Why Tan Kin Lian Keep Talking About Buying Apartments in Malaysia Forest City? Is He Out of His Mind?

 

Not sure why my Facebook will frequently show me Tan Kin Lian’s post. He has been talking about Forest City I recalled from 2017 till now. So what if Forest City is freehold condo and cost just S$300K relative to S$1.5Mil+ Singapore condo right now? Beside the issues of foreign exchange depreciation risk as well as ghost town issue, the MM2H (Malaysia My Second Home) scheme is also fraught with the ever changing political climate risk. One moment Malaysia politicians welcome foreigners like Singaporeans and Chinese and then the next moment they may just decide to ban foreigners or raise up the anti-foreigners sentiment to score political points. 

Hence I am shocked that he even mentioned that it maybe a good idea for retirees to sell one’s property in Singapore and then use part of the proceeds to buy an apartment in Forest City. One will always be a second class citizen in other countries and that is the cold hard truth. 

NTUC Income Already GG 20 Years Ago- So Not Sure Why So Many Old Men Coming Out to Bash The Allianz Offer.

I hope I don't get roasted too badly writing this post. I get the nostalgia that many old old men such as Tommy Koh, Tan Kin Lian and Tan Suee Chieh have about NTUC Income and its goal to help the lower income secure insurance coverage. This was indeed the grand vision of one of the founding fathers of Singapore, Dr Goh Keng Swee. Nevertheless, my personal thoughts and experiences are that NTUC Income Insurance has already lost track of this goal 20 years back when it was run by Mr Tan Kin Lian. 

The sucky parts about NTUC Income Insurance:

At that time (20 yrs ago), NTUC Income kept selling those traditional whole-life policy that one has to pay premium until one's death bed or for 99 years. I wrote to Mr Tan Kin Lian before telling him that other insurers already started offering limited premium paying plans for only 10-20 years (and then become fully paid up) but NTUC Income was still selling its policy holders pay till 99 years old type of stupid traditional insurance plan. His immediate response was a disappointing whether I am another insurance agent from another competitor insurance company. NTUC Income products were already losing innovativeness and relevance to the real market. On a social level, it is actually harming consumers with an inferior product relative to other insurance companies.

NTUC Income was also selling to heartlander customers its investment linked polices- the NTUC Ideal Plan. One would have lost almost 15% of one's invested capital as sales charges before the remaining capital gets invested into unit-trusts. I will leave the link to a post here from 2 March 2012 on my experience with a NTUC Income Insurance agent. 

I also encountered a lot of extreme questioning by NTUC Income assessor trying to get Hospitalisation and Surgical coverage for my aged parents about 15 years ago. They are the pioneer generation that worked hard for Singapore during the early days. I only succeed in getting coverage for my father (with various exclusions) but none for my mother. So what social goal is Tommy Koh, Tan Kin Lian and Tan Suee Chieh talking about that NTUC Income is helping the lower income get insurance coverage? This is Bull-SH*T by these old men. It is clear that NTUC Income is trying to reduce coverage for low income workers while aiming to preserve as much profits as possible.  

Bear in mind that it is Mr Lee Hsien Loong and his government that came up with the Pioneer Generation and Merdeka Generation medical packages to help aged Singaporeans like my Father and Mum generation who most needed the medical coverages but NTUC Income is not keen to cover at all...period. Without the Pioneer generation and Merdeka generation subsidies, my sibling and I would have been saddled with hefty hospitalisation & surgical bills for my aged parents. 

Is NTUC Income Insurance still relevant?

Personally, I thought that it was definitely relevant during the days of Dr Goh Keng Swee when many workers are struggling to get adequate insurance coverage. However, it has since lost its social goal decades later and at current time where for decades, they are very profit driven. Worst still is that Income Insurance is struggling with relevancy for its products and pricing relative to other insurance competitors. I have moved away from NTUC Income many years back due to its inferior products. So I do not understand why so many old men are coming out to stop the Allianz deal which actually has more pros than cons for the future of Income Insurance Ltd. 

Investment Portfolios Updates (26 July 2024) - Net S$620K and Projected Annualised Passive Income of S$42K.

The recent SREIT rally has finally put a brake on the non-stop downward spiralling in market prices. There is a much anticipated worldwide expectation of a US rate cut in September 2024. Based on US inflation reports and moderate job growth data, it seems chances of a rate cut is indeed high. Keeping my fingers crossed that the recent rally in price is permanent with more to come. However, Geopolitics such as the upcoming US Presidential Election (Trump appears to be the favourite to win now after his assassination) and also escalating Middle East conflicts between Israel and Iran back military groups are causing much uncertainty in global economies. There is also the very controversial Allianz offer that affects my current share-holdings in Income Insurance Ltd- please see further remarks under Portfolio 4 section below.

1. Portfolio 1- Stocks held in SGX Central Depository 
(Note: This portfolio is designed to provide immediate dividends for use as it is under my own CDP account and the dividends credited goes directly to my bank account.)

I have given up on Capitaland Investment Limited and sold off all my holdings in it. The proceeds were used to purchase additional units of Keppel Ltd stocks at S$6.62 per unit.

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 have took profit and sold off all my Ping An Insurance shares. Have used the proceeds to purchase Link REIT as well as to pare down on expensive margin loan. Margin loan thus went down from S$291K to S$281K. 

Also took a small speculative 5000 units trade in Mapletree Industrial Trust when its price plummeted to S$2.10 per unit and took profit 2 weeks later @S$2.29 per unit after the SREIT rally. 

3. Portfolio 3 (with Tiger Brokers and MooMoo) 

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

I have took profit and sold off all my Ping An Insurance shares. The proceeds were used to purchase additional Link REIT units when its price plunged to below HK$30 range (HK$29.80) per unit. Also opened up a small position in a penny stock, Oceanus, which had seen continued strong growth in its food distribution business in China. 

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

I have continued to build up my bond funds investment via Endowus platform. 

Guess the only news-worthy update here is that my NTUC Income shares market value will go up from S$1,060 to S$4,300 if the controversial Allianz offer gets approved by local regulator and shareholders. The 2 formers CEOs of NTUC Income Co-operative have come out to speak out against the deal as they do not want the insurance group to lose track of its social goal to provide cheap insurance to the lower income of Singapore society. 

Loyal Shareholders of Income Insurance Ltd See Jaw Dropping 400% Returns From Potential Bidder’s Market Valuation.

Congrats to all Income Insurance Ltd shareholders! The former NTUC Income Co-operative- which has just recently completed its corporatisation in September 2022- announced that German financial services giant Allianz plans to acquire 51% of its share at S$40.58 per share. Considering the fact that many shareholders got their share at S$10 par value (plus the 5%+ dividends over 20 yrs) and considering recent transaction on an exchange setup by Phillips Securities is at around S$20 per share, the S$40.58 offer is a whopping +400% and +100% to cost price and recent transacted price respectively. 

What happens next?

First and foremost, the above offer must be approved by our local regulator. Next, the offer needs to be approved by shareholders of Income Insurance and an EGM thus needs to be convened. The major shareholder of Income Insurance, NTUC Enterprise Co-operative has undertaken to sell part of its shares should the sales of shares by minority retail shareholders falls below the 51% required by Allianz. So, we can tell that the management of Income Insurance has given priority to minority shareholders who would want to exit. More details should be announced soon.

Do note that since the announcement of this deal, ex-CEOs of NTUC Income Co-operative have came out expressing their opposition to the sales of shares by controlling shareholder NTUC Enterprise. Even the influential Prof Tommy Koh (ambassador-at-large at the Ministry of Foreign Affairs, a position he has held since 1990, and a professor of law at the National University of Singapore) is now challenging NTUC Enterprise Chairman Lim Boon Heng’s justification for selling away their majority stake in Income.

Parting thoughts

During late May’24 portfolio review and update, I have stated that I will be keeping my small holding of 106 shares of Income Insurance as a souvenir as the amount is extremely small and then live with its 5%-6% yearly dividend yield. However, with a S$40.58 offer, this paltry investment has suddenly grown from a mere S$1,060 to S$4,300. I guess I will definitely sell if off and then reinvest the proceeds into the Endowus bond funds.