NTU Chartist

Searching for a commodity

2011-08-30T20:54:00.000+08:00

I have an idea in mind with regards to optionality trading. But besides oil, I can't seem to find similar products that work in the same way.

The criteria are as follows

The physical commodity prices off a transparent exchange on a regular basis (i.e the price of the commodity can fluctuate everyday but there should be a fixed/closing price at regular intervals that is recognised by market players)
There is a paper market that follows this price movement
Preferably, this commodity can be stored
Preferably this commodity's absolute value is low (to make financing the purchase easier)

Thanks in advance. You can comment on this post or drop me an email at ntuchartist@hotmail.com

Updates after 10 months! - Business ideas / stock market / oil trading

2011-08-21T17:36:00.004+08:00

I must say that it has been a very long time since I actually looked at my own blog and did a post. So today, I will just like to share a few things that I have gathered over the past 10 months or so.

1. Seems like many of my business ideas that I actually penned down in this blog has materialised.
a. Coupon dispensing idea has been implemented, though still at the infancy stage
b. Nandos is taking off
c. Teaching financial education to students is getting more popular now

Only the last idea of a landlord agency has not been implemented/taken off yet.

2. The current market correction seems to be a good time to start picking up long term stocks. Look for high dividen yielding stocks to invest in! I would think that REITs with low gearing would be a good choice once their dividen yield goes up to 8+ %.

3. My Job.

I am currently working in a rotational program in one of the top few private oil trading companies. My rotations will bring me through shipping/cargo operations, risk management and corporate finance. So far, I have completed my operations rotation and am currently in risk management.

Being in a physical oil trading industry is more like doing a business as compared to what speculative trading that banks do. The part that most resembles a financial institution is where we use derivatives like swaps and futures to hedge our physical underlying position.

Just a brief summary of what I have done/learned over the last 10 months.

Operations:
I did shipping and cargo operations for the following products: gasoil/jet/fuel oil. This involves getting vessels to bring the products from one country to another, while watching the quantity and quality of every loading and discharge. Quantity ranges ranging up to a million barrels per vessel. I estimated that the value of products that I personally shipped, is worth more than USD 1 billion during my time as an operator.

I would say that this is really a big responsibility, considering how new I am in the industry. But the responsibility also came due to certain shifts on my desk whereby I became the most senior far east operator on my desk after only a few months. Hence I had to quickly pick up the skills and knowledge on blending, terminal operations on top of the regular cargo and shipping operation.

The main take away that I had from this rotation is that everything in the world is flexible. People are the ones who make things happen. Most often, problems are solved by being creative, flexible and having good relationships with people all over the region.

Risk Management:
This is currently where I am at the moment, working on Naphtha risk management. Essentially in a physically trading house, we minimize the speculative positions by hedging almost 100% of our cargoes. Knowledge of the different exposures in the book is crucial to knowing where the PnL (profit and loss) is coming from.

Exposures can come about from a variety of reasons. The different hedging instruments that are used, or simply different pricing terms that are used on the buy and sell side. Some exposures are like the Front-to-Back exposure, crack position, east/east position etc. Hence my job is to find out these exposures and see how they affect the book, though some exposures are almost impossible to hedge fully. The ultimate decision on whether to flatten these positions will be determined by the trader.

To end off:
Lastly, physical trading talks about optionality in doing a business. This is the fundamental concept on how to make money in trading and can be applied to any products, any where in the world. The basic concept is simple but it is up to the trader to decide on how to leverage on this and make money. Thus, if any of you out there who are running a simple import/export company and would like to see if this optionality ideal can be used in your business, feel free to drop me an email and we can discuss the possible of applying this concept.

Cheers!

Busy with work

2010-10-10T04:11:00.000+08:00

Dear readers, the lack of updates recently is because of my commitment at my work place. Though the hours at my trading house are rather long, but I actually enjoy what I am doing now and am learning lots of stuff with regards to physical oil trading.

Also because of work,I have also turned down an offer from Mr Tan Kin Lian's (ex CEO of NTUC income) offer to help set up and teach a financial course, but I feel honoured to have been approached by him too.

In other news, currently I am not really actively trading the markets for 2 main reasons,

1. Work makes it hard for me to monitor the markets as actively as in the past
2. Just by looking at the charts, I feel that the market is going to correct soon. All the RSIs are above 70!!

However, I do check my watchlists daily..which comprises of commodity stocks and REITS.

Finally, I believe that I will be updating this blog much less frequently in the future and I thank everyone for the support over the years.

Coupon dispensing machine business idea

2010-08-30T21:58:00.001+08:00

I was in China for my graduation trip when I saw this particular machine dispensing deals via coupons on food/clothes/products etc. It has taken off in China but somehow no one has brought it into Singapore yet. Personally I find the idea very lucrative as I did a mini business plan with a few friends including asking around for potential investors. However I regret to say that nothing has been done as everyone that I talked too would like to concentrate on their jobs.

Nonetheless, here is the idea that I would like to share and maybe someone will actually do it? All the best to the person!

Sample picture of the machines (from english.sina.com)

Concept

Build a machine that dispenses vouchers from merchants in the proximity to passersby, so that they will be enticed to visit these shops.
Charged the merchants for advertising on your machine
Over time, create a profile list of the users of these machines and more revenue can be gained for being able to target specific groups of people

Why I think it will work

At least for people my age group, we tend to meet at a certain MRT station first before actually deciding what to eat. Because some people in a group will definitely be earlier than the rest, he can go take a look at the machine and decide what's having a promotion and propose to the group.
Singaporeans are price conscious
Putting these machines at MRTs is essentially targeting the middle/lower class people who will be more likely to be price conscious
Even if people do not use the vouchers, by having people looking at the machine and the respective merchants on it, advertising is essentially done already
It has been proven that coupons dispensed on these machines have a higher conversion rate as to those given by via pamphlets. (source from the China company)

Rough costing

1 x MRT panel in City hall per month is approx SGD400
15 merchants per machine, each paying SGD500/mth (Presently in China, some merchants pay up to SGD800) = SGD7,500

So as in you can see, even with other costs, the potential returns are huge! If you put it at the major heartland malls where aunties/students are..it should be a hit!

Potential problems/Solution

Low barrier of entry. Essentially a big company like JCDecaux can just come in and build a similar machine beside yours and outlast you as they have more capital. Hence I propose teaming up with another big player in order to allow the company to be sustainable in the long term.

Looking for merchants to partner up with will be a problem. But I propose that we can team up with 'The passion card'. Personally I do not think their card is as widely used as expected (I might be wrong), but essentially partnering with them would give a greater backing and also a list of their existing client. This is also good for them, as it will help promote the use of their card. (The china company actually issues membership card that can be used with the machine. Passion card can be promoted via this means too)

Here is the link to an online article too. Click here

Feel free to comment/email me to exchange ideas and views.

Asian/US/World Cheap now?

2010-08-26T14:18:00.000+08:00

Recently, I attended a seminar (speakers were from Aberdeen asset management and BCM) on the outlook of the Asian / US Economy and here are some takeaways from the seminar:

The economy of Asia ex Japan can be growing, but the market (i.e stock market) might not truly reflect that in the short term. This is because though the Asian ex Japan economy has more or less decoupled from the western economies, the fact remains that our stock market is still coupled. Just look at the impact of a drop of the DJIA has on the subsequent day in the Asian markets!

But this can prove to be a good buying opportunities for the long term. However the speaker from Aberdeen said that they are currently underweight in China but are overweight in Singapore and Thailand
If you want exposure to the China market, do it via the China companies listed on the Hong Kong Stock Exchange as opposed to those listed in the Shanghai Stock Exchange. This is due to various issues like accounting methods, transparency etc.

Singapore has been trading at a long term average of 1.8x PTB(price to book ratio), though he did not mention how long the average was taken and also that presently, we are just slightly above average.

As for the US market, apparently the stimulus of around USD 787 billion has not been fully utilized yet. Only about 60%. Hence the remaining money can still be used to push up the economy.

Currently the S&P 500 companies rake in around 37% of their revenue from non US markets. This means that even if the US economygoes into recession, US companies that actually do well overseas due to the growing world economy, they will still make money. He cited an example of MacDonald. It doesn't take a rocket scientist to predict the MacDonald will have an increase in worldwide revenue over the years.

Overweight on technology stocks. They do not pick it because of the sector, but rather because they see many companies that have big potential coming from that sector. The speaker being based in San Francisco (not too far away from Silicon Valley) says that he has seen many exceptional talents who are setting up their companies, especially in the renewable energy sector, which he feels will do very well in the years to come.

On the topic about price to book ratios, here are some clippings I gotten from The Business Times on 20 Aug 2010.

Looking at the STI graph above, our PTB ratio and dividend yield are almost going back to the pre-recession's value. This signify that the economy might be slightly overvalued now, as per during 2008. But as I mentioned earlier, according to the speaker, we are at a long term average of around 1.8x PTB now, whereas historical high is around 3x PTB, signifying potential upside.

Together with my confidence in the Singapore economy, I am actually looking to buy into the STI ETF next month as a means to invest in the Singapore economy.

Even though the speaker was underweight on China's economy. Looking at the Shanghai Composite graph aboce, you can see that China's PTB ratio is now at a historical low point of around 2.5x, as compared to the peak at 7x. I am looking to put some money into China, but have not really done my home work as to what exactly to buy yet.

In other news, I'm also overweight in commodities myself. The biggest recent event involves Wilmar International, with their entry into the Sugar market. I see big potential in this and will definitely pick up Wilmar stocks in the midst of the currently decline in their stock price. This is because the whole world is heavily dependent on Sugar, Asians being big consumers of it too. The other company is Noble Group.

Looking at the graph above (source from Phillip Securities Research), Noble's main business is in energy and I foresee that the energy market will definitely rise in the long term due to greater consumption. Only thing I worry about Noble Group is the relatively thin margin of 2.1%. But if I am not wrong, I would believe a large chuck of the profits are actually paid to the traders as bonuses. Hence in a bad market, traders will be paid less, thus preserving the company’s margin.

Just in case most of you do not know, commodities traders are paid crazy amount of bonus because of the profit sharing policy in which their remuneration package is defined.

Lastly, I believe that I will be updating this blog much less frequently as I embark on a new journey in my life. I aim to be an oil trader and will defintely strive hard to acheive my goals. Meanwhile, I will still actively search the markets for good investment opportunities in order to create a reliable stream of passive income.

Shorting selling linked to hedge-fund loans

2010-07-18T19:25:00.000+08:00

Recently, I came across an article in 'The Wall Street Journal' that I found interesting.

A report done by four academics and accepted for publications in the Journal of FInancial Economics, tracks the trading of 105 U.S. companies that borrowed money from hedge funds between Jan 2005 and July 2007.

Key information:

Average company that receive a new loan from hedge funds saw a 75% spike in volume of short sales during the five days preceding announcement of the loan, as compared with the volume of short selling 60days before the deal
However, 255 similar companies which turn to banks for loans saw little change in short selling volume
Short selling also jumped 28.4% before any changes in existing loans from hedge funds as compared to a droped in 17.4% in short selling if the changes of loans was done with a bank

Reasons(according to the report):

Short selling after a loan is announced is actually expected as investors and lenders hedge their exposure against the company who will be taking on a debt at a higher rate. (After reading the article, I believe hedge funds charge a higher interest rate as compared to banks)
Hedge funds know that this 'shorting' will happen and thus do the shorting in advance before the public does it. ( Hence the article starts talking about insider trading and the fact that hedge funds are less regulated than banks)

My opinions:

I feel that in order for hedge funds to be willing to lend money to companies, it means that they have already scrutinized the companies. ( From my knowledge, I believe that the really smart people work in hedge funds instead of banks, as remuneration is much better, thus I choose to believe that hedge funds do make better decisions that banks) Hence it actually makes sense to buy up these companies' shares when the public are shorting it.

In other news, I attended the Asian Investment Banking Conference 2010 just a few weeks ago. The main thing I got out of the event is that for those people who are thinking of going into investment banking, just stay in Asia. There is no need to go to USA/Europe. This is because, Asia is now the focus for investment banking. The number of cases that you will get to work on is much much more plentiful in Asia (though it might not be bigger), but it does give you more exposure, which is much more important.

Also, for those who would like to get into the front office of a bank, it is better to work in a front office role in a small bank and learn the essential skills which are transferable, than a back office position in a large reputable bank. This is because it is almost virtually impossible to jump from back office to front office.

How will appreciation of Renminbi (Chinese Yuan) affect Singapore banks?

2010-06-24T23:49:00.002+08:00

According to a report by UOB Kay Hian:

Potential appreciation has little impact on Singapore banks
Table below explains some of the exposure of the Singapore banks
DBS's wholly owned DBS Bank (HK) has 50 braches and a market share of 5% in Hong Kong. Hence they will benefit if the RMB appreciates.
OCBC owns a stake in Bank on Ningbo, which is worth around SGD661.9 million (about 2.3% of OCBC's current market capital) and hence with an appreciation of RMB, this will mean that the investment in Bank of Ningbo is worth more.

	Branch Network	Investments in China	Estimated % of Total Loans
DBS	Eight main branches and seven sub-branches in China	n.a.	2.5
OCBC	Five main branches and four sub-branches in China	10% stake in Bank of Ningbo	2.5
UOB	Eight branches in China	15.4% stake in Evergrowing Bank	2.0

* Table courtesy of UOB KH

In my view, I would think that if the RMB were to appreciate, the banks will actually stand to benefit much much more .This is because I believe that the banks would have also made other kinds of mini investments that are yet to be reported. (We all know that Singapore is heavily invested in China) Hence in general their total assets in China will appreciate!

But then again, though the RMB is expected to appreciate in the long term. We are still unsure about the short term direction!

China removes Yuan peg!

2010-06-21T12:13:00.000+08:00

Picture source: reuters.com

China announced a few days back that it will be removing the Yuan peg (6.38 Yuan to 1 USD), which was implemented during the global crisis in order to shield their exporters.

This decision in my opinion, came as the US has been pressuring China to let its Yuan revalue, citing unfair competition. However even with the unpegging of the Yuan, China said that it is only going to let the Yuan revalue slowly and not let it be a big one time jump.

Some implications for the strengthing Yuan might be:

China citizens will have a higherpurchasing power, as imports will be cheaper hence indirectly increasing their lfestyle.
Paper companies in China will stand to benefit. This is because most of their pulp is imported (thus stronger Yuan, means cheaper pulp for the paper companies) and the final product is mostly kept within China.
Airlines will stand to benefit. Fuel cost which are normally demonited in USD and the cost of buying new Boeing planes will drop (in terms of Chines Yuan)

In my opinion, this might reduce China's competitiveness in the short term as its exports will be more expensive. But in the long term, people will still realise that China's cost is still relatively low, as compared to the rest of the world and hence will be flocking back, when China improves their technology/capabilities. In addition, I feel that the stronger Yuan might help in China acquiring more skills/ technologies from the developed countries too!

Danger! and Parkway holdings

2010-06-19T22:57:00.000+08:00

World cup season has caused a drop in volume in trading activities, though the STI has been rising. In Technical Analysis terms, when a price is rising with dropping volume, there is danger!

Anyway to keep things in perspective, the graph below shows the performance of the STI since 1987. ( I gotten the data off yahoo.) As you can see corrections from peaks usually last quite a while..

In other news, the battle for Parkway holdings by the two firms, Fortis Healthcare Group and Khazanah is making quite a big headline.Here is a summary of events

Fortis bought a part of parkway holdings 2mths ago, bringing their share to 25.3%
Khazanah, who has been a shareholder for some time already, then wants to take control of parkway by making an offer to buy more shares in order to reach 51.5% holding, with an offer price of $3.78. This translate in them buying 364 out of every 1000 shares that they do not own.
If Fortis wants to block Khazanah from doing so, they will have to buy ALL the shares that they do not currently hold. This is because of SGX ruling that states that if a firm has recently became a substantial shareholder, they cannot make a partial offer for the company but would instead need to make an offer for the WHOLE company.

This translates to the following issues

Fortis need to spend more $$ than Khazanah in order to take control of parkway, because they need to make an offer for the WHOLE company, while Khazanah needs to reach only 51.5% to control the company
Fortis can actually give up their recently bought share to Khazanah and make a decent profit of around 6%
Shareholders wise, if you are unsure how the saga will end, and are happy with the current offer price of $3.78 by Fortis, just sell into the market (which I believe is trading around that price) Else, you might not be lucky enough to be the 364/1000 shares people that Fortis intend to buy

World Cup 2010

2010-06-13T02:31:00.000+08:00

Had a good trip to Redang and China. Saw quite a few things over in those 2 countries. For example in China, after speaking to the tour guide, she mentioned that the common people are backing off the property and the stock market, though many local people who are earning around SGD800 had already been flipping properties for a while.

Hearing this, I believe it is really time for foreign investors to stay out and let the situation cool off, which includes giving the time needed for the China property laws to settle down too.

Anyway, for the time being, I have exited all my positions and it seems to be a rather good decision for the pass few weeks.

For those of you who did not subsribe to the world cup, here is a good fast streaming site for the world cup. Enjoy!

http://www.footyfire.com/

Sell in May and go away? World cup on stock markets?

2010-05-17T16:51:00.000+08:00

1) 'Sell in May and go away' , this is the common saying that has been around for years.

Picture courtesy of http://www.ritholtz.com

So as you can see, based on the US's S&P 500, if you sell in May and buy back in Nov, you will generally do better (though one thing to note is that, on average, all months actually generate positive returns). In Singapore's context, I am not very sure, but I guess that it should show a similar trend as the world's economy are interlinked.

2)

Picture courtesy of http://blogs.timeslive.co.za

I have also read reports that during the world cup period, stock markets will drop too. This is because people will be pulling money out of stocks to bet and/or spending more time watching soccer and hence not be as participative in the stock market. These reports were also supported by accompanying statistics.

Though I do not believe 100% what these reports have said, I do believe that they should be some truth in it, considering the statistic were not faked.

In conclusion, statistically, it is not a good time to hold stocks over the next few months. Personally, I have sold away around 80% of my holdings, leaving behind some preference shares which I few should be relatively non-volatile.

Also, besides the above 2 reasons that I have mentioned, I am actually going overseas for my grad trip.(Will be visiting Malaysia and the Shanghai World Expo) Thus without the time/access to my trading accounts, I would rather take my profits and have a peace of mind during my trips.

Graduated! (Greece, Goldman, DJIA)

2010-05-12T15:21:00.001+08:00

Sorry for the lack of posts, was busy with school exams. But finally,I have graduated!

Anyway, many major events happened over the past few weeks. Here are some of the more interesting ones:

Picture courtesy of : http://www.defimediacdn.info/

1. The biggest one is the Greece bailout. It caused the market to go into a panic stricken sell off mode. Hence I bought up some blue chips last week too. Not 100% sure that the market will not be sold down again, but I believe that the fundamentals of Asian markets are strong and especially that of Singapore. So I have basically bought into Singapore companies dealing with land/telco. Also, most of Greece's debt is limited to the EU, with little exposure to the rest of the world. Even America did not take on too much of its debt. I am not saying that it will not affect Asia/Singapore, but rather, I do not personally think the actual impact will be too big.

Picture courtesy of : http://standupforamerica.wordpress.com/

2. The Goldman Sach case. It might be true that Goldman Sach might have a little conflict of interest when structuring their products. BUT, I feel that if the institutional investors can afford to pump in so much money to buy the products, they should actually be smart enough to understand the products before buying it. I mean, we can understand if aunties/uncles who invests $20,000 in structued products and got mislead, but for companies who spend millions in investing, there is really no excuse for them not doing their homework prior to buying such products.

3. The drop of almost a 1000 (approx 10%) points in the Dow Jones Industrial Index last week before a strong recovery to close approx 3% down.. There was speculation that some person keyed in a sell order of 'billions' instead of 'millions. However reports were quick to say that this wasn't the case, and investigations are still undergoing. Personally, I choose to believe that it is due to some computer glitches. If you do not know, with the invention of algorithm trading (i.e computer trading on its own based on predefined rules), it has actually increase the liquidity in the stock market by more than 50%!. So in this particular instant, say for example when a particular stock get sold off by a large institutional investor, it might have triggered a involuntary cut loss mechanism in many trading algorithm, which in turn exacerbated the effect and caused the almost 10% drop in the index.

Commodities (Deutsche Bank) , Oil, World Cup, HDB business idea

2010-04-24T16:35:00.001+08:00

Here are some stuff interesting stuff that I have experienced and read over the past few weeks.

1) I attended a talk by DBS on an insight to commodities. The presentation was however done by 2 bankers from Deutsche Bank. Somethings that I took home from there are.

At the talk, it was said that commodities have outperformed equities for the past 10 plus years, however I feel that the method of comparison is a little flawed. For one, they only compared the basic price of the commodity with that of the Dow Jones. However, we must always remember, when looking at equities, you must power of reinvesting dividends is actually huge!
The 'cost' price oil, which is also the fundamental support, is around USD 70 now.
LPG is undervalued.
Gold is overvalued, however other metals like palladium (used in car catalyst) will see a surge in price, as the automotive industries in emerging markets like India and China picks up.

2) Oil. This is somewhat related to what I will doing in the future, hence the current interest. Some interesting facts:

Lots of companies (private and non-private) are not trading any more oil with Iran This is because the US and their allies do not wish to have Iran benefiting economically, which will indirectly support their nuclear plans.
For oil trading, the best kind of environment is to have low oil prices and high volatility.This is because traders live on volatility and with low oil prices, it is cheaper to fund purchases. This means that in the crisis years of 2008/2009, some companies might actually be making a windfall, contrary to what most people believe.

3) I have been reading articles that predict that the stock market will be weak from around now to June/July. Why? Because the world cup is coming!And it has been proven for the past 5 or so world cups.

4) I have been looking at HDBs at the moment, both resale and the new Punggol Emerald and Punggol Waves. In the process I have though of a business ideas as many property websites are really un-user friendly. So I am looking for any person who is able to do programming and build a website, do drop me an email.

Keppel Corp and Sembcorp Marine

2010-03-31T19:52:00.000+08:00

Did you know that Keppel Corp and Semcorp Marine are the world's larges and second largest rig builders respectively?

Also, they have announced new orders this month (March)

SembMarine

SGD $550 million contract from ConocoPhillips to construct the Ekofish accomodation topside, situtaed in the North Sea

Project to start in 3Q2010 and ready for delivery in 2013

Will cause year to date orders to SGD $810 million, and lift order books to SGD 6.3 Billion

Apparently this project will help to contribute to profits of around SGD $27 million for FY 2011 and FY 2012

Keppel Corp

Its subsidiary Keppel Verolme and Areva Energietechnik GmbH have secured a 62 62 million euros (SGD $117.6 million) contract from Wetfeet Offshore Windenergy GmbH to build a mobile offshore application barge

It will also be situated in the North Sea

Scheduled to be completed in 4Q11

Some interesting facts (from Citigroup)

Operating expenditure in deep water floaters in 2Q02 is USD $60,000 per day

Operating expenditure in deep water floaters in 2Q09 is USD $115,000 per day

It is expected that between 2010 and 2013, median day rates are to be more than USD

$100,000 for jack-up units and USD $400,000 for deep water units

Demand for jack-up rigs should continue to fall as the new oil finds are in deeper waters

China's Yuan valuation : Undervalued?

2010-03-27T23:04:00.002+08:00

Firstly, let us start off by looking at the big mac index. It is based on the theory of purchasing-power parity, which is basically showing how hard you need to work in order to make enough money to buy a Big Mac from MacDonald.

Below is a picture of the index, benched marked to the USD. An example, based on the picture, is that a person in Norway needs to work about 90% lesser than a person in the USA in order to buy a Big Mac.

According to the picture above, China's yuan is about 49% below that of the USD, based on this index.

However, will the USA actually benefit if China strengthen the Yuan? On first thought, it might. Because people will say that with a stronger Yuan, China's goods will be more expensive, hence they will export less to the USA.

But if you look closely, and for those of you who have been to the USA, most of the goods in the USA are actually 'Made in China'. With a stronger Yuan, companies in the USA will have to pay more to purchase their supplies from China, adding to their cost and thus lowering their profits.

An actual example that most of us can relate to is the Iphone. The actual cost of an Iphone is around USD300. The amount that goes to the workers in China who only assemble the parts is only USD 4. The rest of the money actually goes to the other countries that the parts are manufactured in.

So the conclusion is: Yes it is true, with a stronger Yuan, China's goods will be more expensive. However there will be negative repercussion on the USA's economy, whose supplies inevitability comes from China. With more expensive China goods, the USA will have to incur higher cost in their supplies. Thus either the USA companies will have to work with lower profit margins, or pass on the extra cost to their customers. Either way, I personally feel it is quite a lose-lose situation for the USA.

Fish and Co promotion : $1 Fish and Chips promotion for Earth Day

2010-03-21T20:11:00.005+08:00

Not exactly a financial post, but just to let you all know.. Fish and Co is having an Earth Day promotion.

Fish and Chips for $1!

For more information, visit : http://www.fish-co.com/earthhour

Enjoy!

Singapore ranked 4th as a global financial centre

2010-03-14T18:05:00.006+08:00

This study, in which 1700 financial services executives took part in, is based on 64 factors some of them which are:

Business environment
Infrastructure
Market access
General competitiveness

Apparently, it is stated that in general, a good financial hub must also have a fair, consistent and predictable tax policy and supervisory environment.

My thoughts:

This rankings further reiterate our government's emphasis on making Singapore one of the major hubs for financial services. Just look at the new launch of Bank of Singapore, it is a means to grow Singapore's private wealth management.

Also, Singapore is also the 3rd largest oil trading country in the world (once again, behind New York and London), but it is really quite an achievement, considering the fact that we are a small country.

As you can see, Singapore is heading towards these kind of 'high returns' kind of industry. Basically industries they can bring in LOTS of money.

Just a few days back, I was thinking..why are bankers one of the highest paid people in the industry? And why do banks earn sooo much money?

If you actually think about it, ALL industry eventually will need to rely on banks for financial assistance in some way or another. So a bank has a role to play in ALL aspects in the economy. Hence by earning a little bit from EVERYONE in the economy, they actually make tons of money.

Luxury Goods, Asia Remains Attractive, My Thoughts

2010-03-07T22:21:00.005+08:00

Luxury Goods: China is now the number 2 luxury consumer, after beating USA. Japan currently remains as the world's number 1 luxury goods consumer.

Asia Remains Attractive: According to a report by Credit Suisse, the correction in Jan/Feb this year is more of a healthy correction than a trend reversal and advises investors to buy on dips.

In addition, they expect two positive drivers in the economy,

1. Policy risks have been largely priced in. So further downward risks from any more tightening of monetary policies are not expected.

2. They are expecting a positive earning cycle. Companies are currently reporting better than expected earnings, and such reports are expected to continue in the upcoming financial reportings. This improvement in fundamentals is expected to drive up the markets in the near future.

My thoughts : I do agree with Credit Suisse on the positive outlook on the economy.

The Feds has already tried to raise some of their interest rates, signaling improving sentiments. Greece's problems has more or less been factored in the market, and yet it has not been dropping seriously. Dubai's problem is long forgotten. China's hike in interest rates has also not created much of a dent in the stock market.

Basically, with the positive earnings reported by many companies, the stock market should continue to run in the near future.

So personally, I have actually enter the stock market already. And will be looking for addition counters with potential growth, especially in China.

Also, I was reading reports on property investments. It is advised to buy into REITs, rather than companies that deal with the actually property itself. This is because countires, like say Singapore have been starting to implement laws to prevent a property bubble from building. However these laws will not affect REITs as much, as REITs are essentially just looking at the rental revenues.

In my opinion, whether it is REITs or land stocks, it is still important to do your homework on the actual stock that you are interested in. I have actually a land stock in mind at the moment, which is UOL. It is currently trading below its net asset value (NAV). And I feel that even with the additional laws by the Singapore government, land prices will eventually have to go up to, due to our limited supply. So this can be one stock that you can consider.

Interest rates / Oil / Property

2010-02-22T00:50:00.005+08:00

Recently there have been a few major events in the market.

1. Fed raises the emergency lending rate from 0.25% to 0.75% last Thursday, marking the first change to interest rates since Dec 2008 though the all important overnight interbanking borrowing rate is unchanged at almost near 0%.

In my opinion, the Feds are just 'testing water' to see how the market react to such news (i.e. increasing only the EMERGENCY interest rates), because they did not increase the so called 'more important' overnight interbanking borrowing rates, which most people are looking out for. So if all goes well, and the market sentiments still remains good, they will then execute the plan to increase the interbank rate.

This is because, at the moment, the FEDs are keeping extremely low interest rates, which will inevitably erode the USD value. This will in turn cause the huge foreign reserves of countries like Japan and China who have large quantities of USD to start reducing their holdings of USD. (Reason being : They do not want their reserves, which are dominated in USD, to drop in value.) *Dumping of USD is not good, this is because, if the USD devalues too much, the USA will not have much spending power in the future!

On a side note, China have been selling quite some bit of its US treasury bonds, and has fallen behind Japan. Thus Japan is now the country with the larges holding of US treasury bonds of around US$768.8 billion as of Dec 2009, while China holds about US$755.4 billion.

2. Oil Industry

Presently, Singapore is the third largest oil trading hub, behind just New York and London. BUt there is still much intention to increasing the oil activities here.

For example Macquarie is going to start to conduct Asian oil trading in Singapore soon. It will be lead by industry veteran Steven Taylor, with a team of 6 men.

Also, the government is trying to increase Singapore's capability to be a strong force in the oil and gas industry.

The following was taken from The Straits Times:

SINGAPORE'S technical capability and skilled manpower have made it a strong player in the oil and gas industry despite lacking natural resources, but there is no room for complacency.

Mr S. Iswaran, Senior Minister of State, Ministry of Trade and Industry, and Ministry of Education, told an industry event last week that it was imperative the workforce here continues to meet the requirements of the industry.

He also pointed out that the era of finding 'easy oil' in areas close to the shore is over.

Exploration companies now venture into deeper waters offshore for oil and gas, creating rising demand for drill ships, floating production, storage and offloading (FPSO) vessels, as well as subsea equipment capable of withstanding the harsh underwater environment.

'Singapore is hence well-placed to benefit from this trend due to our global leadership in rig building and FPSO conversion, as well as in oil and gas equipment manufacturing and engineering,' said Mr Iswaran.

The minister was speaking at a joint symposium by the National Subsea Research Institute (NSRI) and the Centre for Offshore Research and Engineering (Core) last Friday.

3. Singapore property is on the rise again. And the government is trying to curb speculation by implementing stamp duty on sale of homes within a year of purchase, and decreasing the maximum loan amount to 80% of the house value from 90%.

Some interesting statistics of the Singapore housing market are as follow:

Jan 2010 has 3 times as many houses sold as compared to Dec 2009
Of this, 76% of the units were sold at more than $1,000 per square feet!
In 2009, 76% of all home deals are transacted by Singaporeans (no link to the above though)
In 2009, of all those homes transacted by PRs and foreigners, 27% are by Malaysians.
Price of mass market homes have increased to $610 per sq ft in Q4 2009, which is almost back to the peak price level in Q4 2007 ( so you can see that the recovery in the property is extremely fast! even faster than the stock market!)

Is the correction over?

2010-02-11T10:19:00.003+08:00

Frankly I do not know, but I have decided to stay side lined, at least till the technical indicators get better.

However here are 2 reasons why it might not be over.

1. I was reading a trader's magazine in borders yesterday, and it says that usual technical supports will be broken before the uptrend occurs. In fact, seldom is it ever a very 'clean' support. In short, support and resistance lines are within a region and not at an exact value.

2. Here is a report I received from the Edge magazine.

Since peaking at 2,933 on Jan 11, the STI has lost 6.8% to close at 2,734 today. The big question is: Have the markets bottomed? Is the selling over? Credit Suisse analysts Sakthi Siva and Kin Nang Chik attempted to answer these questions by comparing net foreign selling in the past two weeks with what happened in previous corrections.

The duo estimated that net foreign selling in “emerging Asia” was about US$6.9 billion ($9.8 billion) in the period from Jan 19 to Feb 8. Historically, Credit Suisse says the selling associated with four prior corrections were: US$2.4 billion in April 2004, US$4.5 billion in April 2005, US$4.4 billion in October 2005 and US$14.5 billion in May 2006.

But what’s telling is the length of time of the sell-off, says Credit Suisse. In the corrections of April 2004, April 2005, October 2005 and May 2006, Credit Suisse says the “net foreign selling” usually lasts a full month but so far we’ve only had 11 days. Therefore, it appears that the selling isn’t over from past data.

So I guess it's not really time to buy in yet. This is because about 2 years plus ago, I did an analysis on past market bear length, and found out that it takes around 1.5 years to reach the bootom. And it actually applies to our market!

Bank of Singapore

2010-02-02T20:57:00.004+08:00

There is a full page in the Straits Times today stating that ING Asia Private Bank is now called the Bank of Singapore !

This is after ING Asia private bank was taken over by OCBC bank and being converted to a wholly owned subsidiary.

Details from the newspapers are as follows

Only dedicated private bank headquartered in Singapore ( But I guess it is because its a Singapore bank?)
Aa1 credit rating from Moody's (But then again all the Singapore banks have VERY good ratings)
15% Tier one capital and is ranked amongst world's 50 safest banks, by Global finance

Personally, unless they do much aggressive marketing like what CIMB bank have been doing recently, coupled with great customer service, they will not be able to gain much market share. This is based on what I have observed about the local bank's private bankers. They do not treat their clients as well as those from foreign banks, especially DBS. DBS have relatively bad customer service.

In addition, having keep track of much bank products that are being offered, I have never really found DBS or OCBC offering good products. So let's hope that the Bank of Singapore, being a subsidiary , be able to pull away from the 'norm' of Singapore banks and be a world class private banking center.

Economic Updates

2010-01-24T23:47:00.008+08:00

1) Singapore property

I am sure many people would have seen that the Singapore property market is building up rapidly again from recent newspaper reports, especially the private property market.

Just some statistics that I find interesting : Foreign home buyers from different countries have different price preference for property.

Westerners (UK,US and Australia) and Indonesians preferring houses in the $1.5 million to $5 million.
As for the rest of the people from the region, like Malaysia, China and India, its between $500,000 to$1 million.
Malaysian owns the most number of property in Singapore, followed by Indonesians. However if you were to compute the effective dollars invested, Indonesians beat the Malaysian hands down.

Below is the place where I got the statistics from.

2) People are ditching China for the US

Was reading an article from The Business Times on Friday. Apparently many people, about 60%, are now optimistic about the US economy as compared to the majority who had a pessimistic view when polled in Oct 2009. In addition, many people believe China is building a bubble.

China is said to be building up inventory at a rate which no country/region can follow. This means that even though they might be seen to be growing, eventually if no one else buys from them, they will be in deep trouble.

3) China is seeking ways to invest their Foreign reserves

China has about US$2.4 trillion of reserves and will be looking to grow it. In 2008, Beijing transferred US$200 billion to sovereign wealth fund China Investment Corp in or to seek higher returns.

So if they continue to move more money out of China to invest, I personally would think that it would definitely help the region, especially Hong Kong and Singapore, as we are major financial hubs in the region.

3) China curbing rampant bank lending by increasing its reserve ratio

This has cause the region's stock market to drop the last few trading sessions. However as you can see from the graph above (taken from a report from Phillip Capital), the China government has actually been doing much in curbing speculation. However as long as China is truly growing, the stock market will definitely rise strongly. Hence, if you still believe the China has room for more growth, these few days of weakness is a really a good time to buy in.

4) Below is a table of predicted economy GDP growth for the major countries. Note that all are expected to be positive. ( Courtesy of Citibank)

Others
I just realized that all of my topics have China in them. China is really making much headlines with its growth. And I believe it is worthwhile keeping watch on it.

On a side note, do invest with cation this year. Many reports that I have been reading warns of a correction in the middle of this year, but eventually all is expected to be well by the end of the year. So do trade with care.

However in my opinion, if something major does go wrong again, we could be in for a major correction as I feel that the stock market is recovering a little tooooo fast. Remember, preservation for capital is crucial for long term growth!

Stop Loss Hit!

2010-01-22T12:42:00.002+08:00

Personally I have hit all my trailing stop losses and have exited with quite a good profit.

Even though this time round, it seems like a healthy correction but my gut tells me that it will last longer than the mini corrections that we have seen in the past few months. ( It's just a gut feeling, so I will just be buying with greater caution)

However, these stocks are nearing or at their support lines. (Not very speculative stocks, so rather good for trading if your are low to medium risk takers) So I might actually be buying in soon for trading purpose, depending on the market conditions next week.

Jardine C&C
Keppel Land
Suntec REIT
Parkway REIT
STI ETF
DBS STI ETF

SPDR Gold Shares

2010-01-12T22:30:00.005+08:00

This share caught my eye recently after watching a certain Youtube video about how bad the USD is going to devalue in a few years time.

With the expected depreciation in the USD, many countries are switching to gold as their reserves (besides switching away from USD as their foreign reserves), hence with a limited supply of gold in the world, and increasing demand, price of gold will have to go up!)

This has the same theory as land prices in Singapore will eventually go up over the years. With a limited supply of land, and more people, land prices can only go upwards!

This SPDR Gold Shares is trade on the Singapore stock exchange, under the name GLD 10US$.

One stock is approximately 1/10 ounce of gold. This is because, at the start of this gold fund, it is exactly 1/10 ounce of gold per stock. However over the years, with the management fee of around 0.4% per year, they have to sell some gold to pay for it, so the total amount of gold gets lesser though the number of stock stays the same. Hence the value of stock drops slightly every year, around 0.4%.

Main Advantages:

It is more cost effective to most investors (due to the small amount that we buy) to buy these shares, instead of buying the actual gold, and finding storage and getting insurance

This stock is liquid, meaning that there is always a buyer on the stock market, so that you can dispose of it quickly

Because of the high price of the stock, around USD110 per stock, it is not trade in denominations of 1000, but rather in 10.

Disadvantages :

It is traded in USD. Hence when u see the stock listed on the market as '110' it means 110 USD and you are subjected to the currency conversion of the brokerage firms, unless you have a foreign exchange account. Good thing is that, I have checked, their rates are better than the banks.

Here is the link to the site : SPDR Gold Shares

Some thoughts of mine....

Since gold is denominated in USD.

With the depreciation in USD, and the 'worth' of the gold staying the same, the numerical USD value of the gold will go up.
However, even with the numerical USD going up, say you want to change it back to SGD, you will actually get back the same amount, due to a bad exchange rate.
Aren't we back to square one?

But I would think the most important thing is that gold has a limited supply and an every increasing demand. Unless someone happens to be able to 'make' gold, gold being scarce commodity that is readily used in commercial and retail industry, will continue to have a strong demand, leading to an increase in price.

Attended an Auction by GoIndustry Dovebid

2010-01-07T14:57:00.004+08:00

Today is the first time I attended an auction of a textile company's assets. ( I happened to see a notice of this auction in yesterday's classified ads, in the 'Notice' section). I must say that, I felt really really young at the auction. The average age of the people must be at least 45 years old. Most of the people there looks like old uncles who are into the trading business, where they buy and sell stuff 2nd hand clothes.

This auction is done by an auctioneer, from GoIndustry DoveBid, on behalf of a textile company. I would think that the company has closed down, because they are selling everything, from all their clothes, accessories, to the computers, desks,whiteboard and such, and even their van.

Frankly, the goods that you can get here are really cheap. It starts off with a period of time for your to look at the goods and value it. The auction is rather informal, with one man standing on a stool with a mic and shouting out people's bid, and encouraging people to bid higher. (this is because they get a cut of 10% of the bid). I.e if a person bids $1000, he has to pay $1100 in the end, whereby $100 goes to the person auctioning on behalf of the company.

Things there are really cheap, For example a full size white board with rollers went for $10, and few hundred shirts together with cuff-links, bow ties, few hundred ties in a lot that went for like $2000. If I actually had a shop, I would definitely buy the stuff!

Also, people who are at the auction are goods specific. This means that the moment all the clothes are sold, you can see 'clothes' people starting to leave, leaving behind all the electronics stuff to people who are interested in electronics.

One interesting thing to note is that, you can actually 'advise' the auctioneer to bundle items. For example, you can advise the person to bundle together the table and chair and maybe all the furniture, instead of auctioning them separately, thus creating a better deal!

In all, this has been an eye opener for me, and for those of you out there who are looking for cheap 2nd stuff, this is really worth a visit. However, most of the things are sold in bulk, and hence it will put off many people. But I believe at the end of the auction, you can negotiate with the people who won bids on individual stuff that you might want to purchase. And most likely, this will still be cheaper than buying the stuff from a bazaar and cash converters.

An upcoming auction is by Knight Frank Pte Ltd, on behalf of the Singapore Police Force. It is stated to be selling various goods like confiscated and unclaimed items, jewelery, digital cameras motor vehicles etc. I believe the goods should be relevant enough for most of the public.

Details as follows:

Venue: Presidential Room, Hotel Royal (level 15) 36 Newton Road S 307962

Date and time: 13 Jan 2010, wed, starts at 10am

Viewing dates and time: 11 & 12 Jan 2010, mon/tue 10am-12noon and 2pm-4pm

General Economy Stuff in my Head

2009-12-28T16:42:00.004+08:00

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

1. The Chinese Yuan

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

2. STI

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

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

Go and pursue a business!

2009-12-28T16:03:00.005+08:00

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

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

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

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

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

Back from Hong Kong

2009-12-20T21:26:00.003+08:00

Above are some photos from my trip.

Some interesting observations that I made in Hong Kong are

People there are VERY interested in finance. You see people looking at stocks everywhere, a bunch of old people can be gathering near a small screen near an ATM machine looking at the jumping of the prices in the Hang Seng Index. Also, they have countless magazines talking about investment/money etc. The most amazing thing is that I saw an episode of a lecture on Technical Analysis from the Hong Kong University broadcasting on a Sunday Morning!

They have property rental shops everywhere! I believe this can be viable in Singapore. A physical presence will be very useful for expats who are coming to Singapore in search of a flat. The unique thing about these shops is that the company holds onto the keys of the flats, hence the customer can actually view all the flats immediately! This is similar to those in the UK.

People there trade car park lots like houses. A carpark lot actually comes with a title deed!

I am sure most of you who have been to Hong Kong have seen the dessert shop Xue Liu Shan. It is a dessert shop specializing in selling deserts that are made up of mangoes. I heard that there was a branch in Singapore a few years back, but it failed. I wondered what happened. But frankly, I do see a possible market for this dessert shop in Singapore. Only problem is the high price of the desserts.

Off to Hong Kong

2009-12-09T11:40:00.002+08:00

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

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

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

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

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

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

Asian's Banks Exposure to Dubai and the Middle East

2009-11-28T14:42:00.003+08:00

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

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

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

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

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

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

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

Source: Citi Investment Research and Kinner's Dealogic file

Asian Banks have little, if any exposure to Dubai

Dubai's exposure to the world's banks is actually $22 Billion out of the $80 Billion debt

Main 2 banks are Standard Charted and HSBC due to their operations in the middle east

Standard Charted ( US$14bn at 1H09, equal to 7.6% of group loans and 60% of equity), but this refers to the WHOLE of middle east, not only Dubai
HSBC (US$15.9bn at 1H09, equal to 1.7% of group loans and 13% of equity), but this refer to the UAE, not only Dubai

Below are some bank exposure to Dubai

As you can see, actually there is not much need for alarm. Just that it proves to show that even oil rich countries can be in debt.

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

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

USD and its implication

2009-11-25T18:23:00.008+08:00

Here is the summary of the above video:

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

Things that I would like to add:

In my opinion, commodities like gold are trending up, because of 2 main reasons.

The basic supply and demand. Meaning if more people wants gold, the price will go up.
Gold is usually denominated in USD. So if the USD depreciates, the price will go up. (Imagine that you have a 1kg gold bar, bought with 100USD. If in 1 year's time, USD's depreciates, you need more USD to buy the same 1 kg of gold bar. Hence the price of the gold bar effectively increases, though its worth is the same.)

I'm actually still optimistic about the stock market. The market is still trading sideways, but if you realized, its gradually trending up. So I feel that it is actually a good time to invest, while everyone's still quite uncertain.
Personally, if the government have been revising our growth upwards, Singapore should be expected to do relatively well in the coming months. It is not that I am bias towards the Singapore government, but we have to admit that they do have above average foresight.
Actually a depreciating currency is good for people to borrow. For example, you borrow USD100 to buy gold. Assuming gold does not drop in value, with a depreciation of the USD, in 1 year time, your gold will be worth say for example USD110. So you can sell your gold, return the USD100 and whatever interest to the bank, and pocket the profit!

Rickmers Maritime's problem!

2009-11-10T23:26:00.002+08:00

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

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

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

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

Arbitrage Opportunity for Kreit

2009-11-05T00:38:00.003+08:00

As of the end of today,

The price of Kreit is as follows:

Kreit $1.01
Kreit Rights $0.06

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

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

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

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

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

STI to go down?

2009-10-29T02:10:00.002+08:00

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

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

Buy at your own risk!

My 2 stock picks based on Fundamental Analysis (FA)

2009-10-27T19:58:00.011+08:00

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

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

1. United Engineers :

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

These are some ratio that I took note of based on their price of $1.74 :

Market Capitalization : SGD 400.9 million
Gross Profit Margin: 22.6%
Price to Book ratio: 0.5
Price of 1 stock / Amount of cash company is currently holding per share: 0.5
Dividend : 3.46%

2. Rickmers Maritime :

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

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

These are some ratio that I took note of based on their price of $0.385:

Market Capitalization : SGD 158 million
Price to Book ratio: 0.33
Price of 1 stock / Amount of cash company is currently holding per share: 0.1
Dividend : 27.88%

Any comments?

Set Stop Loss!

2009-10-19T11:20:00.004+08:00

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

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

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

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

Analysis of the Break out of STI and HSI !!

2009-10-15T10:11:00.005+08:00

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

STI Break out

HSI Break out

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

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

As seen from the chart below,

HSI and STI are closely linked

They follow the Fibonacci ratios quite closely

Realized that either market will 'lead' the other market in breaking out of the Fibonacci lines, as shown in the red circles that I have drawn (Chart below). And this difference in time is not very long. Its like within the week itself.

As of yesterday's intra-day trading, Hang Seng broke the resistance quite easily, while STI struggles to go past 2700. However because of this 'HSI following STI or STI following HSI when breaking out' that I assumed. I bought the STI warrants.

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

*Just an opinion of mine

Suntec REIT a good buy?

2009-10-05T01:16:00.006+08:00

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

Image 1 (For dividend image and gearing)

Image 2 ( For Price to NAV image)

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

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

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

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

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

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

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

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

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

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

Star Hub report

2009-10-02T10:12:00.004+08:00

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

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

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

Singtel Won the EPL rights! Star Hub lost!

2009-10-01T18:32:00.006+08:00

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

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

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

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

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

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

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

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

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

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

Your call!

Big Market Movement Coming!

2009-09-23T17:33:00.001+08:00

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

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

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

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

Quadruple Witching

2009-09-17T23:47:00.008+08:00

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

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

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

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

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

Q: What is quadruple witching?

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

Q: When does it occur?

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

Q: What effect does it normally have?

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

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

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

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

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

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

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

Q: What should everyday investors keep in mind?

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

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

My Opinion

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

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

2009-09-10T13:44:00.004+08:00

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

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

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

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

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

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

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

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

Citibank's 'Trust and will' Talk

2009-09-03T22:45:00.005+08:00

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

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

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

1. Private Investment Companies (PLC)

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

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

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

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

What it does is :

You pay a premium, can be a lump sum or monthly install, or just the interest
When you pass away, you beneficiaries get a big sum of $$.

Here is an illustration. For example, at 60 years old you will have an rough gearing of 2.
This means that, say you put $100,000 in this universal account. When you pass away, your beneficiaries get $200,000.

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

As for the payment method of this 'policy', here are the 3 ways (given a scenario of an 'investment' of $100,00)

Lump sum ($100,000)
Monthly over say 10 months ($10,000 per mth)
Interest (But you have to pay part of the 'investment' . So it could be a down payment of $30,000. As for the remaining $70,000, you can just pay 3% worth of interest per year. However when you pass away, and your beneficiaries get the money, this reamining $70,000 have to be deducted and be paid back to the bank)

Hope this is useful for people who would like to write a will.

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

Performance report of the world stock market

2009-09-01T15:18:00.004+08:00

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

Click on the picture below to enlarge

*Credit given to Citibank

Phllip Captital Market Watch

2009-08-30T23:38:00.003+08:00

Here's a summary of the video:

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

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

First Trade, STI ETF

2009-08-24T23:32:00.002+08:00

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

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

Citibank and Barclays

2009-08-22T11:13:00.001+08:00

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

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

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

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

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

Updated FD rates

2009-08-12T23:02:00.001+08:00

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

For more details click here

HDB housing grants

2009-08-09T14:52:00.010+08:00

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

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

Type of Grant Available	Amount	Income Ceiling for the household
CPF housing grant for family	$30,000	$8,000 per mth
CPF housing grant for family (living near parents/married child) - Parents are residing in an HDB flat or owner-occupied private property within same town or within 2 km	$40,000	$8,000 per mth
Half Housing Grant - A first-timer citizen who marries a second-timer spouse, who has previously enjoyed a housing subsidy, can apply for half of the Family Grant amount to buy a resale flat, if the family meets the eligibility criteria of the Family Grant.	$15,000 / $20,000	$8,000 per mth

*Taken from this website

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

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

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

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

That is $80,000!

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

My Stock Picks

2009-08-07T16:31:00.004+08:00

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

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

STI ETF

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

Suntec REIT

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

Brokerage Fees

2009-08-02T16:36:00.004+08:00

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

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

DBS Vickers

Normal Account: Link here

If trade using cash upfront : Link here

Citibank Brokerage

For link to the Citibank website: Click here

POEMS

For link to the POEMS website : Click here

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

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

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

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

Economic Update

2009-07-28T23:48:00.004+08:00

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

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

Some reports feel that market now is in the over-evaluation stage (However, this stage usually lasts for quite some time. But do expect a correction when almost EVERYONE starts to feel extremely confident about making a quick buck)

Out of the 64 banks in the US which has failed so far, 16 occurred this year (2009). The amount of $$ lost in the banks was USD 17.6 billion last year. However for this year to date, its USD 14.2 billion! WE ARE STILL LOSING AS MUCH $$!!

Ben Bernanke expects unemployment rate to go over 10% first before it eases. And the FED predicts this to happen around the 4th quarter 2010.

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

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

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

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

Support: 2400

Back from Indonesia

2009-07-26T15:25:00.004+08:00

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

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

Here are some pics of my trip.

Preview Robert Kiyosaki Book

2009-07-13T08:06:00.003+08:00

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

*taken from conspiracyoftherich.com

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

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

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

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

1. Plan your finances!

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

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

Back from the US

2009-07-11T12:44:00.001+08:00

Hi All! I'm back from the US.

Great trip. Shall be updating soon.. =)

How to subscribe to rights?

2009-06-29T02:36:00.004+08:00

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

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

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

Looks fine in the US

2009-06-23T15:16:00.002+08:00

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

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

For example:

One of my US professors is getting a lower annual pay rise of 1% instead of the usual 4%

Even though staff/American friends were saying that car rentals might not be good due to the 'bad' economy, when I asked the car rental people, they said that all's fine for their business. ( The economy does not look as bad from the outside as it sounds from the news)

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

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

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

Where do you think we are now?

2009-06-18T23:45:00.000+08:00

Off to the USA

2009-06-13T01:14:00.003+08:00

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

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

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

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

What is Bankruptcy Chaper 11?

2009-06-06T02:55:00.004+08:00

On June 1st, General Motors filed for bankruptcy.

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

Chapter 11

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

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

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

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

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

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

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

Oil and Singapore

2009-05-29T06:33:00.002+08:00

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

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

These are the 3 head lines

S'pore set to boost status as energy hub
Oil and Gas firms face difficult year
PetroChina out to be price-maker with SPC deal

All which are oil related.

S'pore set to boost status as energy hub

This is more of converting Singapore into a leader in energy TRADING hub. Currently we are 3rd in the world. ( This will defintely help our economy in the long run. Imagine if SGX is the exchange that is used for these transactions. Its stocks will run like crazy if Singapore becomes Asia's trading hub!)

Having a commodity exchange based in Asia and catered to Asian's need and specifications will increase trading activity in Asia, as the time zone will be catered to us, and not follow America's one. ( I think this would encourage traders to in Asia to increase trading!)

The Singapore Mercantile Exchange will make its debut later this year. Offer essentially all the commodities and futures contracts. ( However I feel that if it were not publicized effectively to all the Asians countries, it will definitely fail. As the Singapore market is not big enough to provide the liquidity for such trades. And only a few more popular commodities like oil, gold will succeed. I can't imagine myself trading 'pork' just yet.)

Singapore Government is gather all the leading companies in trading over here. Some examples are

Opet Trade
Sahara Internate Koc Group
Socar Trading
Tricorona
BP ( oil giant has also recently set up a carbon trading team )

Oil and gas firms face difficult year

Estimated 100 million barrels of crude may be stored on sea tankers
Lower demand as there is low growth
Price volatility
HOWEVER, assuming population and economies to grow, its expected the oil price to go up to US$70-US$90

Seems like a very pessimistic article. Implying that the present market rally will not be able to sustain, as most people expect the economy to be weak.

PetroChina out to be price-maker with SPC deal

PetroChina is bidding for SPC with US$2.2 billion
SPC is a major source of fuel supply where most of Asia's oil prices are determined.
SPC owns half of Singapore Refining Company (SRC) while the remaing is held by US major Cheveron
PetroChina has already long term deals to supply fuel to regional importers like Vietnam and Indonesia
With all this 'control' of fuel, they will have more say in setting the price in the market

We are looking at the new oil leader in Asia if PetroChina is able to follow through with its plans. However I feel that things will not be as simple. This is because its refining capacity of 2.6 million barrel per day lags behind rival Sinopec 4.3 million barrel per day. What makes you think that Sinopec will sit back and not do anything to protect its best interest. Its just a speculation of mine, but I think Sinopec will come up with new policies to challenge PeroChina once its profit margin is at risk.

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

Temesak lose BILLIONS!

2009-05-20T20:16:00.004+08:00

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

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

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

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

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

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

75% chance to make $$ tomorrow according to my TA

2009-05-14T20:19:00.003+08:00

If you followed my post 2 days ago and buy the STI put warrants just before the market closes today(because the STI is below 2128), according to my analysis, you will have a 75% chance of making a profit tomorrow..

These are the probability according to my statistics.

Today (Day 1) : STI closes below 2128
Day 2: 75% chance STI will close below day 1
Day 3: 50% chance STI will close below day 2
Day 3: 74% chance STI will close below day 3

Lets see how it will be like over the next few days..

STI to GAP down tmr?

2009-05-13T22:49:00.002+08:00

There is a high chance for the STI to gap down tomorrow, due to the formation of a shooting star today. ( These are candle sticks trading terms)

Pardon the recent increase in technical analysis posts. This is because I believe that it is really time to start trading the market. Signals that I have observed so far are relatively accurate (not 100%, but good enough to earn $$).

If you would like to discuss any possible trades and stuff, do post comments on my posts, or my shout box on the right.

Time to earn $$! *But do be careful..$$ will be lost in the process. TA is never 100% accurate! But if done right, profits should come in, in the long run.

Trade Analysis

2009-05-12T20:42:00.005+08:00

If you have sold the stock as per my last post when you start to realize that the STI is unfavorable (in the morning), you would have made a profit of 5%.

Though its a profit, but for my TA, its a lost. Because, I am expecting at around 4 days whereby the STI would be dropping. And had you not taken profit,you would have made a 5% lost already.

Looking at today's charts, there is a hammer formation, which is suppose to be bullish for tomorrow, but its a weak signal.

The Strong Signal that I am expecting is: If the STI closes below 2128 tomorrow, you can more or less happily short the market, or buy STI puts, because chances of the market correcting is VERY high.

My STI Trade

2009-05-11T14:38:00.002+08:00

Looks like STI is losing strength.

Trigger: STI is below 2220 at 4.50pm

Stock to buy: STI1900SGAePW090929

Target Price: By duration. Max 4days.

Cut loss limit: Wait for T+1 (this means the day after you buy your stock), if STI gaps up, cut loss on open.

My STI Trading Target

2009-05-11T01:49:00.005+08:00

Paper Trade for upcoming week

Trigger: STI Hits 2436

Stock to buy: STI1900SGAePW090929

Target Price: Index to drop to 2238 (essentially an STI put warrant, meaning the price will increase of the STI drops)

Cut loss limit: Wait for T+1 (this means the day after you buy your stock), if it gaps up, cut loss on open.

Be wary of market

2009-05-10T03:15:00.002+08:00

If you have not bought into the market, like me, do not be tempted to buy in now. Instead, wait for the next correction to buy in. It shouldn't take too long from now...

Also, I have set up a few blogs on finance related stuff that some of you people might be interested in. They are categorized according to:

US Stress test summary

2009-05-07T23:46:00.001+08:00

Got this in email. By Rebecca Christie and Alex Tanzi
May 6 (Bloomberg) -- Following is a summary of the capital requirements
of 10 banks resulting from U.S. regulators’ stress tests, according to people
familiar with the matter. The Federal Reserve is scheduled to release the
results of the tests on the 19 largest U.S. banks tomorrow:
*T
==============================================================================
Company Capital Requirement
==============================================================================
Total $65.5 Billion
Bank of America Judged to need roughly $34.0 Billion in additional capital
Wells Fargo Judged to need roughly $15.0 Billion in additional capital
GMAC Judged to need roughly $11.5 Billion in additional capital
Citigroup Judged to need roughly $5.0 Billion in additional capital
Morgan Stanley Judged not to need to raise additional capital
Goldman Judged not to need to raise additional capital
MetLife Judged not to need to raise additional capital
JPMorgan Chase Judged not to need to raise additional capital
Bank of NY Mellon Judged not to need to raise additional capital
American Express Judged not to need to raise additional capital
==============================================================================
Company Government Capital Injections by Firm
==============================================================================
Bank of America Targeted Investment Program $20 Billion on 01/16/09
Capital Purchase Program $10 Billion on 01/09/09*
Capital Purchase Program $15 Billion on 10/28/08
------------------------------------------------------------------------------
Wells Fargo Capital Purchase Program $25 Billion on 10/28/08
------------------------------------------------------------------------------
GMAC Automotive Industry Financing Program $5 Billion 12/29/08
GMAC has also received other financial assistance
------------------------------------------------------------------------------
Citigroup Targeted Investment Program $20 Billion on 12/31/08
Asset Guarantee Program $5 Billion on 01/16/09
Capital Purchase Program $25 Billion on 10/28/08
------------------------------------------------------------------------------
Morgan Stanley Capital Purchase Program $10 Billion on 10/28/08
------------------------------------------------------------------------------
Goldman Sachs Capital Purchase Program $10 Billion on 10/28/08
------------------------------------------------------------------------------

==============================================================================
Company Government Capital Injections by Firm
==============================================================================
MetLife None
------------------------------------------------------------------------------
JPMorgan Chase Capital Purchase Program $25 Billion on 10/28/08
------------------------------------------------------------------------------
Bank of NY Mellon Capital Purchase Program $3 Billion on 10/28/08
==============================================================================
Note: Dollar figures in billions
*This transaction was included in previous Transaction Report with
Merrill Lynch listed as the qualifying institution and a 10/28/2008
transaction date. The purchase of Merrill Lynch by Bank of America
was completed on Jan. 1, 2009 and this transaction under the CPP was
funded on Jan. 9, 2009.

Case study: SARs on the economy

2009-05-03T15:46:00.009+08:00

GDP Implications

SARs occurred in 2003. The first case was reported in China, Nov 2002.
As for most of the countries, I.e Hong Kong, Canada, Taiwan,Singapore, Vietnam etc. The first case was detected in Mid Feb 2003, and the last case reported was around Mid May 2003.

As you can see, effectively there was only 4 months of 'serious activity' from Mid Feb 03-Mid May 03. This is supposedly the time frame where the economy is responding to the crisis first hand.

Above is the GDP variations of the different countries during that time frame.

Looking at the statistics above, there is no doubt that during the outbreak period, GDP is bound to drop. However recovery follows soon after the last case is reported.( However at that moment in time, we will not be able to tell if the reported cases are going to stop. )

This means that it is highly unlikely that the economy is going to get better if the disease is not under control and/or if new cases are found.

Stock Market Implications

The diagram above shows the STI during the SARs period.

Looking at the stock market, generally sentiments is that, during the period of disease outbreak, expect little advances in the market (makes sense, cos the GDP is negative). Hence it is definitely more favorable to do shorting than trying to go long.

In addition, it looks like the impact of the first reported case and the depth of the market is not immediate too. There is a time lag as seen in the diagram above. First case in Singapore was detected on 25th Feb 03, and the lowest point of the market occurred on 10 Mar 03. Which is a lag time of around 2 weeks.

So..a possible trading strategy could be to buy put warrant on the STI, or short the index, with a time frame of maximum 2 weeks when the first swine flue case occurs in Singapore. If history repeats itself, you should be rewarded.

*Trade at your own risk

Swine Flu and its impact on Singapore

2009-05-01T10:50:00.004+08:00

I am sure most of you are aware that swine flu is causing a worry in the world now. Like many other reports I agree that this flu will cause the economy to slow down like the period during SARS. However, similar to the SARS period, there are still certain sectors which are considered defensive.. such as

telecommunication (cos people travel less and businesses will do video conferencing more often)

Health ( Just look at the newspapers, everyone is selling mask and thermometers, even the flu medicines are selling like hot cakes, though they don't prevent swine flue)

On the other hand, you can start shorting stocks (via CFDs) on companies like SIA, and generally most retail companies too.

The above two methods should be profitable once the first case is detected in Singapore. ( Yup I know its morally wrong, but in economic sense, this should happen)

*Good thing I feel about this swine flue, is that it might cause all the companies to drop harder and faster leading to a faster recovery, instead of the expected slow and long recovery.

Meanwhile, do take care of your personal hygiene, drink more water and stay healthy! Have a good May day!

What will happen if AIG was to fail?

2009-04-27T19:49:00.000+08:00

AIG-Risk- Bankruptcy Report -aka The AIG Blackmail Note

This pdf tells about what will really happen if AIG was not rescued! It tells about :

General Impact on econmy
Impact on life Insurance policy holders
Impact on retirement savings
Extensive business disruption
Impact on Global Capital Markets

Download it here
https://www.yousendit.com/download/dVlyZGVVQXBwM21Ga1E9PQ

Updated REITs yield and PTB ratios

2009-04-24T10:16:00.000+08:00

These REITs look very very tempting! With yields up to 32%! Seems like a good long term investment that will give regular dividends.

Also, I read an article recently that says that property stocks will usually be one of the first few to start running up during an economy recovery, but I am not too sure whether it will apply to REITs.

Anyway, remember to look at the companies refinancing risks too. For example, Suntec REIT, they have a 700 million loan to refinance by the end of this year. 700 million is a big amount, and if they are unable to get the refinancing they will get into big trouble. However if everything works out well, this might also well be a gem! ( I suggest doing your own research first before investing)

Stress results a rumour!

2009-04-23T19:15:00.001+08:00

Got this email from another friend of mine..JUST after I posted the article in the afternoon..haha.

Here it is

Treasury does not yet have stress test results......

Mon Apr 20, 12:10 pm ET

WASHINGTON (Reuters) – The U.S. Treasury said on Monday there was "no basis" for a report that said its "stress tests" on the health of the nation's 19 top banks showed several were "technically insolvent." A Treasury spokesman said the department has not yet received the results. The Turner Radio Network, which describes itself as a "free speech" blog, said 16 of the 19 are "technically insolvent," citing what it said was a U.S. government report. Shares of several banks fell sharply on the report. "There is no basis for that report; we do not even have results yet," Treasury Spokesman Andrew Williams said. The Obama administration has said the results would be released on May 4.

Bank stocks, already lower after Bank of America Corp (BAC.N) reported disappointing quarterly results and outlook, fell further. The Select Sector SPDR Financial ETF (XLF.P) was down 5.4 percent after the blog post was widely disseminated by at least two third-party news services. After the market open the KBW Bank Index (.BKX) fell 9.3 percent.

The site, http://turnerradionetwork.blogspot.com/, is not related to Time Warner's Turner Broadcasting System. "It certainly did (move the market) for a while. It raised people's eyebrows. People had associated it with (Ted) Turner's broadcast network," said Lou Brien, market strategist with DRW Trading in Chicago. The blog said: "Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in nonpaying loans.

"If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding," the post added. The blog was picked up by some third-party news services and cited by another trader for the drop in bank shares. The Turner Radio Network is described by some monitoring groups as a white supremacist organization. (Reporting by Corbett B. Daly and Chris Sanders; Editing by James Dalgleish and Dan Grebler)

US Banks Stress Test results leak?

2009-04-23T13:03:00.004+08:00

Hi got this email from my broker 2 days ago. Take it with a pinch of salt cos it might be a rumor only... But anyway..if you want to bet on it, short now on the rumor and buy when the news is out.

Here is the email..

*************************************************************************************

The Turner Radio Network has obtained "stress test" results for the top 19 Banks in the USA.The stress tests were conducted to determine how well, if at all, the top 19 banks in the USA could withstand further or future economic hardship.
When the tests were completed, regulators within the Treasury and insidethe Federal Reserve began bickering with each other as to whether or not the test results should be made public. That bickering continues to this very day as evidenced by this "main stream media" report.The Turner Radio Network has obtained the stress test results. They arev ery bad. The most salient points from the stress tests appear below.

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent.

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.
3) If any two of the 16 insolvent banks go under, they will totally wipeout all remaining FDIC insurance funding.

4) Of the top 19 banks in the nation, the top five (5) largest banks areunder capitalized so dangerously, there is serious doubt about theirability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorganChase, Goldman Sachs, HSBC Bank America and Citibank - taking especiallylarge risks.

6) Bank of America`s total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank`s was 278 percent; JPMorgan Chase`s, 382 percent; and HSBC America`s, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital!

7) Not only are there serious questions about whether or not JPMorganChase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!
The debt crisis is much greater than the government has reported. TheFDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter.Put bluntly, the entire US Banking System is in complete and totalcollapse.More details as they become available. . . . . .

Disclaimer:
This email may contain privileged and/or confidential information intended only for the use of the addressee. If you are not the addressee, or the person responsible for delivering it to the addressee, you may not use, copy or deliver this to anyone else. If you receive this email by mistake, please immediately notify us.
Opinions contained herein may be the personal opinion of the sender and do not necessarily represent the views of the Company. If you are in any doubt as to whether the opinions are officially endorsed by the Company, please contact our Compliance Dept at (+65) 6225 1228 for clarification.

*************************************************************************************

STI Information

2009-04-22T13:14:00.001+08:00

Read an article published by DBS Group Research ( This was around the time BEFORE the run up). Here are certain graphs that I feel is a good to know..

This picture show how events have been pushing the index in certain directions. This will tell what kind of information has a greater impact on the index and hence general market direction.

Year on year (YOY) Change. This tells us the growth/recession rates of Singapore. Looks like we are at the worst YOY change so far..

Price to Book value. This show the prices that the STI stocks are trading to their book value. The center line shows the mean value, the outer 2 lines shows a standard deviation of 1. Currently we are way way low of the mean, and its even below 1! meaning the price of the stock is BELOW its book value.

Forward Price to earning ratio (PE). This show's the expectation of the Singapore market. Now it is low, meaning the price of the stock is just a few times of its earnings => high potential growth. High PE is usually associated with strong good companies, as the their earning are thought to be stable, hence people do not mind paying a higher price for a small amount of earnings. So in our low PE case, it sort of implies lost of faith in the Singapore economy.

Business Networking Review

2009-04-19T19:26:00.004+08:00

Had a great session today at Phillip Investor Hub! There were 10 of us present, coming from various background and age groups.

The session started off with me introducing some of my ideas, followed by us splitting into 3 groups namely

E shop business
Trading/charting
Food Business

After that, we came together to share a little of what we discussed within each group.

Personally I was in the food business group, which eventually carried on all the way to 5pm. It was fruitful, and most probably something will come out of it.

Here is the brief summary of the meeting

1. E shop business
This discussion was mainly done between 2 of our IT specialist friends with a friend from SMU.

This involves setting up an online retail shop to bring in other small retail shops. Sounds complicated? But its essentially, its like setting up a shopping mall like Takashimaya, Tampines Mall (i.e. this business) and bringing in various shops like Hang Ten, Nike ,Addias. etc ( for example those bloggers who are currently selling stuff on their own blog shop).

2. Trading/ Charting
This discussion was done between a broker friend and 2 TA specialist from http://chartistsunited.com/

This discussion involves helping to build up the web base subscribers due to the moving of their web site.

3. Food business
This discussion involves a man who has been helping people set up food business for the past 20 years. Also, this is the topic that everyone finally converged into and a possible business plan was formed.

This involves setting up a culinary business. However, we do not only teach people HOW to cook. But also HOW to SETUP a food business.
The business aspect will involved education on stuff like...things to look out for like preventing your takings from being stolen etc.
Also, because of the IT specialists, we discussed the feasibility to help put this business online too.
The cooking aspect will be targeted to housewives, maids etc. and might extend to even selling cooking products to them.

This particular business will be seeing another meet up (but is closed to new people) soon to further develop the idea as we have the man to provide the technical know-how. So now its up to the marketing and the further development of the idea.

Review of : Insight to being a professional trade @ SGX academy

2009-04-15T12:58:00.007+08:00

I attended a seminar that is hosted by with Ong First and SGX at SGX Academy on Tuesday 15 Apr 2009 at the SGX building. The talk lasted from 7pm-9.30pm.

The speaker talked about his personal experience ranging from why he started trading,including the time when he was still a floor trader. ( Floor trading has stopped already, i.e. no more shouting with high signals in the stock market like you see on TV. As Singapore has chosen to go electronic.) And the present day, when is still a broker and a trader.

However, the 'real content' as basically catagorized into these 3 points, which he briefly touched on:

Money management

Psychological factors

Having a trading system

To learn more, you will have to attend his course, which will cost $900 by him, and $3000 if it is conducted by a more 'PRO' person.

In general, I find the course structure very similar to all those trading books..so I don't think its particular useful to spend a few thousands to learn these. Unless you want to learn their enter/exit strategy, i.e their systems. However I think a real trader would not want to reveal their winning system to anyone else..

The only thing that I found useful, was one of his trading style. He calls it the opera house system, but essentially its a 'head and shoulder formation' as called in technical analysis. Essentially, the break out would attain a peak of roughly the magnitude of the previous trough. The diagram below will give a better description.

Happy trying around with his strategy!

Review of Far East Organisation talk & show rooms 'Jardin' and 'Gardenvista' Part 2, with Citibank Home loan

2009-04-14T17:50:00.001+08:00

Garden Vista is nice. The place has its own private lift. I.e the lift starts from the ground floor and the basement car park and goes straight up INTO your apartment. Yup, that's right, the lift opens into your home. Privacy is preserved as only by using your unique access card, can you access that particular level of the lift.

Amenities looks good, swimming pool, Teppanyaki station, gym etc. With its own tennis court ( something that Jardin does not have).

After that, I met up with the Citibank home loan specialist. This cash management account (CMA) with an interest off set feature is quite a good one, and I would recommend it to people who are trying to get a home loan.

Here are the rough details :

Floating rate pegged to the either 1/3/6/12 mth SIBOR rate + X% ( where X is 0.85% for the first year, and 1% for subsequent years)
Concurrently, Citibank lets you open this CMA that pays you 70% of the effective interest rate from your home loan on your money in this CMA. For example, if the SIBOR in the 2nd year is at 1%, In the 2nd year, your effective rate is 1% + X% (where X is 1%), hence your pay an interest rate of 2% to the bank. The CMA will let you earn 70% X 2%interest rate =1.4% on the $$ in your CMA.
This interest earned, cannot be withdrawn. It is used to offset the monthly interest component on your monthly home loan, hence a higher percentage of your monthly installments is used to pay off your principle amount, leading to a shorter loan tenure.
The maximum amount that you can put into this CMA is the same as the loan amount.
This floating rate can be interchanged betwen 1,3,6 or 12 mths are any time of the loan duration. However it will only be free if the change is done at the Expiry date of each term. I.e if you take up a 3 months loan, you can only change your 'plan' after 3mths, 12mths loan means you have to wait for 12mth...etc.

The website of Citibank (click here) does not say much about this plan in detail, so I hope the above information is useful for all of you out there!

Review of Far East Organisation talk & show rooms 'Jardin' and 'Gardenvista' Part 1

2009-04-12T23:35:00.002+08:00

Note: I have decided to reopen my 'Power to trade blog' as I believe the time to trade is here!

I was there around 4pm which was early, because the talk starts at 4.30pm. Meanwhile from 4-4.30 pm, Mr Chen from Far East Organization brought me around to see their show flats and told me more about their project 'Jardin', which is situation in Bukit Timah

The price of Jardin is @ SGD1250 psf . Though it is freehold, it is rather pricey as I found from 'The Edge Magazine' that a nearby Maplewoods condo, that is also freehold was transacted at $817 psf just within the week of 13-26 March.

Here is the rough cost of an apartment:
2 Bedroom => 958 sq feet => SGD 1.12 million
2+1 Bedroom => 1098 sq feet => SGD 1.39 million

Now back to the talk, it lasted from 4.30pm to around 5.30pm. It was rather informative, a little more than what I can find from the property reports that my broker sends me. These are some details :

Most high private property prices has drop 30% since its peak.
80% of buyers are Singaporeans, while the rest foreigners.
Out of these 20% of foreigners, around 25% are made up of Malaysians, the other 25% Indonesians.
Usually the volume of the number of transacted property units coincides with the general price trend of the property market. I.e when the prices were sky rocketing a few months back, there was A LOT of sales transaction. And now, with the crisis, though volume has dropped..but the price has not dropped as much. The reason being, developers are still hesitant to do a major adjustment of their prices.
The government is spending around S$40 billion on the Integrated Resorts.
And another S$40 billion on transport and infrastructures.
Government is pushing forward the bukit timah's MRT construction by a year or two.

After the talk, while waiting to speak to one of the Citibank's Home Loan specialist, regarding an interesting Cash Management Account,Mr Chen brought me to the condo next door, Garden Vista to look at their last remaining unit. I shall update this is my next post...

Singapore Property 1Q 2009

2009-04-12T00:48:00.005+08:00

This is a review of an article by Phillip Securities Research plus some of my inputs. ( The number facts are from the article) Found out a few things:

1. Price of non-landed private residential properties decreased by (from URA)

15.2% - core central region
17.2% - rest of core central region
7.55 - outside central region

Reason of the highest decrease in the core central region is because these prices has been high, and are expected to decline further than the 'outside central region', hence due to the lack of demand, the price drop.
The other reason is the HDB up graders find the outside central region more affordable and hence are the people creating the demand.

2. Revaluation losses

Expect property companies ( eg. SPH how hold some properties, wheel lock, REITs etc.) to write down assets by 20-30% in 2009) This is because in 4Q 2008, the write downs less than 10%, as property markets have not dipped much.

3. Interest Absorption Scheme (IAS)

After the Singapore government scarpped the Deferred Payment scheme to curb property speculation ( the scheme that allows buyers to start paying for their house only after it obtain the Temporary Occupation Permit (TOP), developers have comed up with some similar, called the IAS. Under this system, the buyer pays a 20% downpayment when they book,and will not need to make progressive payments untill the house has obatains the TOP. However, there have to pay a premium of about 3% for this IAS

So in general, the property market is expected to decline!

The Voca People

2009-04-09T21:11:00.002+08:00

I know that this is non finance related. But i think this is one really cool video..besides the weird outfit..

Enjoy the video!

Anyway..my previous post on support line looks quite accurate right? Always try to buy on support!

Time to trade with the market?

2009-04-08T13:19:00.002+08:00

I feel that the market might still be in a short time uptrend. Support line is at around 1770. If you would like to trade, its time to buy in now (1765 as of 1.24pm). Cut loss at 1700.

Trade at your own risk!