Monday, December 28, 2009

General Economy Stuff in my Head

It's been a while since I did a hardcore financial/economic blog post. So I will just pen down some stuffs that I have in my head.

1. The Chinese Yuan
  • China is determined not to let the Yuan rise as this will make their exports expensive to other countries, thus reducing their competitiveness. This will be disadvantages for many manufacturing countries. Reiterating that eventually China will not lose its grip as the 'factory of the whole' in the years to come.
  • In addition, it also means that large scare manufacturing company will eventually have to move over to China.
  • They can afford to suppress the valuation of the Yuan because of the large amount of foreign reserve which they have, which actually comes from the large sales of their goods to other countries, which in turn increases their foreign reserves. So as you can see, it is a vicious cycle, and China will have the upper hand
  • On a side note,t I noticed while watching the movie 2012, it tells about how the currency to buy a place on the 'Ark' is in Euros and not in USD, and the building of the Arks were also done in China. Interesting...
2. STI

The STI has been inching up,slowly but steadily. However it appears to me that it will be reaching a 'stationay point' (like in math) soon. I.e. the curve is smoothing off to a peak that looks like it's going to be the fibonnaci line of 61.8% at index value around 2949.(Seen from the graph below)

Also, small caps are running like crazy, and IPOs are having big one day jumps in prices. The last time that we saw this occurrence was just before the financial crisis in Oct 2007. This is making we worry. I am currently quite heavily invested in stocks. So I am still contemplating whether to back away from the market soon..maybe in January after the Capricorn effect.

Go and pursue a business!

I am sure many of you out there must have thought about achieving financial freedom, if not why invest?

In my opinion, another way to achieve freedom (in addition to financial freedom) is to set up your own business.

Frankly, many big business start from really small start ups. For example in today's Life section, it talks about Mr Eldwin Chua, 32, a former Zi Char cook who now owns 8 restaurants including the $4 million taste Paradise at Ion Orchard. But we must also remember that route to success is never easy, and statistically, the odds are against us as 80% of companies will fail within 5 years of start up.

However, this should not deter us from trying. If solely based on this statistics, it means that if you own 5 business, at least one will continue after the 5 years! And like investing, a multi-bagger stock can potentially recoup all the losses from other stocks and give you a massive returns! The upward potential is limitless. (Not an accurate way of reading the statistics, but we should always be optimistic)

Therefore I am urging all those who have ideas and would like to pursue it to drop me an email at NTUchartist@hotmail.com .We can discuss it through and see how it goes from there. But I can assure you that you will have 100% of my commitment, but I also expect the same from you.

Sunday, December 20, 2009

Back from Hong Kong



Above are some photos from my trip.


Some interesting observations that I made in Hong Kong are

  • People there are VERY interested in finance. You see people looking at stocks everywhere, a bunch of old people can be gathering near a small screen near an ATM machine looking at the jumping of the prices in the Hang Seng Index. Also, they have countless magazines talking about investment/money etc. The most amazing thing is that I saw an episode of a lecture on Technical Analysis from the Hong Kong University broadcasting on a Sunday Morning!
  • They have property rental shops everywhere! I believe this can be viable in Singapore. A physical presence will be very useful for expats who are coming to Singapore in search of a flat. The unique thing about these shops is that the company holds onto the keys of the flats, hence the customer can actually view all the flats immediately! This is similar to those in the UK.
  • People there trade car park lots like houses. A carpark lot actually comes with a title deed!
  • I am sure most of you who have been to Hong Kong have seen the dessert shop Xue Liu Shan. It is a dessert shop specializing in selling deserts that are made up of mangoes. I heard that there was a branch in Singapore a few years back, but it failed. I wondered what happened. But frankly, I do see a possible market for this dessert shop in Singapore. Only problem is the high price of the desserts.

Wednesday, December 9, 2009

Off to Hong Kong

I will flying over to Hong Kong for a short holiday and will give some insights and observations of the country.

Anyway, those of you who realized, the china penny stocks are surging like crazy over the last 2 days while the STI index is relatively stagnant...this is causing me to worry a little.

This is because, the last time this happened over a consistent period of time, i.e penny stocks surged while the blue chips are relatively stagnant, a major correction followed after it. This might be a signal that the market might correct soon. So set your stop losses!

I also believe that stop losses are important, even in 'long term investment', this is because I had a bad experience when I did not set my stop losses. (The reason is simple. A stock that drop 50%, needs to gain back 100% in order for you to break even. That's tough!)

Also, if you want to trade China stocks, I have a good stock in mind, ChinaMilk. This is researched by a friend of mine, BT. Just last week, it was trading at around 27 cents which I really wanted to buy in, because the company is actually holding around the equivilant of cash on hand. (meaning, if you can take over the company and liquidate it, you can get back around the same amount of $$, excluding their fixed assets and other stuff) The only thing that I worry is that their core business is doing REALLY badly, with revenue of some businesses dropping over 90%!

But frankly their cash on hand is really enticing. However the stock has started to run. In my opinion, just wait and not rush in. The stock might still run up, like all the other China stocks, but unless there is good reason to back it up, it is pure speculation and thus will definitely correct itself!

Saturday, November 28, 2009

Asian's Banks Exposure to Dubai and the Middle East

As many of you all might have realized, Dubai is asking for 6 more months to pay back its debt. This somehow has caused the whole world's economy to go into panic.

But as quickly as the news came out, many companies/banks/brokerage houses are coming out with reports and statistics to help assure the general public and investors.

Firstly, here is the actual news (Taken from The Straits Times 1 ) :

Dubai's government investment firm Dubai World shocked markets on Thursday when it asked for a six-month delay in repaying a US$59 billion (S$81 billion) tranche of its total debt of US$80 billion.


Next, according to another report by The Straits Times 2:

Local firms like Property group City Developments (CDL) which have links with companies in Dubai come up to assure the public that their investments are safe. In the case of CDL, if Dubai chooses to default on it payments, CDL will just invest more capital but will thus end up with a greater share of the investment.

Now comes the reports by brokerage houses. Here are some facts and figures done by Citibank:

Source: Citi Investment Research and Kinner's Dealogic file

  • Asian Banks have little, if any exposure to Dubai
  • Dubai's exposure to the world's banks is actually $22 Billion out of the $80 Billion debt
  • Main 2 banks are Standard Charted and HSBC due to their operations in the middle east
  1. Standard Charted ( US$14bn at 1H09, equal to 7.6% of group loans and 60% of equity), but this refers to the WHOLE of middle east, not only Dubai
  2. HSBC (US$15.9bn at 1H09, equal to 1.7% of group loans and 13% of equity), but this refer to the UAE, not only Dubai
  • Below are some bank exposure to Dubai
As you can see, actually there is not much need for alarm. Just that it proves to show that even oil rich countries can be in debt.

In my opinion, unless something major actually happens, this news is actually exaggerated by the media and thus indirectly causing mass panic among investors. Thus, this might actually be a good opportunity to invest in some of the bank stocks which will/might be beaten down due to the general bad market sentiments. Especially for those who have totally no exposure to the Middle East at all.

If any of you want the actual report on the Asian Banks by Citibank, do drop me an email at ntuchartist@hotmail.com

Wednesday, November 25, 2009

USD and its implication



Here is the summary of the above video:
  • Since March, the USD has been dropping
  • This is because of the excess USD supply due to the bail out by the FEDs
  • The central bank has been buying 3 times more EURO than USD, implying the switching to EUROs as the reserve currency
  • Since March, USD has slide 70% compared to the Euro/Aussie and 46% to the pound
  • FEDs should not be raising their interest rates for the timing being because this will increase the borrowing cost by corporations, limiting their growth
  • Gold to go up higher, because its a safe asset

Things that I would like to add:
  • In my opinion, commodities like gold are trending up, because of 2 main reasons.
  1. The basic supply and demand. Meaning if more people wants gold, the price will go up.
  2. Gold is usually denominated in USD. So if the USD depreciates, the price will go up. (Imagine that you have a 1kg gold bar, bought with 100USD. If in 1 year's time, USD's depreciates, you need more USD to buy the same 1 kg of gold bar. Hence the price of the gold bar effectively increases, though its worth is the same.)
  • I'm actually still optimistic about the stock market. The market is still trading sideways, but if you realized, its gradually trending up. So I feel that it is actually a good time to invest, while everyone's still quite uncertain.
  • Personally, if the government have been revising our growth upwards, Singapore should be expected to do relatively well in the coming months. It is not that I am bias towards the Singapore government, but we have to admit that they do have above average foresight.
  • Actually a depreciating currency is good for people to borrow. For example, you borrow USD100 to buy gold. Assuming gold does not drop in value, with a depreciation of the USD, in 1 year time, your gold will be worth say for example USD110. So you can sell your gold, return the USD100 and whatever interest to the bank, and pocket the profit!

Tuesday, November 10, 2009

Rickmers Maritime's problem!

Rickmers Maritime (RM) has issued a dividend. However as feared, one of their ships on lease is having its contract terminated on Feb 2010. Hence if they are unable to find another taker for this ship, or if they have to lower the charter price for the ship,this will prove detrimental to RM's income.

So..tentatively some stock brokerage firms are having a sell call on this stock.

Once again as I said, if you believe in the long term potential of the shipping industry, which I feel will definitely be strong once more, you can consider this stock. However, because of the recent news, do give it a few days for the stock to stabilize before buying.

In general, whenever news of a stock is just announced, I do recommend that you give it a few days for the market to digest the news before buying into the stock. This is because there might be many people speculating on the stocks due to the news, so if you are a long term investor, you would not want to be too affected by the immediate news. (However this is my own personal opinion, but it actually varies, depending on the news too)

Thursday, November 5, 2009

Arbitrage Opportunity for Kreit

As of the end of today,

The price of Kreit is as follows:

Kreit $1.01
Kreit Rights $0.06

The cost of converting a right to the stock is $0.93

Hence if you buy the rights and convert them to the stock, the actual price that you will be buying is $0.93 + $0.06 = $0.99 which is 2 cents cheaper than the current traded price.

Hence if you intend to buy this stock for the long term, it is cheaper to buy the rights instead of the stock, if you are going to buy into this stock. In addition, the commission charge that you will be paying would be lesser also because of the lower overall transaction amount.

However if you are going to trade this rights, I suggest you stay away from it. Because it acts similar to a warrant, giving you high leverage but this has a very short lifespan, expiring on 9 Nov.

This works in genera for stocks where they have rights that are facing such scenarios where the conversion price plus the nil paid rights (rights traded on the market before they are converted to stocks) are actually cheaper than the mother stock itself. Thus giving you an opportunity to buy the mother stock at a cheaper price.

Thursday, October 29, 2009

STI to go down?

In my opinion, the uptrend is still intact, unless STI drops below 2621.

So those are investing for the long term, and have faith that the Singapore economy will recover soon, this might actually be a good pull back for you to nibble into the stock market.

Buy at your own risk!

Tuesday, October 27, 2009

My 2 stock picks based on Fundamental Analysis (FA)

Though I am an advocate of Technical Analysis (TA), I do believe in buying undervalued stocks for the long term. I did some stock picking using POEMs' Dataline and,DBS Vickers' Clarity.

Using their software to sieve out stocks. These are the 2 stocks that I chanced upon.

1. United Engineers :

They are a construction firm that also provides other value added services to the construction job. One of their sample project is the Park Central at Ang Mo Kio. I am looking at this due to its gross undervalued share price. And the potential of more HDB housings popping up at Punggol and Seng Kang!

These are some ratio that I took note of based on their price of $1.74 :
  • Market Capitalization : SGD 400.9 million
  • Gross Profit Margin: 22.6%
  • Price to Book ratio: 0.5
  • Price of 1 stock / Amount of cash company is currently holding per share: 0.5
  • Dividend : 3.46%
2. Rickmers Maritime :


Its a shipping firm in essence. I am looking at this, because the Baltic Dry Index has been on the rise recently, but there has been no movement in shipping stocks. The Baltic Dry Index is actually a leading indicator of economy activity, as it measure international shipping prices of various dry bulk cargo daily!

SOO..if its increasing, it means economic activity should be picking up. With greater demand for ships, and the fact that you cannot build more ships overnight, the shipping industry will make more $$. On the other hand, if the economy does not pick up, it will mean that they will suffer great losses. Moreover, Rickmes Maritime is having a ship's contract due in the next 4 years, though most of its other ships have long term contracts ( A key risk in my opinion)

These are some ratio that I took note of based on their price of $0.385:
  • Market Capitalization : SGD 158 million
  • Price to Book ratio: 0.33
  • Price of 1 stock / Amount of cash company is currently holding per share: 0.1
  • Dividend : 27.88%
Any comments?

Monday, October 19, 2009

Set Stop Loss!

I was extremely bullish in the last post. But I forgot to reiterate, remember to set stop loss!

For me, my stop loss is set at STI 2665 (Around the index prior to the mini rally. i.e on the 13th Oct) So there is some room for the index to bounce around.

This is because I feel that 2700 is a psychological line! Do remember that support and resistance lines are not exact, but it is a region where such support/resistance is felt. So you must always give a little more space.

But do keep to the limit that you set! And no give yourself more 'space' in an event the stock moves against you.

Thursday, October 15, 2009

Analysis of the Break out of STI and HSI !!

As you can see from the charts of 'STI break out' and 'HSI break out' I personally feel that this is the 'big move' that all of us have been waiting for.


STI Break out


HSI Break out


In addition, the duration, where they break out of the Fibonacci ratios has also increased, but this is also partly logical, because the market will tend to slow down after initial bigger movements. But do take note, if its take way too long to have the next break out, something bad might be brewing.

Last, I have also bought into an STI call warrants yesterday, when I saw the HSI the resistance line during the intra day trading. My reason for doing so is as follows:

As seen from the chart below,
  • HSI and STI are closely linked
  • They follow the Fibonacci ratios quite closely
  • Realized that either market will 'lead' the other market in breaking out of the Fibonacci lines, as shown in the red circles that I have drawn (Chart below). And this difference in time is not very long. Its like within the week itself.
  • As of yesterday's intra-day trading, Hang Seng broke the resistance quite easily, while STI struggles to go past 2700. However because of this 'HSI following STI or STI following HSI when breaking out' that I assumed. I bought the STI warrants.


As for now, like I said in one of my recent post a feel weeks back, it is still safer to blindly go long now, then trying to time a short!

*Just an opinion of mine

Monday, October 5, 2009

Suntec REIT a good buy?

I have consolidated some data on REITs in Singapore from 2 sources, Dated 22 and 25 Sep 2009.

Image 1 (For dividend image and gearing)


Image 2 ( For Price to NAV image)


Image 3 (For estimated future Net Asset Value, NAV)


Just to clarify, the first image is take from one report, and the 2nd and 3rd image from another report.

From Image 1, we can see that Suntec has one of highest dividend yield in Singapore. Not considering those REITs that are heavily invested in overseas properties. And at a dividend yield of 8%, its attractive! Considering the low bank interest rates now.

In addition in image 1, we can see Suntec has a gearing of 33.9%. This means that it has a debt to equity ratio of 33.9%. Personally I feel that 33.9% is still a healthy value, meaning Suntec is not taking too much loan/debt. ( A low ratio gearing ratio might mean that the company is not taking enough risks to make $$, but a extremely high ratio could also mean that the company is taking excessive risks! and might not be able to pay back the debt. Therefore how much gearing is good, is subjective.)

From Image 2 and 3, we will be looking at price and net asset value. Suntec has one of lowest Price to NAV according to image 2.

In image 3, this particular brokerage report expects Suntec's NAV to drop heavily because of the investment properties i.e the value of Suntec City,Park Mall. The drop is expected to be around 30%!

As seen from my previous post on brokerage firms, values estimated by brokerage firms should be taken with a pinch of salt. In my personal opinion, I do not feel that the asset value of Suntec's properties will drop by 30% in 3 years! Even if it did drop, I feel that it will not drop by more than 10%. This is because I have faith that the Singapore government will do all in the means to make sure the Singapore economy will do well.

If this is the case, at a present price to book value of around half, we are essentially buying a stock that is suppose to be worth almost twice the amount! ( I.e Suntec is worth $1.98 now, but is sold on the stock market for $1.04)

However the current risks is that property prices might really drop THAT badly and that Suntec might issue rights soon, causing a drop in dividend yield. These are the main risks to consider!

But in my opinion, it would be better to just buy Suntec's REIT stock and hold for the long term. With a dividend yield of the ard 11% ( as of 4th Oct), isn't it a better choice than fixed deposits?

Friday, October 2, 2009

Star Hub report

Just when I did a report on Star hub, Phillip securities churned out a new one.

The below table is extracted from the latest report. As you can see, foretasted values by brokerage companies can change VERY VERY quickly, depending on market sentiments. And in this case, the lost of Star Hub's EPL, ESPN etc. channels has caused a decrease in their Cable TV segment, as compared to my previous post, whose data is from Aug 7th, barely a month!


In addition, I am currently looking for a job. My resume is uploaded on this website. The link is on the right of this page, just below the search box.

Thursday, October 1, 2009

Singtel Won the EPL rights! Star Hub lost!

Yup, Singtel won the EPL rights from star hub. And now they have the rights to broad cast the EPL and champions league star sports, ESPN.

This has caused a devastating blow to Star Hub. A drop of 6.5% in their share price! Compared to a rise of 1% in Singtel's share price. ( This is due to the bad market sentiments today)

I was very tempeted to buy into Star Hub, as the drop is really too big for a single day drop, for such a blue chip. But before doing so, I wanted to look at star hub's financial sheet first.

Below is a segment of a financial report by Philips securities.


As you can see, cable TV takes up around 18.7% of total revenue in 2008. And if you realized, this report foretasted that the revenue from cable is set to increase in the next 3 years. This means that cable TV is seen as the market segment that Star hub is expected to excel in.

However with a lost in the broadcasting rights for the EPL, I would think that Star hub will not be able to achieve such growth in their cable TV business segment. Hence, even though there is a drop of 6% in their share price, the company's stock might still be overvalued!

On the other hand, Star hub is having a current yield of 7.9%. And it seems like their core business is highly defensive in nature, i.e mobile lines, network lines etc. ( I mean will you cancel you hand phone line in a bad economy?). So even if the yield drops to 5%, it is still much higher than any fixed deposits now.

Hence, after looking at all this, I am still a little skeptical. I will need to look at Singtel and M1 again before deciding which Tel Co to buy into. Singtel might not be the obvious choice, even though they won the EPL rights.

This is because, a report that I read states that Singtel is not expected to win the bid, because its uneconomical for them to do so. If this is true, I feel that this bid by Singtel is aimed at winning a bigger market share, which might prove beneficial to them, since now they can bundle their MIO TV with EPL and champions league etc. at a higher price.


From the TA point of view, star hub is a good buy.


Your call!

Wednesday, September 23, 2009

Big Market Movement Coming!

Like many reports.. the market is moving side ways now, looking for a direction, because there is no big catalyst yet. BUT I foresee a big movement soon! (Technical indicators points to a major movement soon)

It will most probably be a break out, because sentiments are bullish, judging from the numerous reports from the various brokerage houses. Thus, if you got the capital, do take this opportunity to buy in when the price drops.

However do set cut loss prices, because bullish sentiments do not mean that short term bear corrections cannot take place. And I also advice strongly against shorting the market in the long run.

I was back testing several technical indicators, most shorting trading plan do not work reliably in the present bullish market. It is safer now to blindly go long then trying to short the market via technical or fundamental analysis.

Thursday, September 17, 2009

Quadruple Witching

Today, 17th Sep 2009 is one of the quadruple witching days of the year (Applies to Walls Street). I came across this term 'quadruple witching' in an article from the Straits Times and decided to research on what this is. Below is the explanation of the quadruple witching: Extracted from Here

NEW YORK — For the unsuspecting investor, quadruple witching can be just as scary as it sounds.

The oddly named phenomenon, which happens on Wall Street four times a year — including Friday — involves the expiration of several types of futures contracts on the same day. Generally only the pros have to deal with it, but even everyday investors who don’t wade deep into the market’s intricacies can feel whipsawed by heavy volume and bouncy trading that often results.


For many investors planning to make changes to their stock holdings, the best move might be to mark the days on a calendar and plan to sit on the sidelines. It’s easy to mistake the big moves that can occur for something more meaningful than what they really are — in some cases, nothing more than traders dotting an I or crossing a T on certain types of investments.


Here are some questions and answers about quadruple witching and what investors should know.


Q: What is quadruple witching?

A: It refers to the simultaneous expiration of four types of options and futures contracts. The deadline forces traders to tie up loose ends in contracts they hold. The “witching hour” is what traders sometimes call the final stretch of such a day, before the closing bell — a period that can see particularly heavy volume.


Q: When does it occur?

A: It takes place just before the end of each quarter, on the third Friday of March, June, September and December.


Q: What effect does it normally have?

A: The market usually manages to advance, at least in the short term.

Curtis Teberg, portfolio manager at the Teberg Fund and a market historian, said the moves aren’t significant to a long-term investor. But knowing that stocks tend to rise on this day, he said he had made a list of stocks he wanted to sell.

“If there are some things that I want to sell I know historically today is a much better day,” he said.


Q: What tends to happen in the days that follow?

A: It’s not unusual for the market to fall. Teberg noted that the Dow Jones industrial average has fallen in the week after the June quadruple witching in 16 of the last 18 years.


Q: Why does it sometimes wreak havoc on the market?

A: Traders are forced to step in and buy and sell stocks in order to wrap up the futures and options contracts. That can lead to huge volume, particularly in the first and final hour of the day. And the higher the trading volume, the more stocks can move up and down.


Q: What should everyday investors keep in mind?

A: Analysts say it’s smart to make note of the day before making a trading decision.

“We try not to make investment decisions on these days,” said David Chalupnik, head of equities at First American Funds. “We typically just back off.” He noted that the moves in stocks related to quadruple witching tend to fade within a day or two.


My Opinion

I feel that this might not affect the Asian markets as much as compared to the past. This is because I noticed, in recent months, the Asian markets do not really take cues from the closing of the Dow Jones. Instead, the Dow Jones is taking cues from the closing prices of the Asian markets.

Thursday, September 10, 2009

UOL paid S$508 psf for Dakota Crescent and Chestnut Avenue Sites

There are 13 bids for the Dakota Cresent land! (Its not a freehold land, but just a 99 years one)
And below is the respective bids and how many times over the minimum bid of $201

The winning bid by UOL, paid around 2.5 times of the minimum bid!

There are also 7 developers bidding more than 2 times of the minimum bid!

This tells a lot of the property expectation in the next few years. If you think about it, these land developers will not pay such a high premium of the land, unless they are quite confident that the prices of property will go up. It is possible for 1 developer to make a bad prediction of property prices, but more than 7? I don't think so.

In addition, in the report where I got this information from (DMG & Partners), it is said that, UOL will need a break even selling price of $910. Which is very high! ( I would think this is near freehold price ranges)

So now might actually be a good time to invest in property. Considering that the SIBOR rates are really low now, getting a housing loan that is peg to the SIBOR rate, would mean paying lower interest for the house. Given the 'prediction' by these developers, it might not be a bad idea.

HOWEVER, this is not an inducement to start going out to buy houses. Invest within your means! ( Remember that things can go wrong, and you might be stuck with a monthly loan that you cannot service and thus be forced to sell the house, at a price that might be below the initial price that you bought!)

But I would think, if you intend to buy a property to live in, now much actually be a better time to buy one, than say 3 years time!

Thursday, September 3, 2009

Citibank's 'Trust and will' Talk




I just attended a Citibank's Trust and Will talk today at Oriental Mandarin today.

Here is a link to my previous blog post on writing Wills and Trusts.

Basically here is parts of the talk that I found useful and interesting.

1. Private Investment Companies (PLC)

To protect your overseas assets from estate taxes ( taxes that have to paid after you passed away, before they can be transferred to your beneficiaries) , you can make of of PLC. Essentially, these are corporation that helps to hold your assets overseas, but the asset still belongs to you.

Hence legally, when you pass away, all the PLC have to do is to transfer your overseas assets to your beneficiaries.

This is because, in the eyes of the law of that particular county, the owner of the asset, which is the PLC, is not dead! However, such PLCs have to be housed in countries that have no estate taxes, for example Singapore.

2. Universal Life
It is similar to long term structured deposit in my point of view.

What it does is :
  • You pay a premium, can be a lump sum or monthly install, or just the interest
  • When you pass away, you beneficiaries get a big sum of $$.
Here is an illustration. For example, at 60 years old you will have an rough gearing of 2.
This means that, say you put $100,000 in this universal account. When you pass away, your beneficiaries get $200,000.

Of course when you put in younger, say 30, your gearing is much higher, might even be in the order of 10. Meaning you put in $100,000 and your beneficiaries get $1 million!

As for the payment method of this 'policy', here are the 3 ways (given a scenario of an 'investment' of $100,00)
  • Lump sum ($100,000)
  • Monthly over say 10 months ($10,000 per mth)
  • Interest (But you have to pay part of the 'investment' . So it could be a down payment of $30,000. As for the remaining $70,000, you can just pay 3% worth of interest per year. However when you pass away, and your beneficiaries get the money, this reamining $70,000 have to be deducted and be paid back to the bank)
Hope this is useful for people who would like to write a will.

The part on PLC will be particularly useful for people with lost of foreign assets!

Tuesday, September 1, 2009

Performance report of the world stock market

Just to keep things in perspective, here is the list of stock market indices and their returns so far. STI is one of the best performers!

Click on the picture below to enlarge


*Credit given to Citibank

Sunday, August 30, 2009

Phllip Captital Market Watch



Here's a summary of the video:
  • Sep/Oct Typically bad months for stock market
  • Stock market now is bullish, though the economy is bearish
  • Economic indicators are bad
  • In fact, investors are 'brainwashed' to think that the economy is better
  • This is shown by the lower percentage of cashing holding among people => people are investing more now
  • Oct typical has the largest one day drop in history. Eg. Black Monday in 1929 and 1987. Also, in 2008, Dow Jones and S&P drop 7% in day!
  • Invest in gold for now, if you are conservative

My view:
Personally I have invested in the STI ETF, and judging from the charts, the STI is facing a resistance now( from the Fibonacci retracement). I have initially decided to do dollar cost averaging on this stock, however if this resistance proves to bee too tough to break, I intend sell the stock, and buy back when the market corrects.

Monday, August 24, 2009

First Trade, STI ETF

Finally made my first trade, bought 3 lots of STI ETF @ $2.64

Bought based on momentum crossover, though the Fibonacci retracement condition is not satisfied yet.


Saturday, August 22, 2009

Citibank and Barclays

I had two recruitment talks in NTU in the last week from Citibank and Barclays. Nothing personal about the reviews that I will be doing here, but just an opinion of mine.

Citibank
It was well run, they have very good speakers who shared their working experiences with the audience. The impression I get is that Citibank have very committed and talented people who goes all out to get the job done. They have very good senior management who in turn help to develop very capable future management.

Even during the networking sessions, one of the managers even gave me and my friends his name card and told us to refer any one that we know who are looking for jobs. They are actively doing their jobs! Going the extra mile!

Barclays
Speakers weren't as good and the people do not really know much about what other people in company are doing. Moreover, I feel that they are not as professional when it comes to giving a recruitment talk. However this does not reflect the capability of the company.

I heard that people in this company work very hard, and although its a tough company to work in, if you like challenges, this is the place to be. Also, after talking to a trader from Barclays, it seems that the job is something I might want to do.

Wednesday, August 12, 2009

Updated FD rates

Rates are really low now. The best I feel is by CIMB bank.

For more details click here

Sunday, August 9, 2009

HDB housing grants

Was just looking to the grants available if you are trying to buy a HDB house.

CPF Grants
There are currently 3 main types of grants. (these are meant only for resale flats and not new flats by HDB. This is because the price for the new flats are already subsidized). Also, the income ceiling for household does not include bonuses, income from rental, investment etc.

Type of Grant Available
Amount
Income Ceiling for the household
CPF housing grant for family $30,000 $8,000 per mth
CPF housing grant for family
(living near parents/married child)

- Parents are residing in an HDB flat or owner-occupied private property within same town or within 2 km

$40,000 $8,000 per mth
Half Housing Grant

- A first-timer citizen who marries a second-timer spouse, who has previously enjoyed a housing subsidy, can apply for half of the Family Grant amount to buy a resale flat, if the family meets the eligibility criteria of the Family Grant.

$15,000 /
$20,000
$8,000 per mth
*Taken from this website


AHG
In addition, there is the Additional CPF housing grant (AHG) that is between $5000 to $40,000 on top of the grants that I posted on top. ( Can be used for new or resale HDBs) Below is a table for the amount of the grants)

Average Monthly Household Income *
Additional CPF Housing Grant
(prior to 6 Feb 09)
Enhanced Additional CPF Housing Grant
(wef 6 Feb 09) **
$1,500 or less
$30,000
$40,000
$1,501 - $2,000
$25,000
$35,000
$2,001 - $2,500
$20,000
$30,000
$2,501 - $3,000
$15,000
$25,000
$3,001 - $3,500
$10,000
$20,000
$3,501 - $4,000
$5,000
$15,000
$4,001 - $4,500
-
$10,000
$4,501 - $5,000
-
$ 5,000

Note:
* Previously, the average monthly household income was assessed over a period of 2 years. Under the Enhanced AHG, the average monthly household income is assessed over a period of 1 year.
*Taken from this website


Maximum Subsidy
So the maximum subsidy that you can receive is when
1. Buy resale flat near your parents ($40,000)
2. Both you and your spouse are not working ($40,000)

That is $80,000!


Compare HDB prices in Singapore
This link shows the median prices of different HDD house types in different regions of Singapore

Friday, August 7, 2009

My Stock Picks

Looks like the correction is here. And Singapore is leading the way!

However be prepared for the uptrend. These are the stocks that I'm looking at.

STI ETF

Will buy when nearing 2380. However if it choose to rebound next week, will only buy if it breaks 2666. In addition there should be a crossover of the momentum indicator before I buy


Suntec REIT

  • With a reported NAV of $1.98 and a current market price of less than$1, the discount is one of the biggest of all the REITs with a market capitalization of over S$1 billion.
  • The expected yields based on some reports is around 11%,9%,7% for the year 2009,2010,2011 respectively.
  • Reported gearing of around 35%. Though a little high, I feel that its still managable. Since interest rates are low now, I think their newly funded debts should have low interests too,hence the potential for higher future earnings
  • Though office rental prices are expected to go down, I feel that in the long term, land prices in Singapore in general will still go up
  • Will buy it its nearing $0.874(support) . Or if it breaks out of $1.10(resistance), provided the STI breaks out too.

Sunday, August 2, 2009

Brokerage Fees

I am finally going to start trading soon. Here is a list of brokerage firms that I have research and found to have one of the lowest commission charges around.

I have shortlisted these 3 firms. DBS Vickers, Citibank and POEMS.

DBS Vickers

Normal Account: Link here


If trade using cash upfront : Link here



Citibank Brokerage

For link to the Citibank website: Click here


POEMS

For link to the POEMS website : Click here



Thus looking at the commission charges, I will definitely use DBS Vickers with the cash upfront. It has the LOWEST brokerage / commission charges for the Singapore market at 0.18% or minimum $18. However cash upfront means that before you make the purchase of the shares, you have to transfer the money from your DBS/POSB account into your DBS Vickers account. ( This can be done real time) However, withdrawing of the money in this account back to your DBS/POSB account requires 1 working day. Personally I do not see a problem with this, unless you are doing contra trading.

If you are going to do contra trading, Citibank's internet commission is the lowest, at 0.28% and minimum charge of $22. Though DBS Vickers' normal net account has a 0.28% minimum too, it has a higher minimum charge of $25.

I placed POEMS in the comparison too, because I do use phone trading in the past, especially for emergencies. However, it has a rather high (though considered the market rate) for commissions.

Those are interested to trade together, just drop me an email at NTUChartist@hotmail.com

Tuesday, July 28, 2009

Economic Update

Its been a while since a did a post on the economy.

Been looking through some of the reports/news and here is some important things to take note.

  • Some reports feel that market now is in the over-evaluation stage (However, this stage usually lasts for quite some time. But do expect a correction when almost EVERYONE starts to feel extremely confident about making a quick buck)
  • Out of the 64 banks in the US which has failed so far, 16 occurred this year (2009). The amount of $$ lost in the banks was USD 17.6 billion last year. However for this year to date, its USD 14.2 billion! WE ARE STILL LOSING AS MUCH $$!!
  • Ben Bernanke expects unemployment rate to go over 10% first before it eases. And the FED predicts this to happen around the 4th quarter 2010.

If we look carefully, the economic stimulus were placed quite some time back. However the financial institutions are still facing problems in the US. Why? This means that the real problems are not solved yet.

Though the stock market is supposedly a approx 6mths forward indicator of the economy, the real economy has not been really picking up just as fast as seen by the data. This implies that people are speculating!! So...Be CAREFUL! (However I feel that the speculation is just in the beginning stage, so there is actually still some room left)


Base on my own TA, I feel that there is still room for the Singapore market to go before the slight correction.



Target: STI 2800 (It will act as the resistance, however if this breaks, it should run)

Support: 2400

Sunday, July 26, 2009

Back from Indonesia

Hi all, I was away for the pass week in Indonesia for my school's project. The trip was enriching, however most of us also came down with food poisoning.

After some interactions with the people there, the locals in Indonesia do not actually know much about the financial crisis that had happened. And apparently they are not feeling any implications of the crisis at all. Interesting...

Here are some pics of my trip.


Monday, July 13, 2009

Preview Robert Kiyosaki Book

As mentioned by a fellow reader, preview the latest book by Robert Kiyosaki, 'Conspiracy of the Rich' at http://www.conspiracyoftherich.com/ before he starts to publish it and sell it!


*taken from conspiracyoftherich.com


From my past experiences reading this author's work, I feel that one should not believe/practice every single thing that he says. These are 2 reasons (in my opinion)

1. Lots of examples and scenarios are for the US. So it might not apply in Singapore due to difference in laws, especially tax laws.

2. Some of his examples will only work in the bull market.
For example, borrowing money to fiance a house that you cannot afford. He assumes that the rental income is sufficient to cover the bank loan. However in the event that the economy goes bad (like now), where are you going to get the money to pay off the loan? In the end, you might even lose all the repayment that you have already done.


However here are some good stuff that you can pick up.

1. Plan your finances!

2.Understand the tax laws in the country! It will help you save! Especially if you are a small business owner.

3.Have an open mind to look out for investment opportunities. ( This has to be practiced)




Saturday, July 11, 2009

Back from the US

Hi All! I'm back from the US.

Great trip. Shall be updating soon.. =)

Monday, June 29, 2009

How to subscribe to rights?

I got this in the email from my broker which I think might be useful for some of you all out there.



Anyway, I think Singapore should have ATMs that we can cash cheques in!! In the US, they have ATMs that are to read cheque and immediately credit the money into your account.

The machine basically scans the scan, and read off the amount that is on it. Amazing right! I wonder if it can detect if the cheque is a fake...

Tuesday, June 23, 2009

Looks fine in the US

Sorry for the updates. Have been really busy in the US. Besides school stuff, I have been traveling quite a lot too.

From what I observed, even though people are talking about how bad the economy is, it really does not look like the people around me are having much financial problems.

For example:
  • One of my US professors is getting a lower annual pay rise of 1% instead of the usual 4%
  • Even though staff/American friends were saying that car rentals might not be good due to the 'bad' economy, when I asked the car rental people, they said that all's fine for their business. ( The economy does not look as bad from the outside as it sounds from the news)

I also found out that students over can have really high credit limits! In Singapore, student credit cards have only S$500. However I have an American friend who holds 3 credit cards which have a total credit limit of about USD$10,000. Yup that's right, 10 thousand!

He also mentioned that US is the country where people are always in debt. They choose to just pay the minimum sum every month for their bills. And often, they bring along their debt to the grave. Which I think is quite different from Singaporeans.

Personally, I have not been keeping track of the stock market. But I do still read some reports that my broker sends me. Looks like our economy is not expect to recover so soon. So...if you start seeing a few more reports turning bearish, do start lessening your holdings. Cos the bear market might be arriving soon!

Saturday, June 13, 2009

Off to the USA

Hi Fellow readers, I will leaving for the US today for my school stuff.

Though I will be in the US, I will still continue to update this financial blog. And hopefully I will be able to get a non bias evaluation of the US economy as I see it.

I will be in Los Angeles for the next 3 weeks, after which I will be traveling to San Fransisco and Las Vegas for a week.

*Btw, the economy has a few bad signals.. rallies are not strong, and oil is rising...

Saturday, June 6, 2009

What is Bankruptcy Chaper 11?

On June 1st, General Motors filed for bankruptcy.

They filed for voluntary chapter 11 bankruptcy protection. I am sure many of us have seen these this in many articles in recent months. But what exactly are is it?

Chapter 11

The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership ( Wikipedia).

This is different from
the normal kind of bankruptcy that we know, i.e company closes down and sell all its assets. This kind of bankruptcy code can be found in Chapter 7.

Chapter 11 allows the company to continue running, even though its bankrupt. But of course under the 'care' of the court. It also allows them to continue getting refinancing and money from from different sources (but usually the company have to give some assurance to the money lenders like first priority to business earnings etc.) Its like giving the company a 2nd chance to reorganize itself, and hopefully pull through.

In the process, there will also be this 'automatic stay' clause that states that no debtor to stop collecting money from this bankrupted company. (So good! Bankrupt already can still borrow $$)

Frankly, after reading up more on chapter 11, I personally find that this law a little crappy (no offense, just that I can't think of politically correct word to use) I mean if a company fails, does it seriously deserve a second chance? By giving them a second chance, you are being unfair to the other companies who are doing well. What incentives do companies then have to work hard?

I can understand the reason for saving such big companies (because a lot of people depends on them for their jobs!)..but in the world out there, sometimes its inevitable. By 'rewarding' the bad, there is no point being good. Its like finding a quick way out but creating more problems in the future.

Looking at all these recently Chapter 11 cases, I really feel that USA is going to have bigger problems in the future with their businesses. There is really no more incentive to do things right because there is always a safety net, but at the expense of the tax payers money.




Friday, May 29, 2009

Oil and Singapore

Sorry readers for the lack of updates. Have been rather busy lately with work and stuff. Will be going to the US in a few weeks for a project, so am preparing for all the required adminstrative stuff.

Anyway, I saw this page in The Straits Times, money section on Wednesday May 27 2009. It is basically a page fully dedicated to oil/energy.

These are the 3 head lines
  1. S'pore set to boost status as energy hub
  2. Oil and Gas firms face difficult year
  3. PetroChina out to be price-maker with SPC deal
All which are oil related.


S'pore set to boost status as energy hub
  • This is more of converting Singapore into a leader in energy TRADING hub. Currently we are 3rd in the world. ( This will defintely help our economy in the long run. Imagine if SGX is the exchange that is used for these transactions. Its stocks will run like crazy if Singapore becomes Asia's trading hub!)
  • Having a commodity exchange based in Asia and catered to Asian's need and specifications will increase trading activity in Asia, as the time zone will be catered to us, and not follow America's one. ( I think this would encourage traders to in Asia to increase trading!)
  • The Singapore Mercantile Exchange will make its debut later this year. Offer essentially all the commodities and futures contracts. ( However I feel that if it were not publicized effectively to all the Asians countries, it will definitely fail. As the Singapore market is not big enough to provide the liquidity for such trades. And only a few more popular commodities like oil, gold will succeed. I can't imagine myself trading 'pork' just yet.)
  • Singapore Government is gather all the leading companies in trading over here. Some examples are
  1. Opet Trade
  2. Sahara Internate Koc Group
  3. Socar Trading
  4. Tricorona
  5. BP ( oil giant has also recently set up a carbon trading team )

Oil and gas firms face difficult year
  • Estimated 100 million barrels of crude may be stored on sea tankers
  • Lower demand as there is low growth
  • Price volatility
  • HOWEVER, assuming population and economies to grow, its expected the oil price to go up to US$70-US$90
Seems like a very pessimistic article. Implying that the present market rally will not be able to sustain, as most people expect the economy to be weak.


PetroChina out to be price-maker with SPC deal
  • PetroChina is bidding for SPC with US$2.2 billion
  • SPC is a major source of fuel supply where most of Asia's oil prices are determined.
  • SPC owns half of Singapore Refining Company (SRC) while the remaing is held by US major Cheveron
  • PetroChina has already long term deals to supply fuel to regional importers like Vietnam and Indonesia
  • With all this 'control' of fuel, they will have more say in setting the price in the market
We are looking at the new oil leader in Asia if PetroChina is able to follow through with its plans. However I feel that things will not be as simple. This is because its refining capacity of 2.6 million barrel per day lags behind rival Sinopec 4.3 million barrel per day. What makes you think that Sinopec will sit back and not do anything to protect its best interest. Its just a speculation of mine, but I think Sinopec will come up with new policies to challenge PeroChina once its profit margin is at risk.


Conclusion
Having PetroChina leading the price of oil and Singapore as the leading energy trading hub will definitely help Singapore's economy. However that is provided everything goes as plan. With the tough economic conditions presently, and my speculation of Sinopec's possible actions. We can never be too certain!

Wednesday, May 20, 2009

Temesak lose BILLIONS!


The market has been exceptionally bullish for the last few days. And sadly to say, if I had actually shorted as I mentioned for my previous posts...I would had made a really big lost.

Anyway, lots of things has happened for the past week. The biggest one being Temasek selling its stake in Bank of America, with a staggering lost! Singapore news reports it as US$3 billion, while other online sources reported it as US$4.6 billion. Either way, its really a HUGE loss.

However, we cannot deny the fact that the whole world in general took a huge hit. But losing so much of the people's money is still painful to see.

Some reasons behind the sale was that Bank of America's vision is not inline with that of Temasek. Initially Temasek was suppose to be a major shareholder in Merrill Lynch, which is an investment bank. However, after Merrill Lynch was taken over by Bank of America (which is out of their control), Temasek essentially is now a minor share holder in a bank that does simple home loans etc. With such a big change in company philosophy, it wouldn't be surprising that they would eventually sell off their stakes in Bank of America if they initially bought into Merrill Lynch for its business.

In other news, Market rallying seems to be unstoppable recently. I guess that many people who were sidelined are actually now trying to inch their way into the market. Buying into any small drops, hence supporting the market. However I am still skeptical, because I feel that the situation is not really getting any better. People are still focusing on every little bit of good news to give them a reason to let the stock market rally and denying all the bad news. Logically, this should not be happening.

Also, I just read that south Korea has lifted the ban on short selling. With this, I think more countries are going to start lifting the ban. Which would mean.....if the market were to turn bearish, it will be a VERY quick process. So I would suggest to people who are trading the Singapore market to be wary once Singapore lifts the ban on short selling. I personally think Singaporeans love to be 'shortists'. I.e they like to short the market.