Portfolio Review 2015: Portfolio - 22.7% vs STI - 14.1%

After peaking in April, the Straits Times Index fell sharply in two distinct phases (Apr-Jul, Aug-Oct), ending the year at slightly below the 2,900 level, or 14.2% lower than where it started the year. There were many reasons offered for the weak markets ranging from weak oil price, terrorist threats, the end of quantitative easing and the hike in interest rates.

The portfolio lost a staggering 22.7%, making it the third year in a row that I have underperformed the STI. Excluding dividends, it would have lost 24.7%. The biggest percentage loser was KrisEnergy. The stock lost two-thirds of my purchase value because of the oil rout as well as my not subscribing to their rights. The biggest dollar loser was PetraFoods, shedding close to 12K. This favourite of mine is said to be affected by the weakness in sales to its key Indonesia market.

Colex was the only stock to register positive gains given the flight to safety. The garbage collector gained 15.4% the whole year or 3.2K in value. Smallest loser was Hong Leong Finance, losing 11.1% or 2K in value.

There were only 7 transactions for the whole of 2015, mostly at the start of the year. Auric Pacific, Etika and UOB-KayHian were offloaded. Hong Leong Finance and KrisEnergy were new stocks to the portfolio. In December, I added some more PetraFood to my portfolio.

The reality of retrenchments and the importance of emergency funds

There were several rounds of lay off going through the America-based company I am working at. This is because our major clients are hit by the slump in commodities prices. At the same time, there has been an emphasis at controlling costs and so there is the usual reorganisation and where work that can be sent to be done in lower-cost countries are being sent that way. As a result, about 8 people were retrenched in the past two months.

Fortunately, I was not laid off this time, although the spectre does loom. But if I did get laid off, I would be in some trouble. Firstly, I do no have an emergency fund built up. While I have no mortgage to pay off as I am not yet married, if my parents were to suddenly fall ill, my finances will be strained tremendously. Plans for marriage would also have to be scaled down, if not postponed till I find a new job. I would also be in deep human waste if I were already married and had to pay the mortgage.

Bad things tend to happen together. As you are aware, I am fully exposed to stocks. If I were to liquidate my stock holdings to be used as funds, I will be in the red. Retrenchment exercises tend to occur around the same time the stock market slumps.

Therefore, do no underestimate the importance of having emergency funds. Conventional wisdom suggests that they should be 6-12 times your monthly liabilities. These include your normal living expenses, mortgage instalments and even some creature comforts. The reason is that you do not want to be at your wits' end when you are unemployed as this will add on to your emotional stress. Also, having an emergency fund to draw from allows you cushion to seek for a new job, which again may take some time as employment conditions will be bad.

The 4 predictions I made in 2015 and how it saved your portfolio

In the close to 40 posts in 2015, five of them had predictions about the market:

Jan 2015: "2015 will be a good time to buy stocks, when Brent oil price hits USD 45 per barrel"

3/4 wrong but if your entry point was when Brent hit USD 45 per barrel, there should be upside.

A personal review of 2015

I thought it would be useful to review the past twelve months ignoring the portfolio side of things, which has taken a hit. The annual portfolio review will still be carried out at the end of the month in a separate post.

2015 Action Item versus Deliverables

Blog: I intend to blog lesser but have interesting posts of at least 400 words.

Reality: I blogged slightly more than last year mainly because of the postings on my collar bone injury. (35 vs 32 posts). The posts on analysing and predicting the General Elections were the more interesting ones in 2015.

For 2016, I intend to post at least 40 400 words posts and they will contain more photos and charts. 

Investments: I pumped 30k in capital in 2014.

Reality: I pumped 21.5 k in capital in 2015.

Bought more Petra Foods perhaps at a wrong time

After playing contra with Super towards the end of November, I decided to go long on another of my favourite consumer stock, Petra Foods. On the first day of December, I keyed an order for 4 lots and had it filled immediately at 2.37. Due to the Fed hike, I am sitting on close to 1,000 dollars of losses on this transaction. I am currently fully exposed to the stock market with no cash reserves. We are in the eight month of the bear market which I believe started in mid-April 2015. The next 2-10 more months will be on the continued down trend and I believe one more round of sharp correction is in order before we can see any uptrend. The first correction was the rout that started in July and ended at the start of October.

Eleven more days before I can write the review on my portfolio.

The chill of winter is real

It has been an unsettling time in the office the past few weeks. There have been news of restructuring and layoffs. Over the past year, the market has been bad for my company and I have heard of a few people being let go. Over the recent two to three weeks, I have heard that close to six people have been let go, bearing in mind my company has about 140-plus people in the office.

I have yet to see my new organisation chart and there is a chance that I will be blogging more often. At this point in time, the downturn is feeling a bit too real for me.

7 months in a bear market

I wrote one month ago that we are in a bear market. We are seven months in and there should be another three to eleven months of volatile, if not depressed prices. Your guess is as good as mine but I will probably dip my hands into the market at the shorter end of the time boundary.

Quick updates with regard to my life. I was feeling upset for a good two to three weeks because my client cancelled on my presentation which I was supposed to fly over to Australia to conduct. I received my Invisalign and I will definitely post something about it since it cost quite a bit. On the education front, I have signed up and commenced a course at one of the polytechnics. It is heavily subsidised for Singaporean citizens but the time cost is quite high as I have to allocate three nights a week. On a higher note, I recently attended Taylor Swift's 1989 concert held at the indoor stadium. It was overall enjoyable although I am not familiar with some of her songs and that the presence of teenage girls screaming was overwhelming.

One more month to the end-year portfolio review. Not doing so good.

Dead STI cat bouncing?

My lengthy absence is due to a torrent of work. It did not help that the index went into a sustained free fall the past few weeks after the General Elections. In between, I managed to read Subhas Anandan's two books, The Best I Could and It's Easy to Cry. I found his book very illuminating, giving us a lawyer's view of Singapore's justice system. I felt him talking to me through his book mainly because he was somewhat a media personality and that I saw him in person in his later years. Once, I was on a bus towards Holland Village and saw him seated at a back of a Jaguar. I immediately recognised his face, his white hair and beard. The other time, he was in a hospital robe with his family in the SGH. From the book, I learnt that he had heart problems even from an early age. 

Anyway, my portfolio has declined 17% on a year-to-date basis. I thought of bailing out at some point of time, but I remember that we have to sell in strength. My short view is that April 2015 was the peak of the secular bull and we should expect a bear market to last for 10-18 months. So far, we are only six months into the bear market at the recent uptick I believe is just a technical rebound. Keep cash and wait a bit more.

Singapore GE2015 Prediction: PAP to retain super-majority in new Parliament (77-12-0)

The table above shows predictions of each of the wards contested. Highlighted in blue are the constituencies where Mothership said would be interesting to watch. Predicted vote share in red red text represents the constituencies where PAP is at-risk of losing.

My prediction will be that WP will be able to retain all the seats (7) where it was the incumbent as well as secure East Coast GRC (4) and MacPherson SMC (1). Sources other than Facebook tell me that East Coast GRC has become even more receptive to the Workers' Party in their area. Does not help the PAP that Lim Swee Say has made remarks that can be and has been construed by Malaysia and China as slightly offensive. For MacPherson, while it is a three-cornered fight, the NSP candidate has more or less wrote himself out of the competition with his remarks about PAP's Tin Pei Ling. I am getting more positive about WP's Bernard Chen given the WP's daily rallies.

Although Marine Parade GRC and Fengshan SMC are according to me at-risk of being lost by the PAP, I think it is still slightly in PAP's favour. For Marine Parade GRC, Goh Chok Tong will still be the main draw, rather than Tan Chuan Jin. The PAP team has also been aggressively campaigning. For Fengshan SMC, I saw the the WP candidate's rally speech and I think he is not as inspiring as the rest of the WP slate. The PAP's Cheryl Chan's grassroot experience should shift the results in her favour.

Analysis of PAP’s GE2015 lineup reveals insecurities

Recently, the PAP announced its lineup of 89 candidates for each SMC and GRC for the upcoming general election to be held on 11 September 2015 (GE2015). Although the PAP said it would name 24 new candidates, I counted only 21 new candidates. I had deducted Koh Poh Koon from the list announced by CNA, as he had participated in the Punggol East by-election. Chan Hui Yuh and Kahar Hassan were not named as candidates for GE2015 despite strong signals they would run in Aljunied GRC.

The purpose of this post is to analyse how the PAP has deployed its candidates, to uncover the PAP’s outlook of winning a SMC or GRC. This is done by looking at the age of the candidates, how many years each candidate has served as an MP, and the replacement of candidates and comparing it against the previous election performance (GE2011). For GRCs, the average age and years in service as an MP is used, although there is a high degree of correlation between a candidate’s age and his/her years in service.

Loss of Aljunied GRC a defining moment

Many considered PAP’s loss of Aljunied GRC in GE2011 to be a defining moment because compared to an SMC, it has been a safe channel to bring new candidates into parliament. GRCs were introduced in 1988 after PAP for the first time, lost two seats in in the 1984 elections and since then, until GE2011, no GRCs had fallen into opposition control. Given the relative certainty of winning a GRC, candidates identified to have ministerial calibre have often entered parliament through a GRC.

With the loss of Aljunied GRC, it means that the PAP will now have to assessment the possibility of their GRC candidates not being elected, along with that for the SMCs. This leads me to believe that if the PAP is not confident of winning or winning back a GRC or SMC, it is unlikely to place new candidates that it considers important for the next parliament in that respective GRC or SMC. With respect to Aljunied GRC, I believe that the PAP will field a team that can run in elections after GE2015, because while it may not win at the first try, it may at the second time of asking. This has happened in Potong Pasir SMC.

Understanding PAP’s outlook for GE2015

The rest of the section will look at the profile of the PAP candidates lined up for GE2015.

The average of a PAP GE2015 candidate is 48.2 years. The youngest candidate is Tin Pei Ling (32, MacPherson SMC) and the oldest candidate is Goh Chok Tong (71, Marine Parade GRC). Most of the new candidates except for Chong Kee Hiong (47, Bishan Toa Payoh GRC) and Victor Lye (52, Aljunied GRC).

Slightly more than half the 89 candidates have not yet served as an MP or have served only one term. Another 18 candidates served three or four terms as MPs. Goh Chok Tong has served the longest as an MP for the current PAP candidate lineup (39 years), followed by Lee Hsien Loong (31), K Shanmugam (27) and Charles Chong (27).

Of the MPs, that are not running for GE2015, Wong Kang Seng (31 years) is the most senior, followed by Mah Bow Tan (27 years). Four MPs are not running for GE2015, having served only two terms. Lui Tuck Yew is the most prominent as he was the recent-past Transport Minister.

The next table below is the most interesting because it compares the data described above with the PAP’s performance in GE2011. Jalan Besar GRC, Marsiling-Yew Tee GRC and Tanjong Pagar GRC do not have GE2011 results because they are new or were not contested. Aljunied GRC is the only GRC to be under opposition control. The GRC most at risk of falling into opposition control is East Coast GRC, followed by Marine Parade GRC, Bishan Toa Payoh GRC and Tampines GRC.  GRCs placed after Tampines GRC can be considered “relatively safe”.

PAP not confident of regaining Aljunied GRC

None of the previous candidates that stood in Aljunied GRC in GE2011 returned to contest in this GRC for GE2015, hence a 100% replacement rate. Ong Ye Kung, the only candidate from Aljunied GRC in GE2011 has been redeployed to Sembawang GRC. On the other hand, Yeo Guat Kwang has been redeployed from the relatively safe Ang Mo Kio GRC, into Aljunied GRC. None of the remaining four candidates have been described to possess minister qualities. Consistent with my beliefs, the PAP most likely feels that its chances of winning back the GRC are low. Given that the team is of the average age, it is very likely most of the team will return to run in Aljunied GRC in the next elections, should they not win in GE2015.

Using the replacement rates as an indicator, the most at-risk PAP GRC is East Coast GRC, followed by Marine Parade GRC, Tampines GRC and Bishan Toa Payoh.

PAP very cautious of retaining East Coast GRC, Marine Parade GRC

Should a 6.5% occur in GE2015 as it did on average against the PAP in GE2011, East Coast GRC will fall under opposition control. The candidates for East Coast GRC in GE2015 are the same as for GE2011 save for Raymond Lim, as his Fengshan ward has been carved out into an SMC. Without replacements, the East Coast GRC is also one of the older teams amongst all the other PAP GRCs. Consistent with my beliefs, the PAP is very cautious about its prospects of retaining the East Coast GRC. One minister and two ministers of state are at risk should East Coast GRC comes undone.

For Marine Parade GRC, the PAP has brought in Edwin Tong from the recently disbanded Moulmein-Kallang GRC. At the same time, Tin Pei Ling’s MacPherson ward has been carved into a SMC. With no new candidates introduced, aside from a redeployment, it suggest that the PAP is cautious of retaining Marine Parade GRC. The question remains, why Edwin Tong is brought in to the GRC.

Shaken and stirred

I had not posted anything since 20 June mainly because I was very busy with my office work. I had to rush my reports out before I went for my in-camp training in July. This was quickly followed by another holiday in Perth, Australia. In-camp was exceptionally hectic this time and this was not helped by the fact the camp location remains ulu. My Perth holiday went real well and I might have sometime to do an update over the weekend. I even managed to do a wisdom teeth extraction, the second surgery for 2015!

Of course, the market tanked rather badly in between. When I was in Australia, all I saw on the news was the Yuan devaluation and its impact on the market. When I managed to log in to my account, I saw that all my accumulated gains have been wiped out, save a hair cut. If we have past the bull market (earlier than I had expected) and that we are in a slow decline, I suggest it is time to accumulate cash. If 15th April was the peak of the market, we have at least 12 more months of bear market to follow. I am looking at selling in strength and buying in due course (but I forgot my brokerage account!)

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.

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.

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.

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.

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!

An injury to the body and wallet

I mentioned fleetingly in earlier posts that I had picked up an injury. I broke my collar bone in September 2014 in a football game. I tried to jump over my incoming goalkeeper but my trailing leg caught his. As a result, I fell into the synthetic turf like how a cyclist would, having been flung his bike and into the ground. 

Not realising what had happened, I slowly dragged myself out of the field. I thought I might have dislocated my shoulder and so I tried to rotate my left arm. That was a wrong move. The broken ends of my collar bone (as I would find out later) rubbed each other resulting in a sharp pain that caused me to vomit and almost blackout. I laid on the sidelines for a long while before packing up my kit and making my way to the hospital.

I decided against getting an ambulance since I was not bleeding and still conscious. However, hailing a cab was very difficult. I was half naked and could not call-book a cab. This was made more trying when other people "stole" my cab, not realising I was in a great deal of discomfort. When I did get into the cab, I told the driver to send me to TTSH A&E. He had suggested that I go CGH, since it was closer to where I was. However, I told him to go TTSH as it was closer to where I live.

Fear of heights: Reviewing my 2014 forecast

Financial bloggers like to make predictions because their followers like to read them.

Since it is almost free, I decided to gaze into the crystal ball made the following prediction on 18 Jan 2014:

3 Month Outlook: Bear market and volatility
6 Month Outlook: Bear market and volatility
12 Month Outlook: Recovery

Based on the chart below, I got the 3 month outlook partially right. The market was volatile from January to April 2014, with two corrections but it ended higher overall. 

I got the 6 months outlook wrong. It was pretty much a bullish recovery after early February, if you look at the January to July 2014 period. 

However, I got the overall trend right for the full 12 months. That said, from July 2014 to January 2015, the market was very volatile, with at least 4-5 dips.

Looking ahead, I managed to get the 3 month outlook for my latest forecast right and I expect the bull market to continue until the end of the year.

Portfolio inches up 1.0% month-on-month

The portfolio ended the quarter on a positive note. The end-March value was SGD125,567 of which SGD 6,000 was in cash. The portfolio was 1.0% higher month on month and 4% higher on a year-to-date basis.

For the month of March, GMG Global and Super Group were the top performers adding 18.6% and 24.7% in share price respectively. Both companies reported poor results that were within expectations. Perhaps the worst is over for the two erstwhile battered down companies.
I added 20,000 shares of KrisEnergy to my portfolio. The oil company’s share took a big hit initially but with the airstrikes in Yemen, fears prompted the price of crude to rally and in turn boosting KrisEnergy’s share price.

I think this market still has some momentum. There has yet been an increase in IPO activity nor has there been market euphoria. Therefore, I think I will stay invested in the market and pickup any dividends that is being proposed.

Don't buy shipbuilders, oil and gas services companies!

If someone were to ask me, whether do I think it is a good time now to pickup shares in Nam Cheong or Ezion, I would definitely say no. Let me explain.

Firstly, demand for their products and services has almost become non-existent. The was a boom in new offshore supply vessels and Nam Cheong probably benefited over the last five years leading to its public listing. However, with deliveries still taking place globally amidst the low oil price, there has been no new orders. For Ezion, the demand for its offshore maintenance services is recurring but I believe several of the oil and gas companies have announced budget cuts and will try to manage their operating expenses by either changing their maintenance regimes or asking for lower dayrates.

Secondly, there has been an oversupply situation in both the products and services markets. All the vessels that have been ordered over the last five years are coming online and this will depress the charter rates these vessels can obtain. When charter rates are lower, there is less incentive to order new vessels as the rate of return on these vessels have fallen. The same would apply to Ezion. There is an increase in the number of vessels, the lift boats, which can support offshore maintenance work.

The SGD10,000 bet on KrisEnergy

A trade becomes an investment. On Tuesday, I had keyed in two trades of 10 lots for KrisEnergy at 54 cents each, one after the other. The first ten lots was to be settled and the next ten lots, contra-ed off. However, the market for KrisEnergy shares on Friday (T+3) were less liquid than usual and bids had sank to 50 cents. Contra-ing the ten lots would result in a SGD 500+ immediate loss. I have settled the trade and it now goes to my investment portfolio which is worth SGD 118,100 as of Friday closing.

Buying KrisEnergy was always on the cards for at least three reasons. Firstly, I think crude oil (Brent) prices have reached a floor and a rebound is inevitable. The full effects of the current low oil price on earnings will be seen by the second quarter of 2015 but lower

10 lots of KrisEnergy and SGD 100,000 capital injection mark

To simplify my portfolio calculation for the rest of the year, I have assumed that I will inject capital of SGD 20,000 for 2015 and this will be factored into my performance calculations. This would mean topping up SGD 5,000 which I have yet to have. This would allow me to reach the round number of SGD 100,000 as well as calculated my yield-to cost. YTC would be calculated by dividing the dividends received in a calendar year over the accumulated capital at the start of the calendar year. 

I have also today, pulled the trigger and acquired 10 lots of KrisEnergy shares. The interesting point of this purchase is that I received from some of the counter parties of 100-600 shares. Why would any one key in such a small number of shares on offer? Will update accordingly over the next few days. 

HLFinance, Petra and Super Group financial results

Hong Leong Finance

Interest on loans increased 7.7% to SGD 197 million but earnings to shareholder fell 10.4% to SGD 63 million. This is due to an increase in general provision made on its loan portfolio. 

PE ratio remains stable year-on-year at around 17-18.5 times. PB fell slightly to 0.7 times from 0.72 times in 2013. Yield has however fallen to 1.9% from about 3.0% a year ago.

The softening Singapore property market as well as the Singapore economy will weigh heavily on the future prospects of the company. While the stock is priced right, I am placing Hong Leong Finance on my watchlist of stocks to dispose.

Petra Foods

Revenue fell 0.9% to USD 504 million due largely to weaker sales in the regional markets (ex Indonesia). earnings and profit from continuing operations fell 17.8% due to the weakness of local currencies against the US dollar.

PE ratio improved to 38 times from an astronomical 87 in 2013. PB remained almost unchanged at 6.2 times. Yield fell from 2.2% to 1.9%.

The sale of its ingredients division has entered into arbitration as the buyer has sought price reductions. I like the company because it is in the basic foods segment with exposure to the Indonesian market. I will hold on to this stock until there is a big special dividend.

Financial results out for Colex, GMG Global, Hong Leong Finance, Petra Foods and Super Group

Collected my first dividend worth SGD 210 from F&N in February.

By the end of February, most of the Singapore listed-company's 2014 full-year results were out and I will review two of them quickly below.

Colex Holdings

Revenue for this waste disposal and cleaning services company increased 11.5% to SGD 58.7 million due to rollover effects of existing contracts at a higher value and new contracts secured. As a result, earnings less minority interest increased 56% to SGD 4.3 million. The improvement in net profit margins. 

Working on the recent last done price as well as a year ago, PE ratio remains stable year-on-year at around 8.2-8.3 times. PB increased to 1.4 times from 1.1 times in 2013. Yield has however fallen to 1.9% from about 3.0% a year ago.

The company cited manpower costs as the main challenge going forward. I will need to do more research how the various government incentives will impact the compact. Based on the results and ratios, I will say that the company is priced with almost no further upside unless dividend payout increases. 

Soliciting for Singapore listed company research ideas

I am looking at dedicating some time to research on listed Singapore companies you think need more research on. These should be companies that you think have potential and are not the STI constituents or actively traded counters. Feel free to drop your ideas in the comments section or to my sgxstockpicker gmail account.

Good Investment Advice via Comics

Scott Adams, the artist behind the Dilbert comic, has recently started a short series of investment-related strips, like the one below. Because of the author's frequent use of sarcasm, you cannot be sure whether to follow the advice doled out by the usually incompetent boss. 

As a follower of the strip (I bought a compilation of his strips more than 14 years ago!), and maybe because of his newly introduced Disqus-powered comments sections, there was a lot more discussion generated for this series of strips.

The lesson I gleamed from this series is that better to be the Boss than the Intern! 

Portfolio down 0.3% month-on-month

The portfolio fell marginally in February. The end February value was SGD 119,111 or SGD 375 lower compared to the previous month. SGD 11,462 of the current portfolio is in cash.

Colex, GMG, F&N and Hong Leong Finance all lost some of their January gains. Petra was unchanged, while Super Group added 7.7% or 8.5 cents in share price.

There is still some leg to this market. I am actively eyeing F&N, Super Group and Kris Energy as targets for the remaining SGD 11,000. I can of course stay liquid.

A Secret Bull Market Indicator for the Singapore Stock Market

Why we are not at the market peak and how to identify it

I analysed the number of IPOs floated on the Singapore stock exchange since 1997. What I discovered plotting the data graphically against the Straits Times Index shocked me.

Is the Brazil bubble bursting and bringing Keppel and Sembcorp along?

There is plenty of bad news coming out of Brazil and this will impact Singapore's rigbuilders Keppel Corp and Sembcorp Marine. The national oil company Petrobras is being caught in an ongoing corruption probe that has seen its CEO resign and international suppliers such as Keppel and Sembcorp implicated. Sete Brasil, formed by a group of Brazilian companies to run the offshore rigs working in Brasil has difficulty obtaining financing. As a result, Sembcorp and other rig and shipbuilders have not received payment. 

If Petrobras and Sete Brasil do not sort their issues out in time, it will mean earnings downgrade for the two Singapore stock exchange heavyweights. Sembcorp is much more exposed to the rumble in the Brazilian jungle. Half its net order book comprises drillships ordered by Sete Brasil. Both Singapore rigbuilders have also invested in setting up a yard in Brazil to meet the country's local content requirement.

My very brief experience with the Fitbit activity counter

I bought the two Fitbit Flex from the Challenger store at Funan the IT Mall about two months ago. One was for me to monitor my own activity level, since I put on about 5 kg of weight over the past 4-5 months due to my injury. The other was for my girlfriend as a Christmas present. It was also to encourage her to monitor her activity levels, since she leads a more sedentary lifestyle than I do.

The Fitbit Flex is considered mid-ranged in terms of price for similar wearable technology It cost me about more than SGD 100 per unit, and that was after a 10% discount, as my friend was a Challenger store member. It came with the actually counter, two wrist bands, a RFID USB dongle (to sync from counter to computer) and a USB charging cable.

My experience with the Fitbit was brief because I might have dropped it somewhere in camp while on my recent ICT and only realised it when I was almost home that same day. The Fitbit wristband should not come out that easily but I was guilty of playing with the strap to while some time away. 

My first Samsonite Red

I was not inspired by the Korean actors/models to buy my first Samsonite Red backpack. Moreover, I have been using a briefcase-style bag as I do not have a lot to carry to work other than the odd few documents. However, my purchase was prompted by my wonderful experience with my more than 10-years old, Samsonite soft-casing travel bag which I am still using. The old brown/beige travel bag is made of durable material and the design is stylish.

The new Samsonite Red backpack is much more stylishly designed of course. The backpack has good storage volume and five small external compartments. Inside the bag is a compartment to store your tablet PC. The user-experience has been good so far as the two straps rest on the meaty parts of my shoulder and the material is still keeping shape.

The Samsonite Red is not cheap (by my standards), setting me back by slightly more than SGD 200. Incidentally, there is a Porter bag which my sibling bought from Japan, strewn on the floor. The Samsonite Red does come with a two-year warranty should anything bad happen to your backpack. Buying a Samsonite in Europe should be much cheaper than in Singapore but I do not think I am heading there anytime soon.

Jan 2015 Portfolio update: Strong Start

I am posting this update since I woke up too early to start work but cannot go for a swim as the pool is closed for maintenance.

Compared to the end-December 2014 portfolio of SGD 115,736 (inclusive of capital injections), the portfolio at the end of January 2015 gained 3.2% month-on-month to SGD 119,486, of which SGD 11,462 was cash.

The top contributor was Colex whose share price appreciated 9.6% month-on-month. However, there is a large spread between the buy-sell price and the gains are unlikely to be realised.

F&N and Petra Foods were the next two top contributors. F&N's share price appreciated 8.1% likely on hopes the company will announce a good capital return on the forced-sale of its stake a Myanmar brewery. Like Colex, Petra Foods has a large spread between the buy-sell price.

Super Group was the only loser of the six-stock portfolio, shedding 2.6% in share price. I remain hopeful that the company will post stronger earnings once the political situation in Thailand improves, although I am not going to average down.

I am eyeing KrisEnergy and Colex and potential targets to utilise the free cash.

Singapore stocks analysis: No correlation between individual stock returns and holding period yet

The chart below shows the holding period and return on capital (inclusive of dividends) of the 17 stocks that I have bought and sold, excluding short term trades. The actual returns can be found here. Using Excel, I ran a regression of the two variables and found that there is almost no correlation between the two of them (low R-square of 0.001).

From an academic standpoint, my results do not contradict the conventional wisdom that the you can get good returns when you hold stocks over a long period. This is because the defining study, Stocks for the Long Run,  uses a 30 year period and a very big basket of shares. This is in contrast to the fact that share that I have held longest is at most 6 years and that most of them have small market capitalisation.

Keppel Corp trade settled and sold

To settle my Keppel Corp trade, I had so seek help from my friends and fortunately I have some good ones. Some things happened in my family and I was only able to sell the 3 lots today at SGD 8.36, netting me about SGD 611 or 2.5% return on the capital outlay. On hindsight, it was a lot of asking of favours for a paltry return (percentage wise). I guess the best advice I can give at this point is to trade in money you have and can lose. 

Living on the edge with Keppel Corp contra trade

Bought three lots of Keppel Corp late on Tuesday hoping to catch any upside it has, after it releases its results today. Little would I know that on Wednesday, Keppel Corp along with Keppel Land would request for a trading halt. There are rumours that Keppel Corp will take Keppel Land private. Depending on how the acquisition is carried out - cash, shares or hybrid -  the privatisation will benefit the price of Keppel Land and not Keppel Corp's shares. More importantly, tomorrow will be the last day I can hold on to the shares without settling (T+3). I have thus put myself in a gambling position as I have no intention of settling. Hopefully, things go in my favour this time.

Recounting Chiang Mai (no photos)

Went to Chiang Mai in November 2014 with my secondary school buddies to look for our Thai friend based there. Booked my trip through Tiger Airways (again) way ahead in June that same month and it cost me only SGD 300 return but no frills. We were supposed to fly on Thursday and return Sunday afternoon but the airlines had to reschedule the flight (due to lack of passenger load?). This in turn meant that we spent only 2 days and 2 nights in Chiang Mai and that we could not fully enjoy our stay at the luxurious Shangri-la Hotel. We got a corporate rate on our accommodation (sans breakfast) and it set us back only SGD 65 per night.

Highlights of the trip were:

• Dinner at Baanrai Yarnyen a traditional Thai restaurant, where we had nice Thai food and then fried insects (for us tourists). All the insects were deep fried so they tasted basically the same.
• Visit to an elephant sanctuary, where we rode an elephant. It was a scary ride for me especially when going down hill as the seats were not very secured. You are advised to bring alot of THB 20 notes as tip and to buy the elephants food. There were also other miscellaneous rides - bullock cart ride, sampan ride - that were aimed at taking all our small change.
• Dinner at Mix a fushion cuisine restaurant opened by my friend's auntie.
• Drinks at Warm Up Cafe. I was told by my friend that it was the most happening place to be at and when I was there, I felt that it was the equivalent of Timbre in Singapore. Although there were eight of us, six of us finished a bottle of whisky in the hour we were there because the two host had to drive!
•  En route to the hotel, we visited the Anusan Market and played with air pistols.
• On the final day, we made a short trip to the Wat Phra That Doi Suthep. It was the only temple we went to and the place was very grandly decorated. The dome of the temple was covered in gold leaf!

Overall it was a great trip because of the company. Got to catch up with a long lost friend who shared great insight. Had we spent one more day there we might have stayed in the hotel to chill, although the pool water was very cold since it was "winter" time

Breakdown of cost

Airfare: SGD 300 return by Tiger
Hotel: SGD 130 for two nights
Guide+Driver+Van: THB3,000 for three days

What to do with $30,000 free cash?

The portfolio value for measuring 2015’s performance is SGD 115, 736 and this includes an assumed SGD 15,000 cash injection. This will be corrected for any dividends I may have missed out for 2014, once the yearly SGX statement arrives in my mail.

At the end of today’s trading day (8 January), the portfolio is valued at SGD 116,158 and it comprises almost SGD 30,000 in cash, and SGD 86,000 in five stocks – Colex, F&N, GMG Global, Petra Foods, Super Group. Only Colex and Petra are in the money. I am sitting on a 30% loss for Super Group as it claims to be affected by the impasse in Thailand. The feeling is not so super. GMG Global and F&N are slightly less in the red (-24.5% and -10.7% respectively). GMG has rallied in the start of the year, against the trend of falling natural rubber prices and this may imply a possible cash call.

I am going to stick my head out and say that 2015 will be a good year to buy stocks. My gut feel tells me that when the price of crude oil reaches almost bottom, about USD 45 per barrel, it is time to load up. I have provided the link for your reference. http://www.nasdaq.com/markets/crude-oil-brent.aspx?timeframe=10y 

Early offloading of long-timers

Sensing weakness closer to Chinese New Year, I have sold off three long time stocks - Auric Pacific, Etika (now Envictus) and UOB-KayHian - on the first trading day of 2015. Will now be observing the market for interesting stocks that I can buy into and maybe reinvest early in March.

Portfolio Review 2014: Portfolio - 4.1% vs STI + 6.3%

It was a roller coaster year for the Straits Times Index. The STI sank below 3,000 points in February but went on a straight climb to almost 3,400 points in August. After which, due to uncertainties caused by Russia and falling oil prices, following world indices, the STI dipped twice in October and December, before staging a strong rebound,

My portfolio lost about SGD 2,200 in value during the 12 month period, or 4.1%. This makes it the third time I underperformed against the benchmark index.

It was very difficult to tell which my best or worst performers were because I had forgotten to track prices from the end of 2013. But a quick glance suggest that the portfolio loss was contributed by overall weakness.

Although I did not actively monitored my portfolio (mainly because it was tumbling most of the time) 2014 was an active year for me in the stock market. Within the portfolio, I made 10 transactions (2 more if I include Super and F&N additions). I also made a few contra trades involving SGX resulting in a net gain.

2014 Action Item versus Deliverables

I forgot to set out action items for 2014, so I will reuse 2013’s.

Blog: I intend to blog lesser but have interesting posts of at least 400 words.

Reality: I blogged even lesser this year (32 vs 39 posts). Aside from that one posts comparing bloggers, my posts this year were less interesting than 2013’s.

Investments: I pumped 16k in capital in 2013.

Reality: I pumped 30 k in capital in 2014. This meant that there is very limited cash sitting on the sides and I am extremely vulnerable to the market gyrations.

Career: I recently shifted internally in my company to a new position and I have to learn a new market segment. I thus intend to dedicate more time on learning about the segment at work.

Reality: I have spent some time learning about the new market segment that I have been handed but it does not look adequate. More will be required in 2015 and this will determine my job prospects in 2015 which at the moment, do not look very good due to the falling oil price.