News in The Straits Times (31st Oct 2008)

Was reading the papers today and found 2 articles rather interesting

1 . Singapore central banks announces swap facility with Fed
Summary : Singapore's central bank announced on Thursday a swap facility with the U.S. Federal Reserve that will provide dollar liquidity of up to $30 billion to meet the needs of the banking system. ( The US Fed reserves also gave this swap facility to a few other countries. The gave it to Singapore because its the 2nd largest country, after Japan, in Asia that uses the USD .)

My thoughts : This is most likely a form of insurance just in case anything happens. I.e to prevent a rise in US $$ against the Singapore $$ when there is a shortage of USD in the market This is because currently, we should have sufficient USD,as it does not seem like trade with the US is going to increase very suddenly.
However this could imply that they are expecting more people to exchange SGD for USD..and probably more trading with the US...or at least not to discourage trading with the US. Because a weak Singapore dollar would mean we have to pay more to buy stuff for the US, discouraging us from buying from them.

link: http://sg.news.yahoo.com/rtrs/20081030/tbs-singapore-centralbank-a5a65c6.html

2. Singapore's Accounting Standards Council (ACS) adopts new standards for reclassification of financial assets


Summary : In the near future, financial instruments that Companies use do not have to be marked to the Market condition. Hence affecting the profit and loss statement.
This is because presently many firms are so called 'booking a loss' because some assets ( particularly assets that do not drop in value if held to maturity) that they are holding have a major drop in value, even though the company might be doing well, hence affecting their financial statement.

My thoughts: This is a short term way to help companies improve their financial report in the coming year. Luckily this is a one way change, meaning even in good times, they cannot over inflate their earnings using these assets.
Thus in the future, when looking at financial sheets, one still has to remember the change in accounting practices and evaluate the true worth of the company by including these special assets that might have rise with market conditions.

link: http://www.channelnewsasia.com/stories/singaporebusinessnews/view/386625/1/.html

Fed cuts key interest rate to 1%

Yup, the US Feds have done it again. They have cut the key interest rate by 0.5% to the present 1%. It was 5.25 % not too long ago.

This could be the reason why the market rallied yesterday, and MAYBE for the next few days.

But from experience, usually after this minor rally, the stock markets will still continue to fall. As fundamentals in the economy has not changed yet. Like I said, it will take at least half a year for such rate cuts to be felt through the economy....so it means that the past few rate cuts have not been helping much ( signaling that a real problem is in the economy and has not been solved yet).

Trade with caution, do NOT be lured into this minor rally...but then again, the final decision is yours..personally i would think this would be a good time to start shorting ( but would need to look at the charts before deciding, been busy lately, so the charts have to wait..)


*Disclaimer : What ever appears on the blog is for your own reference only. It is not an investment/trading advice. It is always best to consult your personal financial adviser before parting with your money.

POSB Everday Card

Saw this on the newspaper today. (30 Oct 2008) However this card has been around for quite some time already..

Rebates at a glance	Rebate
SP Services - Utilities	1%*
SPC - Petrol	5%**
Carrefour - Groceries/Hypermart	5%
StarHub - Mobile, Digital Cable & Broadband Services	1%*
Dining/Fashion/Electronics/Home & Decor	Up to 20%
Purchases at non-participating merchants	0.3%
Watsons - Health & Beauty	3%

*Have to charge it through recurring bill ( Something like pay by GIRO)

Tips

• Pay your electric bills( Everyone has to pay it anyway, why not save some $$ doing so)
• Pay for your Starhub services ( Usually its subscription base, might as well use GIRO to pay and start saving!)
• Shopping at Carrefour ( Maybank only covers Cold Storage and NTUC =p )
  

You can either find out more from my credit card's post :
http://ntuchartist.blogspot.com/2008/10/credit-cards-singapore.html

OR

the POSB Everyday Card Site :
http://www.dbs.com/posb/cards/everyday/

Credit Cards ( Singapore)

Found a good link that compares the credit cards available in Singapore.


http://www.compare.sg/

It gives a simple review of most of the credit cards in Singapore and includes information like:

1. Privileges of the cards
2. Minimum Annual Income
3. Interest rate to pay if you choose not to pay up in full
4. Annual Fee
5. How long is the annual fee waived if you apply
6. Link to know more about the card
7. Link to apply for the card

Also,before applying for the card, besides the information given on this site, try to find out more on :

1. What is the minimum sum you must pay per month if you choose to defer the payment to the following month.
2. Minimum finance charge(The minimum interest rate you need to pay a month)
3. The interest rate/minimum charge for using their cash advance. ( If you were to use their credit card to draw cash)
   

Gut feel and analysis was right after all !

Friday's recommendation (24th Oct 2008)
Buy STI 1800BNPeCW090330 at 0.245 ( selling price in market)

Tuesday's Morning ( 28th Oct 2008 9.49AM )
STI 1800BNPeCW090330 (buying price in market = 0.18 )
There paper loss of 26.5% !!

Tuesday Close ( 28th Oct 2008 5pm)
STI 1800BNPeCW090330 at 0.275
Paper profit of 12.2% !!


Hence my gut feeling together with the technical analysis done on friday was right! And if you actually follow through and had faith to hold till the end of the day, you would have made a profit of 12.2% !!

This maybe purely conincidental, but I believe technical anaylsis will give you a higher chance to be correct, thought its not always 100% right.


*Disclaimer : What ever appears on the blog is for your own reference only. It is not an investment/trading advice. It is always best to consult your personal financial adviser before parting with your money.

Bank of East Aisa facing problems

Remember not too long ago that I recommended this bank's fixed deposit. Its really high, at 2.125% for 6months. Link at : http://ntuchartist.blogspot.com/2008/10/fixed-deposit-deals-as-of-18th-oct-2008.html

The brief picture:

Apparently the bank is facing problems, because their earnings was inflated by one of its traders and other losses due to their collateralize debt obligations. Though some people have been taking out their deposits from the bank as they worry about the stability of the bank, the bank states that they are are still in a strong position.
Last year, this bank is Hong Kong's fifth largest bank by assets reported a net profit of HK$4.14 billion.

Link: http://www.forbes.com/2008/09/25/bank-east-asia-markets-equity-cx_tw_0925markets01.html


What I feel:

I am not sure whether the fixed deposit promotion is still on or not, but if you have put your money there already, I have confidence that our MAS has the ability to guaranteed your deposits. So that should be the least of your worries.
The only problem is that if BEA(Bank of East Asia) really falls, it will take time for you to get your money back. As the Deposit Insurance Scheme will only apply, after the bank that falls has sold all its assets and is still unable to compensate you. ( This will definitely take lots of time!)
In other words, your money will be stuck there for a while.

Volatile Market

The stock market yesterday was really bad.

As for the paper trade that I was talking about. The value of the STI 1800BNPeCW090330 is now 0.18, meaning a paper lost of around 26.5%. This is quite a big sum of $$ to lose within a week end.


So far the jumps in the indexes are all crazy! In the past any rise/drop of more than 3% is considered to be big. But nowadays, jumps for even 10% occurs. Hence if you were to play around with index warrants, you could either make lots of $$ or lose lots of it! Hence please trade within your means.

In general, going long in a good company would be the best way to investment, but that does not mean a little short term trading will do any harm. For example, since the market is dropping so steadily, a small punt in index put warrants might make you some extra bucks. However please note that you should do your homework 1st, and not buy when they is a high chance of a rebound, hence losing $$ on your put warrants. And once again, only punt with cash you can spare!

Happy Deepavali

Yup, totally forgotten that today's a public holiday when I was predicting the stock market to rebound either today or tomorrow.

But anyway.. Happy Deepavali to all! =)

Mr Lee Kok Beng Warrant Trading System

Hi all, I got this from another blog.

Personally this is also something that I look at too and so far, to me, it looks relatively reliable. However it DOES NOT work all the time, so just take it with a pinch of salt.

*Disclaimer : What ever appears on the blog is for your own reference only. It is not an investment/trading advice. It is always best to consult your personal financial adviser before parting with your money.

The System

In memory of Mr Lee Kok Beng - a former CNA forumer, as he was reportedly to have passed away earlier this year, I will like and hope that his Warrant Trading System can be passed down for anyone who is interested to apply his way of trading the warrant markets.

His method is so far applicable in the Singapore Warrant Market, so I'm not sure if it may work in any market other than from Singapore.

The below is his suggested trading rules to decide whether to open an overnight position :

1. 4 pm wait for Hong Kong market to close
2. 4 pm ~ 4:30pm look at Dow Jones futures and European market whether they move in the same direction eg up or down
3. If DJIA futures is >+30 points then buy HSI call warrants
4. If DJIA is <-30 points then buy HSI put warrants.
5. If the DJIA value is between -30 and 30 points then stay sideline.

If an overnight position has been opened, then now it's the time to close the position. An important to always keep in mind that, the position must be closed without greed and fear. Here it is the rules :

1. Check the US market overnight closing before Singapore market opens.
2. If US and Asian markets (ie japan and Singapore stock markets) close down, then cut loss immediately when singapore market opens or before HK market opens.
3. If Singapore market is up, then it's time to take profit before HK market opens.

About the Hong Kong and Singapore operating hours :

Singapore Exchange :

• - 9 am ~ 12:30 pm
• - 2 pm ~ 5 pm

Hong Kong Exchange :

• - 10 am ~ 12.30 pm
• - 2.30 pm ~ 4 pm

* Gotten from http://stockpage.blogspot.com/

Food: Beef Steaks

Food is my passion too..haha. Shall put some nice food recommendations that i come across in this blog too. =)

This article is taken from the Sunday Times 26 Oct 2008

Recession and how I think it will affect Singapore

Was reading the Sunday times today and find that many people do not really understand how the present financial crisis is going to affect us, especially the younger generation.

In my opinion, and as like many others, the actual crisis has not really hit Singapore yet. The stock market is usually 6 months ahead of the actual economy. With such a bad stock market now, it means that people anticipate bad times in the near future.

• In an economic crisis, and in our case, also a credit crisis. Companies are not able to get their funding from banks or would have to get their loans at a higher interest rates. Hence this will hamper the company profits.
• Since companies are not able to sell more stuff in a crisis, they will have to cut cost.Hence the workers will get lower pay or even lose their jobs.
• When people lose their jobs, they will start to worry more and spend less.
• Lower spending will in turn decrease the earnings from companies, which triggers a viscous cycle.
• The government in a bid to restore Singapore competitiveness might lower the Singapore $$, making our exports to other countries cheaper but making our imports more expensive. Things like mac books, dairy products and other stuff will get more expensive. Even things like oil will get relatively more expensive and will trigger an increase in transportation, power and other cost, which will eventually be passed onto the normal people like us.
• Hence you can see that for the common people like us, we are going to face hard times with reduced pay but increased cost of living.

This is the really simplified version that I can think of. But of course that are MANY MANY other things that will happen too.

So for you people who are spending money as though it is free, it is seriously time to control the spending. For i foresee tough times ahead of us.

Flaws and improvements in Rolling $$ from credit cards

Just had some feed back. Apparently this method does not work that well because of certain factors like:

1. The payment date for different cards could be on different days, so you might actually need 3 cards to do this looping of credit cards.
2. The moment you actually draw cash out of the credit card, you will incur an administrative charge and an interest rate.

In my opinion, the 1st problem is not really that big. However to the second problem, according to an article that is based in the USA, it is possible to write a check and the payment is done through the credit card and it does not incur an admin fee. ( However this is subject to terms and conditions of the credit card and might not apply to all cards) Also, this will increase the amount of hassle involved every month.
Hence i cannot comment on how well it will work in Singapore or, yet.

The best option is the legitimately use the card to purchase something in which you can draw out the money. As of what this option might be..i have not though of it yet. If any one has any ideas? Feel free to email me at ntuchartist@hotmail.com



Apparently DBS credit cards can be used to pay for diners club and American Express cards, link for DBS at : http://www.dbs.com.sg/sg/personal/ibanking/paymentsvc/


Credit problem ( Updated 2nd Dec 2008)
Apparently doing the rolling of money will affect your credit status, and will affect your ability to get a loan, like housing and car loan from the bank. So i guess you should only reserve this idea when you are really in need on cash.

Gut Feeling

The STI is 1591 as on now, 4.56pm.

I got a feeling that if the closing value is around the same. The should be a technical rebound either on Monday or Tuesday. This is because the drop is really too large, it falls outside the bollinger band.

So lets paper trade, lets say we buy an STI call warrant as of now , 4.55pm
STI 1800BNPeCW090330 at 0.245 ( which is the selling price)

we will check our profit again on Monday and Tuesday.


*Disclaimer : What ever appears on the blog is for your own reference only. It is not an investment/trading advice. It is always best to consult your personal financial adviser before parting with your money.

Downtrend still intact

The trend lines still show that the down trend is still intact.

Short term MACD has a bearish crossover
ADX is high, saying that the current trend is strong.
RSI is low, at a value of 27%, however it is not lower than 11% which occurred on 10 Oct ( so that oversold yet)
However, the chart is nearing the lower band of the bollinger band. ( hence reaching a support line)

Judging from the indicators, the STI is going to keep on falling. Looking at the blue lines I have drawn, only short when it reaches the upper of the blue lines, because the lower of the blue lines is acting as a 'support' and the top as a resistance.


some basic explanations of Technical indicators can be found at
http://www.chartnexus.com/learning/#indicators



*Disclaimer : What ever appears on the blog is for your own reference only. It is not an investment/trading advice. It is always best to consult your personal financial adviser before parting with your money.

Rolling $$ across credit cards

Was thinking recently about how to earn some simple $$ or extend your credit terms for your payment. However this requires that you have a credit card, and preferably a high credit limit on all the cards.

The basic idea

1. Get 2 credit cards ( lets label them as A,B)
2. Using card A, you pay for something
3. At the end of the month, use card B to promptly pay for card A.
4. At the end of the following month, you will use card A to pay back for card B.
5. Repeat 2 and 3 till you decide to pay off the debt by using the cash that you have.

See the potential in this system? ( I am not sure whether banks have a rule on this though)
Lets see how we can make use of this system...

Improving on the idea...

• Say we have 12 credit cards, with $5000 limit on each.
• Hence we are able to have 6 groups of 2 cards each.
• Each group, we will draw out $5000.
• Total we have 6groups X $5000 each = $30,000 at any one time
• Putting this cash into a fixed deposit for a year ( or how ever long you want )
• From the fixed deposit ( at an interest rate of 1.8% per year) you will get $30,000 x 1.8% = $540 per year

As you can see, we are getting free $!
Thus in order to maximize your returns, you will have to

1. Get more credit cards
2. Increase your limit
3. Make sure you pay promptly every month!

Any people got any views on this? Please comment..thanks!


Apparently there are flaws in my ideas, as suggested by readers. I shall update on problems and possible improvements this link :

http://ntuchartist.blogspot.com/2008/10/flaws-and-improvements-in-rolling-from.html

Nanyang Business School's Professors Discuss the Financial Crisis

This video is an 1 hr long, however I find it really informative and gives a really good insight of the crisis from different perspective. The link can be found at :

http://www.nanyangbusinessschool.ntu.edu.sg/announcements/public/images/attachments/pdFinancialCrisis_20081020.wmv


Below is a rough summary of what I feel is good to know, categorized by the different speakers.

Prof Tan

• 0 growth for 2009
• The recovery of the Singapore economy will be a U shaped one, different from the V shaped ones we had in the past.
• Small and Medium Enterprise (SME) will have difficulty getting funding from the banks, as the banks will view SMEs as entities with higher risk than as compared to in the past.
• If countries/ world bank would like to get money from the East, they should also incoperate the money values of these countries. I.e give more monetary power to the east after this crisis.

Prof Huang

• Missing out on the 10 best days in the last decade, will affect your investment gain by half.
• Unless you can perfectly time the market, it is better to remain vested in the market and ride the bear market.

Dr Low

• The reason for MAS to guarantee all deposits, is because other countries in the region are doing so. So in order to remain competitive as a regional wealth management hub, we do not have the choice but to follow.
  

• By guaranteeing all the deposits in the bank, we are punishing those banks that are prudent in their risk management. This is because people will just put their money into the banks who gives the highest interest rates. Hence this might change the way banks manage their risk in the future. In another words, there is no incentive to be 'good' in good times, as there will be always someone you bail you out when a crisis happens.

Prof Suman

• The actual defaulting of loan in the US is not really the main cause of the sub prime. But rather it is the lost of confidence of the people in financial institutions. He mentions about how their sub prime debts, which are high risk, can be packaged and rated as A and sold to people all over the world. And when problems from the 'relatively' small sub prime arise, people started to wonder about the ratings and lose confidence, thus pulling their money out of the market, causing a chain reaction.

Prof Singh

• This could be a start of the shifting of economic powers from the west to the east.( Just a theory of his)
  

* Credits given to NTU's Nanyang Business School for hosting this event

Some investment opinons

Just had a chat with an old friend yesterday. We were discussing about different views on investing.

Just a little more info about this friend of mine. He was an engineering graduate and has been working for a few years now.However he has decided that his present job is not for him and would be changing to investment banking after his current job. His interest in the financial sector is also very strong, up to the extent that he wanted to change course in university, but due to practical reasons, he did not do it.

His investment philosophy is 'Think Business, not stock'. This is really true for the real value investor. You do not only need to look at financial reports of the company, but you would also have to fully understand the business and know how it operates. Going down to company to look at how it works and how the business look is also part of the process. For example, if you were to buy a stock of Eu Yan Sang, it would be best if you visit their branches and find out how they sell their goods, how they market themselves, how they make use of shop area etc.


In my opinion, though I feel that this should be the way investment firms do their analysis of any company, it is quite impossible for an individual to do this kind of in depth analysis on all the companies in the Singapore stock market.
Also, knowing how good the business is does not really mean that you can accurately give a 'market price' for the stock. Usually what the professional investment managers do is that they use a projected earnings model together with discounted cash flow to 'give' a price to the stock. One major flaw i realized about this is that the projected earning tend to vary quite some bit, depending on the market condition.


Giving a very simple example.

Lets say i know that the company earns $0.20 per stock per year. And i predict the PE ( price to earnings ratio) to be 10. Hence the 'market price' of the stock should be $2.

However, due to the economic downturn, with bad market sentiments, the PE ratio can suddenly be downgraded to say 6 times. And the investment managers with issue a new sell call, saying that the stocks is only worth 6 X $0.20 = $.120 . That is a 40% drop in stock price!

Of course this is a hypothetical stock, however many such cases do exist. In good times, stock pricing are extremely highly due to over projection of PE ratio and earnings. On the other hand, in bad times like now, people also tend to under project the earnings of a company suppressing the true value of the company.



Therefore in my opinion, even though you should 'think business, not stock' it is difficult for most people to achieve this highest level of stock investing philosophy. Hence the best way for the most of us would be to practice the use of FA(Fundamental analysis) and TA ( Technical Analysis).

FA: You look at the company report sheet and see how much profits they are marking and whether it is sustainable.Look at the PE ratio and compare it with other companies in the same sector and determine whether it is inflated. Looking at how they use their debts is also important. To go further in depth, you might want to look at their earnings/loss breakdown. Sometimes, even though a big profit is reported, it could be the company selling off their building in a one off event, and thus it would not happen in the following year.

TA: This is what I am focusing on right now. Though it is always said that whatever happens in the past does not necessary mean it will happen in future, I find that in the relatively short time frame, stocks do follow a general trend. There are many school of theory that supports this kind of analysis though there as as many that reject the idea.
One aspect that I could think off is that, big funds usually practice this. In fact, they use computers to execute buy/sell orders base on some set of rules. Usually these set of rules make use of TA, since FA doesn't change that fast in a short time. Hence when a market actually falls below certain trend line, these computers might actually get triggered to sell off all the fund's stock and cause a further drop in stock prices. You can say that this is something like a self fulfilling prophecy.


In all, investment values varies from people to people. But I think that a combination on FA and TA is essential to succeed. Knowing what company to buy depends on FA, however knowing when to buy is also as important, hence the need to know TA.

Stock with high dividends

This are high divined yielding stocks

Above is a list of companies where their :

1. Divined yield is more than 5%
   
2. Market capitalization is more than $50 million (relatively larger companies)

This list in my opinion shows company that has a chance of giving out high dividends. Hence they might be thought as better 'fixed deposits' However we must take into consideration that the price of the stock may drop and hence there is risk of losing your capital. Also, this list generated does not take into account the dividend payout that takes into account one off events. ( I.e. a special dividend that does not occur every year)



Dividend Yield (%)

The amount of dividends declared divided by a stock's current market price.

Some companies may opt not to pay dividends, preferring instead to reward investors through stock appreciation that results from plowing all earnings back into the company.

* Credits given to Phillip securities stock research tools.

* The data shown is not an advice to buy/sell the stocks. Always remember to consult your financial adviser before parting with your money.

Undervalued stocks

Above is a list of companies where their :

1. Price to Book ratio is less than 0.8 ( This is how i define 'undervalued' )
   
2. Market capitalization is more than $500 million (large companies)
   

However, I will not trust the ,price to tangible book ratio, of REIT and trusts in general. This is because their so called 'book value' could be inflated. As the economy worsens, their assets could be worth less, and hence their stock value will also drop.

Also this list in my opinion, serves to show companies in the stock market that are undervalued and large enough to be relatively stable by as given by the search criteria.


Price to Tangible Book

This is the Current Price divided by the latest annual Tangible Book Value Per Share. Tangible Book Value Per Share is defined as Book Value minus Goodwill and Intangible Assets divided by the Shares Outstanding at the end of the fiscal period.

In short, you take the current price of the company divided by the value of the company if you were to sell the whole company. Being less than one usually means that its undervalue. )

Market Cap

This value is calculated by multiplying the current Price by the current number of Shares Outstanding.

In short, this is roughly how much the total company is worth. Bigger value usually mean that they are a bigger company, hence in my own personal opinion, more stable.

* Credits given to Phillip securities stock research tools.

* The data shown is not an advice to buy/sell the stocks. Always remember to consult your financial adviser before parting with your money.

Saving accounts ( at a glance)

Taken from The Sunday times ( 19 Oct 2008)

Parc Vista Condominum for Rent

Here are some pictures of the Parc Vista Condominium :

Living Room


As you can see from the picture, the living room comes with a full Home entertainment system with a brand new 42" LCD TV! It has also a brand new set of sofa with ample space to house a small party!


Being on the 6th floor, the view of the pool is fantastic! =p ( taken from the window of the living room)


Master Bed room and attached toilet
The master bed room comes with its own TV and a King sized bed
The attached bathroom has an elegant feel , with the gold trimmings to give the 'posh hotel' feel
Bedroom 2
Bedroom 2 comes with a super single bed. Nice and cosy, the decoration will definitely appeal to the kids!

Pool view from the window of bedroom 2

Bedroom 3

Bedroom 3 comes with a super single size bed with a 2 seater sofa. The large wardrobe will definitely be enough for everyone!

Pool view out of the window of bedroom 3


Bedroom 4

The second biggest room in the house. It comes with a study desk and a 3 seater sofa

Family Hall

Fully furnished as seen. Comes with a 32" TV and has enough seats for the whole family ( extra space for that house party too!)

Kitchen/Dining Area
Dining area is connected to the kitchen through the window on the top right of the picture

Fully equipped kitchen. I.e. Refrigerator, microwave over, pots, pans, etc.


Laundry area
Comes with washing machine and clothes dryer ( Wash and wear your clothes in the same day!)



Finally the important details!

4 bedrooms, 2 family halls, 1 dining area,3 toilets and has 2 entrance
1700 SQ feet
5min walk to lakeside mrt station, near NTU!
Rooms have pool side view =p
Fully furnished, ready to move in! ( i.e beds, fridge, tables,air cons, washing machine, oven,brand new 42" LCD HD TV , brand new set of sofa etc.)

Asking for $3500/mth

contact ntuchartist@hotmail.com if you are interested.


More information on Parc Vista Condominum in general can be found at :
http://www.singaporeexpats.com/singapore-property-pictures/condo/parc-vista.htm

Funny comics

Maybank Family and Friends Platinum Mastercard

Advantages:

• Sign up before 31st Dec and get $100 cash credit your account! ( Yes free $$ )
• 10 year Annual Fee Waiver ( sign up before 31st Dec )
  
• 5% cash rebate for :

1. Delivery for Mac, KFC,PizzaHut,Canadian Pizza, Oishi Pizza
2. NTUC Fairprice, NTUC Finest, NTUC X-tra
3. Cold storage ( All major outlets)
4. Petrol ( Malaysia only)
5. GNC
6. Guardian Pharmacy
7. Abbott Nutrition
8. Popular book store
9. Supplementary card is free!
   

And many more!! and also there are other kinds of cash rebates that comes with this card!

Disadvantages:

• Must not be a present Maybank Credit Card holder and/or have not canceled their Maybank credit card prior to this promotion
  
• At least 21
• Income of minimum $30,000 a year

more information at : http://info.maybank2u.com.sg/personal/card_services/familyandfriends/plat_mastercard.htm

Fixed deposit deals as of 22th Apr 09

Recently interest rates are dropping to really low rates. Hence I will only list those FDs that I personally think has the best rates.

I try my best to keep the fixed deposit deals as accurate as possible. But i recommend giving the companies a call first before actually going down to the company.

The highest interest rate now should be by CIMB bank

• CIMB bank StarSaver Account (12th Aug 2009)

Link to the website here

Minimum deposit S$5,000.

Month-end incremental deposit	Interest Rate
S$500 or more	1.2%** p.a.
Less than S$500	0.5% p.a.

However, you can put in a lump sum and the whole amount will enjoy the 1.2% (provided you have at least $5500)

This is how it works.

Say you put in $10,000

$5,000 will got into the 'minimum. The remaing 5k will be able to provide you a 1.2% interest for $5000/500=10 months.

Therefore by putting in $10000, you will enjoy an effective interest rates of 1.2% p.a. on the WHOLE $10,000.

Things to note

• No minimum balance required. However there is an early closure fee. Therefore, just withdraw all the cash when required and just leave the account open
• No ATM card
• No Internet banking
• Free cheque books
• The interest is compounded monthly, but the effective interest per year is 1.2% => its less than 1.2%p.a. monthly

I personally find it a good place to park your spare cash, as it has the highest interest rates for liquid assets. You can transfer the money out by just writing a cheque.




Also, here is their FD rates for SGD

1.70% p.a. for 24 months
1.20% p.a. for 12 months
0.75% p.a. for 6 months
0.50% p.a. for 3 months

Promotional rates are for a minimum deposit of SGD10,000 and up to a maximum of SGD500,000

Link to the FD promotion here

Stock picks

A reader recently gave a feedback and requested for some stock picks.

In my opinion, in the current market, it is actually advisable to trade along with the market trend and not try to be a contraian ( someone who goes against the market). This is because, on a really bad trading day, no matter how good the stock is, it will usually drop too.

Hence at the moment, I believe in predicting when the STI index will drop or fall though the use of technical analysis. It might not be full proof, but at least you are not playing against the odds.

Also, through the simulations that I ran using chartnexus for the period of the last 1 year, shorting works the best. I.e try not to pick a stock to buy now, but rather, pick a stock to short by using CFDs or futures. ( The risk is really high, so please consult your financial adviser before doing so)

Market recovery is not really expected yet. So try not to go long for the moment. Even though it might be cheap now, it might get even cheaper. If you are really itching to buy, use the dollar cost averaging method. Buy a little at a time in regular intervals. This is because you can never really predict when the exact market bottom is. However you can increase your returns by using the method nearer the time frame where it is around the bottom that you forecast. And in my opinion, it will at least be May09.

Revision In Maybank Isavvy Account

New interest rates as of 20 oct 2008
Daily balance of below S$5,000 0.25%p.a
Daily balance of S$5,000 to below S$50,000 1.08%p.a.
Daily balance of S$50,000 and above 1.38%p.a.


Old interest rates
Daily balance of below S$5,000 0.25%p.a
Daily balance of S$5,000 to below S$50,000 0.88%p.a.
Daily balance of S$50,000 and above 1.18%p.a.



No catch! Its a good 'normal savings account'

Advantage

• Good interest rate!
• No lock in period, you can withdraw the money any time you want
• For above $50,000 its better than Standard Chartered e$aver
  

Disadvantage

• No bank book, everything is done online
• Cannot draw money over the counter, but if you want they will charge a nominal fee
  
• Maximum internet bank transfer of $10,000 per day. But i guess this is a lot for most people
• For below $50,000 its not as good as Standard Chartered e$aver.
  

More information can be found at : http://info.maybank2u.com.sg/wmc/deposits_rates_revision.asp

Just for laughs ( Japanese Banks)

Japanese Banks in Crisis

Following the problems in the sub-prime lending market in America
and the run on Northern Rock in the UK, uncertainty has now hit
Japan .

In the last 7 days, Origami Bank has folded, Sumo Bank has gone
belly up and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and
will likely go for a song, while today shares in Kamikaze Bank were
suspended after they
nose-dived.

While Samurai Bank is soldiering on following sharp cutbacks, Ninja
Bank is reported to have taken a hit, but they remain in the black.

Furthermore, 500 staff at Karate Bank got the chop and analysts
report that there is something fishy going on at Sushi Bank where
it is feared that staff may get a raw deal.

Heard that those at Harakiri Bank who were once known to be risk-takers have now lost their guts, and those at Nippon Bank are no longer painting the town red.
Those at Toyota Bank have not been spared from the car-nage, and Judo Bank was totally thrown off cos they never saw it coming.
Sayonara Bank just said its goodbye, and Miso Bank is also in hot soup. As last reported, Ramen Bank was holding on to its last strand of hope.


* This was taken from an email that was sent to me by a friend

Singapore Deposit Insurance Corporation

Remember me mentioning about the Deposit Insurance Act in the last few posts? Here are some details about the act ( As of 16oct. Because MAS, the Monetary Authority of Singapore just annoucned that they will guarantee all Singdollar and foreign currency deposits of individual and non-bank customers in licensed banks, finance companies and merchant banks. Cited from : http://www.channelnewsasia.com/stories/singaporelocalnews/view/383331/1/.html )

• These are the financial institutions that are covered

1. Full Banks

   ABN AMRO BANK NV

   AMERICAN EXPRESS BANK LTD

   BANGKOK BANK PUBLIC COMPANY LIMITED

   BANK OF AMERICA, NATIONAL ASSOCIATION

   BANK OF CHINA LIMITED

   BANK OF EAST ASIA LTD

   BANK OF INDIA

   BANK OF SINGAPORE LTD

   BANK OF TOKYO-MITSUBISHI UFJ, LTD

   BNP PARIBAS

   CALYON

   CIMB BANK BERHAD

   CITIBANK NA

   CITIBANK SINGAPORE LIMITED

   DBS BANK LTD

   FAR EASTERN BANK LTD

   HL BANK

   HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

   INDIAN BANK

   INDIAN OVERSEAS BANK

   JPMORGAN CHASE BANK, N.A.

   MALAYAN BANKING BHD

   MIZUHO CORPORATE BANK LTD

   OVERSEA-CHINESE BANKING CORPN LTD

   PT BANK NEGARA INDONESIA (PERSERO) TBK

   RHB BANK BERHAD

   STANDARD CHARTERED BANK

   STATE BANK OF INDIA

   SUMITOMO MITSUI BANKING CORPORATION

   UCO BANK

   UNITED OVERSEAS BANK LTD

   Finance Companies

   HONG LEONG FINANCE LIMITED

   SING INVESTMENTS & FINANCE LIMITED

   SINGAPURA FINANCE LTD

• It insures only
  

1. Savings accounts
2. Fixed deposit accounts
3. Current accounts
4. Deposits under the CPF Investment Scheme
5. foreign currency deposits

• Does not insure
  

1. structured deposits
2. deposits placed as collateral
3. investment products such as unit trusts, shares and other securities

All the above information can be found from the site: http://www.sdic.org.sg/ ( however only $20,000 is guaranteed by the Insurance scheme. The rest of your $$ is guaranteed by MAS)


It is good to take note of such information. This is because any there is any company that wants to take in your money and keep it as a 'fixed deposit', it will most likely fall under this scheme. Hence if they do not appear under this list, then there might be something dubious about the company.

Guarantee on Singapore Deposits?

MAS is still deciding on whether to guarantee all deposits in Singapore as Hong Hong has already done so. In my opinion, since MAS is very confident that Singapore banks have sound fundamentals, they should follow suit. If not they might actually lose the money of the high net worth people to Hong Kong....UNLESS there is something that they are not telling us, but i frankly doubt so....All this in in turn will strengthen Singapore's presence as a financial hub, and might actually give us a boost in our economy for the upcoming year, as regional funds managers/investors will flock to Singapore.

Back to the charts, US market doesn't look too good at the moment. Its currently 8960, 350 points (3.76%) down from yesterday. If this keeps up till the end of their day, the TA on them will turn bearish, which might in turn affect the Singapore market. However based solely the TA off the Singapore market, there is still no distinct short term downward trend yet.

Views about the Singapore market using TA and FA

Looking at the charts, done based on closing of 14th oct. Signals have turned up for the short term.
MACD: it has cross over the signal
Trend lines: It has broke the resistance of the converging downward trend line (for the short term)
Moving average: It has crossed over the 5 and 7 days moving average.

Though I expect profit taking to set it. And also due to the fact that Japan goverenment has flushed out 9.8 billion dollars ( cited from http://sg.news.yahoo.com/afp/20081015/tts-finance-banking-japan-bank-money-7d7070a.html ) The temporary uptrend still looks intact for now.


On the fundamental side
I was just reading an article. It says that due to the global credit crisis, companies which are cash rich will tend to do better. This is because they do not face as much financing problems as companies that require financing ( borrowing cash from banks) to do their business. An example of a cash rich company presently, based on the report is SPH ( the one that prints our newspaper) Companies like REITs ( real estate investment trust) on the other hand, tend to do worst, as they would be be able to get the financing required to expand their their business and do better.

Feed back

Hello Readers!

I would like to ask for suggestions as to what kind of information should I add into the blog..Feel free to leave a comment.

Thanks!

Daily Market Report (14 oct 08 )

Here is the free daily market report that is not available to most people.

https://www.yousendit.com/download/Y2o5ckhUays5eFZjR0E9PQ


The Market rebounded really strongly as I predicted in my post on 12 Oct. Coincidence? It could be, but i believe that Technical analysis gives me a higher chance to predict it correctly than trying to guess it blindly.

POSB My savings Account

The rebound today is huge!

The POSB My savings account is ideal for people who want to start a savings account with higher interest rate than an ordinary account. Though the interest rate is lower than that of NTUC incomes's ( from my previous posts) , some people might feel that POSB is a larger, thus safer bank. However in both cases, they are both insured under the Deposit Insurance scheme ( i.e if the bank fails, you will stil get back at least $20,000 from MAS)

The rough details of the POSB My savings account as follows

• Earn higher interest rates on the money in your savings account, depending on how much you choose to put in every month( monthly contribution is fixed at the start of the plan)
  
• However once you draw out any money or fail to contribute for the month, the interest rate for the month will fall to 0.45% ( which is still higher than the ordinary 0.25%)
  

Rates based on contribution is as follows

MYSAVINGS ACCOUNT (Interest rate is based on the Monthly Savings Amount) FOR MONTHLY SAVINGS AMOUNT
$50 - $290	0.4500%
$300 - $790	1.0000%
$800 - $1,490	1.2000%
$1,500 - $3,000	1.5000%

Links to POSB web site at
http://www.dbs.com.sg/posb/deposit/

Good interest earning accounts

Here are a list of good interest earning accounts. I shall elaborate it on them some other times.

• POSB My Savings
• Citibank Stepup account
• Maybank Isavvy
• Standard Charted Esavers

Short selling did not cause fall of Singapore stock market. Ban of short selling uncalled for

Business Times - 24 Sep 2008

COMMENTARY
SGX short-selling measures fall short

Regulator hasn't addressed the heart of the short-selling equation: the quantities and names of scrip lent to short-sellers

By RSIVANITHY

AFTER resisting for years suggestions made in this newspaper to improve transparency relating to short-selling and the buying-in market (BT, Nov 16, 2004, 'Revive cash market to run in tandem with buying-in'; April 24, 2007, 'Time for exchange to relook buying-in process'; and June 18, 2007, 'Being fairer to investors'), the Singapore Exchange (SGX) on Monday finally caved in - not to calls from the media but presumably to pressure from the public to accompany other exchanges that have banned 'naked' short-selling.

Thankfully, SGX has at least stayed true to its long-time position that no outright ban is needed as long as the deterrents are sufficient. And news that there will be daily disclosure of outstanding short positions and the buying-in list is welcome.

However, in trying to demonstrate solidarity with its peers around the globe, SGX has acted too hastily, in imposing a minimum $1,000 fine on failed trades which have to be bought-in later.

Worse, it appears from buying-in figures released under the new measures that naked short-selling is not a problem in the local market - which in turn means that the focus should really have been on disclosure of covered positions. Unfortunately, this was not addressed.

Let's consider, first, the official reluctance to outlaw shorting. This is a controversial stand given that other countries are in effect making shorting temporarily illegal.

But, on balance, it is the correct approach since in a free market, there should be minimal regulatory interference to bias prices in any particular direction. Still, recognising that the sale of something not owned can raise moral and ethical issues, the exchange has always had in place a set of rules aimed at deterring the activity via punitive buying-in costs.

That this system is actually working well in discouraging naked shorts can be seen from the list of bought-in stocks yesterday that was published on SGX's website. These were for positions left uncovered (or naked) on Wednesday, Sept 17, when the Straits Times Index plunged 42 points to 2,419 and when $1.4 billion was traded.

Yesterday's buying-in, however, involved only 45 counters excluding warrants, with the smallest buying-in quantity being 320 shares of M1 and the largest being 138,147 shares of China Hongxing Sports. Can such small quantities be reasonably said to have aggravated the drop that day? Also, buying-in on Monday, which was for naked shorts on Tuesday, Sept 16 - when the STI dropped 25 points and the market traded $1.6 billion - amounted to only $7.4 million, of which $4.2 million came from one stock (China Hongxing Sports).

In other words, naked shorts accounted for less than 0.5 per cent of turnover that day - again, insignificant.

Unnecessary move

This means that buying-in details released by SGX so far confirm that naked short-selling cannot be a major factor in aggravating the market's declines and that the exchange's deterrent mechanism is functioning properly.

(Of course, intra-day shorting could aggravate a downward slide but these sellers have to buy before 5pm, and in so doing provide support before the end of the day.)

The final proof came yesterday when, despite the new measures, the STI plunged 67 points or 2.7 per cent to 2,476.

All of this suggests that the latest move to fine naked shorts at least 5 per cent of their trades subject to a $1,000 minimum is clearly an overreaction and not necessary. None of the figures above suggests an intent to systematically engineer a collapse, so the parties that will end up being penalised will most probably be inadvertent, innocent retail investors.

Moreover, SGX has not addressed the heart of the short-selling equation: the quantities and names of scrip that have been lent to those seeking to short the market.

Known as 'covered' shorts, information relating to these positions would be just as useful to the public as releasing the list of stocks to be bought-in every day.

Hong Kong recognises this and, twice a day, its exchange releases a report summarising the stocks which have been borrowed and the quantities lent.

Here, SGX and several other houses offer scrip borrowing and lending (SBL). The exchange should compile data on outstanding positions from all SBL providers and publish this information as soon as possible after the market closes every day.

This was not addressed in the Monday announcement; instead, all energies were aimed at the insignificant naked shorts.

You'd have to say that insofar as the intention was to enhance disclosure and help investors' decision- making, SGX's Monday move to fine naked shorts has not only missed the mark, it has also fallen short.

Sample of Securities reseach

This is a sample of a daily report on the world market by phillip securities.

• Broker's recommendation by Phillip Securities
  
• Singapore's company related news that happened in the previous 1 day
• Local and Regional headlines
• US market News
• Changes in share transaction of big share holders in companies ( so it gives you an idea on what people inside the company think of the company )
  
• Earnings announcement of Singapore companies
• And many many more..

Here is where to get the report:

https://www.yousendit.com/download/Y2o4clVCZEtTRTVjR0E9PQ

Still unsafe to short

I decide to include the Dow Jones for my analysis of the up coming week.

Dow Jones: Parabolic SAR : Still shows that the market will continue in a downtrend
MA: The 5 day MA is still below the 7 day MA, which shows a bearish trend, however the divergence shows that it might be reversing soon
Bollinger band: Its way outside the band for a while, and is bound to go back in. As the dotted lines represents standard deviation from the mean, hence statically , the stock price should not vary too far away from its mean.
MACD: Its showing a large divergence away from the signal. And in general it signals that there might be a reversal
RSI: its at 19%, super oversold. and looking from the past, a rebound is bound to happen.

As you can see though the Dow Jones is in a bad shape now, but from the charts, a rebound is bound to happen soon . The day should be coming very very soon.



STI
Parabolic SAR : Still shows that market will continue in a downtrend
MA: The 5 day MA is still below the 7day MA, which shows a bearish trend, however the divergence shows that something might be reversing soon
Bollinger band: Its outside the band and will definitely go back in soon, i.e a rebound
MACD: Its showing a large divergence away from the signal. And in general it signals that there might be a reversal soon.
RSI: its at 11%,its even more super oversold than the Dow Jones.

As you can see, the Singapore market does have a trend similar to that of the US market. However I do not think the rebound on the Singapore market will be bigger than the US market just yet. Because, Singaporeans are mostly 'kiasu'. Given the bad market sentiments, most people would not dare to load up on the stocks yet.


In general:

Looking at how the signals are all pointing, and how far the index is from its mean, I anticipate a world wide rebound within the next 2 weeks ( lets see ..) This could be trigger by many facors,including possible package to save the economy in the world. Frankly, anything can happen.

I still suggest to hold off the shorting for the time being. I anticipate the rebound to be a big one. It better to be safe than sorry, as this blog aims to use TA is to decrease the chances of making a wrong mistake, thus increasing the the chances of making a right one. Remember that capital preservation is important in investing/trading.

Hold on tight for the next 2 weeks!

Why everyone should invest early

Many people feel that investing should be left only to the very rich. However I feel that it should be practiced by everyone, young and old. The problem is that many people only realized that they should invest only when they get older, thus losing out on the time factor.
In this post i will demonstrate the importance of time factor.

Time factor
The comparison is done between 3 working adult who have savings of $15,000 each at the age 30 and decides to use this sum of $$ for their retirement, say at age 65.

Guy1 : He invests in a mix of medium to low risk products, giving him an average interest rate of 5%

At the end of 35 years, excluding inflation.
He gets : $15,000 x 1.05^35 = $82740

Guy2: Invest in the same products but at a later age,say 40 when he gets more financial savvy.
A the end of 25 years, excluding inflation.
He gets : $15,000 x 1.05^24 = $50795

Guy3: He does not do anything with him $$ and leaves it in an ordinary savings account with an interest rate of 0.25% per year
At the end of 35 years.
He gets: $15,000 x 1.0025^35= $16369

As you can see the difference between Guy 1 and GUy2, starting earlier by 10 years, gives him an additional 82740-50795= $31956! ( starting early is good!)
and the different between Guy2 and Guy3= 50795-16369 = $34426 ( its never too late to invest!)

A small sum of $$ also goes a long way if you have a very advantage in time factor. Say for example a University student with savings of $2000. If he were to invest it at 5% per year(super conservative estimate) at the end of 45years when he retires. He will get

$2000 x 1.05%45 = $17970 which is really not too bad, considering how little he will get if the money is left in an ordinary savings account.

I shall discuss about investment time risk factor in the next post. The time risk factors applies mostly to fixed deposits and bonds. Where locking in the money at a particular time and interest rates, subject you to the risk of not being able to put that particular sum of money into a new product with a higher interest rate.

Good savings Account

Good deal on a good interest account found. Thanks to Zheng Qiang.

It is the 'NTUC Thrift Savings account' . The effective interest rate per year is 1.5% ( updated 02 NOV 2008 ) That's really high considering the present market. However there are a few conditions..

• Sign up as a thrift member, however there is no membership fee, just that you must open your savings account with at least $20. ( not an issue i think, since you are going to open the account anyway
• The max amount you can open the account with is $1000. Hence if you are thinking of using it as a fixed deposit for the money you have presently, it might not be as useful.
• You have to top up the account from anywhere between $30-$1000 via GIRO every month. Hence the name 'savings account'
• Nothing has been said about what will happen to the interest earned if you take your money out. However i can not confirm this from the webby, if you are interested, you might want to check out with NTUC first before placing your deposits
  

This i feel i really a very good savings account, as the minimum top up every month is low, and is deal for all of the people who have just started working.

However, for those richer people, who wan to save more..i.e more than $1000 a mth, an alternative will the POSB My savings account and the Citibank step up account, though their interest rates are much lower but it is still higher than an ordinary savings account. More on that in future posts. Also, nothing has been said about what will happen to the interest earned if you take your money out. However i can not confirm this from the webby.

Links to the NTUC thrift savings account can be found at
: http://www.ntuc.org.sg/members/member_benefits_NTUC_Thrift.asp

Ban on Short Selling in the US is lifted

Yup, the initial ban was to prevent the US stock market from dropping too fast.
To those who do not know the implications, let me explain.

Short selling refers to selling stocks you do not own, and hoping to buy back the stocks at a lower price. Hence it creates an impression that more people are selling away stocks than the actual number of people who do actually WANT to sell their stocks.

This problem is magnified when institution investors ( fund mangers and people with lots of $$) start to do this. Because to everyone else in the market, all they see is frantic selling of stocks. And due to herd mentality, they will get scare too and sell the stocks that they own. With more people doing this, the chain effect can be devastating. Finally the ones who profit are these people who short sold at first, and 'covered'( buy back) from the panicked stock owners.

However i feel that the ban was uncalled for..it looks as though US wants to manipulate the market. Purposely changing the rules of stock trading, just to save their own market. There is theoretically nothing wrong with a bear market. Market goes in cycles! It is natural that it corrects itself. I don't see them banning the buying of stocks when the market go up. All this however is just from a logical perspective. The ban was mainly to save companies and people who have invested lost of $$ in the US companies. So i guess its 'right' to have the ban, sounds like I am contradicting myself..haha.

So, now with the ban lifted, i think drops could be more pronounced, but technical rebound will be bigger, cost shortist will definitely need to cover back, and generally they will cover back around the same time, leading to a rally. More on the trading mechanism of the stock market will be discussed in my future posts.

Fix deposits 2

Just in case those people who are lazy to go read up from the previous post, finatiQ is still a bank. Your deposits that you put there are insured under the deposit insurance act, which I believe is $20,000. I.e if the bank were to go bankrupt like those in the US, you will at least get back $20,000.
This act also applies to all Singapore banks in Singapore..i think, or at least it applies to those that we commonly see, like UOB,POSB,DBS, OCBC etc.

Ok now to explain why people should at least put your unused $$ in fixed deposits rather than leave it lying around in your normal bank account. Lets give a simple scenerio. For example you have $20,000 at the age of 30. And decide not to do anything with the $$ till 60.

At End of 30 years, at the average normal interest rate of a saving account of 0.25%
you get: $20,000 x (1.0025)^30 = $21555

At End of 30 years, at an average interest rate of of 3% ( this is the conservative estimate because on average the risk free 10 year Singapore government bonds have an average of 3% already)
you get: $20,000 x (1.03)^30 = $48,545

Difference of $48545-$21555= $26990

As you can see, for just making the effort to do this risk free investing, you can get an extra of
of $26,990!!

Frankly the normals savings interest is peanuts...your $$ is rotting there due to inflation. You should at least leave it in non-fixed bank accounts that gives higher interest rates. Yup, its true, there are actually bank accounts with savings interest rate double of that of POSB. I will come more to that after my discussions on fixed deposits.

*Just to simulate with the finatiQ's 1.6% interest for 30 years
you get: $20,000 x (1.016)^30= $32198
this still is $32198-$21555= $11343 more than leaving it in a savings acocunt.

As you can see, in the current economy, the interest rates are not very good, its below the average. Hence if you feel that interest rates will rise, DO NOT dump ALL your cash into a much longer term fixed deposit just because it it gives a measly 0.1% more than a short term one. Go for a shorter term fixed deposit and when it matured, you can transfer it to another fixed deposit that has a higher interest rate. In my opinion, short term refers to 6-12mths. Anything longer is long term.

Every little bit of effort you put into investing your $$ goes a long way, especially if you are young. The time factor works to our advantage.