Author: The Fifth Person

CapitaLand Commercial Trust declares 3.3% higher DPU of 2.19 cents for 1Q

CapitaLand Commercial Trust (CCT) has declared a distribution per unit (DPU) of 2.19 cents for 1Q 2016. This is 3.3% above the 1Q 2015 DPU of 2.12 cents. Based on the annualised 1Q 2016 DPU and CCT’s closing price per unit of $1.42 on Thursday, CCT’s distribution yield is 6.2%. The trust’s distributable income of$64.8 million in 1Q16 was 3.3% higher than the $62.7 million achieved in 1Q15. This was largely due to higher distributable income from its 40% and 60% interests in CapitaGreen and Raffles City Singapore respectively, said CapitaLand Commercial Trust Management, the manager of CCT. Gross revenue came in 1.9% lower at $66.9 million while net property income came...

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Keppel reports 41% fall in 1Q earnings to $211 million

Keppel Corporation reported a 41% fall in IQ earnings to $211 million, or 11.6 cents, from a year ago. Keppel said the higher contribution from its property division at 47% helped to partially offset lower profits from Offshore & Marine. Its Offshore & Marine division delivered three drilling jackups in IQ, including one unit to Gulf Drilling International at the start of the year. It also delivered a liftboat and a Transformer platform. Keppel said it is working closely with our customers for “winwin outcomes” wherever possible. Earlier this year, Transocean and Ensco have announced the deferment of their projects. Deliveries of two...

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6 things I learned from CapitaLand Commercial Trust’s FY2015 AGM

Singapore’s economic outlook for 2016 is modest despite challenges. The finance and insurance sectors are expected to support overall growth, and the manufacturing sector is likely to remain weak. Growth in labor-intensive sectors such as retail and food trades may be hampered due to labor constraints. Hence, office leasing demand is likely to be suppressed. In addition, there are also supply concerns with a large quantum of new office space expected to come on-stream within the next 12 months. Marina One, DUO, Guoco Tower are just a few of the many upcoming developments in 2016 that might pose as...

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MAS moves to protect Singapore’s economy with surprise easing

The Singapore economy grew at a respectable rate of 1.8% on a quarterly basis for Q1/2016 which was above analysts’ expectations of 1.6%. Despite the decent growth, the Monetary Authority of Singapore (MAS) surprised the market by announcing a new policy last Thursday to basically stop the appreciation of the Singapore dollar (SGD). The SGD immediately weakened against the USD and in the first hour alone, weakened 0.85% from S$1.3502 to S$1.3617 to one US dollar. The MAS has not made such a move since the 2008 Global Financial Crisis. This means, in my opinion, that the MAS foresees...

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5 important questions to ask when choosing an asset manager

You’ve probably heard about passive investing or ETF investing: If you can’t beat the market (and most people can’t), why not just buy the market? It’s a lazy way to invest but you do outperform many people because you’re essentially getting market returns. The recent boom in ETFs offer investors a multitude of choices to allocate their capital. You can invest in the well-known STI ETF (ES3 or G3B), S&P 500 ETF, various bond ETFs and even on triple leveraged (3x) Russia bull/bear ETFs. ETFs can offer anything from staid market indices to oil futures to fear itself (VIX...

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The 80/20 rule of fundamentals-based investing

For most people, value investing makes a lot of sense. Find a business worth a dollar and buy it for 50 cents. Easy enough. And yet, many people (even self-professed long-term investors) find it extremely challenging to implement this in practice. Investors routinely enter the market at high points, only to exit collectively at the low points. This isn’t for a lack of trying or expertise. Institutional behaviour is equally complicit in promoting this herd like mentality. There is no doubt in my mind that individuals armed with CFAs and MBAs working at investment management firms or brokerages are overwhelmingly...

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OSIM International: 6 Things I Learned from the FY2015 AGM

OSIM International (SGX: O23) has been in the news recently due to CEO Ron Sim’s offer to privatize the company at $1.32 a share — which he later raised to $1.39. In my previous article, I made the argument that OSIM is currently undervalued and is worth at least $1.47 a share. With that in mind, I decided to attend OSIM’s FY2015 AGM to gain some insight into the company and Ron Sim’s plans moving forward. Here are six things I learned from OSIM’s FY2015 AGM: 1. Drop in revenue is due to business cycles Ron Sim mentioned that...

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Asia’s ageing population drives demand for dividends

With the current birth rate and without immigration, Singapore’s population will begin to shrink around 2025. By 2030, there will only be 2.1 working-age citizens to support each citizen aged 65 and above. As such, of the “four Ds” impacting companies in Asia, we think Demographics will create opportunities for dividend investors. Global stock markets have been rocked by short-term volatility triggered by falling commodity prices and the start of the US Federal Reserve’s hiking cycle. Despite the more dovish comments, the Federal Open Market Committee remains in hiking mode, with its expectation for two rate increases this year...

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OSIM’s Ron Sim Raises Privatisation Offer to $1.39 a Share

OSIM International’s Chairman and CEO, Ron Sim, has raised his offer to buy the remaining 30.75% stake in the company he and his family do not own to $1.39 a share from $1.32 a share. The final offer price represents a premium of about 38.8% and 40.6% to the volume-weighted average price a share for the corresponding one-month and three month periods up to and including Feb 29, 2016, respectively. Shareholders who accept the offer will receive an amount that will be adjusted to reflect whether they have received the FY2015 final dividend of two cents a share, with effect from April 6, 2016, which is the...

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OSIM International: Why it’s Worth More Than Ron Sim’s Offer of $1.32 Per Share

Chairman and CEO of OSIM International, Ron Sim, announced on 7 March 2016 that he plans to take the company private and offer to buy out remaining shareholders at $1.32 per share – a 7.8% premium to OSIM’s last traded price of $1.225 on 1 March.  Shortly after the announcement, OSIM surged to $1.38 per share – six cents higher then Sim’s offer price.  It seems investors are valuing the company higher than Sim’s $310 million cash offer. OSIM traded as high as $2.90 per share in 2014 but fell to as low as 77 cents in the last...

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Central Banks, Negative Interest Rates, and the Threat of Deflation

There were a record number of hedge funds reporting results far underperforming the S&P 500, and some even closing down. Ackman went as far to blame everyone and everything about his poor performance, Einhorn’s longs crumbled whilst his shorts (Netflix and Amazon) rocketed. It’s a pretty bad time to be a hedge fund manager. One chief complaint is on central banks. You see, hedge funds in general make bets on security prices due to prevailing market sentiments or mispricing of securities. If you tend not to believe in the efficient market hypothesis, then you’d know that if the hedge...

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StarHub’s Acquisition of Stake in mm2 Asia Strengthens Original Content Production Capabilities

BNP Paribas reckons that StarHub’s acquisition of a 9.05% stake in Catalist-listed mm2 Asia should strengthen the formers original content production capabilities. On Tuesday, StarHub announced the stake acquisition for $18 million. This will be undertaken via a share placement by mm2 Asia of 44 million new shares. The acquisition is targeted for completion in May 2016. The broker estimates that the acquisition implies c20x EV/EBITDA based on mm2 Asia’s EBITDA in the FY ended March 2015. mm2 Asia is a producer and distributor of TV and online content, as well as film. In the FY ended March 2015, content production...

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2 Reasons Why the Fed Refused to Raise Interest Rates This Month

The Federal Reserve last raised interest rates by 25 basis points on 16 December 2015. That was the first rate hike in nearly a decade. During that historic meeting, the Fed framed market expectations with their forecast of four rate hikes for 2016. Hence, the market expected a 25 basis point hike every quarter starting March 2016. On 16 March 2016, the Federal Open Market Committee (FOMC) announced that they had decided to hold interest rates at the range of 0.25-0.50% instead of raising rates further. In addition, they changed their forecast from four to two rate hikes this...

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Auric Pacific: Director Acquires $2.3 Million in Shares and 4 Important Things You Need to Know

Auric Pacific Group Limited (APGL) (SGX: A23) came to our attention recently when our editor-in-chief, Adam Wong, was trawling company announcements on the SGX. (I know… he has no life.) He noticed a number of insider trades in APGL – particularly by one executive director, Dr Andy Adhiwana. Executive director Dr Andy Adhiwana has been acquiring shares of APGL from September 2015 till date. He has purchased a total of 3.2 million shares at a total value of $2.3 million so far. The average purchase price is $0.72 per share. In the process, he has increased his ownership from 21.88%...

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Why Warren Buffett is the Osama Bin Laden of Capitalism

Everyone’s heard of him, everyone’s read about him, many people want to emulate his style of investing, some would pay obscene amounts just to lunch with him, the media adores him, Eugene Fama hates him (maybe) and Bill Gates loves playing bridge with him. Warren Buffett is the all-time greatest investing folk hero of our generation and we can’t get enough of him. Despite his fame and wealth, some people haven’t a clue what he actually does to get rich. Most think he simply buys stocks on the cheap like Coca-Cola and holds it for life, that may be...

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