now? The buyer has effectively paid for nothing! It has been said that such practices resulted in many good fundamentally strong companies being driven to bankruptcy in the US and it is claimed that this is rampant in that country. It is also conservatively claimed that about 1% of daily shares volume traded in the US market are such ” phantom shares”.

Guess SGX did a fine job to mandate that investors buy back any naked shorted shares in the market within 1 day or else face a fine of $1000.

Read the articles below for more information. Hmm…we wonder how will the companies issue dividends in this case? Read more…