Monday, December 27, 2010

Things an Employer Should Not Say

Not so long ago, I went for a job interview with a company located at Harbour Front. It was the second time I interviewed with the company, the first when I was a fresh graduate. There was the usual written tests and involving verbal and mathematical ability. It was followed by a panel interview of two – a director and the HR Manager.

Since leaving university two years ago, I consider myself a veteran when it comes to interview. For those leaving school soon, you should always do some research about the company you are interviewing with and try to establish connections. This tells the employer that you are interested in working for them.

But more importantly, you should be able to tell them about yourself. You should be able to tell them about your strengths and weakness, why you are here for the interview and how you feel you can contribute to the team. It would be best if you can give examples from your resume and life experiences.

The interview went on smoothly but the director was very keen on breaking me down. He wanted me to keep telling him what the “real” me would think about certain things and situation. He said he did not want me to give him the politically correct answer. The politically correct answers were answers to the questions I earlier raised, that I have rehearsed very often in front of the mirror.

Sunday, December 26, 2010

Will Ivory Coast Turmoil Affect Petra Foods?

Page 11 of Petra Foods third quarter FY2010 presentation will be useful for those following the company. For those who have not been following the news, Ivory Coast held its first election since 2002 and while a winner has been announced, a political stalemate has resulted as the incumbent refused to acknowledge the validity of the results. This has caused some problems to companies who get their raw materials from the African state. Ivory coast in the third largest producer of cocoa and this may impact the margins of Petra Foods as it is a manufacturer of cocoa ingredients. More analysis by the reader is of course needed as well as direct questions to Petra Food's investor relations.

Saturday, December 25, 2010

Week 51: More Bad News Pummels Portfolio

For some reason, I am not feeling well on Christmas Day. Could be some thing I ate over the past two days that is making my body feel weird. Anyway, Bad news from the Ivory Coast caused GMG Global to slump below the $0.30 mark. China Animal Healthcare also lost quite a bit as its shares in Hong Kong did not garner the hot response management was expecting. Sick out.

Wednesday, December 22, 2010

Reflecting on GMG Global and China Animal Healthcare

I'm sorry it's another GMG Global post. Are all political risks the same. Does it really matter.

For those who were young enough to watch the Matrix when it first screened in the cinemas, you will remember that there was one scene where the dialogue goes (you can find the scene here):

Oracle: I'd ask you to sit down, but, you're not going to anyway. And don't worry about the vase.

Neo: What vase?

[Neo turns to look for a vase, and as he does, he knocks over a vase of flowers, which shatters on the floor]

Oracle: That vase.

Neo: I'm sorry...

Oracle: I said don't worry about it. I'll get one of my kids to fix it.
Neo: How did you know?

Oracle: Ohh, what's really going to bake your noodle later on is, would you still have broken it if I hadn't said anything?

Unless you have been stuck in an airport in Europe due to the snow, you will most likely know that shares of GMG Global - China Animal Healthcare to a greater extent - have taken a beating, falling below the $0.30 mark with heavy volumes. The reason has been plastered in the papers, that the political turmoil in the Ivory Coast has affected GMG Global's operations there. This has affected its shipments of rubber out of the African country's ports.

The political strife in the Ivory Coast resulting from the elections was not entirely foreseen. If you read this article, GMG Global Poised For Big Things, written at the start of the year, you would have been informed of the possibility of turmoil buried all the way in the second last paragraph.
White, Grey and Black Swans

But the question is, would it have mattered at all? If you had not bought the stock at the start of the year because you were worried about the risks, you would have lost out on a 2-bagger up till this point in time. But if you did bought the stock only recently due to its proposed acquisition of Tek Bee Hang, you would have ended up losing a small fortune. There are just so many ifs in life.

The lesson learnt (on hindsight?) here for me is that if there are certain risks that are flagged from the beginning, the onus lies on the investor to keep track of the events that will cause downside. Already it was mentioned that the elections would be contentious. On my part, I could have and should have at least find out what are the latest developments with regards to the Ivory Coast elections.

I am sure that GMG Global is not the first and only SGX-listed company to be affected by political events. Banyan Tree Holdings, which runs resorts in the region, comes to my mind. It too had been affected by the political events in the kingdom which has since reach and uneasy stand still. Bangkok has only recently declared the lifting of martial law.

Factoring political risks in the long run

Political events have both upside and downside risks. If you have the appetite and ability to short, political events are golden opportunities for making loads of money. Just ask George Soros or any "special situations" or "event driven" fund manager.

But such events fall into a spectrum in terms of returns and probability and are very lumpy. Political events can be global or regional with the boundaries very blur. 9/11 can be considered a global event while the Ivory Coast election a micro one.

How should we factor these political risks when valuing the attractiveness of a stock? How would value-investors do it? I really have no answers to the question I posed. And to rephrase the Oracle, would you have not bought or sold the stock, even if someone no one told you that there will be conflict in Ivory Coast?

But there are things we can do to protect our portfolios. Diversification is the most common answer. Limit 10 percent of your portfolio in terms of total cost to any one stock, should dampen the downside. And by using percentage of cost to total portfolio cost, it does not force you to re-balance every year, something I find deleterious to performance.

Staying current is a more tiresome alternative. That would mean trawling the news everyday for developments that are linked to the political risks already defined for a particular stock. This is very demanding and further complicates the investing process, as the investor willingly gets bombarded by the noise in the media. Moreover, you can never really tell how an event will play out. Did you know that America would invade Iraq as a consequence of 9/11, even though Iraq had nothing to do with the whole incident?

I am not actively monitoring the happenings in Ivory Coast which are affecting GMKG Global's stock price negatively. I would preliminarily say that there will be another stalemate, since the incumbent which was voted out has refused to vacate the office. The light at the end of the tunnel won't be seen so early and blood will be shed. However, I am confident in the next 3 months that some sort of truce can be ironed out.

Tuesday, December 21, 2010

Reflecting on 2010

I reached a personal milestone in terms of investing this year by having invested a total $20,000 straight from my pocked into the stock market. This figure of excludes the amount of monies received as dividends as well as the sale of stock, which I have deliberately excluded as it confuses me and lowers my imagined portfolio performance.

For the portfolio, there was only buying and no selling.I started the year with the purchase of China Animal Healthcare and ended it with C&O Pharmaceutical.

In terms of personal achievement, the most significant highlight for the year would be my changing of jobs towards the second half of the year. My current job is much more specialized compared to the past and the knowledge gained has complemented my previous position. I also made some progress in my quest for the CFA Charter.

Goals and Outlook For 2011

Financially, I aim to save as much as I can to provide for my future wedding as well as housing purchase. To those ends, I am thinking of saving maybe $1,000 a month. I am not sure if I will put them aside as pure savings or have them invested. The time horizon for using this money is horribly short compared to my initial investment portfolio which is for retirement. This makes volatility and issue.

In terms of personal developments, I hope to be fitter (IPPT Gold?) and perhaps travel a bit more. I will leave the thoughts of pursuing a Masters education till after I take the CFA Level II examination. All these will have an effect on my financial planning for married life.

Just a short one, I am expecting 2011 to be a year where the stock market will go up a little. Look for yield stocks is my usual advice. I do not foresee any shock to the systems (if I can see it, it can’t be a shock can it?) as most of the bad news from America and Europe have been discounted in. America’s approach has been to print more money (QE2) and forcing its major trading partners to revalue their currency. Across the Atlantic, governments there have preferred the cutting of expenditure in the government sector. The series of austerity measures will bring hardship as the years of plenty are apparently over.

Taken together, the shock that will cause panic in the global financial market should be a mixture of the two very different responses to an economic recession. However, how this shock will manifest itself, is an unknown. A portfolio review will soon follow along with a more comprehensive outlook for 2011

Saturday, December 18, 2010

2010 Singapore Exchange Top 20 Year-to-date Performers

This is as table similar to an earlier one, but I have excluded those with market capitalization of less than USD 1 billion. There is nothing much I can value add to the discussion as most of these stocks are out of my reach and radar. What is noteworthy is that most of them are USD denominated. I am not sure if the weakening greenback has made the stock price appreciate, as investors can borrow Sing dollars in the current low interest rate environment and buy sound stocks.

Week 50: Portfolio Drifts Down As CAH, GMG Sold Down

Went for my company's Christmas dinner last night at the Mandarin Oriental's Melt The World cafe. We did not get the ala carte but chose the buffet menu which was very popular with everyone from the office. I remember going for a few rounds at the food station myself. However, I guess that the bill would be very expensive as it was close to a hundred dollars per person before the charges!

The portfolio was not as happy as I was last night. Compared to the previous week, the portfolio pared about $530 as a result of the sell down of several counters. China Animal Healthcare, which had fared so well last week, so a sell down of its shares from a high of 41.5 cents to close 39.5 cents, as investors took profit. GMG Global also lost 2 cents in trade.

The spotlight for the past few weeks have really been the stellar performance of Amtek Engineering and STX OSV. Despite critical comments from others and myself, the stock has performed much better than the first few days of listing, with the re-listing at $1.13 and the shipbuilder at $1.12. Interestingly, while their shares were initially falling - below a dollar for Amtek and 80 cents for STX OSV - due to poor sentiment, there was plenty of stabilisation trades.

From my limited understanding, stabilization trades are trades carried out to ensure that the IPO price does not fall too much due to open market selling. The opposite will be the over allotment option which allows the vendor or the issue manager to sell more shares, if they see that there is as strong demand for it.

Both Amtek and STX OSV have also recently posted good results. Amtek's earnings for the first quarter of its financial year doubled to $12 million on the back of a 11 per cent increase in revenue. STX OSV revenue was up by 6 per cent for the first nine months of its financial year, with the ship builder turing around to record a profit of NOK 740 million (approx SGD 162 million) from a loss of NOK 40 million.

2011 should see more IPO in the local market. This is contingent on how the proposed merger between ASX and SGX pans outs. In the unlikely event that the deal goes through, we could see more Australian companies list here to tap liquidity, Whether there will be anymore S-Chips coming to town is another question. But the lesson I have learned from my poor calls on IPOs, is that we should not under estimate the strong hands behind the scene. They have the ability to keep a stock from falling underwater through their sheer financial resources. Meanwhile, I will try my best to keep my mouth shut. Lol.

Thursday, December 16, 2010

Who Didn't Buy OSIM This Year

A new Straits Times journalist wrote "Bought Osim stocks this year?" as part of her review of the top performers in the local stock market in 2010. This got me thinking quite a bit. For those with good memory, you would also be aware that OSIM was also the best performer for 2009.

In this instance, if you had sold your house and bought shares in the massage chair maker, you would have become famous by now.The reason I say so and hence the title of the post, is that most of the people I come across, that are termed successful investors, have bought OSIM. I just so happen to flip an old copy of Pulses (soon to be discontinued) and the founders of Lumiere Capital said that OSIM was one of their best buys.

Not so long ago, a person appearing on Lorna Tan's column, said that he too leveraged on the strong performance of OSIM. Or was it Golden-Agri.

Yet I am curious, why did not anyone ask Ron Sim himself how it feels to see his wealth quadruple within 2 years immediately after the worst recession ever?

I believe I am ranting but I have a point. And that is OSIM is sure a hot stock but that does not make a person fully invested in that stock a good investor. I believe the term gambler - a derogatory epithet at poker tables - is more appropriate. Nonetheless, fortune favors the brave. OSIM for a hat trick in 2011 anyone?

Monday, December 13, 2010

Top 50 Stocks On Singapore Stock Exchange On 52 Weeks Basis

Just for kicks, I went to find the top performing stocks over a 52 weeks basis, using my stock screener courtesy of DBS Vickers. What is unsurprising was that almost all the stocks that tripled in price were under a dollar. The most expensive stock that made it to the top fifty list was OUE, which was just under a two dollars.

The Top 10
  1. Sim Siang Choon was that stock that gave its shareholders the best returns over the defined period. Previously a retail business selling toilet bowls, due to investment by Ezra Holdings-linked vehicle, it has become transformed into an offshore and marine play, with a slant towards India.
  2. OSIM International. For the second year in a row, the massage chair maker is one of the best performing stock on the local bourse. Last year, it was number one. Its phenomenal rise has been attributed to many things such as its write-off of Brookstone as well as its support by investment funds. OSIM has also a share buy back scheme and has been penetrating the Chinese market. Last heard, CEO Ron Sim said that the company is on the lookout for M&A targets.
  3. Sunvic Chemical. I totally know nothing about this company. But I understand that the stock made its climb up in terms of share price only within the past three months.
  4. Nobel Design. As above.
  5. Bright World. Stamping machine maker that whose revenue comes mainly overseas.
  6. SP Corp is a diversified industrial group whose interests spans from making tyres to even commodities trading.
  7. GMG Global. Enough has been said, can read more here.
  8. Juken Tech. No eye deer.
  9. Trek 2000 International. Maker of the thumb drive?
  10. UMS Holdings. Technology play.
I will go to the library and dig out an old edition of Shares Investment to see what valuations these top performers were trading at. Comments are appreciated as usual.


Unlike the IPO guru lurking in the forum of SI by the name of Palawan, I would have to say that I got it wrong with STX OSV. Since listing on the Singapore stock exchange earlier last month, while wobbling initially, it has gained 25 percent on the back of positive announcements such as contract wins.

Shortly after listing, it announced that it won contracts for the manufacture of 4 PSVs, Rolls-Royce design, worth a total of NOK1.3billion. It has also announced that it won a contract for one PSV under its on in house design.

Interestingly, Goldman Sachs bought close to 9 million shares as part of a stabilization exercise at prices raning from 78 to 79 cents.

STX OSV's third quarter results are posted on SGX website and it can be read for those interested here

Saturday, December 11, 2010

What Is Your Main Investing Indicator?

I have set up a poll on the right so do participate!

Retail investors use many indicators when deciding when to buy or sell. However, there is always one indicator that they will prefer over others, when faced with a tough investing decision. The most common indicator is the Price-to-Earnings ratio which is derived by dividing share price over the latest full year earnings per share (EPS). This is also know as the trailing PE. There is also a forward PE which is derived by dividing the share price over a predicted EPS, usually taken from a consensus of analysts' estimates.

Price-to-Book or PB ratio is derived by dividing the share price over the equity per share, or NAV per share. There have been extensive studies that argue that low PB stocks will give the best returns. But in most cases, retail investors use PB ratios to assess a "margin of safety". For example, if a stock is trading at $1.00 but its equity attributable to shareholders is $2.00, its PB is 0.5 times.If this company liquidates, it can sell its assets, payoff liabilities, and still in theory return shareholders $1.00 per share. Correct me if I am wrong.

Then there are the technical indicators. For those following this blog for a long time, I am quite an idiot when it comes to technical indicators. But I do know that it is the use of numbers derived from the averages of price and volume as well as other data points. The whole idea here is that the derived figures from price and volume offer insight to the direction of the market - hence oversold and overbought are some of the words used to describe a stock or market index.

The fourth choice of None might sound funny to some. Yet there are quite a few people who are part of this program unwittingly through their insurance plans. The idea behind investing at regular intervals - dollar cost averaging to some - is that the odds work in your favor eventually. It is like doubling up at the dice table. But in the stock market, you seldom lose all your capital and that you need not bet twice as much to recoup your losses. This is even a more unemotive form of investing when compared to technical indicators.

Gut feeling or spider senses as it implies, use intuition rather than any concrete number or logic. I believe that most traders and investors use this as their main indicator. Like me, they already know what they want to buy, but then to internalize the decision, they go on at lengths to write down their rationale for trading and investing, through some form of perspective or analytical lens.

How do you invest or trade?

Week 49: Portfolio Trends Higher Amid Interesting Times

The portfolio trended higher higher, this time due mainly to the announcement that China Animal Healthcare will finally carry out its proposed dual-listing on the Hong Kong Stock Exchange. The listing will be by introduction and a few batches of shares have been transferred to the Chinese territory, as part of its listing on 21 December.

I say that this week has been interesting times because while the heavy weights were losing steam, the penny plays have come into the spotlight. Apart from China Animal Healthcare, other small caps that saw plenty of shares traded were Bio-Treat, Consciencefood and for today Armada Group.

This is week 49 and there are 3 more weeks to go before the year comes to a close. The portfolio has gained 40 percent but that is not factoring the recent acquisition of C&O Pharma as well as dividends.

For 2011, it is very unlikely I will invest further as I will be bulking up on my savings account. Alternatively, once I get the critical mass, I will start investing again.

But it should not be soon as those who follow this blog know that I just changed jobs. As a result, I am not going to be entitled to a thirteenth month bonus or any increment. That is a downside but overall, work has been good.

Wednesday, December 8, 2010

Fuxing China Group : Some More Comments

Edit: For those who want to read about YKK, the largest zipper manufacturer, you can click here. Though dated, it gives alot of insight to the zipper industry and how the Chinese are playing catch up.

Some time back, a reader asked me what I thought about Fuxing China Group but I did not give a thorough response. I'm revisiting the question because I happened to read an old article (below) on the same issue.

My response will still be the same, in that Fuxing is in a very competitive industry, whereby profit margins will remain thing in the long run as zippers are a commoditized product, with little possibility of creating barriers to entry.It is unlikely that it can do to zippers what Nike did to sports shoes.

Of course promoters of the stock will argue that it is trading at a sharp discount to book value with a high cash to share price percentage. Moreover, compared to its China-listed peers, valuations are very attractive.

I agree that Fuxing has a strong cash pile, but like the article below points out, doubts will surface unless more is done. That said, Fuxing has been distributing dividends consistently for the past 4 years. It is a confidence booster  to already depressed valuations, as investors here have become averse to small cap S-Chips.

However, in my opinion, it is unlikely to trade at 20-30 times earnings as the equity conditions in China are much different than Singapore. There are still plenty of capital controls in China, giving their local investors no choice but to invest locally, regardless it being the better choice.

If Fuxing's management thinks that its valuation is too low, perhaps it could take the advice of Tan Chin Hwee of Apollo Management (Singapore) who said in the article:

He added that if a company tells him that it has lots of cash and that its stock is undervalued, he is likely to challenge the company: 'Why don't you then privatise your company? You can relist it another time, or somewhere else.'

Tuesday, December 7, 2010

Gridlock Is Good for Stocks?

Go check out Kenneth Fisher's latest article on Forbes This is an interesting quote:

"We haven't had a negative stock market return in either the 6 or 12 months following a midterm election since World War II."

Sunday, December 5, 2010

How Much Money Is Enough?

One of Leo Tolstoy's short story asked How much Land Does a Man need. This is a very fitting question to land-scarce Singapore and its citizens. The long-dead writer answers at the end of the story : Six feet from his head to his heels was all he needed.

I chanced upon a blog while searching for criticism of Warren Buffet and in it, a similar post asking How Much Money is Enough? Paul Polak, the blog owner says:

“What’s your number?”

“What do you mean? They ask.

“Your number is the amount of money you and your family needs to live comfortably.”   For example, if you need $100,000 a year, and expect to earn 5% each year on your assets your number is two million dollars. Once you’ve reached your number, you can start doing whatever you’ve always dreamt of doing all your life.”

 What's your number?

Some Stuff On About Your Mind To Read

Here are some interesting stuff to read from Singapore papers during the past week. The first one is by Andy Ho of The Straits Times on How Hypnosis can implant false memories, which he warns about the dangers unethical hypnotherapists. But what I find most interesting about the article was his highlighted quote:

"Should a false assertion be repeated often enough, the hearer will become increasingly familiar with it. Increasing familiarity tends to be interpreted as evidence of truth. This is why 'abductees' are convinced that they really were abducted." 

Wednesday, December 1, 2010

Updates On GMG Global and C&O Pharma

GMG Global recently announced that it would acquire slightly more that a majority stake in Thai rubber producer Teck Bee Hang for a nominal fee of USD 909. However, GMG Global will make out significant loans to Teck Bee Hang amounting to at least SGD62 million for the purpose of working capital as well as to finance outstanding debt. GMG Global says the move fits its expansion strategy and intends to turnaround the Thai rubber producer by 2011.

Meanwhile, C&O Pharma Tech announced that Japanese conglomerate Sumitomo Corp will acquire a 29% from Executive Chairman Gao Bin for $96 million. This is about 50 cents per share and will make the Japanese conglomerate the second largest shareholder after the company's Executive Chairman himself. The announcement was made after the company was halted from trading for two days since Tuesday.

SGX Stockpicker Says...

Monday, November 29, 2010

C and O : Trading Halt. WTH!?

I think this is a bit too much for me. First it was GMG Global that declared a trading halt on a Monday morning. Now is it C&O Pharma turn to announce a trading halt in the evening. The company says it will make an announcement on Tuesday morning.

Given the lack of price-volume action but a substantial paring in stake in recent months by a Lee Chong Min who linked to a PE firm, I can only think of three possibilities what will happen tomorrow:

  1. C&O is affected by some new regulation or price cuts.
  2. Insignificant acquisition of a smaller company (Most likely)
  3. Placement of shares.
Good luck to all those vested.


Removed profit warning.

GMG Global : Trading Halt

GMG Global announced early on Monday morning that it would be halted pending an announcement. Given that it had a rights issue last year and that in terms of price movement before trading was halted, there was nothing spectacular, my guess is that the trading halt has got to do with developments in Africa. We will only know probably after the trading day has ended. BB.


Looks like I got it wrong. GMG intends to acquire a Thai rubber processor, which is in negative equity. GMG intends to turnaround this target by 2011. read more here$file/Announcement_Acquisition_TBH.pdf?openelement

Added (29 November 2010 11.30pm Singapore)

here are some little known facts:

1. the target is part of the Tan Kah Kee group of businesses
2. it once monopolized the Thai rubber market in the very early days till political reforms set in
3. based on 2008 figures, TBH is the 9th largest rubber exporter.

Saturday, November 27, 2010

Sheer Arrogance

Taken from a blog's comment section, posted somewhere in May 2008:

"I do not base my picks on just NAV.

If you bother reading my blog from the start, you will find that a good portion of my portfolio was bought at prices that have since doubled or trebled.

Any old fogey can tell you to buy blue chips when they are distressed. In theory that sounds good, but it is not as simple to apply.

And the last I checked, most old fogies have less money than me in their bank."

For those who do not know, the person who made that comment has definitely a tidy sum of money in his bank account, probably around $300,000.
For clarity, this was what the blog owner was responding to:

"undervalued never works, buying blue chips in distressed markets works eventually they all shine

if u base your picks on NAV, the question is that how the market ignores them in the first place?"

The commenter did make a fair comment although I would hesitate to say buying undervalued stocks never work. Never say never.

But that is not the point. The blog owner's reply was sheer arrogance because the fact that he has more money in his bank account is not proof that his stock picking methods are successful to a large extent. Rather, the performance of his stock portfolio over a long period of time, would suffice in demonstrating to the commenter that his NAV-centric stock picking methods works.

I can link you to the blog to read the full extent of his hubris if you email me. But to summarize, he did turn the money that was in his bank account into a lot of money, doubling it to more than half a million in stocks at the height of the stock market in 2007-8. He was at ease dispensing advice to those who frequented his blog seeking an opinion. I believe he even tried to use his blog as a testimonial of his equity market acumen so as to land an investment banker job.

However the tide turned, something we knew after the fact. The portfolio shriveled and the blog owner disappeared. Despite people calling out for him on his blog, he has not replied aver since.

The point here is not to castigate him for his arrogance. Rather, it is meant as a cautionary tale for all retail investors, especially the new. There is nothing wrong with being confident. You have to be confident, if not why should you put money in the stock. However, as so many have pointed out, just because you happened to ride the wave up, does not make you a stock market genius. It is this over confidence and hubris that will be fatal for your wealth creation plans when a bear market strikes. Always have an open mind and be prepared.

Week 47: Portfolio Trends Downwards

For a moment, I thought the portfolio covered! I was wrong of course, if we compared to the previous week. FJ Benjamin moved below the 40 cents mark. I have reasons to believe that this is due mainly to Peter Lim making an offer for Thomson Medical Center. If he has made a bid for the pregnancy-centric medical center and at such a premium, he must definitely find some way to cough up the cash as well. Unless he already had earmarked the money for his latest acquisition, after his failed attempt to take over Liverpool FC.

During the week, I purchased a few more lots of C&O Pharmaceutical. That makes the amount of capital from my salaries injected to the stock market, to the $20,000 mark. However, I took too much a time to consider my purchase as I was deliberating whether to sell Asiatic or Stratech to make my holdings leaner. I was looking at either OSIM or NOL the day that the market correct on Wednesday but I did not have the courage the key the buy order. Fortune favors the brave.

Macro Economic Issues And War
For those who have been catching up with the news, two significant headlines were the Irish government seeking a bailout from the IMF as well as North Korea lobbing a few artillery shells at an isolated South Korean island. In my opinion, both headlines have almost no impact on the stock market. For Ireland, they do have enough money to keep itself running at least next year. That its finance minister announce a requirement for bailout, is more pre-emptive than indicative of the troubles that ails the once booming economy. It should be noted that there are many options available to Ireland but some of the IMF sponsored ones need Ireland to increase its corporate tax rate. This will cause a flight of corporations from the island country and seems to me a evil plot by the IMF.
As for North Korea's histrionics, they distract most of us who are already bothered by how QE2 will affect the stock market or by slasher teen gangs in Singapore. The STI is on course for slight gains from the start of the year as I had hope. We should see more action in the month of December as more investors, especially the larger ones, gear up for 2011.

Friday, November 26, 2010

Bought C and O

I bought 4 lots of C&O Pharma at $0.48. Could not make up my mind what other stocks to buy when the market fell badly on Wednesday.

Monday, November 22, 2010

Beware The Amtek IPO?

For those who are looking for a heads up for the Amtek IPO, you can click on the above link. I generally have a disliking for IPOs so I have nothing much to value add.

Sunday, November 21, 2010

Doing Business With China

Good stuff from The Economist about Chinese takeovers and doing business with Chinese partners. The articles are also useful to help you understand what happens behind the scenes for most S-Chips.

Saturday, November 20, 2010

Looking For Investing Ideas Between S$2,000 - S$3,000

About $500 worth of dividends over the past and coming few days. While I am about $1,500 short before reaching the $20,000 mark of capital invested (money from my salary, not from gains and dividends). If I were to divest some of my smaller loss-making positions, namely Asiatic Group (break even) and Stratech, (down 2 cents from purchase price) it will top the amount to $3,000.

A slight deviation. I have been holding on to Asiatic and Stratech since the middle of last year. Although the power making Asiatic has seen a run up in share price, it was all down hill for motion sensor company Stratech. After a brief turnaround, which saw it being taken out of the SGX Watchlist, Stratech slumped back into the red with a loss-making 6 months.

What will I do with the $2,000 - $3,000? Since the end of the month is coming, I am feeling trigger happy but there a lack of good investing ideas. I flipped through my dad's past edition of Shares Investment and struggled to find any leads. I would like to average up on my existing holdings, namely Etika International or C&O Pharmaceutical but it would dilute any sense of "multi-bagger-ness". I did also consider China Animal Healthcare, but the stock has had its dual-listing almost priced in. I can of course keep the money as a cash buffer in my portfolio.

Here is a list of companies other than I am holding that I may research and take action on, if you have other good SGX-listed investing ideas, do post your comments!

1. Del Monte Holdings. Very illiquid stock doing FMCG which is an industry I love most.
2. Ezra Holdings. Very geared company but it is making its move to cement its market share through latest acquisition of Akers. But I can only buy one lot.
3. AusGroup. Exposure to the Australian mining sector but as a contractor, it is prone to margin pressures as well as competition from outside Australia.

Wednesday, November 17, 2010

Write On Your Favourite Stock And Win S$50!!!

The contest is now open and the rules and format can be found here. Briefly, produce a short writeup of 200-250 words on a SGX Mainboard or Catalist company. No ADRs. On the header, state your target price for that stock as well as your prediction for the STI closing for end-2011.

Email me (found in "my profile") by Singapore Time 6.00pm, Friday 17 December 2010 your entry with the necessary details as spelled out. The winning entry will be announced 7 days after closing of competition, and payment will proceed shortly. You do not have to reveal your real name, just the one you wish to be identified. Real address and email to be contacted at though.

This should not take long, so what are you waiting for! Write and stand a chance to win.

Quantitative Easing Explained

See this video. If you think you are having it bad in Singapore, imagine you are mainstream American!

GDP Growth and Stock Market Performance: Any Links?

Speaking to reporters after the two-day Asia-Pacific Economic Cooperation meeting held in Japan over the weekend, Prime Minister Lee Hsien Loong said it would be more realistic to expect the Singapore economy to grow three to five per cent in the medium term.

PM Lee added that, “Even if the external conditions are strong, we are not able to expand so quickly, unless you are prepared to take in more foreign workers and take the risk of overheating.”

Singapore is expected to achieve growth of between 13 and 15 per cent for the whole of 2010.

Earlier in July, Singapore gross domestic product (GDP) for the second quarter grew per cent driven by a surge in the output of biomedical manufacturing, as well as a strong expansion in electronics underpinned by healthy worldwide demand. Advanced GDP estimates for the third quarter will be announced early 18 November by the Singapore Department of Statistics.

Does the PM’s Lee guidance for moderate economic growth the coming year spell poor returns? 

Sunday, November 14, 2010

POSB everyday Card: The Only Credit Card I Have (At The Moment)

Here are the banking facilities that I have in my wallet everyday. There is the gray POSB Cash. It is almost unusable as there are cracks that run three quarters' way into the plastic. I do not intend to swap it for the new-ish looking DBS card because I am a sentimentalist.

I also have a United Overseas Bank Unicard. This is the newest ATM card I got, because I setup an account with UOB to help facilitate monthly salary crediting. I also use the UOB account as my daily expenses card.

A card that most Singaporeans do not have is the Malayan Banking (MayBank) card. This savings account goes back a long way and was setup when I was a kid, by my mother. One of the good or bad things is that you can withdraw cash when you are in Malaysia. If you happen to be in Genting Highlands, it can be a source of reserves should you happen to lose all the money at the tables.

The only credit card I have is the POSB everyday, which is a supplementary card courtesy of my mother. You can read more about what it has here, but what I want to say is that I am sort of proud that I have not succumb to peer pressure and apply for more cards. You may have received numerous calls by the banks touting their credit facilities, flashing "promotions" and how "you are invited" to tempt you into signing up for one more plastic.

Buying An Apple iPhone

I thought of buying an Apple iPhone. After all, almost everyone has it and it can help me relieve boredom on those long train rides. However, I have been going to some major telcos' shops and they seem to be sold out. I did give it another thought and it did occur to me that the iPhone is only good if you have a data plan. From casual asking, this would costs about $60 per month and it excludes SMS. An iPhone without data plan means that one cannot readily access facebook or other time wasting website. It would be no different from a iPod Touch, a conclusion that my girlfriend reached. Given these considerations, I think I will wait until iPhone is so commoditized or that data download plans become very competitive, before getting one. Isn't it strange that with more competition on a small island, it is so costly to get an internet data plan on the cheap. Good night everyone.

Saturday, November 13, 2010

Something About Top Global

This link from Friday's Business Times, extracted below, is worth a read. My opinion is that there are good and bad stocks that are run by Indonesian families. L&M is a good example. The latter was a contruction company that was part of the STI for a while before the stock tumbled and enter Judicial Management. It has since been reborn as Seroja Investment, but after much grief to those shareholders who had to endure a stock consolidation. Nonetheless, Top Global can give gains to those who are prone to gambling as it has all the characteristics of a punting penny play. Buy beware.

Can Top Global live up to its name?

AS Top Global, the Catalist-listed company that has transformed itself into a property group, continues to hog the trading limelight, a question uppermost in investors' mind is whether it is capable of launching a meteoric rise to the top, living up to its ambitious tag.
Top Global, which is now run by Sukmawati Widjaja of the famous Widjaja lineage, recently caught the attention with its triumphant $250 million bid to develop an iconic site that includes Capitol Theatre, Capitol Building and Stamford House through a consortium.

The partners - including Pontiac Land's Kwee Liong Seen and Pua Seck Guan, founder of Perennial Real Estate Group and former chief executive of CapitaMall Trust Management - plan to invest about $700 million in total to develop the site into a hotel, theatre, and retail and residential area, with half the 542,382 square feet of maximum gross floor area for retail and entertainment use, and 25 per cent each for hotel and residential purposes.

This is quite a coup, considering that the consortium beat out 13 other bids, many of which came from the heavyweights of the property scene. The tenders included three bids from Far East Organization alone, one from CapitaMalls Asia and CapitaLand, GuocoLand as well as YTL Corporation.

C&O Pharmaceutical: 1QFY11 Results Review

While doing research on Sinotel, I chance upon an old post by MusicWhiz on C&O Pharma (link). I f I had read his bit first, I would probably not buy the stock at all. But since I suffer from confirmation bias, I will do a review of C&O Pharmaceutical's recently released first quarter results, for their financial year ending 30 June 2011. Take note that I bought 5 lots at $0.505 a few months back and its current price is $0.475 (slight ouch).

Sinotel Technologies : A Dying Or Dead Stock?

In my earlier post, I talked about how Sinotel Technologies' time has  come to past. There was definitely money to be made if you had bought into the S-Chip at prices below the current price of $0.345. More upside had you bought it during March 2009 bottom of around 10 to 12 cents. But I dare say that more investors bought into the stock when it was 50 - 70 cents during the euphoria over its ADRs and have been sitting on hefty paper loss.

Despite the recent slate of announcements and a revived PR campaign, from a long term investors perspective, I think the hey days for this company are over, consigned to the rubbish bin of history. Of course some people would point out that the stock is currently trading at about 4 times price-to-earnings. But I reiterate the point that the company has a very strong balance sheet even before the rights issue and the cash call was totally unnecessary from my point of view. Furthermore, I would really like to see the company payout some dividends. It has not done so in its listed history.

Defenders of Sinotel would say that the company has a recurring cash flow and that it is poised to benefit from China's growing wireless infrastructure. If that really is the case, why are there no dividends? Sinotel's management by declaring even a 0.1 cents dividend, will help bolster investors' confidence and interest. Too many an S-Chip show a huge cash pile but many have went belly up - ChinaMilk Products is a good example.

My conclusion is that there are other better companies with better fundamentals that have received lesser media coverage exactly because they are out to improve their returns to shareholders. Stay away.

Friday, November 12, 2010

Portfolio Remains Stable, Monthly Updates For 2011 Planned

It has been a roller coaster week for the local stock market. After breaching the 3,300 mark earlier the week, the STI retreated by 41 points on Friday to settle at 3,252.

The portfolio managed to stay firm, with GMG Global and Etika International providing buffer for losses elsewhere. Strangely, Etika International recovered to $0.50, which is close to the adjusted price before XB.

Going forward, portfolio updates will be once a month. I am finding it a bit tedious. But write ups will still be in the pipeline. Have a good weekend!

Wednesday, November 10, 2010

Biosensors International Group Transforms Into An S-Chip$file/Q2FY2011_Presentation_Slides.pdf?openelement

Well, my list of S-Chips has just grown to 4 - GMG Global, C&O, China Animal Healthcare and now Biosensors. In brief, the group that was involved in buying a significant stake in the stent-maker, has recently brought its own people to the board. Keep a look out of things over the next 1-2 years. If things do work out, that is, the new board can wholly control JWMS, there is a potential for upside in excess of the market. Nonetheless, at this point in time, it is still too highly valued for investors looking for gains in excess of the market, within the next three months.

Edited in bold

Sunday, November 7, 2010

Write On Your Favourite Stock And Win $50!!!

  1. Write 200-250 words about your favorite Singapore-listed (Mainboard and Catalist) stock, which you think will provide the greatest total returns in percentage terms. No ADRs will be considered. State your target price as well as STI closing for the end of 2011. (See Below)
  2. The contest will use the closing price on 31 December 2010 and 31 December 2011 as the reference points to determine the winner. If there are bonus issues and stock splits, prices will be adjusted. Dividends will be added to total returns but not re-invested.
  3. By joining the contest you agree that the submission can be reproduced in full or in part on
  4. The best writeup - to be determined by me - will be awarded a cash prize of Singapore dollar Fifty only.
  5. The entry that showed the greatest total returns from 31 December 2010 to 31 December 2011 will be awarded a cash prize of Singapore dollar Fifty only.
  6. Each contestant is limited to ONE ENTRY ONLY. Those found with multiple entries will be disqualified. We will operate on an honour system.
  7. To join the contest, email me (find the email in my profile) and include your name you wish to be identified, Email, Home Address. Mobile phone number is optional.
You email should follow the format below:

Your e-mail
Re: Write Up Competition - SP Ausnet TP $X.XX STI 5,000

Your name you wish to be identified, Email, Home Address
 SP Ausnet TP $X.XX STI 5,000
Your 200-250 begins now. I am essentially looking at why should I invest in the company from your write up.


How To Be Richer In At Least 30 Years Time

Read this article by Kenneth Fisher, Make Yourself Self-Made . Do note that he is a fund manager that espouses a portfolio comprising all stock.

Side note, I am thinking of having a small competition for those visiting my blog. Stay tuned.

Friday, November 5, 2010

STX OSV To IPO at $0.79 per share

It is always funny how an European shipbuilder comes here to raise cash. I am guessing that Oslo may have too many people aware of the situation that is going on, given there proximity to the North Sea vessel market.

As you can read from the newspapers, the shipbuilder intends to raise $257.3 million by selling and placing out shares at $0.79 a piece. I always look at IPOs with disdain. STX OSV is no exception because it is priced at slight more than 2 times its NAV (even after IPO). Moreover, the vessel market really peaked last 2 years. So what we can see here is that earnings that have come in may be exceptional, and that there still is a supply glut. The latter means that newbuild orders will be fewer or postponed, until the excess vessels can be taken off the market.

About STX OSV (More here)
We are one of the major global designers and shipbuilders of offshore and specialized vessels used in the offshore oil and gas exploration and production and oil services industries. Headquartered in Norway with approximately 9,000 employees worldwide as at June 30, 2010, we operate nine strategically located shipbuilding facilities,including fi ve in Norway, two in Romania, one in Brazil and one in Vietnam. Our technological know-how and innovation coupled with our global operations ensure access to the fastest growing oil exploration markets. Our core business is the design and construction of complex and highly customized offshore and specialized vessels including platform supply vessels (“PSV”), anchor handling tug supply vessels (“AHTS”) and advanced offshore subsea construction vessels (“OSCV”). In addition, we operate a design subsidiary which develops commercialized designs with high market acceptance by our customers, including the most commonly used design for PSVs of more than 4,500 deadweight tons (“DWT”)1. Our expertise and track record in constructing complex and highly customized offshore and specialized vessels have earned us recognition from industry players, including our customers. We have built strong relationships with our customers including companies that operate under the brand names of DOF, Farstad Shipping, AP Møller- Maersk, Island Offshore, Solstad Offshore, “K” Line Offshore, Petroleum Geo-Services, Aker Oilfi eld Services and Rem Offshore. According to RS Platou, as of August 31, 2010, we have approximately 30.8% market share of AHTSs of more than 20,000 brake horsepower (“BHP”), approximately 18.0% market share of PSVs above 4,500 DWT, and a market share of approximately 6.6% for selected types of OSCVs2.

Action Asia Declares 0.5 Cents Dividend For 3Q10

Happy Deepavali! The portfolio traced higher from the previous week as the markets anticipate the Fed's next round of quantitative easing (QE2). QE2 has had the effect of weakening the dollar against all currencies as the demand for dollars cannot keep pace with the rate of green backs printed.

Action Asia, declared a 0.5 cents dividend for the third quarter ended 30 September 2010. That is good news for me as the stock has been stuck, but is returning profits to shareholders.

Elsewhere, I may have overlooked it because of my work schedule, Etika and Templeton have not reached an agreement with regards to a proposed bond subscription by the fund. That is one less bullish factor about my favourite stock.

Meanwhile, I am looking at investing close to

Saturday, October 30, 2010

GMG Global: A Brief Analysis

From the website, GMG Global is a Singapore-based plantation group dedicated to long-term investments in Central, West Africa, and Asia.

GMG is an integrated producer of natural rubber engaged in the planting, growing, tapping, processing, marketing and exporting of natural rubber. The Group's emphasis is on producing premium rubber products for Europe, American and Asian markets.

GMG focuses on centrifuged latex and tyre-grade rubber; in addition to two supplementary products: block rubbers of latex and skim; "centrifuged latex grade rubber" used in gloves, condoms and adhesives industry and "tyre grade rubber" used in the manufacture of tyres (for cars, commercial trucks, machineries, etc).

In 2008, there was a shift in the shareholding structure of GMG with Sinochem International Corporation acquiring 51% of the GMG shareholding. Sinochem is publicly listed on the Shanghai Stock Exchange, and comprises a diversified international group specializing in the trading, manufacturing and transportation of chemicals, plastics, and rubber and metallurgy products. In the field of rubber business, Sinochem is placed at the top in the PRC in terms of natural rubber sales.

Besides having its first processing facility in South Kalimantan (P.T. Bumi Jaya), GMG expanded further into Kalimantan with a 75% stake in a joint venture (PT GMG Sentosa) and completed takeover on 15 January 2010 of a processing facility in Pontianak, West Kalimantan, that has an annual production capability of 25,000 metric tons.

Recent Developments
There was a recent leadership change in the management in GMG Global. In July, GMG Global's Chairman Xian Ming, who is also from Sinochem International Corporation, was appointed as CEO, replacing Elson Ng. The latter is part of the GMG Global's original founding members and stays on as an advisor to the company. Taking over the position of Chairman was also another Sinochem International Corporation individual, Zhang Zhengen.
More recently in September, in response to a query to SGX over a sharp spike in trading activity, GMG said that was currently in discussions with certain parties to acquire a foreign company in Southeast Asia which is engaged in rubber production and trading. However, GMG said no agreement has been reached on the Proposed Acquisition, and there was no certainty as to whether such Proposed Acquisition will take place.

GMG also added that it was also in the process of embarking on a new rubber related project in Africa. To that end, it has since setup a JV company in Cameroon specifically for the development of natural rubber plantations.

Financial Results

portfolio end of october

I am currently working on an analysis of GMG but the portfolio has slipped quite a bit from the previous week. My short term forecast was correct in that the 3,200 was not breached by the end of the month.

Wednesday, October 27, 2010

HDB Should Return To Cost-based Approach

I fully agree with the letter writer. If the problem is really too high public housing cost, the solution is to revert to the cost based approach which has worked fine. If the cost based solution was not working fine in ensuring access to cheap public housing to Singaporean couples, the relevant authorities should bring out the issues. Other wise, Singapore will have a sub-prime mortgage problem. Already, we read of stories of people living on beaches in tents, or young couples putting of marriage. The latter definitely has an impact on Singapore birthrate.


HDB should return to ‘cost-based’ pricing
mypaper October 27 2010

THE various propertymarket cooling measures announced so far have not addressed these two fundamental issues: Root cause behind high prices of new and resale HDB flats. The high prices of HDB flats will naturally push up private- property prices. Thus, this issue affects all Singaporeans, even those aspiring to own private property.

In Marine Parade during the 1 9 7 0 s , p r i c e s o f new three-room, four-room and five-room flats were $17,000, $20,000 and $35,000 respectively. In 1990, new five-room flats cost around $70,000. Such prices reflected a “cost-based” pricing approach then.

But, following the property bull run in the mid-90s, HDB switched to a “market-based” pricing approach, and has confirmed that “the prices of new HDB flats are based on the market prices of resale HDB flats, and not their costs of construction”. In 2000, t h e t o t a l break-even cost (comprising construction, land and other related costs) of a new five-room flat was estimated at about $120,000.

However, under market- based pricing, HDB will first look at the prevailing market price of, say, $260,000 for a five-room resale flat. It will then pick a slightly lower figure of, say, $200,000 as the selling price for the new flat – despite the break-even cost of $120,000.
HDB will then say the newflat buyer is getting a so-called “market subsidy” of $60,000, which is the difference between the resale flat’s market price and the new flat’s selling price. There is not really a “cash subsidy” for the buyer, while the HDB makes a profit of $80,000 for each flat sold.

The financial losses reported in HDB’s audited statements could well come from “transferpricing” accounting between HDB, the Singapore Land Authority and the Ministry of Finance.

A plate of chicken rice costs $3 at a coffee shop and $20 at a hotel coffee house. It would be illogical to say that every person eating chicken rice at a coffee shop is getting a “market subsidy” of $17 per plate!
HDB’s “market-based” pricing approach is the root cause of the continual rise in the prices of new and resale flats, which is detrimental to flat buyers.
Why is HDB not doing the right thing, as a not-for-profit, low-cost public-housing developer, by pricing new flats on a cost-based, break-even basis, passing on to Singaporeans the economy-of-scale cost  savings from its huge developments?

HDB flats are public housing developed using public funds. Thus, HDB must be transparent and accountable by disclosing detailed cost figures for all its housing projects.

Are new flats really affordable now? While even a taxi driver could say that he was able to afford a $35,000 five-room flat previously, he would be right to worry how his children could afford to buy a similar flat costing close to $500,000 now.

It is misleading for HDB to say that its flats are “affordable” without clearly specifying that a 30-year loan period is assumed. If one were to stretch a home loan for as long as 30 years, even private property would become “affordable”.

For a couple with a combined monthly income of $8,000 , a 30-year HDB loan of $500,000 with a 2.6 per cent interest rate and $2,000 monthly loan instalment may appear to be affordable.

But, at the end of 30 years, they would have coughed up a whopping $800,000 in total capital and interest repayments. A financially prudent loan period would be around 15 to 20 years.