Monday, March 19, 2018

My thoughts about the Singapore property market

Everywhere i turn, i can't escape from someone getting a windfall from their enbloc sale. My parents, my secondary school friend, my client, my cousin and the newspapers. And i didn't. Horror of horrors!
The following are taken from SRX.

Private property ( non landed) Sale - above and Rental- below index

HDB Sale- above and Rental-below Index
1) For private property, the price is increasing but the rental is decreasing. Coupled with increasing interest rates, i wonder what is the fuel that will sustain the price increases? Euphoria borne from the spate of enbloc sales? What else?

2) HDB is following a more logical path, price goes down and rental also go down. And not all HDB dwellers are with a bank loan as they can take HDB loan. Such will be immune to interest rate rises going forward.

3) If HDB rental continues to fall, where is the "floor" to support private property rental rates?

4) I can see on hindsight how property prices continued its appreciation till 2013 as property price increases are coupled with rental increases. ( not to mention low ir). 

Tuesday, December 26, 2017

About Bitcoins, Ethereum and other Altcoins

I feel like i am living in a tulip mania. Admittedly, i am not technologically inclined or maybe i am not as open-minded as i think i am. And it is very very difficult to tell what is real in this time and age. I feel more alone as i get older.
"Human action can be modified to some extent, but human nature cannot be changed. "- Abraham Lincoln.
I want to believe in digital currency but i can't seem to find the answers. People who have spoken to me have been mixing up Block Chain with Bitcoins, Ethereum, Litecoins or other Altcoins and showing me articles about major banks and MAS sanctioning trials on Block Chain instead.

Some questions that needs to be answered.
1) The advantage of digital currency is decentralised, so no one can control it.
But what happens when the digital currency vanishes, who do we turn to or is there insurance like SDIC 50k in singapore? Which country law to apply?
And it seems that it can be controlled or at least corrupted if a group takes over more than 51% of the mining power based on this link

2)The advantage of digitial currency is its limited supply, with Bitcoin purportedly capping the supply at 21 million coins. Miners , earn digital currency by verifying the transactions, so what happens when 21 million coins is reached? No more miners, mean nobody willing to verify anymore since there is electricity bills involved?
I think they will increase the cap when this is reached but then again, it contradicts its original aim which is to stop the disadvantage of money printing by governements.

3)Internet says it saves transaction cost compared with traditional credit card fees or wire fees. But when i see i want to convert into bitcoin or trade, the fees damn high like 5-6% for ATM conversion or 3.99% for some transactions. Is this a marketing lie about the fees involved?

4) Is it impossible to hack these kind of thing to steal? I understand that the information is stored in millions of computers so one cannot change one ledger without no one knowing since it wont tally with the others millions of computers ledger based on BlockChain technology. With a virus that can affect millions of computers at one go like wannacry or God knows what, is this really unhackable? At least for a centralised source, the company or bank can spent billions for security but for millions of computers who many dont or use low grade security, is it really safer?

5) The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to. It seems like there is transparency especially with all the negativity about secrecy agendas of the government so it appeals to the masses , BUT shouldnt open source be easier to hack and who has MORE motivation to check the codes, a person who wants to profit OR a person who is civic minded ?

Sunday, November 19, 2017

Some Corporate Bonds and their Yield to Maturity

To me, investing in corporate bonds is easier than investing in equities, because all one needs to care about is not whether the company makes more and more money in the future, but whether the company can make enough money to survive the holding period of the bond. 
However, needing to fork out generally $250k a unit ( except retail ones) adds to the risk. Given that there is little capital appreciation, the greediness to leverage looms large. I really need to give myself a slap in the face if i ever think about it and thank God, i have not levered ...yet.
The fall of Swiber, Marco Polo, krisenergy is a lesson for bondholders. Other than just simply looking at pure numbers, it is imperative to know what kind of assets a company holds. A company holding computers as assets does not give one peace of mind. 
Perpertual securities and preference shares are a very tricky lot and they must be adjusted for as in the end, it is still a liability to the company.
From the table, generally, the higher the liabilities/equity, the greater the yield to maturity (ytm). The further the maturity of the bond, the greater the yield to maturity.
Heeton seems very "value" from the perspective of it having a lower liabilities/equity than Tuan Sing, Oxley and Aspial but commanding a higher ytm.
(ytm taken from bondsupermart. liabilities/equity taken from financial statements.)

Wednesday, October 25, 2017

Committing Financial Harakiri and the ICBC Travel Mastercard

I will be going overseas to splurge on luxury watches (looking for Pateks and Audemars Piguet) hence committing financial harakiri. Sweat.... Actually, its a gift to people special so damn it, better make it bang for the buck. Save on the taxes. I can't possibly be carrying more than ten thousands of cash overseas. Fortunately, a special shoutout to a forumner called BBCwatcher who alerted the public on the ICBC Travel Mastercard. No link nor picture, as i am not advertising for them nor paid by them.

My motive of this post is for constructive feedback in case i did my calculations improperly or for any alerts if there is a better card out there for overseas foreign transaction because every cent counts.

The ICBC Travel Mastercard has a bank fee of 2.5% and an unlimited cashback of 3% on foreign transactions.

I used the following 2 websites.
1) The official Mastercard website that lists the indicative forex rates. We can input the bank fee which i inputted as 2.5%.
2) A money exchange website that lists the exchange rates that one can find in Singapore ( i am not being paid so no link).
Official Mastercard Website
Money exchange website
Nett cashbacks for transactions in stated currencies after bank fees 
(done on 25/10/2018 11.10am)
YEN = 0.41%
USD = 0.53%
AUD = 0.22%
MYR = 0.43%
NZD = 0.74%
EUR = 0.46%
KRW = 1.4%

The KRW and NZD are aberrations. I will need to observe them again as what Mastercard does is to convert foreign currencies to USD before converting to SGD. Since all foreign currencies have to be converted to USD first before being converted to SGD, it is unlikely that the nett cashback on any foreign currency to be higher than the nett cashback on USD. Perhaps the money exchange website isn't showing correctly for these rates. 

Wednesday, October 11, 2017

Unsatisfactory reply from SGX Regarding SIAEC - Part 2

Oh boy, i sound like the mad dog who refuses to let go.

Actually, if they have read my blog, they would have realised i already checked the annual reports and also checked the funds JP Morgan holds.

The annual report reflects many nominee accounts who hold shares for people and one of these nominee accounts could be holding shares for JP Morgan. Most likely DBS Nominees or Citbank Nominees since they are the only ones who hold more than 38.8 million shares. 

I understand the rule that a shareholder, holding less than 5%, do not need to issue notifications as they are not substantial shareholders. 

This reply email from SGX doesn't tell me anything i don't already know. Perhaps, it adds to my curiousity only.

What i am curious is:
1) How come SGX through their stockfacts service is aware that Matthews own 22 million and Seafarer owns 10 million but not aware that JP Morgan owns 38.8 million shares?
2) Is there some form of market manipulation going on where major news are allowed to broadcast news but no one knows what's happening and no one questions? I mean if im a big  boy and just releasing such unverified facts to move a share price without any cost, wow, easy money.
3) Can SGX stockfacts be relied upon and trusted? 

Which points me to another question. Why does SIA not want to privatise SIA engineering since it already owns 77% and save on listing fees?

Lots to learn..lots to learn

Tuesday, October 10, 2017

Unsatisfactory reply from SGX regarding SIAEC

Alamak. What kind of reply is this? Why is SGX asking me to clarify with the source of the information when it is already published publicly in Reuters and SPH Business Times .Unless they are implying the above news is unverified. 

Reply by SGX

Anyway,  for the sake of continous learning and curiousity, i have emailed back.

Saturday, October 7, 2017

SIA Engineering and JP Morgan Asset Management

I understand that SIA Engineering was dropped as a STI Component on 1 Sep 2017 and this remains the most possible explanation for now, though lingering doubts remain.

The Curious Case of SIA Engineering
SIA Engineering and try to make sense of JP Morgan's sale

Based on SGX website, the Edge Singapore mentioned JP Morgan Asset Management Real Assets (Singapore) Pte Ltd, so i went to google and it brought me to a list of funds managed by JP Morgan Asset Management.

The most likely place a stake such as SIA Engineering would be hiding in would be in the following 3 funds.

JP Morgan Funds - Singapore Fund (Total fund size of USD63 Million)
JP Morgan Funds - Singapore Fund

JP Morgan Funds - Asean Equity ( Total fund size of USD433.9 Million)
JP Morgan Funds - ASEAN Equity

JP Morgan Funds - Asia Pacific Equity (Total fund size of USD 919 Million)
JP Morgan Funds - Asia Pacific
Based on the total fund size and top ten holdings, it is impossible for SIA Engineering to be among the list of funds above, unless they bought it after July 2017. The traded volume, however, does not correspond to this hypothesis.
Maybe, it is in the other entities of JP Morgan. Anyhow, let's see what SGX emails back with.

Thursday, October 5, 2017

Sia Engineering - trying to make sense JP Morgan's sale

SIA Engineering's response to SGX queries still sheds no light on why JP Morgan offered to sell 28 million shares. Looking at the volume traded on 4 october, about 5.5 million shares changed hands through SGX. The past 2-3 months total volume also don't add up to 28 million which mean they haven't sold it yet. Could they have done it through a married deal and who is the counterparty? According to SGX rulebook, married deal needs to be reported.


Direct Business must be reported through the married trade reporting system of the Trading System under Rule 8.7.5.
I need to be educated on this.

How did Reuters or Bloomberg know about this? And why would JP Morgan make it a public news? Very curious.

Actually, people tend to focus on the bad news but every sale has a buyer and what if the buyer who is not known is warren buffet? Anyway, just some due diligence  before i decide to plonk in more money if it goes down further.

Comparing the 767 (old model ) vs 787(new model), indeed, SIA engineering, like Comfortdelgro, Singpost, SPH is facing the disruption due to new technologies. Using the above comparision, if every old plane is replaced with a new one and assuming the total number of planes serviced does not increase, SIA engineering will be facing with a 65% reduction in total man-hours.
We are indeed entering a new era of technology disrupting our lifes!