CapitaMalls Asia: Interim dividend of 1.75c declared.

CapitaMalls Asia is slowly and steadily improving its EPS and increasing its DPS. The latest results are encouraging and affirmed my conviction that this stock is going to be worth much more in a few years' time.

1H 2013 EPS: 8.2 c
1H 2013 DPS: 1.75c

Payout ratio: 21.34%.

The company's malls in China show a high percentage growth in NPI of 12.1% while malls in Singapore only registered a 2% NPI growth, reflecting the mature market here. The company's strategy of being in China and being there early is paying off nicely.

CapitaMalls Asia owns real estate and I would like to buy at a discount to the net value of its assets, if possible. The number to look at? Its NTA/share of $1.78.

Of course, paying a bit more for professional managers and also growth that seems to be in the bag is not an unreasonable proposition. In fact, at $2.00, some might say that it is hardly expensive. Indeed, annualising its 1H 2013 EPS would mean a PER of 12.2x. Fair? I think so.

After all, we have to remember that CapitaMalls Asia is not only a developer and owner of malls, it also derives a significant portion of its income from REITs in the family. This income stream is recurring and dependable.

However, I am also corrupted by TA and it is clear that the stock is in a downtrend which started in February 2013. That was also the last time I blogged about the stock. Resistance for the week is at $2.04.

Weekly chart.

If resistance at $2.04 could be overcome convincingly (i.e. with high volume), then, the downtrend would have been broken and exciting times could be in store for fellow shareholders of CapitaMalls Asia.

If things turn out to be less than exciting, well, I will be sure to dip into my war chests to accumulate at prices closer to or below NTA/share.

See presentation: here.

Related post:
CapitaMalls Asia: Reduced exposure.

Tea with Matthew Seah: POSB Invest-Saver Account.

POSB's newly launched Invest-Saver Account is a Regular Savings Plan that allows us to invest via a GIRO arrangement on a monthly basis.

No securities trading account or CDP account is required. 

All we need is a savings or current account with POSB.

It charges a flat fee of 1% per transaction.

For more information, go to:
POSB Invest-Save Account.
NEW LINK:  HERE.





My take? 

In a nutshell:

If we are putting aside between $100 to $500 a month, POSB Invest-Saver is a good choice.

If we are putting aside more than $500 a month, OCBC Blue Chip Investment Plan is a better choice.





See:
OCBC Blue Chip Investment Plan.

How much will my tea break and lunch cost tomorrow?

This is an impromptu blog post in response to a comment by a reader, Serendib, in an earlier blog post: here.

That is how much my tea break and lunch will cost tomorrow. Yup, a grand total of $1.00. Actually, it will be less because I will get a 5% rebate from the SMRT Pay Wave VISA and I will also get a rebate from being a NTUC CO-OP shareholder. If you can see me now, I am smiling.

Tea to be provided by the office pantry, of course.

I am quite looking forward to having this tomorrow. In fact, I am tempted to eat one now but I shall resist! Yum, yum.

Tax paid with Citibank Dividend Card.

It is a once a year affair. Got to pay Road Tax for my car:

I paid at an AXS machine this evening and was pleasantly surprised to find that I had a choice of paying with a DBS or a Citibank credit card too.

So, I paid with my Citibank Dividend Card and I guess tonight's dinner at the food court was free! That makes me happy!

I used to NETS it using my POSB ATM card. Things have changed for the better.

NeraTel: A voluminous day of fear.

There is lots of fear in the air for some people trading the stock of NeraTel today. I won't be surprised if some people lost money as well. Why? A long black candle was formed on the back of relatively high volume. There must have been some panic selling as share price touched a low of 74.5c before closing at 76.5c.

However, this could be good news for some. Who? For people who have been waiting to buy into NeraTel because of its strong fundamentals and attractive dividend, of course.

The question on their minds might be whether it is the best time to buy now?

Well, if we remove the word "best" from the question, then, it becomes easier to find an answer. Linked to this, ask what is our motivation for investing in NeraTel.

My primary motivation for investing in NeraTel is for income. It was not to trade the stock. However, with the rapid and significant rise in the share price, I turned partial trader by reducing my long position in the stock last week.

As my primary motivation for investing in NeraTel is unchanged, the dramatic pull back in share price is a boon for me as I bought back what I sold recently. This means that the planned passive income from NeraTel's dividends in my portfolio is now restored.

Of course, I received a nice little bonus from trading around the investment as well. Quite happy to get some pocket money from Mr. Market, for sure.

Next question, will I increase the size of my long position in NeraTel at current prices?

Well, I think it is now common knowledge what NeraTel's full potential is. Apart from impressive growth potential, it is also a net cash company with a recurring income base. So, it is a stock anyone investing for income and growth would be attracted to. For anyone who is not in the know, I have provided links at the end of this blog for further reading.

Technically, a weak immediate support is at 76c. This is followed by the rising 20dMA which approximates 73c today. Failure of the support provided by the rising 20dMA to hold means a possible decline in share price to 66c.

Fundamentally, at 66c, we are looking at a PER of less than 10x once more and an estimated dividend yield of 6.06%. So, expectation for strong support at that price is not premised only on the technical picture but also on more attractive numbers.

I will be adding to my long position if supports are tested.

Related posts:
1. NeraTel: Trading around an investment.
2. NeraTel: A very good investment.

Tea with AK71: Wah! Your car is SO big!

Some people drive big cars:

So big that a single parking lot is not enough.

The inconsiderate, selfish and idiotic people like this driver are why the world is in such a mess!

KNS!

Marco Polo Marine: Bracing news from Indonesia.

Some news from Marco Polo Marine's subsidiary, PT Pelayaran Nasional Bina Buana Raya Tbk:

1. They are seeking to purchase another new AHTS before the end of 2013. I like this because this will allow them to capitalise on the higher rates in Indonesia more rapidly.

2. The management is projecting at least a double digit growth in revenue and profits in 2013!

Things are looking pretty good and the Indonesian growth story is cruising ahead at full steam.

Would I buy more of Marco Polo Marine's stock?

If Mr. Market is willing to sell to me cheaply again, why not?

Related post:
Which stocks have I been accumulating in June 2013?

Reference:
RESUME HASIL PAPARAN PUBLIK TAHUNAN

OUE Hospitality Trust: Considerations and comparisons.

Some might be more interested in OUE Hospitality Trust than SPH Trust because the distribution yield the former has promised is higher at 7.46% compared to the latter's 5.79%. 

Although the two are not strictly comparable since they are holding different types of real estate, let us look past that for now and just concentrate on the numbers to see which one is a better deal.

Mandarin Hotel.

OUE Hospitality Trust is being offered at a small discount to NAV while SPH REIT is being offered at a small premium to NAV. Oh, I like a discount!

OUE Hospitality Trust is going to have a gearing level of some 32.8% while SPH REIT's gearing level is 27.3%. Oh, I like SPH REIT more now because its gearing level is lower.

Leverage, of course, makes it harder to see the underlying yield. If we were to remove leverage and assume that there was none, we see that OUE Hospitality Trust approximately yields 5.62% while SPH REIT yields 4.55%. The former still gives us 1.1% more a year!

SPH REIT's Clementi Mall.

OUE Hospitality Trust has 2 properties and apparently they have 44 years left to their leases. SPH REIT has 2 properties too. The Paragon will have a fresh 99 years lease while Clementi Mall has a few years lesser than that. I like longer leases, for sure.

So, although OUE Hospitality Trust is able to generate 1.1% more return per year compared to SPH REIT, the life of its assets is less than half of SPH REIT's, assuming the status quo is maintained.

Ariake Sunroute Hotel

OUE Hospitality Trust is a stapled security and not a REIT per se. I have blogged about Ascendas Hospitality Trust before which is also a stapled security. For anyone who might want to find out more about this, I have provided the link at the end of this blog.

Like OUE Hospitality Trust, Ascendas Hospitality Trust also had its IPO priced at 88c.

Ascendas Hospitality Trust last traded at 85.5c which is still at a slight premium to its NAV. At 85.5c, it has an estimated distribution yield of 8.57% and a gearing level of about 35%. 90% of its assets are in Australia and Japan. These are freehold in nature!

AK is just talking to himself.


Related posts:
1. Ascendas Hospitality Trust.
2. SPH or SPH REIT?

Facebook: An alternative to real life.

I became active in Facebook only very recently and I have been under a spell since! It is terribly addictive and, honestly, this scares me.

I still remember when older folks were complaining that people rather talked on the phone instead of meeting up in person years ago. Then, a few years ago, they complained that people would rather send text messages on their phones rather than talk to people on the phone.

Now, some might be at a loss when I say the physical world is going to be a lesser reality compared to the online world for many people, well, if it has not happened already! The culprit? Facebook!

Roughly, there are more than 7.1 billion people in this world and Facebook has 1.1 billion users! Just 3 years ago, Facebook had less than half the number of current users!

Facebook has more than doubled the number of users in just 3 years while world population is estimated to have grown only 1.1% per annum. Imagine a business with a penetration rate of 14.29% globally and growing!

We don't have to be very good at math to guess that years into the future, almost everyone will be a Facebook user.

Facebook is not an alternative to real life! It is real life for many people and, I suspect, soon it will be so for all!

Related post:
Really follow AK71 on Facebook.

To rent or to buy: Rule of 15.

I get the feeling that most of us don't like the idea of renting a place to stay in Singapore. Why pay rent and not own the place? We are helping the landlord pay his mortgage on the property!





However, a question then is what if we were to buy our home only to find out that we bought it at a price too high? That has happened to many people before, I am sure. 

Then, in such an instance, the person who chose to rent instead of buying would have done better.

How not to pay a price too high?

I am sure that there are many things to consider but there is a nice little rule that can make it easier for us to make a decision on whether to rent or to buy.

"Rule of 15" says that if we could buy a home at a price that is 15 times or less the annual rent a similar property would fetch in the area, it makes more sense to buy than to rent.

So, if a two bedroom condominium is selling for $1.5m and the gross annual rent a similar property in the same area is $60k, it makes more sense to rent than to buy. Annual rent of $60k x 15 years = $900k.





We can also use this simple rule of thumb to help decide if we would like to put up a property for sale.

If we look at it in terms of rental yield, this rule is basically saying that if the gross rental yield of a property is 6.66% or higher, it makes sense to buy and if it is lower, it makes sense to rent.

For a while now, we see people buying real estate in Singapore and being quite happy with rental yields of 2+% to 3+%. This is acceptable really only because of the abnormally low interest rate environment. It won't last.





The "Rule of 15" is a rough gauge but it is a sensible one as it suggests that a 6.66% gross yield, whether we are owner occupiers or real estate investors, is what we should be looking for to survive more normalised (i.e. higher) interest rates in future.

Definitely, it does not take in all factors which are necessary for consideration but it is a nice preliminary check on whether we should buy or rent a home.

Related post:
Leverage up and buy investment properties.

Cheong arh! No, I am not referring to the stock market.

I just saw this on YouTube. Unbelievable!





Minions from Despicable Me are all the rage at McDonald's. I think people who didn't get their Hello Kitty are having their revenge by going after the Minions instead.

Imagine people being that excited about attaining financial freedom instead! Oi! Queue up hor.

These people are crazy over us?

Wahahahaha! Banana & potato!

Related post:
McDonald's Singing Bone Hello Kitty.

Rich gets richer and poor gets poorer.

Point #1

Someone might have more money than another. He is simply richer. It doesn't mean that he is rich.

Someone might have less money than another. He is simply poorer. It doesn't mean that he is poor.


Compared to the needy, most of us are very fortunate.

Point #2

Instead of lamenting how some people are getting richer, try to understand what they are doing to become richer. Unless seriously disadvantaged, anyone can become richer.

If we want it badly enough, we will make it happen!

只要功夫深，铁杆磨成针.

Related post:
The very first step to becoming richer!

Sabana REIT: 2Q 2013 2.4c DPU.

Sabana REIT has declared a DPU of 2.4c and will go XD on 23 July. Unit holders will be paid on 29 August.

The numbers are nothing out of the ordinary:

NAV/share: $1.06

Gearing: 37.1%

Interest cover ratio: 5.1x

Occupancy: 100%

Some people wonder why Sabana REIT is trading with such a high distribution yield. It is nearly 8%.

Well, there are many possible reasons but one reason is probably because 5 of its master leases are expiring in November this year and this is something I have blogged about since the second half of last year.

In the latest report, the management revealed that 1 of the master leases will be renewed while the other 4 are still undergoing negotiations. It has been revealed that in the event these 4 master leases are not renewed, the REIT will see a 7.3% vacancy rate. This would impact income available for distribution negatively even if temporarily.

As asking rents of industrial properties have risen over the last 3 years, I expect Sabana REIT to renew these leases with positive rental reversions if they should be successful in securing renewals. Failure to secure renewals would mean some temporary loss of income but it could be a good thing as the asking rents could be scaled higher compared to that of a master lease.

See presentation slides: here.

ASSI: 10 quarterly reports with 1 blog post.

One of the things I used to do which I stopped more than two years ago was to keep track of how ASSI was doing in terms of visitor numbers and pageviews. Someone told me back then that it was as if ASSI was a company and I was reporting to shareholders on its performance. Guess what? The last time I did such a report was on 2 April 2011!

I guess I am pretty late in presenting the results of the last 10 quarters. Yes, I know. If I were the CEO of a registered company, I would be in so much trouble. Thank goodness I am not.

Click to enlarge.

You know it is like how we live with someone in the same flat for a couple of years and we can't really tell if the person has changed in appearance? It takes someone who has not seen the person for quite a while to be able to tell the difference, if any.

Well, I had such a moment just now when I looked at the graph. Amazed.

I guess, somehow, I must be doing something right and there is even less reason for me to stop blogging now. Thanks to all of you. :)

Related post:
ASSI 1Q 2011Quarterly Report.

Sex bloggers did it again!

As if it is not enough being labelled a sex blogger and having National University of Singapore terminated his scholarship last year, Alvin Tan has done it again with his girlfriend, Vivian Lee!

What? Another sex video gone viral? Nope, something worse!

This:

Last Thursday, Tan and Lee, both Malaysians, posted a photograph of themselves eating “bak kut teh” (herbal pork soup) with the words “Selamat Berbuka Puasa” - a Malay greeting for breaking fast - and the “halal” logo, prompting attacks by netizens for its insensitivity toward religious matters.

Are they dumb or what? Insensitive and selfish. They are a disgrace to their country, their schools, their families and their race!

The couple could be prosecuted for displaying offensive pictures and words under Section 233 of the Communications and Multimedia Act. If convicted, they could be fined up to RM50,000 or be given a one year jail sentence, or both.

Lock them up! They have to be taught a lesson in decency (in more ways than one too)!

They have issued an apology but will they change? Spare the cane and spoil the child, I say.

Source:
Dr Mahathir: Punish the sex bloggers!

Related post:
Sex blogger loses scholarship!

A movie: Pacific Rim.

Watched Pacific Rim this evening. I guess I went in with lots of expectations because I have heard so many good things about it from friends. It was good but I wasn't wowed by it.

Took a photo of this standee outside the cinema.

The story is kind of predictable. I mean I could guess who were going to die and who would live in the end. I think more effort could have gone into fleshing out the story too. It was a little bit weak.

There was this scene where a Jaeger (human controlled robot) used what looked like a bulk carrier, a ship as a club to hammer a Kaiju (monster). Watch the scene in the trailer (about 2 minutes 4 seconds into the trailer):



At that point in time, a question came into my head. I wondered which shipyard might have built that ship. It was so sturdy! Didn't break into half when it clobbered the Kaiju.

Anyone knows the answer?

NeraTel: Trading around an investment.

Today, I divested some of my investment in NeraTel. Why? Do I not think that the share price could go higher?

Well, high could go higher. With the MACD and RSI still rising, the positive momentum is strong for price to possibly go higher. We also see a higher high in the CMF.

However, there seems to be an established pattern in the recent meteoric rise of NeraTel's share price. A high volume long white candle day seems to be followed by a short period of low volume pull back.

So, sell some close to the high and buy in again as price pulls back seems to be a good trading strategy. It also seems like a good idea for a long only investor to do this and make some pocket money in the process.

Fundamentally, my main motivation for investing in NeraTel is for a relatively high dividend yield. With its share price having run up so much in so short a time, dividend yield has compressed rapidly. At 84c, we are looking at a yield of 4.76%, far less than the 6.35% to 6.67% just a month or so ago.

With the uptrend intact, I will be looking to add to my long position if a retracement to support should happen. Where is immediate support? Possibly at 79.5c, give or take a bid.

Related post:
NeraTel: Is there no telling how high it could go?

恨人有, 笑人无.

We are human, we are flawed and money issues sometimes bring out the worst in us!

I read this in a rather candid article:

I have a tendency to use money as a scorekeeper in life. If I’m doing well financially, I’m beating all of those schmucks who have less than I do. And all of the people who are doing better than me got there because they cheated, got lucky, or otherwise fell into wealth.

The problem is the worst when I notice other people’s money making me mad. Here (is an example) of the sorts of relationships and encounters that stick in my craw:

• I have an acquaintance who is aloof, socially awkward and somewhat dimwitted. He also tends towards greed and arrogance to boot. But somehow, despite all of these serious faults, he has a knack for making big money. Against all odds, he is succeeding in his field. If current trends continue, he will end up far wealthier than me. And it burns me up.

Source: Your money, my problem.

I have always said that there is no need to compare. Why do people like to keep score and measure how successful a person is? The only person I should compare against is myself.

The Chinese have a saying:

恨人有, 笑人无.

Translation:
To loathe people who have wealth and to laugh at people who don't.

This is a behaviour we should all avoid.

Related posts:
1. Money making.
2. To be a happy peasant.

AK responds to wedding advice given by an IFA. (Financially prepared to be married?)

I might be putting my head on the chopping board with this blog post but this is not something I have not said before: 

"If there is not enough money for a wedding, the two people do not have enough money to be married."

So, when I saw this topic being discussed in Facebook and, shortly after, read an article on how to prepare financially for marriage, the writing bug bit me.






The article written by an independent financial adviser (IFA) is titled "10 Tips on What to Prepare Financially for Your Upcoming Marriage".

The first line in the article: 

IFA:
"If you have finished school, worked for a few years and is attached, your most likely plan next in the agenda is to get married."

This is like someone who translated his emotional needs into action without sending his emotions through a mental filter first! 

A more prudent thing for the couple to do is to ensure that they are financially stable and have the financial capability to be married.

IFA:
"It is OK to rent (a flat) when you get married."

My response:
No, it is not. I don't think I need to say why. (Unless you do not qualify for a BTO flat, why can't you wait for a BTO flat? Why are you in such a rush to get your own place? OK, you don't need to answer that. Think Rule of 15.)

IFA:
"If you are going to borrow to pay that renovation, try to borrow from your own parents first (hopefully they can lend you interest free!)."

My response:
Forget the renovation. If you do not have the money to renovate your home (unless there is a safety issue), don't. You think parents are ATMs?

IFA:
"You may wish to postpone investments until you have fully satisfied that you have set aside sufficient budget for your marriage."

My response:
This is like putting the cart in front of the horse! Consumption before investment? OMG! Whatever happened to delaying gratification? OMG! This is like... er... OMG!

IFA:
"Finally, do spend some amount of money engaging a good professional wedding photographer. Years later, the only way your kids can know about your wedding is through photographs. Make sure you have both hard and softcopies of these photographs."

My response:
I am not curious about my parents' wedding and they do not see the need to tell me anything about it too. I wonder how many are curious about their parents' weddings or how many people would see it as important to educate their children about theirs?




If you ask me, true love does not need a marriage certificate. Of course, if you want to have kids, then, please get married. 

Marriage, in my opinion, is to give the children legitimacy. Unless the family is not part of mainstream society, children born out of wedlock will have many issues growing up.

Two people planning to get married and thinking of borrowing money for everything in the process should not be getting married. 

Obviously, at least to me, they are not financially prepared for it.

"Once you get into debt, it's hell to get out." Charlie Munger.

Related post:
Not enough money to be married.