Saturday, June 20, 2015

Straits Times Index: Will MERS cause STI to do a SARS?

On 20 May, South Korea reported the first case of MERS in the country and since then it has spread throughout Asia with Thailand being the latest country to be affected. Singapore’s Lee Hsien Loong has also warned that it is inevitable that MERS “will reach our shores”.


To see if there are any clues how the stock market has and will perform in a period of highly infectious disease, I have in the above chart, superimposed the STI on the corresponding trading day that Singapore reported its first SARScase (1 March 2003) with the trading day when South Korea reported its first MERS case (20 May 2015). Based on 2003 historical trends, I have projected that period’s performance onto the closing STI on 19 June 2015 to create a forecast.

For the 60 trading days before MERS was reported in South Korea, the STI performed in a volatile and mostly positive manner. When news of MERS in South Korea broke out, the index was rather unmoved but has been on a downwards trend since then.
For the corresponding period in 2003, the STI was similarly volatile but in a negative manner. When SARS broke out in Singapore, the index suffered a same day plunge but quickly recovered. It then fell for the next 20 trading days before staging a broad market recovery.

Judging by the immediate trading days before SARS, should MERS hit Singapore, we can expect the STI to plunge rather sharply. However, the market is expected to rebound short-term. However, unlike in 2003, I caution against expecting a longer term recovery because that 2003 period coincided with one of the greatest secular bull markets of our time.

Therefore, the verdict therefore is that you should look at the bigger picture. MERS will benefit day-traders as it provide the catalyst for short-term massive fluctuations as fear initially permeates and sets in. After a while, this information should be priced into the market, with broader factors dictating its longer-term movement.



Thursday, June 18, 2015

KrisEnergy 42-for-100 rights issue:

KrisEnergy has called for cash. The company will issue 42 rights share for every 100 existing share at an issue price of SGD 0.385, representing a discount of 13.5% to its closing price when the announcement was made.

I can use my existing cash reserves to subscribe to the rights issue. I am entitled to 8,400 rights shares based on my current shareholding. But I am also in the red with my average purchase price 10 cents lower than the current market price. This would mean that should I subscribe to my entitlement, I would be putting in more capital at a time where markets are generally skittish, if not heading for the inevitable slump. At the same time, the oil and gas market looks with weak, with a recovery at least 1-2 years out. Russian bear.

Notwithstanding my vested interest, generally, I would not subscribe to rights issue because companies that do call for cash, tend to underperform the market, even after adjusting for dilution. I have only participated in one rights issue, that of GMG Global, and am still waiting for my super-sized returns after many years.

Having said that, I am very likely to subscribe to the rights issue because the alternative would mean either dilution or taking a hit by selling my shares. I will update on any future action.

Saturday, June 13, 2015

Stitches off.


Just more than 2 weeks after the operations, the sutures were removed. What's left is a thin red line and red dots resembling staple marks. 

Going into week 3 of post-op, my left shoulder feels much more mobile and I am able to put on clothes and wash my hair with greater ease. There is a patch of skin below the operation site that feels "dead" because some of the nerves were damaged during the surgery to put the titanium plate in. I was warned about this. 

Meanwhile, the only exercises that I have been doing is weightless bicep curls, pendulum swings as well as running my hand up against a wall to ensure the shoulder retains its range of motion (ROM). However, I dare not lift my left arm straight over my head from the side (like you would in a jumping jack) because it would mean moving my entire left collar bone in a manner it has not been able to do for the last 9 months.

Monday, May 25, 2015

One plate and six screws later

The Mount E orthopaedic specialist told me that based on the latest x-rays (above), I was suffering from a clavicle (collar bone) non-union – the bones have not united. There was some callus (pre-bone material) formation but the two pieces of bone were still mobile after more than 6 months. This was opposed to the malunion I was informed much earlier, where the bones were united but not in a proper alignment. The specialist told me that plate and screws were in order. 

 The preliminary costing estimates given for my planning was slightly more than SGD 20k (!). The locking plates and screws (seen in the x-ray above) were to be made of titanium and I would have a synthetic bone implanted onto the fracture site to help healing. Based on checks with various sources, this was twice the amount you pay at a public hospital (the equipment would also be different), although I have been advised against going to a public hospital if possible. I frantically checks with my company and personal insurance. Not all the expenses relating to the surgery would be covered by my insurance. At the back of my head, it felt like a big blow to my wallet and financial planning.

Fast forward one month after my encounter with private specialist, I was admitted during lunch time to Parkway East Hospital for the operation. Everything was getting too real. The specialist ran through the operation and the possible complications – infection of the operation site, non-union and numbness surrounding the operation site. I proceeded for financial counselling and then I was shown my bed and my parameters were tested. I was asked about my medical history and if I knew what operation I was going for and what time it was. I was told to change into a gown and before I knew it, I was in the waiting room. I was again asked the same set of questions but this time by a different team of nurses. Upon confirmation, I was pushed in the operating theatre.

Thursday, May 14, 2015

200,000 page views

Close to five years after setting up this blog, I finally managed to hit the 200,000 page views levels. While not all page views may be unique, I do feel a slight sense of satisfaction. In terms of Adsense revenue, I think it has amounted to only SGD 300-400 and that is definitely an aspect I should improve upon.

Thank you all for closely following my blog! If you could, please share my blog with your friends through facebook or even whatsapp!

It has been a learning journey the whole while. Initially, there was the ChannelNewsAsia Forum where I could share my posts but that was closed down during one of Singapore's general elections. Now, most of the traffic is directed wholly by the Singapore Investment Blogger page.

The top two posts with the most page views surprised me because they were not investment related. In top spot was the post on my Taiwan trip: http://sgxstockpicker.blogspot.sg/2013/06/my-taiwan-trip-june-1-9.html and this was followed by the post on my kick scooter: http://sgxstockpicker.blogspot.sg/2014/01/bought-new-oxelo-town-7-kick-scooter.html. Both these posts are relatively new and showed me the importance of writing on topics that could reach a bigger audience as opposed to the narrow investing community. 

Once, thank you very much for reading this blog. May you have a great investment journey ahead!