Pages

Monday, September 23, 2013

SGX Stocks Starter Kit


The image above shows a starter kit provided by myself for initial investments of up to $25K. The rational for this starter kit is to help people who do not know about investments to get started with some of the good stocks i've picked up over the years.

A diversified portfolio helps an individual to hedge against risks across different sectors. This starter kit will help to kick start a fresh equities investor and journey him to finding the best mix for himself in future, with good returns yet protect against the downfalls of the stock market.

*note: Invest at your own risk. I will not be responsible for any of your loses or winnings.

Sunday, September 22, 2013

Cheap outdated electronics caused by QE

With the continuation of quantitative easing in the US, inflation as a whole will rise and that will force growing countries in Asia to strengthen their currencies against a weaker USD.

Food prices, fuel prices will rise as well as transportation costs. The medium income group which i call the savers group will be badly affected by this.

On the other hand, the IT geeks are able find great bargains from IT products as the electronics sector are facing an overwhelming supply of products in the market. Technology companies compete very fiercely to innovate and push out better products.

Consumers, on the other hand are also sitting on the addiction to upgrade their products. The electronics second hand market is facing a problem of over-supply and people are all-time ready to sell their second hand electronics to upgrade to a better model.

The second-hand markets are filled with bargains or cheap electronic products as people seeks to upgrade their model.

There could be other sector that may be affected by this, by i think the most visible market to me is the electronics market.


Friday, September 20, 2013

SGX breaking into the China Market

SGX yesterday announced that it had signed a memorandum of understanding with the Bank of China to develop RMB products and services and expand the exchange business in China as well as helping the Chinese to expand their products in Singapore.


Singapore is a small country and it is tough for SGX to grow its securities and derivatives business in the region. Given the largest population country like China, SGX is able to leverage on the population numbers to better grow its business. 

Furthermore, companies in China still lack good corporate governance and locals seeked to park their cash elsewhere. SGX, as Geoff Howie, market strategist at SGX, explains that SGX remains one of the most diversified exchange in the world perfectly caters for the people in China, who are in search of companies with better corporate governance and good returns on investments.

Fed Delay Taper, So what's next for the market?

Fed's decision to taper was because unemployment rates were still high. However, cheap money does not seemed to flow to where it is suppose to flow. According to Bloomberg, the QE saves companies such as Verizon, Apple and other companies about $700Billion in interests payments. However, it does not seem to effectively bring the jobless rate down.

What is seen is that stock markets are rallying and companies are able to lend cheaply to expand business. This can lead to a bubble when some companies spend the cheap loans on bad investments, and later not being able to pay back. Another scenario can be as such that companies took advantage of the cheap loans to borrow excessively, without concerns of being able to pay back and when interest rates hike, these companies default on their payments.

These two scenarios are likely to bring about a great correction like the Lehman Brother's bankruptcy back in 2009. And this time it could be bigger because this time the target audience are companies instead of the local public. The companies with good management and strong cash flow will inevitably benefit from the QE in the long run.

Therefore, right now the good investment opportunities lies in the US.

What about Singapore stocks? 

The cheap money continue to flow into Asia by spurring US companies spending and currencies has to be strengthened to control inflation growth.

Stocks will likely to grow at a slower pace, as spending power is dispersed within the Asian region. I expect to see healthy and steady growth in the Singapore stocks. STI could go up to 3,300 this year, but looking ahead, tapering could set in a major correction in the stock market. Now is a good time to offload stocks which are heavily in debt, and then buy back when STI retreats to 3,000.

Companies with solid fundamentals and remains low and or zero debt position will bear sweet and juicy fruit in the long run.

Source: http://www.bloomberg.com/news/2013-09-17/bernanke-saves-companies-700-billion-as-apple-to-verizon-borrow.html

Tuesday, September 10, 2013

Hafary paying out 29% dividend


They supply flooring tiles to the Singapore market by importing from manufacturers located around the world.

Such companies do not produce good cash flows, but this time they are paying out a dividend yield of 29%. Such a huge payout may not be sustainable for the company to grow healthily, but if they are able to consistently grow, then i think it is an attractive bet.

But for now, markets are cautious about the bond tapering which is expected to happen this month. I will be cautious about it too because when markets fall, fundamentals will not work on those who deal in large volumes.

Friday, September 6, 2013

SATS, stable recurring income

SATS two main stream of incomes lies in its gateway services and food solutions.

Its gateway services operate in Changi Airport and Marina Bay Cruise Centre which are the 2 major tourist stopovers.

Their food solutions served mainly the Airline catering and also SFI, which feed the soldiers in Singapore every day.

These 2 businesses experienced high daily traffic and deemed to supply the company with stable recurring income in the long run.