Category: Investment Stab

We Don’t Lack Leaders, We Lack People With Empathy

What makes a leader? What makes a person a leader?We follow leaders because of many reasons; because they have a strong vision; because they are charismatic; because they inspire us to do great things; because of this and that.Great leaders like Steve …

Is Whole Life Insurance A Scam?

A lot of people have written a lot about the difference between the 2.So instead of comparing them again, we recommend you read the difference in the link below:The Case of Term vs Whole Life InsuranceInstead, I will go into the figures.Context:30-year…

5% Travel Insurance Discount with FWD

At Investment Stab, we are always finding ways to help you save money, earn money, earn more money, and learn about money.And we have just this offer right here today:5% discount on your insurance premiums with FWD Insurance!Simply click on the link be…

Differences in investing viewpoints for bonds and equities

Recently, Azalea Group has just released its Astrea IV Class A-1 bonds. It was widely marketed as the debt instrument which provides access to private equity investments. This was definitely confusing (at least for me) and here are the reasons.
Bonds and equities have different long-term investing objectives
Bonds are predominantly debt instruments while equity, regardless private or public, are stake holdings in companies. Debt is primarily raised externally with the purpose of investing in the company’s operations for higher future returns. Interest and loan repayment is required. Debt is classed higher than equity for repayment in the event of a default. While the risk of failure of loan repayment can be mitigated by securing the loan with collaterals (where the collateral can be sold in the event of default), the investment returns are still from the interest payments. Hence, simple judgement of attractiveness of a bond is based on the underlying company’s ability to pay (risk) and the interest rate it is offering (reward). Investors should look for cash flow stability for company’s ability to pay.
Equity funding can be raised internally or externally with the similar purpose of investing in the company’s operations for higher future returns. However, the principal amount invested is not required to be repaid. Investors get their returns from the performance of the company through dividends issued or sales of its shares. As such, the attractiveness of a company’s equity is based on its probability of default (risk) and its business potential and performance (reward).
Why I am confused
While Azalea Group is a Private Equity firm, Astrea IV is a debt instrument which relies on Azalea Group’s cash flow for interest repayment. The attractiveness of this bond should be based on its relative interest rate offered and ifs underlying ability to pay the interest and principal loan amount. If the underlying private equity investments do perform better, the bond investors does not receive further benefits from the interest rate offered. In addition to this, even though Azalea Group is indirectly wholly-owned by Temasek Holdings, the bonds are not guaranteed by Temasek. 
While I understand that the rarity of these private-equity-backed bonds may be the reason of its attractiveness, getting exposure to Private Equity via debt instruments does not resonate well unless the debt instrument has an option to convert into equities or equity-related benefits. A better gauge of bond attractiveness will be to compare its relative default risk and interest rate among other bonds offered in the market.
Conclusion
The Astrea IV bonds have definitely performed well in the light of the positive marketing and its early performance (heavily oversubscribed). The purpose of this post is also not to discount its merits but to offer my 2-cents thoughts of how investors should differentiate the investment perspectives of an equity and debt instrument.

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SGX My First Stock Carnival (AKA Stock FunFair)

SGX will be holding a carnival this coming weekend at Vivo City!This event is suitable for those of you who are wanted to start their investing journey.Join us at this event to learn more about investing and how to start the journey.MOST IMPORTANT THIN…

Get $2 Cashback & More When Watching Avengers

Yes, movie promotions are here, and of course, it is for any movies, not just Marvel The Avengers Infinity War.This promotion is by DBS in conjunction with Golden Village (GV).Simply pay with DBS PayLah App when you buy your tickets at GV’s automated t…

How to Buy Real Estate in Singapore?

Property purchases in Singapore can be some of the most lucrative if done right. However, it is without a doubt challenging. For instance, anyone looking to invest in the property project should understand what it offers in its entirety.
You need to follow a process, and some decisions need to be made early on. Like buying property anywhere else in the world, in Singapore too, owners incur costs like repairs, maintenance, and a commitment.

Do Your Research
Researching the market is a great way to find out what type of properties are available and what you can expect to pay. Prepare a short list of homes that meet your requirements. Your requirements may include things like:

  • The number of bedrooms.
  • The overall size of the home or real estate.
  • Your preferred location.
  • Reoccurring costs associated with the property.

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Usually, it’s better to start your research from the websites of the best property developers. Here is the list of the Top 10 property developers in Singapore, created by https://www.asiapropertyhq.com/property-developers-singapore/ :

  • Far East Organization
  • El Development Pte Ltd
  • City Development Ltd
  • Frasers Centrepoint Ltd
  • MCC Land
  • Qingjian Realty
  • GuocoLand
  • Bukit Sembawang Estates Limited
  • Hoi Hup Realty Pte Ltd
  • CapitaLand

Take the New Futura Condo for instance. If you were considering the condo, you would have to research to determine which size will fit you the best. You’ll also need to determine if you have the required budget for the beach facing view. Other things you’ll need to consider when choosing a condo is if its near to your place of work. Also, what type of maintenance costs you’ll incur.

Types of Properties You Can Buy – Freehold VS Leasehold
When buying property in Singapore, you’ll be faced with a choice between freehold and leasehold. The difference between the two is significant, and so that has influence over the price as well.
Freehold properties can be held by the owner forever or transferred to their kin.
On the other hand, leasehold properties will revert back to the state when the lease expires.
Lots of properties in Singapore are freehold. That means you can own the property for as long as you want and sell it when the time comes.
However, keep in mind that generally speaking freehold properties are 10% – 15% more expensive.

Price Valuation
Before you buy any property, you’ll want to get it valuated. Now even though property price has already been valuated, it is essential to make a comparison. When you compare the costs of this project with others, it becomes easier to estimate how big a loan you can or should get.

You should also consider the total duration of the loan and its subsequent monthly instalments.
Individual borrowers who don’t have an outstanding house loan, the LVL or Loan to Value Limit is 80%.
If the tenure exceeds 30 years or extends beyond the age of retirement of a borrower, then it’s 60% of the property’s value.

Closing the Deal
Once the buyer and seller have agreed on a price, the sale can be completed. Completing the purchase will require paying the seller, and transferring the CT or ‘Certificate of Title’ to the purchaser.
The CT is only issued by the Singapore Land Authority (SLA). It is also proof that you own the property.
Your lawyer then inspects the CT. It is also at this point that the lawyer holds on to the CT.
The next couple of steps are handled by the lawyer. This usually requires that the solicitor holds the CT until legal formalities have been completed. After that, it is surrendered to the SLA, which then reissues a new CT in the name of the new owner.
It takes a total of around ten weeks for the process to complete. If a mortgage has been sought the solicitor lodges a caveat for the property and coordinates with the bank or any other financial institution.
Finally, the mortgage documents are prepared, and the property is officially yours.

Remember to offer your opinions. 
If you don’t put your two cents in, how can you expect to get change?

Have a feedback? Tell us now! 
Subscribe to us or 
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This article is brought to you by:
Author: Robert LampPosition: Ghostwriter in New Property Guide, Blogger Email: robertlamp10@gmail.com

Free $5 with DBS PayLah

Here is a guide to finding your promocode to share with your friends.The first part of the guide is to get you signed up and get your first $5.The second part of the guide is to get you familiar with how to share your promocode with your friend so…

Uber’s Partnership in Recent Years

Biggest news in Singapore yesterday was the merger between Uber’s Southeast Asia wing and Grab. This is not something new. After years of fighting and bleeding money in markets all around the world, Uber decided to try a different route and has been pa…