TheFinance.sg » SGDividends

How interest rate affects perpertuals- Genting

SGDividends — Thu, 17 May 2012 06:58:00 +0000

A reader commented that interest rates were at the historical low and that the only way is up. That i totally agree. What i am unsure of is just when. When interest rate increases, price of bonds will go down, especially so for bonds without maturity, a..k.a perpertuals like Genting. Looking at the 12 month Sibor from 1987 – 2012, the highest it has reached is 7.75% and the lowest it ever reached is right now, 0.59%.

Genting perpetual was offered at $1 par value with 5.125% coupon at the time when the 12 month Sibor was about 0.59%. This implies that the market is willing to take on the risk of holding the perpetual with an additional interest rate spread of 4.535% ( 5.125%-0.59%) over the 12 month sibor.

Assuming the market expects this spread of 4.535% forever and we keep it as …

Perpetual bonds should not be a cause for concern

SGDividends — Wed, 16 May 2012 06:21:00 +0000

I ,being a small fry, have an investment in Genting Perpetual 5.125% retail which i bought during IPO for diversification. It’s only takes up about 5% of my investible assets, excluding property. Now that you know that i am vested,i want to say that i totally do not agree with MAS being alarmed by people buying perpetual bonds. By being alarmed and placing restrictions on these kind of investments, it will simply reduce investment alternatives and push retail investors into more exotic and more risky products.

I feel that for retail investors who do not know how to invest, perpetual bonds offer a relatively safe store of value, with Genting 5.125% matching inflation. The risk of perpetuals are as follows: Genting going bankkrupt being the worst case scenario or interest rate rising, making the price of Genting lower.

Let’s look at the worst case scenario, Genting going bankrupt. Holding the perpetuals is …

Increasingly Motivated Property Sellers

SGDividends — Fri, 06 Apr 2012 01:14:00 +0000

I was sent an Amortisation Tabe for Progressive Payment for a certain new development from a property agent. He is wasting his time as i told him politely i am not interested in property now as i expect it to go down. I am definitely not buying even after stamp duty rebates, furniture vouchers, special discount here and there, extended warranty and prices magically reducing by some weird way of calculation(hmm did i even hear a renovation rebate, valentines discount..) Setting ridiculously high asking prices and then reducing it is an old marketing trick.

However way i see it, i am increasingly more bearish on the property market. Let us look at the Amortisation Table sent by this agent who seems so persistant, i have to give it to him to at least read his emails.

The purchase price is $1,500,435 after all the discounts,30 years repayment, 80% loan …

Oil prices- a negative for property

SGDividends — Wed, 21 Mar 2012 10:48:00 +0000

Everyone knows that property has been propped up by low interest rates and excess cash liquidity in the world. If you haven’t noticed yet, the finance sector in Singapore has been silently retrenching people since last November.These banks are mainly those europe ones due to the euro-zone crisis. I am not too sure if these banks are as flush with liquidity given the bad loans that need to be forgiven, Greece for now. maybe Spain next?( 500 singtel employees retrenched and given a new role in Huawei..hmm for how long?Nice spin.SIA offers pilots unpaid leave for up to 2 years…Whats happening?Good deal for SIA)

Some people may say, the Central banks can just pump somemore money into the system to shore up the liquidity of these banks. True….but with oil prices slowly creeping up and inflation becoming more pervasive and with the …

Singapore housing loans FAQ: WHAT IS ASSET BASED LENDING Mortgage in Singapore

SGDividends — Sat, 11 Feb 2012 02:39:00 +0000

If you are looking to leverage on an illiquid asset to acquire some good debt to grow your wealth….Read on.

The following article is reprinted with permission from singaporehomeloans. All information or queries are to be directed to loans@propertybuyer.com.sg directly or mobile (sms) : +65 9782 8606.
(There is no affiliation between this website (sgdividends) and singaporehomeloans website and the owners are different)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Most banks in Singapore lend based on criteria such as debt to servicing ratio. The usual debt servicing ratio is capped at 50% to 60%.(Note: This is different from the financial planning guideline of setting the debt at 35% of monthly income.) Singapore banks who lend money based on asset based lending will assess your property valuation and lend you money based on your assets.However many banks do not engage in asset based lending as they deemed it risky. For those …

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 …

Japan last decades – a surprise!

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 …

Overseas Property Investment Part Two: Investment Considerations

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 …

No related posts.

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

No related posts.

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) …

First REIT’s land lease info: Hak Guna Bangunan (HGB) Rights

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

First REIT’s land lease info: Hak Guna Bangunan (HGB) Rights

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…….