Donald Trump Whacked Elon Musk- Tesla Ouch!

Donald Trump has threaten to take away EV subsidies after Elon Musk went berserk and wanted to start a new political party (The America Party) due to the Big Beautiful Tax Cut Bill. Consequently, Tesla dipped close to 6% during early trading. Analysts have mentioned that up to 40% of Tesla’s profit may be at stake if the regulatory ground shift under Donald Trump. Donald Trump has once again proved himself to be the King of Mayhem if he succeed in throwing the wrecking ball at Tesla and other Musk’s businesses. 

So why did Elon Musk supported Donald Trump with so much political donation in the first place? Haiz…..what a mess for the stock market.

Manulife US REIT and Things To Take Note for US Office REITs listed on SGX.

I used to hold all the US office REITs of Manulife US REIT ("MUST"), Keppel Pacific Oak REIT ("KORE") and Prime US REIT ("PRIME") listed on SGX. Post COVID, all 3 REITS imploded in varying degree due to the work from home trend. I have then sold off the weakest 2 commercial REIT of MUST and PRIME and allocated the funds to KORE which I thought held the strongest balance sheet relative to the other 2 to mitigate the risk of bankruptcy while waiting for the US office market recovery. I thought that Dividend Uncle's recent interview with the new MUST CEO and his analysis on it are quite interesting, do take a look at his post here.

1. MUST Debt Restructuring On Track

Basically, MUST selling off of properties are on track to meet the debt restructuring plan imposed by the bankers. The only tragic part is that Donald Trump's import tariff imposition led to sudden uncertainty in the business environment and led to a 19% discount to net book value of Peachtree office building but nevertheless, this is still higher than the current market price of US$0.161 per unit of MUST which is just a fraction of its net asset value per unit.

Nevertheless, the same storyline of huge potential upside of 100% to 200% for the 3 US Office REITs which are trading at record low to their net asset value per unit hid a a major issue that has often been neglected and forgotten which I will elaborate below.

2. My Beef with US Commercial Office SREITS  

The often forgotten issue is that during times of crisis, US Commercial Office SREITs are unable to tap onto its sponsors or existing unit-holders to raise much needed funds to survive the crisis.

The major hurdle is the problem of the complex holding structure designed to minimise withholding tax in the rental return to unit-holders. The sponsors are unable to underwrite the rights issue during crisis time as their own unit-holdings will exceed 9.8%- please see my previous post on the technicality here.

(i) So far, one of the solutions we seen during such crisis time is the selling off of office building at fire sales price for MUST and PRIME. KORE also announced in 2025 the sales of non-core assets. This is not exactly an ideal solution and as a matter of fact a really bad move. 

(ii) The other solution is private placement to 3rd parties at extremely dilutive pricing. MUST tried that but failed in the face of institutional investors protest at the grave dilution for existing unit-holders.

(iii) A 3rd fund raising solution will be as per what KORE has done- it has suspended all distribution to unit-holders from 2023 to 2025 and only resume pay-out in 2026 subject to improvement in US commercial office space conditions. The retained distributions is akin to a forced rights issue where everyone will need to contribute thus circumventing the issue of non-subscription which will cause breach of the  more than 9.8% individual threshold allowance. 

Parting Thoughts:

While current US office REITs seemed very much undervalued, my personal thoughts are that retail investors may seriously need to consider whether it is worth holding on to a ticking-time bomb (due to market cycle) or to consider an exit strategy once the price recovery plays out.

Investment Portfolios Updates (27 June 2025) - Net Investment of S$750K and Projected Annualised Passive Income of S$46K.

Singapore REITs suddenly sprang back to life with the anticpation of 2 more rate cuts in 2nd half of FY2025. More funds also moved from overseas markets into the local SGX. My gross portfolio managed to hit the above S$1.02Mil mark again albeit the see-saw ride from Donald Trump's erratic policies from import tariff fight with other countries (the most recent one is with Canada and sending US airforce to bomb Iran). Net investment (including cash) is approximately S$750K as at 27 June 2025. I guess this is not bad considering that I had cashed out S$10k from my unit trust bond funds for personal expenses usage.

1. Portfolio 1- Stocks Held in SGX Central Depository 

2. Portfolio 2- Margin Purchased Securities

(Note: My margin purchased securities has grown to a sufficient scale to sustain itself and can pay off annual financing charges as well as to gradually pay down the margin loan through dividends generated.) 

Have continued paying down my margin loan from S$272K to S$267K. Going forward, will target to bring the margin loan utilisation down to S$250k hopefully by year end in case Donald Trump screw up the world economies again.

In addition, I have also sold off part of my Keppel Corp stocks (1,000 shares) as its price hit over S$7.35 per share to recycle the capital into Alibaba (9988).

3. Portfolio 3 (with Tiger Brokers and MooMoo) 

(Venture into higher risk as well as capital growth stocks here)

I have added 400 shares of Alibaba when its price drop back to HKD110- HKD113 range over the past few months as it is now a cloud and also AI tech play on top of its usual core E-commerce business.

Also added 10,000 units of Lendlease Commercial REIT in end May 2025 when its price plunged to S$0.480 per unit. Its price has since recovered to S$0.525 per unit as at 27 June 2025.

4. Portfolio 4 (Endowus Unit Trusts & Other Investments)

I have taken out S$10K from my Higher Income Endowus portfolio for personal usage. Also did a bit of rebalancing and direct purchase of PIMCO bond fund as well as Pine Bridge Asia Pacific fixed income fund. 

In addition, decided to buy into the Fidelity APAC Dividend Fund to to reduce US equities exposure in my unit trusts portfolio as US market is way overvalued (near 52 weeks high and extremely high PE ratio for many US firms) right now. 

Parting Thoughts

I am keeping my fingers crossed that there will be at least 2 more rate cuts this year so that interest rates go down and REITs continue to increase their distributions.

Elite UK REIT Acquistion of UK Government Leased Properties-Bad Move and Shooting Existing Unit-holders in the Foot.

This is one REIT that I got roasted before talking about the possible risks arising from what everyone thought is an invincible REIT that draws rental income from the UK Government so hopefully I don't get flammed posting about it again. Elite UK REIT ("Elite") recently proposed acquiring three freehold/virtual freehold properties in the UK currently leased to government departments, representing a strategic expansion of its portfolio. I thought that Elite is taking a wrong step again following its disastraous plummet during its debt leverage crisis (spiralling towards a potential breach of MAS requirement then). It is interesting to note that Elite debuted on the SGX mainboard on 6 February 2020, trading initially at around £0.705–£0.71 but saw its unit price declined to a record low of £0.231 per unt as at 30 October 2023. Its price has since recovered to £0.31 per unit but a far cry from its IPO debut days. 

1. What happened in the past of 2023 that led to Elite's worst crisis as a REIT?  

Under Elite's original 2018 leases, around 70–83% of its gross rental income (GRI)—equivalent to 117 properties—had break clauses allowing tenants (primarily the DWP and MoD) to terminate after 5 years, with one year’s notice 

Break notices issued by UK government:

The UK Department for Work and Pensions ("DWP") exercised the break option for 8 properties, representing approximately 4.8% of FY2022 contractual rent. 

Countermeasures by Elite's management:

• For 100 of the DWP-leased properties, break clauses were removed via renegotiation with the tenant ensuring leases now run to March 2028 .

• This move stabilized lease term and income visibility for a significant majority of the portfolio (around 83% by GRI)

Throw in the high interest rate environment and consequentially, all hell break lose and Elite found itself having to get unit-holders to bail itself out in December 2023.

2. Why I think it is a bad move to acquire the 3 properties?

The acquisition of another 3 government properties smacks of a deja vu. The one primary risk of Elite is that it has an over-concentration of 1 single major tenant which is the UK Government. So I do not like it that the management decided to continue adding on properties being leased to the UK Government. We have all seen the myth of the "resilient income stream" from government agencies.   

I thought that Elite should focus more on buying or developing data centre properties similar to its foray into its planned development of Peel Park data centre campus. Alternatively, it should look for other non-government commercial tenants to diversify away from the concentration risk of a single major tenant. 

3. Private placement is a slap in the face of loyal unit-holders from IPO/Debut days

Elite management should have offered a rights issue to give its long time unit-holders a right of first refusal. Many have been holding on to their units from the £0.60–£0.70 days. The extremely dilutive price of £0.295 per unit private placement price is extremely disappointing from many of its long time loyal unit-holders. Only good news is that it is slightly higher than the bail out rights package of £0.27 per unit.

4. High Leverage Ratio > 40%

While leverage ratio will improve sligthly from 43.4% to 43.2% post acquistion, it is still too high and worrying.

Parting thoughts

I will continue to stay away from Elite as I do not like the over-concentration in UK government tenants. The post acquisition leverage ratio of 43.2% (over 40%) is also of grave concern bearing in mind what had happened in 2023. Anyway, above just my personal thoughts. This is a free-world....for those who still think that Elite's earnings from the UK government are extremely defensive and resilient, please go ahead to buy more to take advantage of the attractive 9%-10% distribution yield. 

Personal Updates- My Little Piece of Joy Albeit The Stock Market Doldrum.

Life is certainly dull these past few years with the asset classes (primarily SREITs) that I am vested in, perfoming mediocrally. The only little small piece of joy is that I finally won the TOTO after so many years! Well, I am not the lucky guy from Yew Tew who won the S$12Mil grand prize on 19th June 2025 but finally have the luck to be one of the winner of the 7th prize of S$10 for matching 3 similiar numbers....haha.

It is certainly easier to gain more speculating in some risky stock picks rather than ploughing hundreds of dollars that went into SG Pools but only gain a cumulative windfall of S$10. 

Fu Yu Corporation- Former Super Hero Cash Cow Became Bleeding Cow.

What a change of fortune for Fu Yu Corporation ("Fu Yu Corp") since the original owners sold off the business to the new owner.  Fu Yu Corporation was sold by its founding shareholders-Ching Heng Yang, Tam Wai, Ho Nee Kit, and Hew Lien Lee- to a fund managed by Pilgrim Partners on 18 January 2021. On that date, Pilgrim Partners’ vehicle acquired approximately 29.8% of the company (around 224 million shares) at S$0.26 per share, in a deal valued at roughly S$58.3 million. From a former superhero dividend cash cow generator, Fu Yu Corp has unfortunately became a shadow of its former self. 

1.  Opening of Smart Factory and Venture into Bio-medical Market Segment

Apparently, the opening of the smart factory which have state of the art technologies such as 3D printing and automation in Singapore as well as the new strategic growth into bio-tech sector, did not boost revenue and net profit. Worse still, the business performance went opposite and is now operating in a net loss position. 

2. Recent New Woes- Infighting Among Internal Stakeholders

Victor Lim, one of the substantial shareholders wanted a board seat with executive power to push forward a strategic reset for Fu Yu Corp. The crash between the senior managmenet team and Victor Lim has been onging since 2024. This does not bode well for the entire business when its leadership team is distracted from running the business. Saying that, my personal thoughts are that Victor does have valid concerns on the current direction of the business which is clearly not working out as one can see from the losses suffered since the exit of the founding shareholders.

3. Corporate Governance Issues

The fiasco of the USD3Mil in unverified payments and email irregularities in Fu Yu Supply Chain Solutions seems to be unresolved and investigation are still ongoing.

Parting Thoughts

As of 18 June 2025, its share price is traded at S$0.09 per share. This is a far cry from its glorious days of S$0.25 to S$0.30 per share range before the exit of the founding shareholders. Hope that most retail shareholders had already exited last year before the crash to below 10 cents a share. 

Buying Opportunities Again- Israel Attacked Iran.

Just when everyone thought that the stock market had stabilised with the “not too bad” export control truce from the US-China trade negotiation post UK London meetup, Israel suddenly launched an attack on Iran that sank most stock markets and drive oil prices up. The devastating attack destroyed Iran’s nuclear enrichment facilities and also tragically killed many of its top military leaders. Iran also counter-attacked with the launch of hundreds over ballistic missiles at Israel. The retaliatory strikes have killed many civilians and many suffered injuries.

1. Do not panic and sell all

While there is a distinct possibility of the conflict spreading and dragging in more countries, I think that most likely the war between Israel and Iran will be contained as currently, it only involves air-strikes on both sides and no ground deployment. I will thus be holding on to most of my equity portfolios.

Nevertheless, I have sold off approximately 10% of my stakes of Keppel (SGX Stock code: BN4) when its price reached a high of S$7.30 to S$7.36 on 17 June 2025 to take some profits off the table and prepare for re-deployment to other investment assets like SREITs or HK/China stocks that are trading at huge discount off their books value. Sold off 1,800 shares of Keppel at around S$7.35 per share.

2. Best time to accumulate more equities/bonds.

Come to month end, I will also be pumping in another extra S$2K into my bond fund (Pine Bridge Asia Pacific Investment Grade Bond Fund) and equity fund  portfolio at Endowus. It maybe better to also diversify widely via unit-trusts to minimise total loss from a costly investment decision.

Parting thoughts

Personally, I think that this maybe the best opportunity to accumulate more stocks. A bigger dilemma for me is whether to keep my remaining S$20K stakes in Keppel Pacific Oak US REIT ("KORE") which appears severely undervalued but facing the propsect of a US economy entering a severe recession due to the crazy antics of Donald Trump as well the ongoing Israel-Iran war that increases the propsect of high oil prices and consequently worsening demand for US Commercial office space. We may have to accept that the slum in KORE market price may continue for the next decade. Maybe better to just bite the bullet and redeploy the funds into e-commerce and cloud giant Alibaba or other SREITs.