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. 

Asia Focused Bond Funds Besides PIMCO GIS Income Fund Which Has Overly Concentration in United States.

With the numerous online concern by many folks over the weakening USD and US inflationary pressure from Donald Trump's import tariff, the popular PIMCO GIS Income fund and other US bond funds which are heavily concentrated in US assets has been making people very uncomfortable. The funny thing is that the market cannot decide on whether it will be an inflationary environment or a declining interest rate environment (from imminent rate cut due to worsening business sentiment). There are currently 2 Asian bond funds which I have considered for diversification away from US geographical sector over-concentration.

1. PineBridge Asia Pacific Investment Grade Bond Fund

The 12mth yield for this fixed income fund is at 5.63%. Howver, annualised 1 year return has only been at +2.70%. Strangely, despite it being an Asia Pacific focused bond fund, it contained 2.16% of US bonds in its portfolio- but I guess this is a lot better as compared to the Fidelity Asian Bond Fund which I will discuss further below in Pt 2.

2. Fidelity Asian Bond Fund

As aforesaid mentioned, a surprising high amount of 27.32% of its investment in bonds is in the United States albeit being an Asian focused fixed income fund. It is giving out 5.65% of distribution yield. Its annualised 1 year return of +2.56% is almost similar to the PineBridge Asia Pacific Investment Grade Bond Fund. 

Parting Thoughts

I am currently vested in the PineBridge Asia Pacific Investment Bond Fund as it has the least concentration of US assets in its geographic allocation relative to Fidelity Asian Bond Fund. My personal experience of a higher return fixed income fund is still PIMCO GIS Income Fund which delivered an annualised return of 4.61%. With the economic downturn, it is inevtible that the distribution yield of all bond funds will continue to go further down and prices of bond funds will have potential upside. Anyway, good to put away some of my investments in bond funds which do help a lot in reducing wild volatiltiy in valuation as compared to my equities holding. 

Shocked to Learn that 90% of Pre-University Space Reserved for Indigenous Population- Be thankful!

Snippet Extract from The Straits Times on 9 June 2025 "Malaysian top scorers’ hopes for pre-uni spots dashed, reigniting fairness debate"

I was shocked beyond words that Malaysian top scorers scoring 10As in our neighbouring country of Malaysia does not guarantee a spot for public Pre-University programme. Apparently, 90% are still being reserved for indigenous population. I thought that things have improved slightly since the new poltical parties coalition took power. If separation from Malaysia did not happen in 1965, Singaporeans would also have faced the same policy and the only way out were to send your kids to costly private college programme. Think we should be grateful that our local meritocracy system (albeit its con of highly stressful education environment) creates a equal opportunity environment regardless of race and religion.  

Alibaba Shares Dropped Back to HKD110 Level- Thanks to King of Mayhem Donald Trump.

Interestingly, Alibaba has been on a wild see-saw ride over the past year with unprecdented level of violatitlity thanks to the antics of the King of Mayhem Donald Trump who ranted on China for violating the trade pact reached in Geneva to avoid punishing Geneva. On mid-may 2025, Alibaba hit a high of HKD131 per share but yesterday it went down to HKD110 on 2 June 2025. This is a crazy drop of 16% within 2 short weeks. 

1. Added 300 Alibaba shares at HKD110 per share

When I happened to see the sudden dip to HKD110 level just before lunch break, I decided to take action and accumulate additional 9988 stocks. I pumped in S$2K and also sold off all my Industrial and Commercial Bank of China stocks to raise funds to purchase 300 Alibaba shares. Alibaba cloud busines looks promising in the long term with ambitious global growth-this is now the new growth engine of Alibaba. 

2. The famous AK71 now also buying Alibaba

When you see long time critic of Alibaba and China stocks now changing his stock pick to Alibaba, it does point to the severe undervaluation of its current weak market share price relative to its underlying business growth potential. But I kinda find it amusing that AK71 just changed tune like that when over the past few years, his stand on China was that it was uninvestable due to political/policy changes risk.

Parting thoughts

I may acquire further Alibaba shares if the price plunge to HKD100 level or below. In addition, Alibaba will be paying out its annual dividend soon. For those interested, it will ex-dividend on 11 June 2025 (Wednesday) and payout US$0.2501 per share on 3 July 2025 (Thursday). This is a 1.7% dividend yield and not too bad while waiting for the market to re-price Alibaba. 

Capitaland Ascendas REIT Disastrous Acquisition of Data Centre & Science Park- Selling Out Long Term Loyal Retail Shareholders.

I am utterly flabbergasted by the mostly raving praises by analysts with regard to the recently announced S$700Mil acquisition of the new Tai Seng data centre and business property at Science Park by Capitaland Ascendas REIT ("CLAR"). Yes, I have no doubt that the usual yield accretive argument and stable & resilient income streams from established tenants (Shopee) makes perfect sense. But the financing aspect of this acquisition exercise is a slap in the face of long term loyal retail Unit-holders with the severe dilution in their investment into CLAR via only a private placement instead of opening up to all unit-holders. 

How bad is the dilution on long term unit-holders?

Most long term Unit-holders probably entered into CLAR at prices ranging from S$2.80 per unit to S$3.00 per unit. If one entered during the pre-COVID days, then it will be S$3.00 to S$3.50 per unit range. Worst still, CLAR management offered a 5% discount to the market price of S$2.6059 per unit on 27 May 2025, that is, S$2.47 per unit.

Overall, S$500Mil of private proceeds were raised to fund the purchase of the above mentioned properties at the discounted price per unit of S$2.470. 

Parting thoughts

Personally, I thought that the CLAR management ought to have opened up the fund raising to all retail-unit holders instead of taking the easy way out and selling out long-term loyal unit-holders. Anyway, if queried, CLAR management will probably come up with the stupid excuses of (i) uncertainty of successful fund raising via preferential rights issue in current economic climate and/or (ii) the need for speed to close out the deal. This is extremely disappointing as this corporate action does not benefit existing retail unit-holders and is a stab in their back. 

Additional Thoughts on Unit Trust PIMCO Income- Opaque and Little Transparency Leads To Weird Theories.

This is following up on my last post on "The Bashing of PIMCO GIS Income Fund" on 20 May 2025. Since then, Mr Loo from 1M65 has also presented his extensive research by his 2 staff members. Similar to Master Leong, both concluded that PIMCO GIS Income Fund pays out one-third of its distribution from capital. Hence Mr Loo asserted that PIMCO GIS Income is functioning like our CPF-Life whereby one enjoy high upfront payout but the capital will be depleting as the recurring income is only two-third of the payout.  

There are a number of extremely contradictory points:

1. Capital Distribution unsustainable may not be true.

Yes. Apparently, it is true that one-third of the distribution are from capital as per additional details published on PIMCO GIS own website. The current yield from income produced from the fixed income instrutment is only 4.6%. Hence if one pays out 6.5% per annum, then the difference of <1.9%> payout must be coming from capital. Therefore, arguably, PIMCO GIS Income is a declining fund that behaves like CPF Life. Saying that, I disagree with this CPF-Life analogy and I should elaborate further below. 

Extract of Risk Free US Treasuries- 4% to 4.51% interest yield.

2. The current yield of 4.6% does not make sense.

The least attractive yield of the financial instrument invested by PIMCO should be US Treasuries as these are usually considered risk-free. As per above screenshot, Us treasuries hover around 4%-4.5% currently. Hence the other component of PIMCO Income portfolio of commercial grade bonds will be priced at 1%-3% premium on  top of any risk free bond rate. Also, PIMCO's investment into Mortgage back securities should be yielding between 6% to 7%.  Taking into account basic logic, the theoretical yield can never be 4.6%. It will be a lot higher. 

Did PIMCO publish the yield of 4.6% based on its historic original investment cost from the pre-spike in interest rate era and not after fair valuation downward adjustment? The maths looks pretty weird.

3. Published yield to maturity is 6.71% relative to the current yield of 4.63%

Now, if your current yield is only 4.63%, then how on earth will your yield to maturity hit 6.71%? This means that PIMCO does have strategy that works on reaping consistent capital gains from fixed income instrument. 

Note that "yield to maturity" of fixed income instrument considers not only the coupon payments but also any appreciation or depreciation in the bond's price if it's held until maturity. 

Parting thoughts

Based on the above 3 points, PIMCO is definitely not functioning like CPF-Life as per what 1M65 Mr Loo is asserting. I can only say that most unit trusts like PIMCO GIS is quite opaque and despite so many finance influencers analysing it, the only folks who knew the exact functioning is PIMCO themselves.  

Lendlease REIT Fell Below $0.50 Per Unit- 7.6% Distribution Yield.

The recent Donald Trump madness has caused many SREITs to decline sharply again with US Treasury rates spiking due to lack of market confidence and demand. Equities such as REITs are thus also adversely impacted. For Lendlease Global REIT (“LREIT”), based on the last half year distribution of $0.018 per unit, this will mean an annualized distribution of $0.036 per unit. Since last market traded price is $0.475 per unit as at 23 May 2025, this translates to a high distribution yield of 7.6%

While LREIT is not affiliated with Temasek Holdings such as REITs from the Mapletree and Capitaland stable, it is nevertheless still an attractive retail REIT for further diversification. Its heartland retail mall of JEM and long tenancy of office block in JEM to the Ministry of National Development added further resiliency to its rental income base. I will scoop up more of LREIT if the unit price crash further. Not sure whether it will reach $0.450 or below per unit. I am seriously pondering how low can SREIT decline and despite the global market pessimism, I believe the light will shine one day for REITs.

Interestingly, I noticed that Choon Yuan from InvestMoolah had moved in to accumulate LREIT recently. Personally, I am looking to add on additional retail focused REIT such as LREIT and Mapletree Pan Asia Commercial Trust amidst the current storm if the distribution yield spikes further to near 8%.

Living on the Knife’s Edge These Days- Investment Portfolios Heavy Losses and Personal Wealth Maybe Already Destined at Birth

Just when everyone thought that the China-US trade war has simmered down, the King of Mayhem, Donald Trump, unleashed another round of turmoil to the global stock markets by threatening a 50% tariff on the European Union (“EU”) and a 25% import tariff on Apple iPhones not made in US. This is hundred of billions in trade with EU. Retaliatory actions-which we are sure of-by the EU will basically mean the end of trade between US and the EU. It does not matter whether this is another brilliant negotiation tactic out of the “Art of the Deal” book by Trump as he has succeed in damaging trade and bilateral ties with EU even if he were to change his mind later on. 

1. Local bread and butter- potential loss of jobs in upcoming market slowdown.

There has been a slow down in business in retail definitely. I have been living on the knife’s edge (刀口上舔血) for the past 2 years. Despite my company making record profits in 2024, the senior management at HQ has not approved any salary increment again. I guess the uncertain economic outlook contributes to the current predicament. Maybe should have applied to be a civil servant in government for stability instead of taking a private commercial career path. Now too old to change with a short runway once you hit middle age.

2. REIT heavy portfolio going lower.

Wow, the recent see-saw up down up down for REITs is never ending. With bond price crashing due to higher yield demand for the supposingly risk free US Treasuries, this mean that REITs must also produce a higher income yield which puts tremendous downward pressure on REITs. We can see the Mapletree family of REITs crashing to near recent low again. Will it go down further? Yup, this is definitely possible given the antics of the King of Mayhem.  

3. Transferring CPF Ordinary Account to CPF Special Account for higher 1.5% more interest income.

When we talk about the strategy of transferring CPF OA to CPF special to get the higher 1.5% more interest income, the property guru and YouTuber Eric Chiew always come to my mind. This is because Eric will mock folks who do this as it means not much money left in the CPF OA to upgrade to bigger private condominium to make tons of money. 

Sometimes, one has to accept one’s wealth destiny. My ex-colleague (68 years old) who has retired told me that in everyone’s life, how much money one can made in this lifetime is more or less already decided at birth. Haha….so not everyone can expect to be like Eric who keep flipping properties to get wealthy and then get to live in landed property. If your destined life is like salted vegetable, chances are when you try to buy a second property to Huat big big, you may end up like in 2008 or 1990s where the property market crash over 20% and get very stressed up for 4-5 years trying to pay off the mortgage like a slave to the bank and your work place boss.

Or to share another tragic story, I had another colleague who suddenly got into a car accident (you can’t control other drivers from recklessly driving into you) with multiple fractures and also pain medication withdrawal side effects that effectively diminish your ability permanently to function effectively as an employee and business owner. Then how to pay for huge monthly mortgages?

Parting thoughts

The only light at the end of the tunnel is that Donald Trump only has 4 years tenure as president of the United States. Making America Great Again (“MAGA”) seems to be destroying everyone including US itself with the high prices for daily necessities and other imported products.

The Bashing of PIMCO GIS Income Fund That Gives a High 6.5% Distribution Yield- Sustainable Or Junk Bond Fund?

Recently, 1M65 Mr Loo has been talking about his potential investment target into the PIMCO GIS Income Fund which gives a more than 6% annual distribution yield (with payout on a monthly basis). On the contrary, we have Master Leong bashing the PIMCO GIS Income Fund ("PIMCO GIS") for various reasons such as the fund being mostly US focused (and his view that USD is weakening and thus upcoming huge forex losses for those who invested). In addition, Master Leong also warned about its high risk investment into assets such as the Mortgage Backed Securities ("MBS") credit default swap instrument. The credit default swap makes up about 20.22% of the investment of PIMCO GIS. Master Leong also mentioned that PIMCO GIS is using leverage which is extremely risky. Also, based on current US treasury yield of 4% to 4.45% (depending on the tenure), Master Leong asserted that the sustainable yield is only around 4% and the excess of 2% plus return is actually from capital. Henceforth, Master Leong is insinuating that PIMCO GIS NAV fund price is on a perpertual downward trend due to depleting payout funds from original capital.  So, is PIMCO GIS a junk investment as per what he asserted?  

1. Seeing with your eyes rather than hearsay- Is PIMCO GIS gone case?

Master Leong is a contrarian and has been gaining fame recently for his stock-picks which adopts the value investing approach. He has been highlighting the overvalued US market (28 times earnings) relative to China/Hong Kong markets (12-13 times earnings). For PIMCO GIS, based on my own personal experience, it is not exactly as bad as what Master Leong asserted.

2. Assertion that PIMCO GIS has too much USD (which is weakening over the long term) exposure.

The fact is that PIMCO GIS is hedged to SGD. The only issue here is what is the effectiveness of the hedge. To illustrate using a quick high level mental acrobatics exercise, if the hedge is 70% effective and say one invested S$100,000 into this unit trust, then S$30K will be exposed to USD foreign currency movement. So a drop of 20% in USD vs SGD will mean a S$6K capital loss in 5 to 10 years. This potential decline is actually already compensated via the interest income in a single year. So it is a fallacy that the entire S$100K of investment is being exposed. 

My PIMCO GIS investments so far has held up well with its capital value intact since mid-2023 and I have been getting 6%+ annual return via the monthly distribution into my bank account.  

 

Of course, if one has bought it during the pre- drastic inflation period of 5 years ago (2020-2022), then one would have been sitting on heavy capital losses (please see NAV chart above) . The capital losses from this period is certainly not because of USD weakness but mainly due to the surging Treasury risk free rates from near zero percentage (due to raging inflation) whereby the US Fed suddenly went on a spree to adjust interest rates upwards swiftly. The old adage of bond prices is inversely proportional to interest rate is unchanged here for this bond fund. 

3. Assertion that PIMCO GIS uses lots of leverage which amplify gains but also losses.

Strangely, even Master Leong is unable to provide an exact figure of how much leverage is being employed by PIMCO GIS but then insinuate that this is a major factor. So, I will suggest folks to raise query directly with their platform or PIMCO GIS fund manager. Else, it is hard to decipher whether this is a material number. For myself, I have also been using leverage in my equities investment and levergae is not a dirty word. Key to employment of leverage is risk management and the quantum of leverage employed. The track record for PIMCO GIS has been wonderful especially for my current foray into PIMCO GIS via Endowus.

4. Assertion that MBS credit default swaps are highly risky

I think that MBS triggered off crisis from 2008 global financial crisis is real. However, lot of investments also collapsed during a deep recession for both equities and bond funds. So, not a fair point. If you want safe risk free investment, then the rate of return will be only 2% to 3% in Singapore. PIMCO GIS as per above illustrative screenshot is a well-diversified bond fund.

5. Assertion of High Fund Level Expense of 1% to 1.5% for PIMCO GIS

Endowus PIMCO GIS is only 0.85% (0.55% fund level + Endowus 0.3%). The 1% to 1.5% is probably referring to the PIMCO GIS being sold by local banks and their relationship/investment managers.

6. Assertion that the sustainable return (interest income) of PIMCO GIS is only 4% with rest of one-third payout from capital

I really have to disagree with this assessment and assertion: 

(i) MBS Credit default swap already around 6.5% to 7%; 

(ii) investment grade bond and high yield bonds in the portfolio 5.5% to 8%;

(iii) Treasury bonds- 4.45%. 

Based on above interest income return and the weightage mentioned in item 4, I thought it is fairly close to 6% hence I am puzzled by the comment that one-third of PIMCO GIS distributions are being paid-out from capital.

Parting thoughts

The beauty of a bond fund is the sheer number of bonds inside it that enable one to have a well-diversified portfolio of bonds to prevent over-concentration risk should an entity default on its bond obligation. For an income investor, I am fine with the NAV movement volatility. So far (touch wood), my investments during the high interest rate period from 2023-2024 seems fine. Even my recent tranche in 2025 is holding up well in terms of its NAV capital value. 

Do take note that bond funds will still have its share of market risk and does not mean that they are risk free. Ok, that's all for today....Bye folks and have a great week ahead!

Investment Portfolios Updates (9 May 2025) - Net Investment of S$723K and Projected Annualised Passive Income of S$47K.

Wow, it has been a long 3 weeks since my last post. I had been super busy for the past weeks with entertainment of overseas clients and execution of a major project at workplace. Finally have some moment now to catch my breath and also do a quick post. I don't think things are fine at all albeit Donald Trump claiming that US and China having a "total reset" of their acrimonious relationship during the Geneva negotiation over the weekend. Since the "Liberation Day" trade tariff announcement by Donald Trump on April 2, 2025, stock markets worldwide plummeted. Despite the subsequent pull back of the reciprocal tariff by 90 days (except for China) by Trump a few days later, the damage has been done. My gross portfolios were not spared and fell to below S$1Mil while overall net investment after netting off margin loan hovers around S$723K.

1. Portfolio 1- Stocks Held in SGX Central Depository 

Not much changes here while waiting for the storm to stabilise. May'25 and June'25 have a couple of dividends payment. Haw Par Corp also paying out its usual dividends plus a special dividend totalling S$1 per share on May 21, 2025.

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.) 

I closed off my ICBC China banking stock of 12,000 shares at 13% profit to reduce leverage. Also, sold off all my rights issue (2,000 units) from Frasers Centrepoint Trust to lock in the small profit. Margin loan has been reduced from S$291K to S$273k in view of the gloomy marco-economic outlook.

3. Portfolio 3 (with Tiger Brokers and MooMoo) 

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

Interestingly, Link REIT, Alibaba and Bank of China rallied after the recent emergency meeting by the Chinese government. There are plans to include Link REIT to stock-connect-the inclusion of real estate investment trusts (Reits) in the China-Hong Kong Stock Connect mechanism will expand the investor base, increase the trading liquidity and attract more listings of these collective investment schemes to Hong Kong, analysts said.

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

I have reduced the equties funds (Fidelity Global Dividend Fund & Franklin Templeton) exposure and switched them over to the PIMCO Income bond fund which is offering an attractive annual yield of 6%.

Parting Thoughts

I do not think that Trump is going to drop the China Tariff by a lot. The Chinese government are in a stronger position and it benefits China to drag on the current standoff as it is obvious that Trump has screwed himself and is in hot soup over the lack of goods in retail stores and lack of China containers coming into US ports. 

Updates as at 12 May 2025: Speaking after talks with Chinese officials in Geneva, US Treasury Secretary Scott Bessent told reporters the two sides had reached a deal for a 90 day pause on measures and that reciprocal tariffs would come down by 115 per cent.

Donald Trump Scores Own Goal And Destroy Worldwide Stock Markets- The King of Mayhem.

Wow Bian, I woke up this morning to the astounding news that President Trump has decided to do a U-turn to “exempt” smart phones, chips, computers from the China tariff of 145%. Then why impose the 145% China import tariff in the first place which ends up with China retaliatory tariffs against US exports that hurts its own people? Not sure what Donald Trump gains from his “negotiation strategy” which is nothing short of an own goal. No wonder Elon Musk asserts that Donald’s top trade advisor is “dumber than a sack of bricks” and a moron.

What to do during this stock market crash?

1. I have been reserving some of my limited cash in event that the stock markets tank further. There maybe a few dead cat bounce given that business sentiment across the world have been really bad and bruised from the US tariff that is causing disruption and chaos everywhere. We maybe already in a recessionary environment. So be wary not to enter fully into the equity markets but to spread the entry over a few tranches.

2. At the same time, it seems a too good opportunity to be missed after the recent crash. There are a lot of companies out there now trading at a further discount of over 10%. I have added the following over the last week:

(i）Alibaba (9988) at HKD99-cash 

I nibbled away at a tiny 100 shares since Alibaba already got so much cash on its balance sheet and also a big discount off its past few months of rallied price. I like its e-commerce and AI investment.

(ii) Nikko AM REIT index (“CFA”)

CPF OA. REITs are at a 52 week if not 5 years low. I am seriously wondering how low can REITs go at this juncture and willing to take some risk with my CPF OA. Added a further 28,000 units over the week. Please also see my post in March 2025 on this CFA index fund- basically, it enables one to use 100% of CPF OA without the usual 35% restriction on investable amount above S$20K.  

(iii) rights issue for Frasers Centrepoint Trust (Cash + Margin).

Now, this one is a tough one for me. I was initially thinking of utilizing the cash for buying into 1 of the 3 Mapletree REITs as the distribution yield for these have been over 7% with the recent crash whereas FCT has a so much lower distribution yield of around 5.8%. But decided to invest into something that is fully vested in Singapore neighborhood shopping malls that has more predictable rental income streams. Took up my allotted rights of around 1,000 units and subscribed for excess of another 1,000 units.  

Parting Thoughts

Nothing much to say…..I am speechless over the antics of the King of Mayhem that single-handedly erased around US$10 trillion dollars from global stock markets in a few days. So much wealth vaporized overnight is simply shocking.

Beware of US Bonds Also Declining in Trade War- No Asset Class Safe.

Interestingly, I noticed that my PIMCO Bond funds purchased via Endowus have been declining recently. Rising interest rates on bonds seems to be due mainly to sell off by worldwide investors who are losing confidence hence US bond value has declined. Apparently, the ripples from Donald Trump's trade wars have sent US government bond prices down sharply last Wednesday, driving up yields in a paradoxical development as the global economy faces a recession. A key safe-haven asset, US Treasuries usually offer lower yields when investors seek shelter from volatility but has now been viewed as a risky asset class with a higher yield. What a strange twist this has turned out.

So do look out to ensure broad diversification in terms of asset class as well as geographically in one’s investment portfolio. 

The Tragic Fate of SREITs- Battered Down Time and Time Again Over Past 5 Years.

This is just a short post to ramble on SREITs which have always made up the bulk of my investment portfolios. The SREITs journey over the past 5 years have been nothing short of a major disaster. Since the 2020 COVID crisis, REITS prices have been hammered down non-stop. After COVID, too much money printing worldwide lead to inflation getting out of control and the US Federal Reserve started increasing interest rates which led to sudden spike in financing cost and borrowings/leverage ratio soaring. 

Just when everyone thought that the global inflation is under control and interest rates finally coming down, the megalomaniac and narcissitic Donald Trump kicked off the tariff war swhich seems to be the onset triggering off of a global recession. Many SREITs such as my favoruite Mapletree Industrial Trust ("MIT") is already at its 5 year low as at 8th April 2025. I am wondering how much will SREITs be further dropping this week given that China will be announcing its retaliatory measures to Trump's additional 50% tariff hike as China has mentioned that it will not be blackmailed into submission and will fight US tariffs to the very end. 

How does Donald Trump plan to make America great again when using artifical tariffs simply erodes America's industrial competitiveness? Also, for much of the products being manufactured, US does not have the competitive advantage. Today's news report that Trump's wishlist of moving back iPhone production to US will mean the cost of iphone going up from US$1,000 to US$3,500 per phone. Even if the tariff is now 100%, it will still be cheaper to import them. Consequentially, consumers back in US will still be bearing the brunt of the tariff being imposed. Focusing on US competitive advantage in its tech and financial services maybe better in the long term I thought. 

Fear of Black Monday from Trade War To Be a Self-Fufilling Prophecy?

Just be careful when many folks are shouting out Black Monday for today's trading......we may just witness the self-fufilling prophecy theory in motion with everyone rushing for the exit and much panic selling. In a recession (which is starting to look like a Global Depression if worldwide trading volume drop substantially), even if interest rates are cut, SREITS will also not escape unscathed. Not sure whether Frasers Centrepoint Trust ("FCT") rights issue at this juncture will go through smoothly- assuming a global market bloodbath this week, if unit price of FCT drops below S$2.05 per unit, then the rights issue will be a gone case. So don't be the first one to rush in to subscribe for the rights. Wait till the end of subscription period to assess further.  

Nonetheless, I do not think I will be adjusting for my cash investment porfolios. Also being vested in the market for the long term rather than playing trading suits me better. No one knows what Donald Trump is playing and maybe he will do a sudden reversal of his tariff threats. I am glad that 1 month ago, I have commenced adjusting my CPF Endowus portfolio configuration from mostly equities focused into a 70% bond and 30% equities. On hindsight, maybe should have just converted 100% of the unit trusts into bond funds. As for my other CPF direct investment into SGX REITs index fund recently, I think I will just leave it for now. Looking forward to deploy rest of my CPF OA into the US market if the S&P 500 crashes to COVID-19 level.

Keep your fingers crossed folks. 

Grab Got 10 Years License For Taxi In Singapore- Strange Venture Into Sunset Industy?

We have already seen the video of rows of empty SMRT taxis being parked long term in public HDB carpark. So it is a somewhat mind boggling to learn that Grab has just joined the fray into the local Singapore taxi service sector. Perhaps, Grab saw their competitive advantage in their popular online booking platform giving priority to their own taxi fleet on top of being able to do stop and pick up along the road. Nevertheless, it has been a bloodbath on the local taxi industy (ComfortDelgro and SMRT taxi arm all in trouble) which has been in the doldrums since the coming of Uber and Grab that disrupted their traditional taxi business model. 

I do hope that Grab management knows what they are getting themselves in and have already done their sums. Nevertheless, I view extra competition as beneficial to consumers. 

Quick Thoughts on Frasers Centre Point Trust Upcoming Rights Issue- Potential Trading Opportunity.

Just penning down some of my quick thoughts for Frasers Centre Point Trust ("FCT") upcoming rights issue to fund the purchase of Northpoint City Southern Wing which is a popular mall in Yishun. This exercise is a no choice election but forced to subscribe to avoid dilution kind...so no need to think too much over it, unless there is a downturn in stock market. Only question is whether one want to subscribe for excess rights. The current market price hovers from S$2.170 per unit to S$2.19 per unit after the announcement. The ex-dividend date is 3rd April 2025 (Thursday) and worth S$0.0615 per unit. So if you own 10K units, you will be getting dividends of S$615 in total. I expect the price range to drop to between S$2.10 per unit to S$2.13 per unit after the ex-dividend record date.

1. Preferential Offering Attractiveness Analysis

The issuance price will be between S$2.030 and S$2.070. Assuming somewhere in between of S$2.050, this will be a discount of only +2.4% to the lower end of the market of S$2.10 per unit. If market price hovers at S$2.13 per unit, then it will be at a higher discount of +3.9% to the upper end market price of S$2.13 per unit. Saying that, if the market price tanks due to the current tariff war and other unforeseen macroeconomic events, then one would have to hold and wait it out for the long term. I will probably be subscribing for some excess rights for speculative purpose in the hope that I can sell them off for a tiny profit to eat egg fried rice with pork chop at Ding Tai Fung.

2. Indicative Timeline For Retail Preferential Offering

For fellow retail investors who are interested in this exercise, please take note that the tenative commencement timeline is 8th April 2025 (Tuesday) for retail tranche offering. This exercise will end in about a week, that is, 16th April 2025 (Wednesday) so do indicate your acceptance by this date.

Parting Thoughts

Personally, I am not extremely excited by this rights issue as FCT has higher potential business risks ahead with the Johor Bahru Rapid Transit System ("RTS") rail project that may take away many shoppers from Woodlands and other suburban malls. In addition, FCT is also in trouble in one of its smaller Mall in Hougang where the government is launching a huge plot of land this year for a mega shopping mall just next to it. Frasers will most likely be bidding aggressively for this intergrated project as a defensive maneuver (similar to what they done for Northpoint City integrated development). But we will have to wait and see what happens next.

(Updated 7 April 2025: This week will be mayhem on the stock markets, not sure whether Frasers Centrepoint Trust ("FCT") rights issue at this juncture will go through smoothly- assuming a global market bloodbath this week, if unit price of FCT drops below S$2.05 per unit, then the rights issue will be a gone case. So don't be the first one to rush in to subscribe for the rights. Wait towards the end of subscription period to assess further.) 

Life Reflection- "The pain of losing someone we love is the price we pay for the privilege of having loved someone and having that person be a part of our lives".

Would you have chosen to re-live your life differently if at the age of 21 during university time, you happen to steal a glimspe of the future and gleaned from there that you will have stage 4 cancer (that continues to spread aggressively despite all medically available treatment) in another 20 years time? I was left pondering this question when I heard the poignant news of a friend who unfortunately have a bad prognosis from her medical specialist albeit early pick up of the medical issue and extensive medical treatments as I understand. There is also the issue of the young children.....what will happen to them after the parent is gone? I am still reeling in from the shock and unfairness of life and I was despondent over this devastating news during the entire long weekend.

Life is full of uncertainties, tomorrow isn't promised or guaranteed. Spend more time with your loved ones as much as possible.

Keppel Pacific Oak REIT- Latest Proposed Change To Trust Deed To Pave Way For Reinstatement of Distribution and Potential 22% Distribution Yield.

Keppel Pacific Oak REIT ("KORE") along with the other US office commercial REITS have been in the doldrums for the past few years. The work from home trend since COVID had a devastating effect across the entire US office REITs with some on the brink of bankruptcy from low tenant occupancy. Anti-inflation measures with high interest rate hikes by the US Fed further worsen the woes of US Office Commercial REITs. With the announcement by Donald Trump and many US business leaders such as the chief of JP Morgan to be back office, there are finally green shoots of recovery emerging. But the light at the end of the tunnel may not appear so fast for US Office REITS as US seems to be entering into a recession.

1. Gap Between High Net Asset Value Per Unit to Market Price Per Unit is Insanely High. 

Interestingly, market is viewing KORE as extremely risky with Net Asset Value ("NAV") at US$0.69 per unit as at 31 December 2024 while market price is US$0.205 per unit which represented a whopping -70.3% discount from NAV. Even if the current market price climb 100%, to US$0.410 per unit, KORE will still be at another significant discount of -40.6% to NAV. The extremely high risk premium is not surprising in the context of high leverage of 43.7% albeit 1 years plus of retaining all distributions to boost equity as well as the ever decreasing gross rental income collection reflecting that the US office industry is still in trouble. 

In addition, by now, I think many retail investors would have realised the hidden danger for investing into US Commercial REITS, that is, during crisis, rights issue to recapitalise the REITs will not be possible. The only proven way out are either (i) selling properties during crisis at fire sales price or (ii) reduce or suspend distribution to raise the cash position for CAPEX and working capital. For those interested on the technicality, you can read this post- "Updates on United Hampshire US REIT and Manulife US REIT- The Curse of the 9.8% Unit Holdings Limit Imposed On US REITs Sponsor."

2. Current Distribution Yield Assuming Stabilisation of Office Occupancy From Back to Office

Current income for distribution has unfortunately declined to US$47.6Mil for FY2024 mainly due to raging financing cost for its loans in the higher rate environment. Base on 1,044,450,000 units available as at 31 December 2024 and assuming 90% pay out upon restoration, this will mean a distribution yield of 22.24%.

3. Amendment of Trust Deed To Allow Smaller Amount of Distribution and Varied Frequency For Flexibility is Essential Step to Pave Way For Reinstatement of Distribution.

Extract of Current Terms of Trust Deed Before Proposed Amendment

Extract of Proposed Amendment To Trust Deed For "Flexibility"

The EGM seeks to amend the trust deed to give more flexibility in terms of distribution percentage of income as well as the frequency. This will be an essential step that is necessary for KORE to begin preparation for distribution restoration. 

Parting Thoughts

Overall, I view the proposed trust deed amendment as positive and also a potential signal that KORE management may start paying distributions earlier than the original planned 2026 by starting off with a smaller pay out ratio after getting unit-holders to bless the amendment to the original Trust Deed. Nevertheless, I am concerned on the tax transparency of such a move to vary payout below 90%. KORE has been rather silent on the regulatory tax exemption treatment for REITs in such scenario.

Eagle Hospitality Trust Aftermath- Grand Design Fraud by Apparent Swindlers Who Managed To List Trust on SGX.

 

It has been almost 5 years since Eagle Hospitality Trust ("EHT") sank to the bottom of the ocean within a year of its listing in 2019. Till date, none of the directors involved have been punished yet. The 2 main perpetrators, Howard Wu and Taylor Woods from US, have been busy swindling new investors in the aftermath of the collapse of EHT. Apaprently both conmen are extrememly charming and eloquent. 

For the fun of it, I have put up the latest updates with regard to Howard Wu and Taylor Woods who have been charged by the US Securities and Exchange Commission in August 2024 for the following allegations:

Securities Fraud Scheme 1: Misrepresentation to investors to sell their hotels to 3rd parties but secretly injected them as part of investment properties into EHT and then list them on SGX.

Extract of charges filed

Securities Fraud Scheme 2: Raised money (US$1.775Mil) from new investors as bid placement for buying hotels on firesales from EHT under bankruptcy.

Extract from charges filed

Parting Thoughts

Howard Wu and Taylor Wood have wicked moral compasses. There maybe also a streak of narcissism in them. I am flabbergasted that after both have caused the bankruptcy of EHT, they have the audacity to fraudulently raise money from new investors on the pretex of bid placement to buy the EHT hotels under liquidation and even before placing the bid, they have commenced using the money for their own personal purpose. Nonetheless, both scammers have made a name for themselves for succesful listing of EHT on SGX right under the nose of the IPO banker and SGX regulators. As for Singapore, so far there have been no fraud charges brought against Howard Wu and Taylor Wood yet as if everything is being swept under the carpet to keep the entire fiasco quiet.  

The Little Known Way to Use 100% CPF OA Investable Amount For Investment into REITs Without Road Block of the Usual 35% Limit.

I have always wanted to use my CPF Investment account to buy into REITs. Unfortunately, I was always restricted by the 35% limit on excess investable funds over S$20K for property funds and equities. Property funds under CPF website refers to SREITs on its white list which is subject to this 35% limit. While watching Master Leong's You Tube video on "A Different Path to CPF  Investing...", I could not believe my ears when I heard that one can buy into the REIT ETF (NikkoAM-StraitsTrading Asia ex Japan REIT ETF-CFA.SI) using 100% CPF OA investable amount. Earlier this week, I invested S$20K of my CPF investable balances into the CFA ETF and the first few days was nerve wrecking on me as my trading representative and my CPF agent bank officer both insisted that this is impossible and CFA ETF is under the 35% limit grouping, hence I have to prepare to cough up S$15K in hard cash due to insufficient CPF funds for release after the T+2.

1. Stock Firm Trading Broker Says Impossible For 100% CPF Allowed Into CFA REIT ETF.

When I contacted my trading representative, she insisted that base on her years of experiences, this is not allowed as there is always a 35% limit on SGX traded securities. She gave me the number of the Stock Trading Firm front desk to double check. Funny thing is that the front desk also sings the same tune and referred me to call my CPF Agent Bank (I am using United Overseas Bank ("UOB") which is the right party to check).  

Apparently, the entire stock trading firm is not sure whether ETF funds can use 100% CPF and their thoughts are that it should be subject to the 35% stock limit. In any case, no one wants to take responsibility hence easier to just Tai Ji to the agent bank. 

2. UOB CPF Agent Response Equally Bad

Now, this gets even more interesting. The UOB CPF Agent customer service officer told me that while CFA REIT falls under the approved "List A ETF", not all ETF is 100%. He cited SPDR Gold ETF, which is subject to the 10% investable limit, as a good example of exception. So for CFA ETF, the officer argued that this is a "Property Fund" since it invested into various REITs hence it is caught under the 35% investable limit. What the heck???

3. Master Leong Response To My Query On You-Tube Video.

I then decided to seek clarification from Master Leong as I am not sure whether my understanding of what he has mentioned inside his video is referring to 100% usage of investable CPF amount. Master Leong replied: 

Summary

Anyway, by mid-week, the trade which I made went through with CPF Board releasing 100% CPF funds to my UOB agent bank and from there the money went to my stock broker. So, it appears that UOB CPF account management customer service team and the stock broker firm personnel are rather out-dated with their staff knowledge and training which is really shocking.