NTT Data Centre REIT IPO Flop- Stuck at US$1 Per Unit On Debut

NTT Data Centre REIT (“NTT DCR”) IPO debut on July 14, 2025 was extremely disappointing. Its closing price on its first day of trading ended at a miserable US$1 per unit which was its IPO price. This is certainly unlike most of the SGX IPOs where prices usually surge by 10% on debut as many prospective investors are unable to get their hands on the shares during the IPO. 

Anyway, it maybe a blessing in disguise for many folks who are unable to get their hands on NTT DCR. I really have doubts on the sustainability of the 7.5% distribution yield as I do not think the management will maintain a 100% payout ratio for the longer term and it is getting too gimmicky.  Also, in my previous post, I have reiterated on the often forgotten point that the trust deed only permits not more than 9.8% shareholding by any investor (except for the sponsor 25% limit) which can have devastating consequences during crisis. 

Parting Thoughts- Personal View

Despite the risks as aforesaid mentioned, if the price of NTT DCR were to drop more than 10%-20%, it may serve as a good entry point (with additional safety buffer) to accumulate some units at an attractive distribution yield.

Keppel Ltd Rising From The Ash- Transformation On Target and 4.39% Dividend Yield For Waiting.

Recently, the share price of Keppel Ltd finally roared back to life after being in a limbo for the past 2 years. From its share price of S$6.87 per share as at beginning of January 2025, it has now hit an improved market valuation of S$7.74 per share as at 11 July 2025. This is an impressive 12.7% capital appreciation in 2025 alone for all retail investors. Congrats to all fellow shareholders who are holding on to Keppel Ltd and have subscribed to the revised asset light model strategy which focuses now on building up recurring income from management of investment assets. For myself, Keppel Ltd has been my best performing non-banking stock with a total gain of +S$22K (including S$6.2K of dividends) which is a +27.8% return. I had been accumulating shares of Keppel Ltd from May 2023 to November 2024. I have listed below the reasons for the sudden rise in the market price of Keppel Ltd.

1. The Piyush Gupta Effect

Personally, I think that this is the main catalyst for the recent spike in the share price of Keppel Ltd. Once Keppel Ltd announced the appointment of the ex-CEO of DBS as its deputy Chairman and non-executive independent director, the market became mad with excitement. Piyush has a stellar strong track record in transforming DBS into a leading digital bank in Singapore. His experience in driving digital transformation and innovation, as well as his leadership in navigating complex business environments, is seen as a valuable asset for Keppel as it reinvents itself as a global asset manager. 

Strangely enough, the share price of Keppel Ltd seems to have suddenly been re-rated by analysts and the entire market by this single announcement and the share price started soaring. Other supplementary reasons for its rise from the ash are as per below:

2. Strong Financial Results 

Keppel Ltd Q1 2025 net profit rose 25% year-over-year, driven by stable infrastructure earnings and a 9% increase in asset management fees-S$96 Mil. FY 2024 profit (excluding offshore & marine) increased by 5%, with data-center margins up ~45% thanks to AI and digital infrastructure tailwinds.

3. Robust Asset Monetisation

Since FY2023, the monetisation of non-core assets has been substantial: S$347 Mil in Q1 2025 alone and S$4.8 billion cumulatively since 2020. Analysts estimate another upcoming S$550 Mil asset sale pipeline in India and Singapore.

4. Recurring Revenue and Asset Manager Pivot

Keppel’s Vision 2030 strategy has rebalanced earnings towards recurring income—from 60% in 2022 to over 80% in Q1 2025 from infrastructure, fees, and data centers.

Its commitment to manage S$200 Billion AUM by 2030 is advancing, with S$88 Billion reported end-2024, and another S$4.9 Billion raised in Q1 2025.

5. Strategic Partnerships & Capital Inflows

Keppel has secured S$2 Billion in institutional investments for data centres, education, and sustainable urban renewal funds. It has also recently partnered with Asian Infrastructure Investment Bank (“AIIB”) for a S$1.5 Billion green-infra investment program across Asia.

Parting Thoughts- Personal Views on Keppel’s Outlook.

Based on its historical annual dividends of S$ 0.34 per share and its market price of S$7.74 per share as at 11 June 2025, this is an annualized dividend yield of 4.39%. For myself as a dividend investor, this is still somewhat attractive to me taking into account Keppel’s target to grow its asset under management to S$200 Billion by 2030 and I will be holding on to my remaining shares. Saying that, from a risk management perspective, I will not be adding on to my current investment into Keppel Ltd as it already made up close to 10% of my gross portfolio value and I have in fact sold off part of my holdings last month to take some profit off the table. Hopefully, Mr Gupta will be able to put in some of his magic into enhancing further growth opportunity for Keppel Ltd for all investors. Let’s wait and see! :)     

Don’t Give Too Little Credit To The People of Singapore.

I came across 1M65 Mr Loo’s latest videos of his visit to Shenzhen and Hong Kong where he came away with the proclamation that retail business in Singapore will soon be in bad shape with the opening of the RTS to Johor Bahru. In addition, worst part of all of this is that he has strangely mentioned that the people in China and Hong Kong are all more competitive and hardworking than Singaporeans but struggling in their daily lives and thereafter, he made a point that the only sole reason that Singapore economy and its people are still in better shape is due to our strong Singapore Government leadership. 

So is he saying that other governments are not as good as the Singapore government when sometimes it is not something that can be compared apple to apple especially for a gigantic and complicated country like China? Also, is it a right assertion to say that Singaporeans are not as competitive and hardworking than folks in other countries? Maybe Mr Loo has been mixing with the wrong crowd. I have known many Singaporeans who are working lots of overtime and even during the weekend on their jobs. I have also seen many Singaporeans hungrily scouting for new business opportunities and pipelines for their organization and are very highly driven. There will always be different types of people in every society of highly driven vs those that only desire a “simpler” life in China, Hong Kong and also Singapore. 

Surely, there is no need to discredit his own fellow Singaporeans just to score brownie points with regard to the SG government? Instead, is it not the competitive advantage from Tripartism (collaboration between local workers, businessmen and the SG government), which has been – and continues to be – one of the cornerstones of Singapore’s economic, social and political development and success thus far?

DBS $3 PayLah Weekly Cashback Is Back! 12 July 2025 To 27 September 2025- Don’t Miss It!

 

Hi Folks, awesome news! DBS is bringing back its popular S$3 PayLah cashback at hawker centres every Saturday for the first 160,000 people who uses PayLah to scan and pay at participating stalls from this Saturday (12 July 2025) onwards. I vividly recalled that the first cashback promotion used to be every Friday. So why did they change it Saturday instead? Rumors has it that many elderly folks were complaining about having to compete with younger working crowd and thus unable to enjoy the offer. Apparently, the move to Saturday morning will benefit more elderly folks since the younger ones will not be able to wake up early to compete given that they are busy partying late into the night to let their hair down on Friday (last working day of the week)…haha. 

Anyway, the S$3 cashback from PayLah may not be all good news for me. The last time DBS run this promotion, my favourite economic Bee Hoon stall started boosting a super long queue from 7.30am to 8.30am which rendered me too impatient to queue and buy it. Looks like I will have to settle for fishball noodle instead….haiz.

NTT Data Centre REIT IPO- Another Ticking Time Bomb- 3 Reasons to Stay Away.

There is another upcoming data centre REIT IPO on SGX by Nippon Telegraph and Telephone (“NTT”) of some of its data centres in order to raise funding of up to US$864 Mil on SGX. NTT is dangling a big fat carrot of between 7% to 7.5% annual distribution yield to attract investors. One of the cornerstone investors is our own Singapore sovereign wealth fund, GIC which invested US$100 Mil. Nevertheless, my personal view is that NTT data centre REIT will just be another ticking time bomb and I will be staying far away from this REIT for 3 main reasons:

(Please click here for those who preferred the You-Tube version)

1. Handicapped Shareholder/Unitholder Structure in Trust Deed Doomed for Failure.

This is the part that many retail investors got ensnared. All investors can only hold up to 9.8% holdings in NTT Data Centre REIT (with the exception of Sponsor who can hold up to 25%). I have written it many times on the red flag of the exemption on withholding tax for crafting US properties as a REIT structure.

Extract of the restriction on shareholding

Basically, our global economies will go through market cycles. During economic crisis or crisis caused by the REIT itself, the REIT cannot save itself by rights issuance exercise because it will breach the trust deed limitation of 9.8% for individual shareholding. So the banker or the sponsor cannot undertake unsubscribed excess rights which will mean an immediate violation of its own trust deed as well as US tax transparency rule for REIT holdings. Look at what happened to US Commercial Office REITs of MUST, KORE and PRIME on SGX which are unable to do rights issuance and you will understand why they have to do either a fire sales of assets during crisis and/or stop paying out distributions to save itself. 

2. Over Concentration Risk of Key Tenant Making Up 31.5% of Monthly Base Rent.

There is one major tenant, with only a triple B credit rating, which makes up a significant 31.5% overall in NTT Data Centre REIT monthly rental income. If there are defaults, a huge chunk of “stable” rental income distribution to unit-holders will be gone with the wind. Look at what happened to DigiCore REIT and one will understand the impact.

If we are to do an online search on the mysterious identity of this major automotive tenant, 2 names came up with BBB S&P credit rating, that is, either Tesla or General Motors. Both are not exactly in a good financial state if you know what I mean. 

3. Forex Risk- Most of the Assets Are Located in US.

4 out of the 6 injected properties are based in the US and this current data centre REIT is also priced in USD. This will mean a forex risk to SG investors. I am not exactly sure whether this is the right time to be vested in so much US assets especially with the crazy antics by Donald Trump. 

Parting Thoughts- Personal Views

Interestingly, the sponsor has highlighted the low 35% leverage ratio will help NTT Data Centre REIT expand in future. But as alluded to Point 1 above, NTT Data Centre REIT most likely is destined for private placements route  for future acquisition. The problem with such REIT structure is that it can only raise funds from existing unit-holders during good times. During crunch times, retail investors will be faced with severe dilution as the sponsor and management will have to turn to private investors to raise fundings. I thought that folks should look at Mapletree Industrial Trust or Keppel Data Centre REIT if they want to be vested in the data centre business.

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.

(Please click here for thos who preferred the You Tube version)

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. 

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.