Online shopping, retail S-REITs and Starhill Global REIT.

Online shopping is gaining strength rapidly and even an IT dinosaur like AK buys stuff online. From my own experience, I would say that online shopping is attractive because of two factors:

1. Convenience. Delivered to my home with either very competitively priced delivery fee or free delivery.

2. Cheaper. For the same item, I have saved as much as 30% buying online than buying in a brick and mortar shop.




So, if a shop in a mall is selling stuff that could be found online, unless the mall is conveniently located and unless they are priced competitively, that shop is going the way of the Dodo. 

It is just a matter of time.

Shopping malls must fill themselves more with shops that offer goods and services which cannot be found online for one reason or another. 

After all, there are things which online shops cannot do or cannot do well.

Therefore, despite the growing reach of online vendors, I believe that some shopping malls will continue to do reasonably well and some readers might remember that I have been waiting to invest in CapitaMall Trust (CMT). 

However, I have not been able to get in at a price which I am comfortable with because Mr. Market likes pedigree and, just like Frasers Centrepoint Trust (FCT), even now, CMT is trading at around its Net Asset Value (NAV) and both are offering very similar distribution yields in the mid 5%.




REITs, unlike companies, pay out most of their cash flow from operations to their investors. 

They do not pay dividends from their earnings. 

They distribute income. 

They do not have retained earnings. 

One way REITs grow, without placing too much demand on shareholders (think rights issue) or diluting minority shareholders (think private placements) is to ensure that there is genuine growth in the value of their assets which would in turn give them more leeway to fund more growth through using debt. 

It is a virtuous cycle, one that hinges on the growing value of assets. I think we can agree that CMT and FCT have done rather well in this area.




However, given the uncertain retail environment for some time now, although well run, I would like to invest in CMT and FCT at a meaningful discount to NAV and if they offered higher distribution yields.

Asset values in good times would appreciate but in bad times they could come under pressure. 

So, buying at a discount to NAV makes sense to me unless we feel that asset values can only go up and never go down.

Although I have been mostly looking at CMT, I have also looked at FCT and Starhill Global REIT (SGR).




I like CMT and FCT. I am more familiar with their malls. However, I am not comfortable with getting in at current prices. 

I am not as familiar with SGR's malls (i.e. Wisma Atria and Ngee Ann City) and not all their malls are in Singapore which, by the way, is a good thing. 

However, trading at a meaningful discount to NAV and offering a distribution yield closer to 7%, to me, SGR is priced more attractively.

There are a few more factors which pushed me towards investing in SGR:

1. More than a third of SGR is owned by the sponsor, YTL Group. 

This helps to ensure a greater degree of alignment of interest with minority unit holders.

2. The management is looking to sell the REIT's Chinese and Japanese assets to concentrate on what they consider the REIT's core markets of Singapore, Australia and Malaysia. 

Now, reducing concentration risk is good but having a handful of assets in China and Japan probably isn't beneficial and would, in fact, add disproportionately to operating costs.

3. The relative weakness in SGR's performance is probably going to be temporary because of redevelopment works in an asset in Australia and a delay in a new tenant moving into its asset in China.




Looking at SGR's DPU for the last quarter, annual DPU, all else remaining equal is about 5c which gives us a 6.85% distribution yield based on 73c per unit. 

However, if there were to be more hiccups, income could be affected negatively and I am knocking off 5% from DPU to 4.75c to take this into consideration. 6.5% distribution yield is good enough for me while I wait for an improvement in performance.

I am not buying into SGR because I think its outlook is fantastic. For sure, they will face challenges.

I am buying into SGR because, taking advantage of its recent price weakness, I feel that there is some margin of safety.




SGR is an investment that is likely to generate a fairly good yield for the price that I paid.

Related posts:
1. CRCT added to my portfolio.
2. CMT and when am I nibbing?

Understated gains from Saizen REIT.

For a while, I have suspected that ASSI has stalkers but the following can only happen because this stalker happens to be a friend. If he were just any other reader, I would freak out.

Reader:

I believe you made in mistake calculating your gains from Saizen. 

Just letting you know. You see if you want to amend.

"How much space is enough?"

AK:

I checked the numbers again. You are right!

Spooky!!!

I think I mixed up my average cost price for Saizen REIT with First REIT's.

So, $245,000 is too low.

It should be $30,000 to $40,000 higher.

So, the returns, in terms of percentage, should be higher. Maybe more than 25% a year.

Too lazy to come up with the exact figures. Of course, this shouldn't surprise you. LOL.

I will publish a blog as an errata. Thanks.

This is a very good reminder to everyone that ASSI is not very reliable. If you have yet to read the ASSI disclaimer, it is at the bottom of the blog.

If you choose to eavesdrop on AK talking to himself, do it at your own risk.

What? You are like AK? Too lazy to scroll to the bottom to read?

I reproduce it here:

"The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog."

Related post:
How much did AK make from Saizen REIT?

How much did AK make from Saizen REIT?

Reader:

Dear AK,

I just started following your blog this year. So many gems!

Thanks for resharing your Saizen REIT blog post from 2015 on Facebook. It just tells me how much more I have to read in your archives!

I might regret asking this but how much money did you make from your investment in Saizen REIT?






AK:

Don't worry, you can ask. 

I won't bite your head off. 

Whether I give you the desired answer or not is something else.

If I did not reveal the larger investments in my portfolio recently, I would probably have refused your request.

Now, I don't see any harm in sharing the numbers. :)

Income distributions plus capital gains (excluding return of capital) from the sale of all the REIT's assets, roughly,

$ 245,000

Almost a quarter of a million dollars.

The number shouldn't be surprising since Saizen REIT was one of my 3 largest investments in S-REITs and my entry prices were pretty low.

In terms of percentage, the return was probably around 20% per year, give or take a little. 

I am not crazy enough to calculate the exact numbers.

Of course, now, with news that Saizen REIT is to be liquidated, I should be seeing another few thousand dollars coming back but that is really a return of capital.

Related posts:
1. 2016 full year passive income.
2. Saizen REIT: Right prices and luck.
3. My investment porfolio.

See errata (19 Mar 17, 9.25pm):
Understated gains from Saizen REIT.

Made $14K a month and struggling at 48 years old.

Reader:
This one worth a share man.
Financial prudence - 14K a mth former banker and struggling at 48yo. Pity him anot?

http://www.straitstimes.com/singapore/out-of-work-and-out-of-luck-in-search-for-full-time-jobs?xtor=CS3-18

AK:
OMG!

Reader: 
14k per mth I think exclude bonus lah

AK:
Sigh. Banker somemore. Should know better.

Reader:
Master in Financial Engineering somemore.
Wasted, if got 14k a mth I think I can retire 5yrs - 10 yrs earlier.

AK: 
I also say. Squandered opportunity.

Reader:
Sayang the chance.

AK:
Don't ever think we are invincible. Plan for the day we meet our kryptonite. LOL



Tragic.

Of course, this is not a new topic in ASSI. See blogs like the following:

1. Don't think and grow rich.

2. From rich to broke.

3. Why some might never be rich?

Missed selling APTT at higher price.

Hi Mr. AK,

I like when you say all investments are good at the right price.

I also follow you to buy APTT when it was 38c. Thank you.






I just found out you sold end of last month. The price now 43c.

I missed the chance to sell at 49.5c. Do you think I should sell at 43c?






I am not blaming you but I only read your blogs on stocks.

I missed the sell on APTT at high price because it was not not in the blog title.








Hi LK,

Welcome to my blog.

If you like Peter Lynch's famous saying, you should first learn to tell the difference between price and value. 

You could start by reading some books: HERE.





Read that blog post of mine again to learn why did I choose to sell and not hold on to APTT for dividends. 

Note that although the investment gave me a very nice 32% capital gain, that was not the main reason for selling.






As for being less than organised in my blog, I am a mental blogger. Sometimes, I confuse even myself. 

A thousand apologies.

Best wishes,
AK

Related post:
The reader was referring to this blog:
My savings accounts, recent money flow and investments.

AIMS AMP Capital Industrial REIT levels up.

UPDATED JULY 2018

DPU of 2.5c declared for quarter ending June 2018 to be paid on 20 Sep 18.

Refinancing in July 2018, weighted average debt maturity lengthened to 3.1 year, with interest savings of about $0.7 million per annum.

88.1% of interest rate fixed with interest rate swaps and fixed rate notes.

Overall blended funding cost of 3.8%





..........
AIMS AMP Capital Industrial REIT (AA REIT) is probably one of the better run REITs in Singapore, creating value for unit holders in a sustainable manner and their recent action reaffirms my view.





Most REITs are leveraged to some degree. Although leverage could magnify gains, in an environment of lacklustre growth and rising interest rates, too much leverage could spell trouble.


I remember putting forth my concern on rising interest rate to AA REIT's CEO when I was invited to tour some of the REIT's properties. 

I wondered if it was possible to issue longer term bonds to lock in lower interest rates.






Mr. Koh Wee Lih told me that issuing longer term bonds could mean paying a higher coupon which made perfect sense, of course. 

So, if AA REIT should be able to issue bonds without shortening their tenors and enjoy paying lower coupons, what does that tell us?





AIMS AMP Capital Industrial REIT (AA REIT) announced it will be issuing S$50 million Fixed Rate Notes as part of its Medium Term Notes (MTN) Programme.

The 5-year Notes will bear interest at a fixed rate of 3.60 per cent per annum payable semi-annually in arrear, until maturity on 22 March 2022. The Notes are expected to be issued on 22 March 2017.

“The net proceeds from the issue will be used to partially repay the revolving credit facility due in November 2017 which was used to fund ongoing developments. This also enables us to diversify our funding sources and free up more undrawn available facilities for potential further growth.”

This is the fourth time the Manager has used its MTN programme to raise debt. 

AA REIT raised S$100 million with the four-year 4.90 per cent Fixed Rate Notes issue in August 2012 , S$30 million with the seven-year 4.35 per cent Fixed Rate Notes issue in December 2012 and S$50 million with the five-year 3.80 per cent Fixed Notes bond issue in May 2014. 

Mr. Market demands higher returns for junk bonds but accepts lower returns from investment grade bonds. 

I like the direction AA REIT is heading. Good job!





Related post:
A tour of AA REIT's properties.

Ascott REIT's mega discounted rights issue.

Hi AK

With the recent rights issue of Ascott reit, i read that the DPU and NAV per unit will most likely drop after this event.

Can you share your thoughts about this(the reason for this rights issue)?

Declining DPU. Source: HERE.

Hi AY,
I don't like Ascott Residence Trust. I don't have this.
They are always raising funds but I don't see performance improving.
If you want to read more about rights issue, here are some of my blogs you might be interested in:
1. http://singaporeanstocksinvestor.blogspot.sg/2011/10/reits-and-rights-issues-dilutive-or-not.html
2. http://singaporeanstocksinvestor.blogspot.sg/2010/09/reits-simply-explained.html
3. http://singaporeanstocksinvestor.blogspot.sg/2011/11/reits-and-rights-issues-singaporean.html

I feel that unit holders would have been better off without the acquisitions and the mega rights issue.

Reference:
"Ascott Reit unit holders will have the option of purchasing up to 481.7 million rights units at a ratio of 29 rights units for every 100 units they own. The rights units will be issued at 91.9 cents - a 21.5 per cent discount to the closing price of $1.17 per unit on Monday. Ascott Reit expects yields of up to 4.5 per cent for the acquisition of AOS and 5.4 per cent for the German properties." Source: The Straits Times, 8 March 2017.

AK the born again teacher or a mental blogger?

Reader:
I chanced upon your blog half a year ago and been following your every entry since then. In my free time, i try to read up your entries to get a grasp of what we can do to improve our wealth and be financially independent.

Articles such as contribution to CPF SA holds dearly to my heart as it means the earlier we transfer from OA (of course living a portion for hdb flat payment) to SA and cash top up (tax rebate) the more we can enjoy the compounding interest and what we will receive from our retirement in the future.


I also benefited from your lucky 4 numbers and won a little fortune. Thank you.





Your insight into shares also led me to buy shares which I wasn't aware of. I assume I am too lazy to read up on Financial news.


Thanks for talking to yourself every now and then.


When you talk to yourself, it's like a teacher giving a lecture to his students. Valuable advice which will benefit us. But at the same time in no way should we blindly always follow what you do. Rather having an opinion of our own and then making own decision based on our analysis should be the way to go

Please continue doing what you do best as what you are doing will inspire us to be better in being financially independent and gain more knowledge in financial knowledge.


Your sincerely
K

AK: Alamak. I am only talking to myself... OK, I am delivering a lecture to myself. ;)

On a serious note, I like helping people to help themselves. So, I am glad if talking to myself has achieved this.

However, not for the first time, I have been made aware that my blogs could also have caused harm. See comments: HERE.

It was followed by a chat I had soon after with a blogger:

However, given the overwhelmingly positive messages I received from readers when I shared my thoughts on my FB wall, I guess I will keep blogging, keeping the status quo.

Although I won't stop blogging anytime soon, I might slow down from time to time.

I want to avoid the feeling that blogging is a full time job. Blogging should always be a hobby to me.

Even if I do stop blogging one day, my blog is still here. So, you are never alone on the journey to financial freedom.




Be good. Be prudent. Be pragmatic. Be patient. We will do well enough.

If AK can do it, so can you!

Related post:
How did AK achieve financial freedom?

OUE C-REIT will see DPU declining.

Back in 2014, when OUE C-REIT had its IPO, I warned that its gearing was too high and its distribution yield (which was financially engineered to be higher through income support given by the sponsor) was too low given its IPO price of 80c a unit. 

The IPO was a good deal for OUE Limited.

Cheers!

Investing in REITs, we should be prepared for fund raising because they distribute most of their income to their investors. 

When a REIT raises funds, we have to question their reason for doing so. 

If it is to invest in yield accretive assets, it is a good thing. 

Regular readers of my blog would be familiar with the argument that not all rights issues are bad.

See: 
REITs and rights issues: Dilutive or not?

In this instance, OUE C-REIT is placing out new shares at 64.3c a unit (which is some 20% lower than its IPO price) in order to strengthen its balance sheet. 

So, there will be no additional income from this exercise. 

In fact, DPU will most certainly decline since there will be more units in issue while income stays the same.

The REIT's 4Q 2016 DPU was 1.18c. 

This is a 9.36% reduction from a DPU of 1.26c in 4Q 2015 and this is after contribution from One Raffles Place which was acquired in late 2015 too.

OUE C-REIT has about 1,300,000,000 units in issue. 

Placing out around 233,000,000 units to strengthen its balance sheet will see some savings in interest expense but the REIT's DPU is likely to decline further.

Roughly, we could see interest expense reducing some $5 million per year or $1.25 million per quarter. 

While distributable income will increase by a similar quantum, in percentage terms, we will see about an 8% increase. 

Now, put this against an 18% increase in units in issue and do the math.

Math is not my strongest subject but I think we will see quarterly DPU declining to less than 1.1c which means less than 4.4c for a whole year. 

Just to put this in perspective, at the REIT's IPO, DPU was 5.44c.

Therefore, to get the same distribution yield as what was offered during its IPO, OUE C-REIT's units should trade at a much lower price compared to its IPO price. 

How much lower? 

About 20% lower which means a unit price of 64c.

Of course, we want to remember that without income support for OUE Bayfront, the REIT's DPU would be even lower. 

This income support will expire end of 2018. Coupled with new supply of office space which will worsen the excess supply situation in the CBD, OUE C-REIT is on a slippery slope.

So, demanding an even lower price than 64c a unit before investing in OUE C-REIT is not unreasonable but whether Mr. Market is willing to sell at a lower price is anyone's guess.

For anyone who is interested in reading more of my thoughts on OUE C-REIT and, specifically, why I avoided it, please see the related post below and its comments section.

Related post:
OUE C-REIT (12 Jan 14).

See OUE C-REIT presentation (26 January 2017): HERE.

Every 25bps increase in floating interest rates is expected to reduce distribution by S$0.7 million per annum, or 0.05 cents in DPU

Sabana REIT could see a change for the better.

As we grow older, feelings of deja vu might become a bit more common. It is probably due to accumulated life experience or maybe the mind is just degenerating.

Anyway, when I read that e-Shang Redwood Ltd (ESR) became a substantial unitholder in Sabana REIT about a week ago, I got a feeling of deja vu.

ESR are the people who bought a majority stake in the manager of Cambridge Industrial Trust (CIT) not too long ago and they also own 12% of CIT.

e-Shang Redwood is a pan Asian logistics entity. Don't play, play.

This reminds me of the time when CIT tried to take over the distressed MacArthurCook Industrial REIT (MI-REIT). Chris Calvert, the CEO of CIT, who was then formerly the CEO of MI-REIT used CIT's resources to buy into MI-REIT.

There was a big fight over MI-REIT with the team led by George Wang. Fortunately, George Wang et. al. won the fight and AIMS AMP Capital Industrial REIT was formed.

In my opinion, Chris Calvert did a poor job of running MI-REIT which led to a need for massive re-capitalisation. If CIT had taken over MI-REIT, with CIT's lacklustre performance and controversy over the years, I think MI-REIT would not have done any better.

It is one thing having good assets and another having a good manager. If we have both in a REIT, we have a clear winner. However, if I must choose, I will choose a good manager because a bad one will just squander away good assets.

With Sabana REIT, I have shared how its numbers were really good at IPO and it just went downhill 3 years later. The manager has constantly struck me as self serving and mediocre and this is putting it mildly.

So, in Sabana REIT's case, a change is needed. Some might say any manager is better than the current one but, more accurately, I would say that it is difficult to do worse than the current manager.

When CIT bought a big stake in MI-REIT years ago, it was with the intention of taking over MI-REIT. Now, I believe that ESR has the intention of taking over Sabana REIT one way or another.

I am holding on to a legacy investment in Sabana REIT that is free of cost as well as units from the recent deeply discounted rights issue. So, I am very much in the black. If ESR is going to bring change to the REIT, even better.

Related post:
History with Sabana REIT.

Reference:
Sabana REIT and ESR.

Say VES and make $35,000 selling my car?

There was the CEVS and, now, we have the VES.

Lucky for my readers, ASSI is always just ASSI.

Anyway, the CEVS stands for Carbon Emission-Based Vehicle Scheme. Basically, cars with lower carbon emission were given rebates and I benefitted from this scheme when I bought a diesel car about a year ago. It reduced the price tag of my car by more than 10% which was a big deal.

In January this year, when the government announced that they were looking into the real environmental cost of diesel cars, I expected them to disallow diesel cars eventually. It would take many years to achieve this but, in Singapore, if the government wants to do something, we better believe it will be implemented.

So, to discourage higher consumption of diesel, last month, we saw an additional tax on diesel. 10c per litre. That is a few percentage points higher in price but still about 30% cheaper than RON95 petrol. It was 40% cheaper but 30% cheaper is still a lot cheaper. Diesel cars still make more sense for the cost conscious car owner.

Negligible impact.


I was also pleasantly surprised that the government decided to reduce the special tax on diesel cars. I am paying about $1,200 in annual road tax for my diesel car whereas I was paying $700 for my petrol car, both are 1.5 litre cars. 

Apparently, I will be paying less in annual road tax in future. I guess I am lucky that taxis make up the bulk of the diesel car population in Singapore and the government has quite a few (very good) reasons not to rock the boat too much.

Zero impact.

Now, what is the VES? This is the new Vehicular Emission Scheme and will stay in effect till end of 2019. Vehicles will enjoy rebates or suffer surcharges based not only on carbon dioxide emission but nitrogen oxide and particulate emissions as well.

So, diesel cars, with their lower carbon dioxide emission which enjoyed rebates in the past will suffer surcharges. Now, this, in my opinion, will really discourage diesel car ownership. It will do what the 10c per litre increase in diesel price cannot do.

If I were to buy my diesel car under the VES, I would be looking at a price tag that is some 15% higher whereas it was 10% lower with the CEVS before!

Earth shattering impact!

10%? 15%? No big deal?

OK. Let's put it in dollar terms.

Imagine a $140,000 price tag receiving a CEVS rebate of $15,000 which brings the price down to $125,000.

Now, imagine the same car receiving a VES surcharge of $20,000 which brings the price up to $160,000!

We are looking at a $35,000 difference!

For most middle income households, that is a big deal.


I really enjoy driving my diesel car and I am lucky I paid a lot less for it too.

Now, I wonder if I can sell my car for a higher price. Yes, I know. Bad AK! Bad AK!

(Oh, I hope you enjoyed the 3 video clips too. I laughed a lot and my jaw also dropped many times. Think I need to see a doctor liao.)

Related post:
5 reasons to buy a diesel car.

References:
1. Diesel vehicle taxes.
2. Vehicular Emission Scheme.

NikkoAM-StraitsTrading ex-Japan REIT ETF or "AK REIT ETF"?

I am feeling lazy, as always, and didn't want to write about the new REIT ETF but I received so many messages that I decided, maybe, I should say something.

I didn't want to blog about the ETF because it is easy enough to understand. 

It will hold a basket of REITs, 23 to be exact, from countries such as Singapore, Hong Kong and Malaysia. 

It will distribute income quarterly and the distribution yield is estimated to be 5% at IPO.

The ETF is probably a good choice for people who want to have exposure to REITs but are too lazy to be bothered with researching individual REITs. 




OK, I understand the lazy bit but they will have to take the good with the bad in the ETF.

For people who know more about REITs, they are probably better off investing in individual REITs. 

I don't know about you but a 5% distribution yield from a REIT product is unattractive to me.

Why?









Well, remember that REITs are leveraged instruments. 

Leverage magnifies gains. 

So, the 5% yield is after magnification. 

Taking into consideration that they distribute 90% to 100% of their cash flow (i.e. they have zero retained earnings), a 5% yield doesn't seem attractive.

To me, the only good thing about the ETF is that having a portfolio of 23 REITs reduces concentration risk. 

However, if diversification is what we want, we can try to form our own REIT ETF.










Taking from my portfolio, for example, we could put together an "AK REIT ETF":

1. AIMS AMP Cap. Ind. REIT

2. FIRST REIT

3. Frasers Log and Ind. Trust

4. Ascendas Hospitality Trust

5. IREIT Global

6. Croesus Retail Trust

7. Religare Health Trust

OK, I am being a bit liberal here since not all are REITs but you get the idea.




Assuming equal weight given to the 7 components in "AK REIT ETF", we are looking at a distribution yield of more than 7%. 



"AK REIT ETF" would generate at least 40% more in income than "NikkoAM-Straits Trading ex-Japan REIT ETF".


Oh, did you notice that my REIT is also less of a mouthful? 

Yes, I know. 

Bad AK! Bad AK!










Of course, we would also have control of what we want in and what we want out. 

We could also change the weight of each component.

If we are investing in REITs for income, if we want some diversification, then, perhaps, NikkoAM-StraitsTrading ex-Japan REIT ETF is a decent option. 

Otherwise, the ETF really doesn't seem attractive to me at all.





-------------------
UPDATE (16 March 2017):
What happens if one of the REITs (or a few) in the ETF had a rights issue?
A reader found out from the horse's mouth:
"Investors in the ETF have no direct access to the rights issues.... Manager has the discretion whether to take up the rights/sell the rights..."

Ron and Dave dissect some of today’s most important REIT ETFs.

Food inflation in Malaysia and Singapore.

We are always saying how things are cheaper across the Causeway and I do it too. 

I have said it often enough to get rebuked by some of my Malaysian friends.

"You Singaporeans only find it cheap because of the strong S$. 

"Life is actually very difficult for common Malaysians, you know.

"And you people come here and drive prices up.

"You think the people in Johor like higher prices?"





I grew up loving McDonald's fast food.

It was always a treat.

These days, I still go to McDonald's and I like ordering the S$2.50 Fillet o fish. 

Since they dropped the price to S$2.00 before increasing it to S$2.50 for the burger alone, I have not had the meals.

The meal comes with fries and a drink but costs S$5.00.

It is just paying more for extra (and empty) calories which I don't need.





In JB, I remember it cost me about RM9.00 for a Fillet o fish meal.

That is less than S$3.00!

It is like paying 50c for fries and a drink!

It is a no brainer for me.

Of course, I would take the meal! 

Yes, I know.

Suddenly, I am OK with with the extra (and empty) calories.

Bad AK! Bad AK!





For the Malaysians, however, paying for a Fillet o fish meal in Malaysia is like Singaporeans paying for a Fillet o fish meal in Singapore.

It is not more affordable for them.

Actually, it is the opposite.

I found out that an optometrist makes about RM4,000 in Malaysia but an optometrist makes about S$4,000 in Singapore.

The former pays RM9.00 (0.225% of his salary) while the latter pays S$5.00 (0.125% of his salary) for the same meal.

Although inflation is affecting food prices everywhere, it is worse in Malaysia than in Singapore.

Malaysia Food Inflation  Forecast 2016-2020

Food Inflation in Malaysia is expected to be 4.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Food Inflation in Malaysia to stand at 4.70 in 12 months time. Source: HERE.

Singapore Food Inflation  Forecast 2016-2020

Food Inflation in Singapore is expected to be 2.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Food Inflation in Singapore to stand at 2.90 in 12 months time. Source: HERE.

I have made a mental note to be more sensitive when I talk about the cost of living when I am with my Malaysian friends.

Malaysia cuts food subsidies.




Related post:
We manage our savings better!
Malaysia and India pay higher interests in similar pension schemes but our Singapore dollar is rated AAA and has appreciated against the currencies of many other countries.

OUE Limited is offering me money for IHC.

Mr Riady explains how he built up his business empire.

International Healthway Corporation Limited (IHC) was spun off from Healthway Medical Corporation (HMC) in 2013. Back then, its IPO price was 48c a share. 

Being a HMC shareholder, I was given free shares of IHC which I have mostly forgotten about until the recent saga in which the entire board of IHC was given the boot. 

Of course, it was revealed then that OUE Limited became a substantial shareholder of IHC.

Today, I received an offer from OUE to buy my shares. Offer price is 10.6c a share.

Two days ago, I blogged about receiving an offer from OUE for my shares in HMC. It seems that OUE sees potential in IHC too. Both IHC and HMC are probably undervalued in their eyes.

I don't have the business savvy, connections nor the foresight of the Riady family. What I do know is that they won't buy heavily into an investment unless they are able to benefit from it.

Both IHC and HMC suffered from having mediocre management which were too adventurous for their own good. 

With my small stakes in both entities, I got tickets to go for the ride with the Riady family. Yes, I won't be accepting this offer either.

Now, from an email I received regarding my blog on HMC recently, I must emphasize that I am rather cavalier about the offers because my stakes are not only small, they are also free of cost. What I am happy doing, of course, might not sit well with others.

I apologise if my blog post on HMC offended some readers and, now, my blog post on IHC too.

If you should feel upset with what you hear, eavesdropping on AK, tell yourself that he is just a mental blogger. Ignore him.

Anger is bad for health. Way too bad.

Related post:
HMC and free money from Lippo.