Category: SG Wealth Builder

DBS versus OCBC, clash of the banking titans

It is the clash of the banking titans as Singapore no.1 and 2 banks slugged it out to achieve stellar first quarter 2018 results. On the basis of the latest financial results, DBS edged past OCBC to smash in a record $1.52 billion. Shareholders must be very pleased with DBS CEO Piyush Gupta’s performance because share price stormed to $30 upon the release of the results.

Notwithstanding the good performances, there are lurking risks from technology disruptions which had impacted SingPost, M1 and ComfortDelgro. To tackle this challenge, DBS CEO is leading the bank on an aggressive digital transformation. After all, Piyush Gupta once famously declared that “people need banking, not banks”. But then again, OCBC has not been resting on its laurels and had been making a series of significant acquisitions in the wealth management realms that may prove to be game-changers in the coming years.

It remains to be seen as who will be the ultimate winner but I firmly believe strategies made by DBS’ Gupta and OCBC’s Samuel Tsien would define the course of the banks’ destinies with the next five years.

DBS

DBS share price to reach $50 for 50th anniversary?

Since the $30 mark, the …

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Scary growth project of Mapletree Logistics Trust

Mapletree Logistics Trust was the first of the four REITs to be listed on SGX Mainboard after its sponsor, Mapletree Investments, was established in December 2000 to hold non-port properties transferred from PSA Corporation to Temasek Holdings.

According to SGX Research, this REIT delivered the best total returns among the four since IPO – at an incredible 336%. In my point of view, Mapletree Logistics Trust is at a cross-road as it tried to ride on the exciting wave of e-commerce in China.

Listed in 2005 with an IPO price of $0.68, the unit price had withstood the onslaught of the Great Financial Crisis and went on strength to strength to hit a peak of $1.37 in January 2018. In recent months, the unit price had experienced some form of correction, which I think could be due to the number of on-coming asset acquisitions.

Part of the reason for this article is the compelling growth project of Mapletree Logistics Trust. Its Sponsor, Mapletree Investments Pte Ltd has an incredible pipeline of 45 projects in China that could be injected to Mapletree Logistics Trust in the coming years. Henceforth, the value of its investment properties could potentially double in a couple …

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The stunning rise of Micro-Mechanics

Crisis? What crisis? Home-grown Micro-Mechanics shrugged off recent bearish trend in share price to post a set of good quarterly financial results. Of course, investors should not judge a company by one quarterly results. But if you look at the past five year’s performance, Micro-Mechanics’ growth had been consistently good. So the recent correction in share price should be a healthy one.

In retrospect, it is a mystery that Micro-Mechanics went under my radar until recently when a member requested me to do a coverage on this counter. The story of Micro-Mechanics is nothing short of fantastic. Within the span of four years, share price soared four-fold to reach a high of $2.40 in January 2018, creating immense wealth for shareholders.

From a penny stock as recent as 2014, Micro-Mechanics confounded critics to attain the status of mid-size cap in the SGX mainboard. Its meteoric rise was in part due to the sustaining growth in the semiconductor industry as there are ever increasing use of embedded chips.

Micro-Mechanics

Company profile

Micro-Mechanics started life in 1983 with a small factory in Singapore. Through the years, the Group [This is a premium article. The rest of the content is blocked and can be

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Wilmar International share price to rocket upon China IPO?

Will Wilmar International share price soar on the back of its impending IPO of its China unit? Being the largest listed agribusiness group by market capitalization on the Singapore Exchange, it is certainly a fascinating journey for Wilmar. From a start-up, Wilmar has overcome various challenges through the years to become one of the elites in the prestigious Straits Times Index (STI).

Many analysts have debated the need for Wilmar to list its Chinese unit in Shanghai while others had wondered the merits of announcing the plan at its infancy stage. In my point of view, the purpose of the initiative is more of business scaling rather than raising capital.

In recent years, Wilmar has struggled to meet great expectations due to the collapse of palm oil price, which was largely caused by overcapacity in the market. FY2017 results revealed that net cash flow from operating activities dropped significantly to USD 386 million, as compared to USD 1.1 billion in 2016. The terrible net cash flow was due to the huge increase in inventories (USD 1.2 billion in FY2017 as compared to USD 727 million).

Against the backdrop of ailing market demand, can Wilmar fight gravity? Ultimately, is this counter …

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Venture Corporation share price went ballistic!

Within the span of one year, share price of electronic contract manufacturer, Venture Corporation Limited, surged from $11 to $22. This is an impressive two-fold increase. What a majestic fine run! The fine performance led to Venture Corporation joining the prestigious Straits Times Index (STI) in January 2018.

Nonetheless, it is a mistake to view Venture Corporation as purely an electronic contract manufacturer. A close review of the balance sheet revealed stunning “goodwill assets” worth about $640 million. Read on to find out whether this counter is a potential multi-bagger or value trap.

Company profile

Founded in 1984, Venture Corporation’s capabilities span across research, design and development, product and process engineering, design for manufacturability, supply chain management, as well as product refurbishment and technical support of electronic equipment.

The products developed by Venture Corporation are used in a huge array of industries – advanced industrial, consumer, financial, healthcare, security and life science. Fundamentally, it should be noted that [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

Sign up as member and receive a bonus investment report …

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Is M1 a lost cause?

FY2017 had been a year of reckoning as M1 celebrated its 20th anniversary but continued to struggle in the midst of technology disruption. Revenue remained fairly stable at $1.07 billion. However, profit after tax dropped to a whopping 5-year low at $132.5 million.

Correspondingly, since my last coverage on 25 January 2018, M1 share price turned bearish, dropping from $1.88 to $1.70 in early April. It recovered only recently on the back of a decent set of 1QFY18 results.

For sure, investors would look back and lamented that the past 20 years had been a journey of lost opportunities as M1 had become the smallest telecommunication player despite being “the first to offer nationwide 4G service, as well as ultra high-speed fixed broadband, fixed voice and other services on the Next Generation Nationwide Broadband Network (NGNBN)”.

But is M1 really a lost cause? Should shareholders run for their lives? In this article, the investment merits of M1 are examined.

Market share

According to Info-communications Media Development Authority’s (IMDA) statistics, as of November 2017, Singapore’s mobile market penetration rate was almost 150%. This means that [This is a premium article. The rest of the content is blocked and can be

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Investing in Capitaland

Being one of the largest listed real estate companies in South East Asia, Capitaland remains an enigma in Singapore stock exchange. Share price reached a record high of $7.00 in 2007 and subsequent bombed out during the Great Financial Crisis.

Since then, this counter never really recover from the setback, presumably due to the slew of property cooling measures implemented by Singapore government. The slowing down of the China market could also played a part in the laggard of the share price. In this article, the investment merits of Capitaland are examined.

Profile of Capitaland

Formed in November 2000 following a “big bang” merger between DBS Land Limited and Pidemco Land Limited, Capitaland is 40% owned by Temasek Holdings. Black Rock also has a stake of 6% in this real estate giant.

Capitaland is famous for its Raffles City integrated projects. [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

Sign up as member and receive a bonus investment report on Singapore stocks! The membership benefits include:

1) Access to the latest premium articles of SG Wealth …

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Understanding CPF LIFE (Lifelong Income for Elderly)

Sometimes, you really have to hand it to the policymakers for coming out with an acronym like CPF LIFE, which stands for Lifelong Income for Elderly. As the name aptly suggests, CPF LIFE provides you with a lifetime monthly pay outs.

Introduced in 2009 by the Singapore government, this annuity scheme ensures that Singaporeans do not outlive their CPF savings.

There is a marked difference between the previous scheme, CPF Retirement Sum, and the current CPF LIFE. It is important that Singaporeans understand how this improved system works so that they can plan their retirement needs appropriately. It should also be noted that the old scheme, CPF Retirement Sum, has not been phased out because there are many Singaporeans who may not qualify for CPF LIFE.

Another unique aspect of CPF LIFE is that it allows you to decide how much you wish to set aside for your loved ones upon your death while balancing the amount of monthly payouts. Thus, I feel that the CPF Advisory Panel had developed a rather comprehensive framework because the plans allow you to choose whether you want a higher monthly payout or lower monthly payouts with more bequest for your loved ones.…

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Special dividends for OCBC shareholders?

Singapore’s oldest bank, OCBC, delivered an excellent full year results for 2017, setting the share price on fire. The venerable bank reported on 14 February 2018 a net profit after tax of $4.15 billion, an increase of 19% from $3.47 billion a year ago. This is the first time the net profit of OCBC surpassed the $4 billion mark.

In my opinion, OCBC share price is poised to surge to another new level with the impending divestment of Great Eastern Life Insurance (Malaysia). There might even be special dividends for OCBC shareholders. Against this background, OCBC is deemed to be in the unique category of a stock which possesses features of growth, value and asset-rich.

There are a few important drivers for OCBC share price to rise in the next few months, not least because of its recent divestment moves to dispose its non-core banking assets accumulated in the past 100 years. Great Eastern Holdings remains the crown jewel of OCBC, setting the iconic bank apart from the rest of its competitors.

Unrealized Valuation Surplus

For FY2017, OCBC’s unrealized valuation surplus stood at $9.9 billion, 54% higher from S$6.45 billion as at 31 December 2016, mainly from [This is a

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Investing in overseas properties

In the aftermath of the 2009’s Great Financial Crisis, interest rates had remained very low, driving Singapore wealth builders to look to overseas properties that generate high returns. In addition, the implementation of Additional Buyer Stamp Duty (ABSD) has also led to many wealthy Singaporeans to invest in overseas properties in United Kingdom, Malaysia and United States. In this article, the risks of investing in overseas properties are discussed.

Before we talk about returns, it is important to think about the risks of owning a foreign property. Context is important because investing in properties in Singapore is very different as compared to investing in overseas properties.

In life, if it is too good to be true, it probably is. Henceforth, I always believe in taking care the downside risks and let the potential upsides do the talking itself. Broadly speaking, the downside risks are geopolitical, regulatory and market supply.

Geopolitical risk

Unlike many countries, Singapore has a very stable government with strong ruling party. This is an important factor because investors do not like uncertainties arising from a change of government or major upheaval in the political environment, which often leads to new policies for property ownership for foreigners.

Brexit …

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