Wednesday, 12 September 2012

Investment Philosophy

This is so awesome!
  • Buy companies on substantial discounts to net asset value
  • investment holding companies on wide discounts
  • companies with a strong balance sheet and good quality of underlying assets
  • seek anomalies
  • under-researched situations
  • situations where the underlying assets are not recognized or are misunderstood by the market

Sunday, 9 September 2012

Investment Updates

Was extremely busy recently with my new Financial Controller role, hence did not have the time to update the blog frequently. Singapore REITS have performed extremely well over the past 3 months. Based on an average dividend yield of 6.4%, it is offering good values for investors who want to still mop up more Singapore REITS. This average yield is higher than say Hong Kong and Australia of approximately 5%. As for me, I do not think that it is a good time to buy more. Once the herd rushed in, no point joining them for limited upside. 

My portfolio has done well as a result of the strong rally in REITS. Wilmar turned out to be a huge disappointment. But I think the strong management team will pull Wilmar through this difficult time of low market value for it's stock.

Bartley Residences - Hong Leong and CDL

Went to the show flat. Was extremely diasppointed with Hong Leong and CDL gang....a real bunch of blood suckers....no difference from Far East. Heard on radio advertisment that says very well utilisation of space and thus still look spacious. The common bedrooms sizes actually very small....even if you try pushing bed to wall to try squeeze 2 beds, still a tough fit. In addition, ceiling height only 2.8m....at least Far East projects has higher ceiling height. 100sqm for 3 bedders....n 1250psf. Even more disgusting is that Kwek keep telling the media he got a strong balance sheet and will not lower price. Think the general public should seriously give other property developers a second look and stay away from Hong Leong and Far East. Say no to exorbitant pricing and product.

But I must say the finishing given (such as Kitchen Cabinets and wardrobe) are of extremely good quality.

Seletar Mall- First Cineplex in Seng Kang

Extracted from Singapore Business Review (good news for property investors of H2O Residences and Seletar Park Residences):

SPH's Seletar Mall to be completed by end-2014

284,000-sqft mall to open in Sengkang West Avenue and Fernvale Road junction.

"The design intent is to create a friendly, comfortable and pleasant environment to encourage shoppers to spend longer quality time in the mall. This is achieved through the clarity of retail circulation and space planning both horizontally and vertically, creating interesting architectural spaces, the introduction of natural lighting and thoughtful material selection," said SPH in a release.

"The mall is positioned to cater to the convenience, lifestyle and dining needs of existing residents as well as those in the upcoming new residential developments in the vicinity, consisting of HDB Built-To-Order flats, private condominiums and landed properties at the Seletar estate. The new mall will enjoy a catchment (within 5 km) of 730,000 residents and a working population of 47,000, including the Aerospace Park, slated for completion in 2013," it said.

"The mall will have a gross floor area of 284,000 sq ft and net let table area of 188,000 sq ft, spread over four levels above ground, and two basement levels. The four- storey retail podium above the ground creates a less imposing building facade, and allows a friendlier suburban shopping experience. A variety of key anchor tenants are strategically planned to attract shoppers to various locations within the mall. These include a Cineplex on the 4th storey, a food court on the 3rd level, anchor retail shops at the 1st, 2nd and 3rd storey, and a good-sized supermarket at Basement 2," it added.

Providing more details, SPH said the unique triangular-shaped site with three corner nodal points allows entry from Fernvale LRT station, corner junction of Fernvale Road and Sengkang West Avenue, as well as Fernvale Road. All entrances direct pedestrians to a four-storey high atrium, serving as the central feature of the whole mall. Within this atrium is the main event space flanked at two ends by the escalators that connect to basement levels and upper floors.

"The retail planning is based on a wide single loaded retail corridor organised around the voluminous atrium space. This provides a simple and friendly shopping experience and also allows visual connectivity between floors. A large clerestory skylight perched above the atrium allows natural light to enter the mall, thereby ensuring a cheerful atmosphere throughout the day. The shopping floors recede from the 2nd storey to the 4th storey in a terracing manner, allowing a clear view of activities at the lower levels, and particularly, the main event space. Roof gardens outside the food court and the Cineplex offer an outdoor experience with views of lush greenery," it said.

About 390 car park lots are provided at Basements 3, 4 and 5. To ensure user friendliness, the driveway, ramp and car park lots are designed with widths wider than the norm.

Environmentally-sustainable design features and energy efficient mechanical and electrical systems are carefully selected such as high efficiency water cooled chiller plants, installation of LED lights within the mall, lift cars and escalators with sleep mode function, and carbon monoxide sensors in the carpark to regulate demand for mechanical ventilation. Non-potable water including rain water harvesting will be used for landscape irrigation and washing of some areas in the mall.  

"The Seletar Mall is easily accessible to all shoppers - it is connected to the Fernvale Light Rail Transit (LRT) which is seamlessly linked to the Sengkang North East Line (NEL) MRT/LRT station and the Sengkang bus interchange. It is also located near expressways, including the Tampines Expressway and Central Expressway," SPH said.

Sunday, 17 June 2012

Greek Election and the future of Eurozone

Ballots are now opened nationwide in Greece for the crucial general re-election which will determine whether the debt-laden nation will undertake painful austerity reform or see its eurozone future jeopardised by rejecting the original package.

The past few weeks have seen the Singapore stock market stock turnover hovering around the daily billion dollar mark with most investors choosing to stay on the side line till the dust settles (me included). Dividend yield stocks such as telecom and REITs continue to hold well amidst the financial turbulent.

Bought additional Wilmar when it slided below S$4. At the same time, sold off OCBC and reinvest the proceeds into Macquire Infrastructure Fund where prices has dropped approximately 15% due to China authority revising the toll rates at Hua Nan Expressway.  

Raised cash position to S$15K and wait for clearer signal whether market is almost bottom or STI will crash and drop below 2000. Taking into account market crashes on the STI....generally the highest point reached divided by 2.....STI may hit a bottom of 1600 if things do not turn out well in Europe. 

Sunday, 13 May 2012

Economic Outlook- Greek sparks off Economic Woes again

In view of the recurring economic turmoil from Europe, risk of holding on to non-dividend yield stocks increases drastically. (Note: Non-dividend yield stocks tend to rise and fall drastically relative to dividend yield stock which are more defensive in nature) It leads to a re-assessment of whether I should hold or sell off (i) OCBC; (ii) OUE and (iii) Wilmar. Wilmar as per the last entry gave a significant upside potential due to it's current low price hence to keep and wait for price rebound. OCBC just announced it's quarterly and numbers still going strong while OUE seems to be in a perpetual limbo state. Conclusion is to keep OCBC and Wilmar and sell off OUE to mitigate market risk.

Wilmar disappointing first quarter result1Q12.

Extract of Wilmar's announcement on SGX: 

"Singapore, May 10, 2012 – Wilmar International Limited (“Wilmar” or “the Group”),
Asia’s leading agribusiness group, posted a 34% decrease in net profit to US$255.9
million for the quarter ended March 31, 2012 (“1Q2012”). The decline in net profit was
largely due to lower Oilseeds & Grains margins. However, the Group enjoyed robust
earnings growth from Palm & Laurics, Consumer Products and Plantations & Palm Oil
Mills."

Interestingly, many analysts and investors claimed that they were extremely disappointed with the results which falls below their expectation. Hence the share prices plummet from S$4.80 to S$4.060 within 2 days.....a billion dollar written off market capitalization....oouch!

Once I saw the price at S$4.070, it became a no brainer and I immediately bought 1 more lot of Wilmar on 11 May 2012 (Friday). Market overreacted over the Oilsees and Grains decline as well as loss from sugar processing. True enough, the price rebounded upwards to close off at S$4.140. Should price drop below S$4.00, it may be time to accumulate more Wilmar stocks.

Analysts revised beta due to lower margin to increase risk profile. Targeted price range from S$4.60 to S$4.85 according to these experts. My own analysis points towards S$5.20. Anyway, think that the probability of upside seems greater at this one year all time low price of as low as S$4.060.