60 years leasehold condominium in Singapore.

When I was told many years ago that residential properties in Hong Kong generally come with a 50 years lease, I was amazed. 

So, if someone in his 30s were to buy a condo in Hong Kong and if he should live to be 90 years old, he could be kicked out of the property as there is no guarantee that the lease would be extended?

To someone from Hong Kong, a 99 years leasehold property in Singapore is probably a steal! The lease is twice as long as back home and the prices are probably lower too, like for like. However, what I have read in the papers today could change things in Singapore for the next generation.

A 1.02 ha residential site in Jurong Kechil comes with an unusual 60 years leasehold term.  This is believed to be the first time a private housing site is being sold on such short tenure under the GLS.

Developers have options for a 30, 45 or 60 year lease period for the plot, URA said. The development conditions for the site cap the maximum number of units at 203 units and can be built up to part 5 storeys and part 8 storeys. The tender will be launched in about two weeks.

Industry experts are expecting a top bid of between $200 to $250 psf ppr and a sale price of $550 to $600 psf. This compares with freehold developments in the area going for about $1,000 psf.

(Source: The Business Times, 6 September 2012)

The government did mention some time ago that it would explore offering residential sites with shorter leases to bring down the cost of home ownership in Singapore.

Possibly, I am out of touch with the reality on the ground. Foreigners, new citizens and younger Singaporeans are probably less concerned with shorter land leases. 

They might just want a home in their living years or to reap as much rental returns as possible in the same years. A project that is freehold or 999 years leasehold and selling at a premium might only be attractive to older Singaporeans over time.

Now, in my 40s, maybe, I would consider buying a new private residential property with a 60 years lease if I could save 40 to 50% compared to buying a similar property which is freehold or has a longer lease. This is for self stay only as the property could be hard to resell as its lease gets progressively shorter. 

Just pray I do not live to be a hundred.

However, for someone in his 20s or 30s, would he buy a new private residential property that comes with a 60 years lease? By the time the project gets its TOP, the property would only have 55 years left to the lease...

AK's simple strategy.

What is my simple strategy?

按兵不动

- Hold our troops; bide our time.

Collect regular dividends and wait for opportunities.

We want to be in a position which would allow us to benefit from market weakness as well as strength. The way to do this is to stay invested in the market and also have a war chest ready.

Opportunities to accumulate will always show themselves but without a war chest, it would be difficult to take advantage of them.

Sometimes, doing nothing is also doing something.

So, as I wait and do nothing, I might have mostly nothing to blog about. ;p

Related post:
To be richer, be comfortable with being invested.


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Singapore REITs yield world’s best returns: Southeast Asia
Wednesday, 05 September 2012

© 2012 - The Edge Singapore

Tea with AK71: Funny!

I was sent this and found it amusing:

I hope this has coaxed a chuckle or even a hearty laughter from you, no matter what your personal beliefs might be.

Life is short. Don't take it too seriously. ;)

This is funny! I really laughed very hard!

I don't know who are responsible for these works but kudos to them for bringing fun and laughter to our lives. :)

I know I need some cheering up as I will be sending my car to the workshop for major repairs early tomorrow and will be carless for a week or more. :(

See: Traffic accident with a Malaysian vehicle.

Wilmar: Should we be buying?

A reader asked me if I am buying more shares of Wilmar as I said before that the time to buy is when the selling has dried up. Has the selling dried up?

Well, the trend is still obviously down and my investment is in the red. My long position in Wilmar is my biggest money losing investment on paper this year.

However, I have bought more shares of Wilmar as the MACD is rising while share price declined. Momentum is still negative but with a rising MACD, the negative momentum is weakening.

There is no obvious sign of accumulation or distribution with the OBV flat as the share price languished more or less at the 61.8% Fibo line.

Volume has been relatively low as the Bollinger bands begin to squeeze, confirming the picture of low volatility. A big move in Wilmar's share price could be on the horizon. Which direction? That is anybody's guess.

If the move is to the upside, overcoming the 20d MA on high volume would signal a breakout. If the move is to the downside, the low of $3.04 touched on 15 Aug is the support to watch.

A sign that things might have bottomed is when there is massive pessimism and no one is interested in buying anymore. In fact, there would be more who would sell even at a big loss because they believe the share price could move much lower over time. Then, there are the increasing number of "sell" calls by the research houses all offering much lower 12 months target prices.

The relatively low volumes, the gently rising MACD and the flat OBV tell me that there is currently a stalemate between the bulls and the bears, pending a possible big move in price with the constriction seen in the Bollinger bands. The trend is, however, still in the bears' favour.

Now, no one should tell you what you should do. You have to decide for yourself.

Related post:
Wilmar: Touched a new low.

Tea with AK71: Quick, buy a new car cheaper now!

It is reported that last weekend saw 5 to 20% more new cars sold in the showrooms here as COE premiums declined for the first time in months.

We probably have friends and family members who are looking to buy a car for a host of reasons. Although some might think that cars are not necessary in Singapore, many would beg to differ.

Finance manager Lionel Ng, 58, and his wife, 53, a homemaker, own a MPV vehicle which will be 10 years old in October. Yesterday, they took advantage of the lower COEs to purchase a Toyota Altis which will replace their current car.

Mr. Ng said: "The COE is still very expensive but we cannot wait anymore - I feel a car is a necessity in Singapore but right now, it's priced like a luxury item."

Ms. Evelyn Tan, 36, self-employed, upgraded her vehicle from a 3 year old Toyota Vios to a Mercedes Benz C-Class. She said: "With the trade-in and lower COE, I'm getting a very good deal on my new car." (The Straits Times, August 27, 2012).

I bought my current car about two years ago and I have not really been looking at cars or tracking their prices. A quick check online revealed the following:

1. New Toyota Altis 1.6 Classic (A) @ S$ 123,988
2. New Mercedes Benz C180 (A) @ S$ 214,888

Wow! WOW! WOW!!!!!!

I am used to driving around and would find it hard to adapt to a carless lifestyle. However, to pay so much even for a new Toyota Altis is simply mind-boggling.

If I were to buy a car now, I would look at pre-owned cars.

A 2006 registered Mercedes Benz C180 would, for example, set us back by S$60,000. This means saving S$154,888 for losing 6 years of use. This is rather simplistic, of course, as we would be buying an older car with older technology which would probably cost more to maintain with the wear and tear accumulated over 6 years. However, we would be saving ourselves some hefty depreciation.

Although I would always argue it is not a matter of affordability but a matter of value for money, consumption is always more of an emotive activity for most. So, happy, buy lor! ;)

Related posts:
1. Tea with AK71: A new car for $75,000?
2. Tea with AK71: The price of my car now.

Saizen REIT: 2H FY2012.

Thanks to its recent acquisitive activities, paying down of its loans and a strong JPY, Saizen REIT is able to declare a higher DPU of 0.63c for 2H FY2012. This is payable on 18 Sep.

Therefore, the expected reduction in DPU of 10+% with the conversion of its warrants did not materialise and Mr. Market has shown his approval in the usual way as unit price of the REIT climbed higher today.

Net gearing: 24%
Interest cover ratio: 6x
NAV/unit: 30c

Annualising the DPU of 0.63c would give us 1.26c or a distribution yield of 7.875% at a unit price of 16c. Everything remaining constant, the DPU is likely to increase as the REIT's management continues to look out for apartment buildings to acquire and pay down its loans which are amortising in nature.

I have mentioned before that if the REIT's loans were not amortising in nature, its DPU could be some 50% higher than it is now.

The management has also indicated it could buy back units from the open market if unit price should be depressed. This would also improve DPU if it should happen.

All in all, I am very pleased with Saizen REIT's results.

With numbers very healthy and operations stable, Saizen REIT is very much undervalued. I believe a 30% discount to NAV/unit is closer to fair value. That would be 21c per unit.

Assuming that there is no new acquisitions from here on and everything else remains constant, at 21c a unit, we would be looking at a distribution yield of 6%. Bearing in mind that this would likely improve in time due to the amortising nature of the REIT's loans, everything else remaining constant, makes Saizen REIT a strong value proposition for anyone investing for income.

Results presentation slides: here.

Related posts:
1. Saizen REIT: Why did I buy and would I buy more?
2. Saizen REIT: Beefing up distributable income.

Have a plan, your own plan.

"As always, invest based on your risk comfort level. 

"Remember that media headlines should not be what is driving your overall strategy and, instead, thoughtful analysis of your goals (and willingness to absorb pain in market down periods) is what is necessary for a successful investment strategy.





"Decide which type of investor you are before you invest and make sure the overall strategy reflects your view of the world as well as the degree to which you can afford to be completely wrong. 

"And always remember that no matter what you read, opinions change and strategists are fallible.





"It's a mistake to believe that anyone has all the answers; if they did they probably would not be sharing their secret with the world."

Michael Yoshikami





Related posts:
1. Sleep well at night with a plan.
2. Roads to wealth creation in the stock market.

The very first step to becoming richer.

Singaporeans have a reputation for being very good at complaining. This is not a bad thing per se. 

After all, if some things are really bad and in urgent need of correction, we should complain. 

How else would the relevant authorities know about the problems and to take action? 

I draw the line at taking videos and photos of minor incidents and posting it on Stomp!





However, what I really find unacceptable is perfectly healthy and whole people complaining about how they do not make enough money. 

I have blogged about this before and I must say this again: If we feel that we are not making enough money, ask ourselves if we are being shortchanged.

Are we being paid fairly? 

If others in similar position are being paid more, hey, we got a raw deal! Negotiate with our employer. 

If we are really good workers, our employers would want to keep us and give us a much deserved raise. 

If we are sub-par workers, we should keep quiet if we want to keep our job (and, hey, stop complaining). 




We have a choice if we want to do better or to remain sub-par, of course.

Would you believe me if I were to tell you that it is always harder to keep really good workers in any company? 

Sometimes, even with above market rate compensation, it could be difficult to retain really good workers. Why? 

They keep improving themselves and would try to look for better paying positions which could even be in a totally different industry. Jobs could even come looking for them! 

These people are dynamic and driven. It is not surprising that they are usually able to earn higher incomes. One day, they could even strike out on their own and run their own businesses.




Very few things in life are free. 

To earn money, we must give something in exchange. 

To make more money, we must give more in exchange or give what few could give as it would be more highly valued. 

If we have a relatively low income and would like to have a higher income, complaining is unlikely to help make us more money.




Now, I always say that we are all made differently and some of us are just comfortable enough doing what we are doing, feeling that there is no reason to change. 

Is there anything wrong with this? 

Well, if by keeping the status quo, we become wage slaves, yes, it is wrong, very wrong.

The last thing we want to be is to be a burden to people we love or, indeed, to society as a whole. 

Well, I could be generalising too much but common decency would require that we think this way. 

Taking affirmative action to plan for self-sufficiency, avoiding dependency, is not only financially prudent, it is the responsible thing to do.




Think of our lives like how we would think of a business. 

Healthy personal finances would require us to, firstly, increase our revenue and, secondly, to keep our expenses prudent. 

OK, not necessarily in this order.

If we feel that we do not make enough money, look at our revenue and expenses. Something must be wrong with one or both. 

Unless we are severely disadvantaged in some way, there is no reason why we cannot do something about one or both.




With such people who are always complaining they do not have enough money, naturally, I would not even talk to them about investing in the stock market. 

They have to seek freedom from their mental shackles first. Otherwise, they are just wasting everyone's time.

Do you know of anyone like that? 

If you do, try reaching out to them. 

You would be doing them a big favour.

Related posts:
1. Do you want to be richer?
2. Wage slaves should be fearful.
3. Money management: Needs and wants.
4. A common piece of advice on saving.

AIMS AMP Capital Industrial REIT: Scrip dividend II.

I have been asked online and offline if I would be taking part in the Distribution Reinvestment Plan (DRP) offered by AIMS AMP Capital Industrial REIT.

The price is $1.2421 per unit. This is at a slight discount compared to the closing price of the REIT in the last session which was $1.27 per unit.

The last DRP offered unitholders a price of $1.1622. Shortly after, the unit price plunged to hit a low of $1.085. Could we see a repeat of history? Could unit price plunge lower this time as well?

I did not take part in the last DRP and was waiting to accumulate closer to S$1.00 a unit. Unfortunately, Mr. Market was hungry for AIMS AMP Capital Industrial REIT and buyers overwhelmed sellers after unit price touched a low of $1.085.

So, if we put these pictures together, we could see the REIT's unit price plunge below the DRP's offered price again. How low would the unit price go? This, no one can say for sure but if the opportunity should present itself, for anyone who would like to increase exposure to the REIT, buying then would make sense.

So, am I taking part in the DRP?

Related post:
AIMS AMP Capital Industrial REIT: Scrip Dividend.

Tea with AK71: Kwan Im Thong Hood Cho Temple.

As a boy, I used to visit the temple dedicated to the Goddess of Mercy on Waterloo Street regularly with my parents. During the very difficult years of the 1980s recession, we were even more regular. Till today, my dad would still visit regularly.

Personally, I have not been to the temple in years. Today, I made use of the public holiday to visit the temple. I went through the usual routine of prayers and making a donation to the needy when I got there.

A visit to the temple always sets my mind at ease, not because I think the Goddess of Mercy would make things right but because I would reflect on my life and realise that things are not too bad. Sometimes, life gets a bit choppy but we have to count our blessings. Remember to be humble and remember to help the less fortunate.

As I was leaving the temple, on impulse, I took a photo with my Samsung Galaxy Ace. It was hastily taken and as it was very sunny, I could not see the photo taken clearly then. I looked at the photo when I got home just now and I was really amazed by it.

佛光普照

May the benevolent radiance of the Lord Buddha shine on all of us.

Good debt is always good?

I look at debt as a necessary evil. Sometimes, I need that extra help in order to buy something.

Then, do I take as long as I can to repay the debt? Well, in this environment of very low interest rates, the concept of good debt has gained traction. Why not?

The idea of good debt is appealing because it gives us more funds which could possibly generate higher returns than the interest paid on the borrowed funds. What is the catch here? Yes, only if we can use the funds to generate higher returns.

The late Dennis Ng said that the rich always take on debt while the average man tries to be debt free. This is not always true. I know of rich towkays who have so much money in their bank accounts that they would pay for a luxury car in cash instead of taking a car loan! No matter how low the interest rate is on a car loan, it is still some 10x more than what a savings account pays in interest. I also know of average people who are leveraged to the max to capitalise on good debt.

So, who is right and who is wrong?

Recently, UOB came up with a 50 year home loan offer. Khaw Boon Wan has called this a gimmick, advising people not to fall for that and that it doesn't make sense. Now, does it make sense? For someone who is financially savvy and who is able to make his money work much harder, it could possibly make sense.

Personally, I am rather apathetic about the whole matter. There will always be people who are more comfortable with debt. Hey, ask the Americans. Then, there are those who are less comfortable with debt. I have heard of mainland Chinese buying condominium units with cold, hard cash.

Again, who is right and who is wrong? It is really subjective, isn't it?

For people who are proponents of good debt, the pertinent question to ask is whether our money can always make higher returns than the interest paid on the loans? For now, it looks that way. What happens the day the party ends? Are they getting drunk on debt?

For people who are more conservative, the pertinent question to ask is whether they could be short changing themselves by being debt free in this environment of very low interest rates. Of course, if the most sophisticated wealth building tool they know is fixed deposits, staying debt free is the way to go.

Like a friend told me, I have a choice. His intended message was that I have a choice whether or not to embrace good debt. Personally, I understand the concept but I am more comfortable being debt free.

I feigned ignorance and replied: "People who do not have a choice should not be investing in property." With this, I deviated from his line of reasoning that good debt is always good. Instead, I insinuated that people who do not have a choice but to borrow to invest in properties just because of the very low interest rate environment and the perceived future returns should think twice.

Of course, the choice is theirs. ;)

Tea with AK71: Climate change.

Let us take a break from all the hustle and bustle of our lives. Let us think about the world and if we are helping to make a difference.

Beijing was hit by the worst rainfall in 60 years last month.

The relentless, weather gone crazy type of heat that has blistered the USA and other parts of the world in recent years is so rare that it can't be anything but man-made global warming...

The research says that the likelihood of such temperatures occurring from the 1950s through the 1980s was rarer than one in 300, Now, the odds are closer to one in 10...

The increase in the chance of extreme heat, drought and heavy downpours in certain regions is so huge that scientists should stop hemming and hawing... AP



Mother Nature will find a way to right the imbalances. In Beijing, the official pollution index, which had showed an unhealthy rating before the storm hit, registered “excellent” after the storm, with the air noticeably free of its normal acrid smell. Full story: here.

If we do not make changes, Mother Nature will change things her way.

Related post:
Tea with AK71: Just storms?

Wilmar: Touched a new low.

In the last session, Wilmar's share price touched a new low of $3.18. Many market participants are wondering if they should go long here. Of course, conventional wisdom would say wait for the sellers to be done selling.

So, are the sellers done selling? The OBV shows that distribution activity has not ceased. However, both MFI and MACD have not formed lower lows as compared to May 2012 when share price was higher but declining. Together, the technicals tell me that there are still sellers around but demand has picked up if only barely so.

Technically very weak, we could see lower prices for Wilmar's shares if the current floor fails to hold. Immediate support is at $3.18 while immediate resistance is at $3.54.

Although we could hope for a gap fill at $4.65 which is also where we find the declining 200dMA, that is a long shot and unlikely to happen in the near future.

After such a massive selling down, market participants are likely to take whatever gains they can and run for the hills if there should be any run up in share price. So, adopting a trading mentality could be fruitful for anyone interested in going long here.

Related post:
Wilmar: Not a time to sell.

China Minzhong: Pushing higher.

To any chart watchers, it is obvious that China Minzhong's share price has broken out of resistance.  From here the immediate resistance is provided by the declining 100dMA which is currently at 73c. It could approximate 72c in the next few sessions.

Overcoming the 100dMA could see a test of resistance provided by the 200dMA which is also declining but more gently so. The 200dMA is at 83c. The last time the 200dMA was tested was earlier this year in February.

With all the momentum oscillators up sharply, the worst is over for China Minzhong's share price, it would seem. MACD suggests a return of positive momentum. MFI suggests demand is stronger. OBV suggests robust and continuing accumulation.

It has to be said that a longer term downtrend that started in early 2011 is still intact. So, traders ought to be careful and watch the longer term resistance.

Related post:
China Minzhong: Crossroads.

Sound Global: Retest of resistance likely

On 7 July, I said that the technicals suggested it could be time to sell Sound Global's shares and that if price were to move higher, it would be a slow grind upwards. This picture has, essentially, stayed intact till now as its share price has been stuck at resistance, not being able to move convincingly above 61.5c, a many times tested resistance in the last few months.

Mr. Market is feeling slightly bullish of late and, so, could his attention move to Sound Global?

The company's fundamentals are strong and with sentiments improving, there is a chance that its share price could move higher. A retest of resistance at 61.5c looks likely. However, whether resistance could be taken out would depend on volume which has been rather low.

After 61.5c, the next major resistance is at 68c.

Related post:
Sound Global: Would I buy now?

Sound Global said it has agreed to undertake the second phase to expand the existing capacity as well as to increase the existing discharge standard of the wastewater treatment plant BOT project in Jingbian County, Shaanxi Province, China.

Sound Global wins Shaanxi wastewater treatment plant BOT project for $16m
Friday, 03 August 2012

© 2012 - The Edge Singapore

Ben & Jerry’s Chunkfest!

Have you been to an ice-cream beach festival? Ice-cream what? Yes, an ice-cream beach festival!

Featuring 15 exclusive and specially flown flavours from around the world as well as our favourite flavours in Singapore, there will be fun, games and activities for everyone. And to top it all, we are also introducing a brand new flavor at the event this year!

Join us from 2pm to 10pm on August 25, 2012!

Follow this link for full details: Ben & Jerry's Chunkfest!

Saizen REIT: Beefing up distributable income.

Saizen REIT has been adding apartment buildings to its portfolio since resolving the CMBS for YK Shintoku. This will go some way to ameliorating the expected decline in DPU due to warrants exercised earlier.

Since my blog post of 26 May 2012, Saizen REIT's unit price has been rising gradually, hitting a high of 16c just two sessions ago. Mr. Market has recovered from his anxiety and is making up for over selling the REIT back in May, it seems.

For anyone who has missed the boat and is thinking of jumping in now, I would say that the risk premium is higher now, obviously. In the last two years or so, the highest Saizen REIT's unit price went to was 18c, if I remember correctly. Would its unit price push to test 18c again? I am almost confident it would but when would it do so? That, I cannot say.

If the REIT's unit price should decline, there are layers of support with longer term supports clustered at 14.6c, 14.4c and 14.3c. The shorter term 20dMA is at 15.4c. People anticipating its half yearly income distribution which is payable sometime in September and to be announced this month could be eyeing the 20dMA. So, the support, if tested, could show some strength in the near term.

Related post:
Saizen REIT: Why did I buy and would I buy more?

Japan Residential Assets Manager, the manager (of Saizen Real Estate Investment Trust (Saizen REIT),said associate Godo Kaisha has agreed to acquire of Rise Yotsugibashi (RYB) from an independent party for JPY 428 million ($6.8 million).


RYB is a brand new building built in June. It comprises 49 residential units, three car parking lots and five bicycle lots....


RYB is currently in the process of being tenanted. It is expected to generate annual revenue and net property income of JPY 36.3 million and JPY 27.5 million respectively, which are equivalent to about 0.9% and 1.1% of Saizen REIT’s annual revenue and net property income in the financial year ended 30 June 2011 (FY2011).

Saizen REIT acquires residential apartment for $6.8m
Friday, 03 August 2012

© 2012 - The Edge Singapore

LMIR: 2Q 2012 DPU 0.79c.

LMIR has increased distributable income, giving a distribution per unit (DPU) of 0.79c in 2Q 2012, payable on 30 August 2012. This an improvement over the DPU of 0.69c in 1Q 2012. Having said this, it is still lower than the 0.815c I estimated, post rights.

LMIR has a gearing level of 9.3% (9.2% in 1Q 2012) and its interest cover ratio is 11.4x (13.3x in 1Q 2012).  There is plenty of debt headroom and I still believe that growth through further acquisitions is likely to be funded fully by debt and we could see DPU improving by a fair amount.

Indonesia remains a growth story with domestic consumption forming some 60% of its GDP. The demand for quality retail space is growing over time.

LMIR remains a bullet proof REIT with a strong balance sheet. However, whether it could deliver meaningfully higher DPU depends on its management which seems slow to act and has, in my opinion, under-delivered, post rights.

Would at I buy at current prices? No.

See slides presentation: here.

Related post:
LMIR: 1Q 2012 DPU 0.69c.

Masters In Management - At The London Business School

In a very competitive job market, are you thinking of how to stand out from the crowd? Have you thought of having a Masters Degree to give you that competitive edge in job applications?

London Business School is looking to increase the number of Masters in Management (MiM) applications it receives from graduates/recent graduates with less than a year’s work experience, who are looking for a post-graduate business course. 

The Master in Management (MiM) programme will lay the foundations for a successful career in business as it gives students a competitive edge in front of global recruiters. 

The MiM programme helps students develop deep knowledge and skills in the key areas of business that can be transferred directly to the corporate world. 
 Develop deep knowledge and skills in the key areas of business that can be transferred directly to the corporate world · Develop deep knowledge and skills in the key areas of business that can be transferred directly to the co
The MiM programme also comes with a Career Skills Programme which runs alongside academic study and assists students with career evaluation, job search and professional skill development.

To stay relevant and current, the MiM programme was developed in extensive consultation with top recruiters and the curriculum focuses on the knowledge and skills that employers demand.

Leading recruiters regularly visit the school and the programme's Career and Business Immersion weeks provide exclusive opportunities to meet top graduate employers.

In just one year, LBS graduates can get a world-respected brand on their CV. 

The 2011 Masters in Management Employment Report shows that:

· 96% of the class secured an offer of employment within three months of graduation

· 42% of graduates went into finance; 35% into consulting and 23% into corporate sectors

· There was an increase in the number of students being hired into the same organisation which shows that recruiters value the contribution MiM make.

· Companies hiring MiMs included A.T. Kearney, Apple, Bain & Company, Booz & Company, Citi, Google, HSBC, L'Oreal, McKinsey & Company, The Boston Consulting Group, Unilever, Universal McCann, UBS and ZS Associates. 

See the full report here.

MiM alum Andreas Lubbe, who used the MiM to fast-track his business career, said: "I felt that there was no degree other than the London Business School Masters in Management that would really help to prepare me for working in top tier companies."

Andreas's programme experience video is available on the London Business School Masters in Management website.http://bs.serving-sys.com/BurstingPipe/adServer.bs?cn=tf&c=20&mc=click&pli=4543570&PluID=0&ord=[timestamp]  

So, if you are thinking of gaining a strong competitive edge in a business career, why not consider the London Business School Masters in Management?  MiM is a full-time, 12 month programme and the next start date is September 2012.

For more information, download the brochure here

Relevant links:
London Business School
Masters In Management


Sponsored Post

Traffic accident with a Malaysian vehicle.

On Saturday night, while driving home on the PIE, there was an accident on the lane I was in. As I always make it a point not to follow too closely the vehicle in front of me when I drive, I was able to stop my car in time although the wet road surface from an earlier downpour made braking more hazardous.

I was really pleased that my safe driving style paid off. However, that happiness lasted for only 3 or 4 seconds. There was a loud bang and I felt the impact as a motorcycle crashed into the back of my car. Sigh. I got out of my car and took a look. Argh! It was a motorcycle from Johor! Nooooo!

From being pleased, I became upset in a flash.

The motorcyclist was dazed and he probably cut his lips in the fall as he had blood on his teeth. His bike had a "P" sticker. A newly licensed rider. He looked frightened too and I later found out that the bike was borrowed from a friend.

I think I must have felt sorry for him and he must have have felt relieved that I did not scold him. He said he had tried to change lanes instead of braking but because traffic was heavy, he couldn't do it and ended up crashing into the rear of my car. He should have stopped his bike instead of trying to change lanes.

Anyway, I made a police report later that night at the advice of a friend. In any traffic accident involving a foreign vehicle in Singapore, a police report must be made within 24 hours of the accident.

Today, I brought my car to the approved workshop and my worst fear was realised. I would have to claim against my own insurance policy first because the other party is a foreign vehicle. It has to be so if I want to get my car repaired soon. There is no guarantee that the cost of repair could be recovered from the other party!

I would also have to pay an excess of $600 claiming against my own insurance policy. I bought an NCD protector. Otherwise, I would also lose my NCD.

Whenever I hear of accidents like this, I would always wonder why it is so difficult to claim against insurance policies of Malaysian vehicles involved in accidents here. In fact, I was told that it is almost impossible.

Singapore vehicles are not allowed on the roads unless they have valid insurance policies. The same should apply to foreign vehicles but if it is almost impossible to claim against their insurance policies, then, it is as good as being uninsured when they are in Singapore, isn't it? Then, they should not be allowed on our roads.

This reminds me of an accident here which I read in the papers some time ago involving a local female reporter. Her vehicle was the second last vehicle in a chain collision and the last vehicle was a van from Malaysia. She really suffered in the entire claim process which lasted months. I cannot remember clearly now but I think she had to bear all the cost in the chain collision as they could not track down the van from Malaysia.

These days, I always try to look on the brighter side of things. If I had not been able to brake in time, I would have been the second last vehicle in the chain collision and things would be more complicated now. I would have been in same situation as the female reporter mentioned earlier. So, I should count my blessings.

However, I am only human and cannot help but feel rather sad now...

To be richer, be comfortable with being invested.

I met someone recently who told me he is swearing off the stock market for good. I asked him why. He told me that he lost a lot of money in the global financial crisis but he managed to recover all his losses in the ensuing recovery. That is good news, isn't it? Well, apparently, Mr. Market took back some of the gains in the last one year. So, he is still in a nett loss position.

I asked if his investments paid any dividends and he said yes but very little. He said that with the amount of time and effort he put into the stock market, he might as well just leave the money in a fixed deposit and save himself some headache (and heartache).

This person was not a very close friend but for some reason when I meet people, the conversation would steer towards investments and personal finance matters. Anyway, as I did not know the person very well, I did not want to volunteer too much information because it could come back to haunt me one day.

However, I could not resist asking if he had thought of REITs. He looked at me with frown and said he vaguely remembered reading in the newspapers that REITs were a waste of time. He asked why did I ask. I told him I have some investments in REITs and they have been very good to me. He was curious and asked me for more information. I was in a slight fix.

I believe that for any investor, the most important knowledge is not TA or FA, it is self-knowledge. Know ourselves and we will know if a product is suitable for us. Know ourselves and we will know if a certain something is what we have been looking for. We could have all the financial knowledge in the world but not knowing ourselves, we could end up having sleepless nights as investors.

Why are investors in the stock market? To make money. Why do drivers go on the road? To get from point A to point B. Well, that would be a logical assumption. There are many types of investors in the stock market just like there are many types of drivers on the road. Each type would have a distinct behaviour but they all share one primary reason for doing what they do.

Some drivers are speed demons and they also like weaving in and out of traffic. On more than one occasion, a speeding car which had overtaken my slower Mazda 2 a few minutes before would be waiting for me at the next traffic light a few minutes later. Of course, if the driver had not been stopped by the traffic light, he could have reached his destination a few minutes earlier. Just for a few minutes, why increase the risk of getting into an accident?

Some spend much of their time in the stock market looking for the next big thing. The theme is multi-baggers. Is this wrong? No, of course not. I do it too. If we could find a multi-bagger, we would be rewarded many times over. However, once invested, the waiting is the hardest. What if something were to go wrong? Luck plays a big part in success.

These days, I still do a spot of potential multi-bagger spotting but I am able to do it now with a greater level of comfort. Why? I have a thick cushion of capital gains and dividends received. On top of this, I have a predictable flow of passive income from my investments in selected S-REITs and some high yield stocks. So, it helps to reduce any feeling of anxiety if my spotting becomes spotty. Being comfortable, therefore, would contribute to our success rate and if we are honest with ourselves, we would agree that this rings true.

We have probably heard from gurus that we must be emotionless in the stock market. I am only human. So, try as I may, I am not totally without emotions. I know that we should be greedy when others are fearful but if I do not have a greater level of comfort, I find it hard not to be at least somewhat fearful. It is like a person on a flying trapeze. He would feel less fearful if he had a safety net, wouldn't he?

I am a creature of comfort in more ways than one. I must feel comfortable in anything I do. I believe every human being is the same. Now, when financial advisors ask us what is our risk appetite, they could very well be asking us what is the level of comfort we need before we might want to take the plunge. Why do they not ask it differently? I wonder.

Finally, after such a long winded discourse, I am back to where I started. I asked this person to closely examine what he needs in order to feel comfortable in being invested in the stock market. That answer lies within him and he has to be honest with himself. Once he has the answer, things would fall into place and he would know what to do. Ideally, anyway.

Related posts:
1. Of primates and their diet.
2. Trading to put food on the table.
3. A common piece of advice on saving.
4. To protect our wealth, we have to take risk.
5. Why do I not panic?

What should a Singaporean have by age 35?

I came across an article in Yahoo!Finance: "The 5 things every Singaporean should have by 35."

The 5 things the author listed are:

1.  A time deposit that would be maturing soon. He thinks that people should start by having a reliable investment scheme in their 20s and went on to say that fixed deposits are a good place to look... er...

2.  A relevant degree. He thinks that a degree is the norm these days and people should get a degree as soon as possible. He also thinks that a degree is the key to employability. I wonder if diploma holders might disagree and, also, I guess for those who are more entrepreneurial, a degree might not really be a necessity.

3. A job with a health plan. OK, this sounds kind of strange to me. It is as if one of the reasons for working for company ABC must be because it has comprehensive health benefits for employees... I would rather have a comprehensive personal medical insurance policy. After all, what if company ABC were to retrench me?

4. All rollover debts resolved. This means no credit card debts. I think we should not have any credit card debts no matter our age. It is the most expensive debt anyone could have! 24% interest per annum? Of course, there are balance transfer offers aplenty these days but they aren't exactly free either, are they? So, zero rollover debts from the day we get our credit cards, period.

5. At least one form of side income. He says it doesn't matter if it is forex trading, franchise ownership or a money making hobby. This is to provide for retirement and some extra spending money. I would agree to this but I would try to make it so that this side income is passive in nature. The side income should be such that it continues to flow in even if we should be incapacitated in one way or another.

The author probably means well but I cannot help but feel that the article was hastily written although it is obvious to me that the writer has a flair for writing.

I suppose people in different age groups would have different things to say about what we should have by age 35. What would you say are the things we should have by age 35?

CapitaMalls Asia: Interim dividend of 1.625c per share.

Hurrah!

CapitaMalls Asia posted profit after tax and minority interests (PATMI) of $232 million for 2Q 2012, an increase of 40.7% from the $164.9 million for 2Q 2011.

Earnings before interest and tax (EBIT) were $283.8 million for 2Q 2012, 33.4% higher than the $212.8 million for 2Q 2011.

CapitaMalls Asia has declared an interim dividend of 1.625 cents each.

CapitaMalls Asia’s 2Q earnings up 40.7% to $232m
Thursday, 26 July 2012

© 2012 - The Edge Singapore

Cache Logistics Trust: 2Q 2012's DPU down 5%.

A drop in DPU? Yes, that is right. From 2.086c in the last distribution to 1.981c this time round.

This is due mainly to a private placement of 60 million units in March this year. This is an important reason why I prefer a rights issue to a private placement.

With a rights issue, all unitholders are given a chance to participate in the enlarged capital base of the REIT. With a private placement, retail investors are usually disadvantaged.

Although the DPU might still fall 5% if the REIT had a rights issue instead of a private placement, at least all unitholders would have had a chance to buy new units at a discount which would mean the distribution yields on their investments would be less affected negatively, if at all. Unitholders would also be able to benefit from the price appreciation of the rights units.

Well, it remains to be seen if the management is able to improve DPU in the coming quarters, raising it to the level before the private placement in March.

NAV/unit: 90c.
Gearing: 27.5%.
Interest cover ratio: 7.5x.

With gearing lower at 27.5%, new acquisitions could be in the pipeline.

See presentation slides: here.

Related post:
Cache Logistics Trust: 1Q 2012.

First REIT: 2Q 2012 DPU unchanged.

First REIT has delivered another quarterly DPU of 1.93c, unchanged from the last quarter. However, the quarterly DPU of 1.93c would not be repeated as it includes the final payment from the gain from selling of its Adam Road property. This is why I have cautioned more than once that we should use a more conservative quarterly DPU estimate of 1.6c when valuing the REIT.

The REIT goes XD on 30 July 2012 and income distribution is payable to unitholders on 29 August 2012.

NAV/unit: 79.5c
Gearing: 15.9%
Interest cover ratio: 11.8x
Occupancy: 100%

In 2H 2012, the REIT could see marginally higher income once a 5 storey annex is completed in its Lentor Residence later this year. It is also expected to take advantage of its low gearing and acquire more properties from its sponsor, Lippo Karawaci. The REIT has ROFR to several properties in Indonesia in various stages of completion.

Lentor Residence

First REIT's current unit price is definitely on the high side. Mr. Market is not known for patience. So, if the REIT should be tardy in its efforts to improve DPU, we could see its unit price declining over time now that the contribution from the sale of its Adam Road property will cease.

See slides presentation: here.

Related post:
First REIT: 1Q 2012 DPU of 1.93c and a higher fair value?

Ascendas Hospitality Trust: Am I interested?

Over the weekend, a friend asked me if I would be interested in Ascendas Hospitality Trust although he knew that I am generally not interested in IPOs. He was just asking for my thoughts on the Trust.

Ariake Sunroute Hotel, Japan.

Ascendas Hospitality Trust (A-HTrust) will be offering 437.33 million stapled securities at 88 cents each for mainboard listing in its initial public offer (IPO) in Singapore.

(Source: The Business Times, 18 July 2012)

What are stapled securities?

Stapling simply means that two different securities are "stapled" together for the purposes of trading or transfers. Stapled security could comprise two or more of the same or legally different instruments, for example, a share in a company and a unit in a trust.

The trust(s) and the company(ies) can hold assets and operate businesses, but active business, such as asset management and development are typically conducted by the company while passive investments in property or funds are undertaken by the trust. In practice, the trust and the company effectively operate as one entity although the company continues to be a separate legal entity from the trust.

Source: http://www.invested.hk/invested/en/html/section/index.html

For example:

CDL Hospitality Trusts is a stapled group comprising CDL Hospitality Real Estate Investment Trust ("H-REIT"), a real estate investment trust, and CDL Hospitality Business Trust ("HBT"), a business trust.

Well, what do I think of Ascendas Hospitality Trust? I won't do a thorough analysis of the Trust because I don't really have the inclination although I will share why I am not interested in it (now).

ibis Beijing Sanyuan Hotel.

Initially, the Trust will hold 10 hotels in its portfolio. These hotels are in the countries of China, Australia and Japan with Australia contributing to some three quarters of its income. The Trust also projects an 8% distribution yield in the year 2014.

I feel that I need to be conversant in the economies of three countries and the health of their respective tourism sectors to analyse how well they could continue doing. I would also need to take into consideration that income would be collected in three foreign currencies and converted to S$ for distribution to unitholders. Foreign exchange rates would affect income in S$ terms.

So, analysing this Trust and forecasting its future income is somewhat more challenging. It is less straightforward.

Then, what about my investment in Saizen REIT? Isn't that Japanese?

I won't say that I am conversant with the Japanese economy or its housing sector but I am a bit better informed in the area. Also, it is one country, not three and I only have to look at a pair of currencies, not three.

Saizen REIT is also holding residential properties, not hotels. Demand for housing is more inelastic compared to demand for hotels and with the type of properties Saizen REIT owns, there is lesser correlation with the ups and downs of the economy. Demand for hotels, however, is very different.

Ascendas Hospitality Trust is going to demand a lot of time and effort from me if I were to be become a unitholder. An eventual 8% distribution yield? I will need a higher distribution yield to entice me into this one in view of the work I have to do.

Hong Kong Disneyland - Grizzly Gulch!

Where to go during the upcoming school holidays?

Disneyland, where magical moments happen every day!

Hong Kong Disneyland is bringing in new exclusive theme lands to add to all the fun!

Grizzly Gulch - Wild wild west!

Grizzly Gulch is an upcoming theme land set to open at Hong Kong Disneyland, this will be a World Exclusive only for Hong Kong, so you won’t be able to find this in any other Disneyland around the world!

Toy Story Land

Remember the familiar phrase “To infinity & Beyond!” from Buzz Lightyear? Now you can experience the magic at The Asia Exclusive Toy Story Land which opened last November!

Bring out the child at heart and set sail to enjoy the new theme rides and just bask in Disneyland’s magic: Hong Kong Disneyland! 

Good deal:
4 Days 3 Nights Hong Kong at less than $400 per person. Find your Hong Kong Long Weekend Getaway at the best price with ZUJI.