Here we go again – Restrictions for Four Weeks

Starting today, people can only gather in groups of 2 down from 5 previously. Dine in at food and beverage outlets (other than hawker centres and coffee shops) for the vaccinated individuals is similarly reduced to 2 instead of 5. Unique visitors to each household are also limited to 2 per day. The Multi-Ministry Task Force (MTF) called this the Stabilisation Phase to stabilise the rising daily infections. There were 1,939 cases yesterday. The concern of MTF was that the healthcare system could be overwhelmed if the cases were not brought under control.

We are going backward in social distancing measures for living with Covid-19 as an endemic disease. Vaccination does not prevent someone from catching the highly transmissible Delta variant of Covid-19. (However, vaccination helps to protect someone from serious illness.)

We are not in normal times and we have been at it since late March 2020. It has taken its toll on the mental health of individuals. We cannot achieve herd immunity and vaccination does not stop the virus from spreading. So what are we to do?

Copyright © 2021, limkimtong for Living Investment

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Experience in Singapore Equities since 2008

After seeing value of my investments in Singapore equities plummeted since Covid-19 pandemic started in 2020, I asked myself whether I was doing alright since 2008, some thirteen years ago. 2008 was the year I started to build up a portfolio of Singapore equities.

I went back into history to track my investments and income made on these stocks. Income consists of dividend income and capital gains (or losses) on selling the stocks.

The conclusion is that total income received exceeded the current paper losses on investments by 80%. That is to say total receipts exceeded paper losses by a wide margin.

On average, dividend yield was 3.2% per year over 13 years (excluding capital gains on sales of shares).

I am comforted. Hopefully the paper losses do not translate into actual losses. That will be a bonus.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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Number of Covid-19 jumped past 800

For two days in a row, the number of daily infections crossed the eight hundred mark. Number for 14 September was 837. Number for 15 September was 807. MOH has stopped providing number of unlinked cases to previous cases since 8 September. The unlinked cases were high before 8 September. This was a worrisome sign back then. It begs the question: Where did these new cases catch Covid-19? The spread in the community is not traceable until an active cluster was formed. Even with this information, the infection may have started somewhere else.

What are we to do to prevent us from getting Covid-19? Even for the vaccinated individuals, they can still catch the Delta Variant. Could someone we meet carry the virus without outward symptoms for us to see? Should we then stop to go to places such as malls, supermarkets, wet markets, eating places, etc?

This is how I am feeling now. For one year and nine months, the world has been living under the cloud of fear. This is getting stressful.

Copyright © 2021, limkimtong for Living Investment

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Only 23% voted in SPH EGM

Extraordinary General Meeting was called by Singapore Press Holdings (SPH) on 10 September 2021 to get shareholders’ approval on hiving off the media businesses of SPH to a company limited by guarantee (CLG).

Based on total ordinary shares issued (1,600,649,000 shares*) only 23% of the total ordinary shares care to vote on the ordinary resolution (comprising 369,120,948 shares).

* extracted from the Annual Report of SPH for 31 August 2020.

Of these 369,120,948 shares, 97.5% voted in favour and 2.45% voted against the resolution.

77% of total shareholder base did not care to vote. I wonder how this large base feels of the resolution?

Singapore Press Holdings is now going to lose the media businesses and becomes a pure property player after that.

The share price of SPH had risen from a low of $1.09 at 31 August 2020 to $1.96 (2.08 pm 13 Sep 2021). The pure property play raises the share price of SPH.

Next to watch is whether Keppel Corp succeeds in acquiring SPH.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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SembCorp Marine – Second Rights Issue

Second Rights Issue is for amount of $1.5 billion. Trading of Rights on the Singapore Exchange ended yesterday 8 September.

The last date for subscribing to the Rights Issue is on 14 September (see Sembcorp application forms).

Backtracking a bit, the approval for going ahead with the Rights Issue was based on EGM on 23 August. 98.05% voted in favour and 1.95% voted against the Rights Issue.

My loss percentage shot up to 87.1% on 8 September 2021 since the announcement of the Second Rights Issue. Share price plunged to $0.084 from $0.12 on 30 June 2021 (a drop of 30%). 

Date Loss Percentage (%) Remarks
29-May-20 58.4
31-Aug-20 67.6
30-Sep-20 59.6 After first Rights Issue of SembCorp Marine
31-May-21 55.8
25-Jun-21 60.1 Announcement of second Rights Issue
8-Sep-21 87.1

Not encouraging at all. I subscribe to all my entitlement of the Rights at $0.08 a piece. The loss percentage was brought down slightly to 72.7%.

Let’s see how SembCorp Marine can work its magic with this additional infusion of capital of $1.5 billion.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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More into STI Exchange Traded Fund (ETF)

Back in 2017, I changed my equity investment strategy to one of investing more in SPDR STI ETF instead of targeting single company stocks.

By investing in STI ETF, I have a stake in banking stocks amongst the 30 component stocks in the Straits Times Index (STI). Furthermore, I can receive dividends proposed by these 30 component stocks through investing in STI ETF.

Last year’s dividend yield of SPDR STI ETF was 3.56%. This year’s dividend yield was lower since 2020 was a Covid-19 year. The yield was just 2.61%. Not too bad considering CPF Ordinary Account gave 2.50% per annum interest.

My SPDR STI ETF now make up 31% of total Singapore equity portfolio. As for the rest, most were bought before 2017. The latter were not doing well price-wise. But SPDR STI ETF is holding up well.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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For those who use “buy and hold” strategy

Have you wondered who made money from investing in stock markets? Is it a zero sum gain, ie someone’s loss equals to someone’s gains? How about those investors who “buy and hold” on to shares and seeing them decline in value?

Assuming that Company XYZ started a public company with 10 original investors/shareholders putting in $10,000 each at $1 per share. Company used initial capital of $100,000 for operating the business Overtime, the business made losses constantly each year. New investors will only be willing to buy from the original investors based on the current valuation of the company. This valuation will be lower than $1 per share say 30 cents per share. The 10 original investors lost 70% of their investments. Assuming that the company continued to make losses, the second set of investors/shareholders will lose money on their investments when the share price dropped to 10 cents per share. These second set of investors lost about 67% of their investments. The third set of investors having picked up the shares at 10 cents per share lost every thing when the company was liquidated with zero return on liquidation.

In the above scenario, who made money on their share investments? All made losses on their investments when the company did poorly in the business. Some investors recover only a fraction of their original investments. This is the peril of “buy and hold” strategy. The sooner one can sell their investments early, the better he/she can be. Losses are limited instead of total losses. Lesson learned is to sell early when the company is not looking bright.

This brought to mind the case of Hyflux. Shareholders like me will get zero from their shareholdings.

Another lesson learned is that shareholders must watch the company’s operations, the business environment it operates in and the performance of management consisting of the CEO and the Board of Directors. These factors affect the market valuation of the company.

Some examples include Singtel, SPH, SingPost. Market values of these shares came down by 42% to 55% for me. Some of these valuations may be permanent diminution.

Shareholders like me tend to buy on the belief that these companies are brand names with a good future. I did not cut losses at the earliest opportunities. That was a mistake.

To steer a business to profitability, the CEO with his/her Board plays a vital role. If they were to fumble and make wrong investment decisions, shareholders are at the receiving end of their follies.

I am not a day trader or short-term trader. I agree that these share traders make money by buying and selling using the spread of share prices. The higher the volatility of share prices, the happier these day traders will be. Someone’s gains are someone’s losses. This is too speculative for me and I do not have the time to watch the market.

Final lesson learned is that one is better off buying a basket of different company shares. This is spreading the risk of equity investments. Buying into a single company and buying big in a single company has the risk of “putting all eggs into a single basket”. You either strike it very rich or you lose greatly.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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Singapore stock markets down again

For August, the Straits Times Index (STI) lost 2.7%, followed by Hang Seng Index (-2.1%). STI was the worst in the list below. Singapore is experiencing a surge in Covid-19 infections in recent days.

Stock Indices 30-Jul-21 27-Aug-21 Change (%)
Mumbai BSESN 52,586.84 56,124.72 6.7%
Shanghai Composite 3,397.36 3,522.16 3.7%
Nasdaq (USA) 14,672.68 15,129.50 3.1%
S&P 500 (USA) 4,395.26 4,509.37 2.6%
Germany DAX 15,544.39 15,851.75 2.0%
UK FTSE 100 7,032.30 7,148.01 1.6%
Dow Jones (USA) 34,935.47 35,455.80 1.5%
Nikkei 225 (Japan) 27,283.59 27,641.14 1.3%
Australia All Ordinaries 7,664.20 7,760.10 1.3%
CAC 40 (France) 6,612.76 6,681.92 1.0%
Hang Seng (HK) 25,961.03 25,407.89 -2.1%
STI (Singapore) 3,166.94 3,080.77 -2.7%

On a year-to-date basis, the table is shown below.

Stock Indices 31-Dec-20 27-Aug-21 Change (%)
CAC 40 (France) 5,551.41 6,681.92 20.4%
S&P 500 (USA) 3,756.07 4,509.37 20.1%
Mumbai BSESN 47,751.33 56,124.72 17.5%
Nasdaq (USA) 12,888.28 15,129.50 17.4%
Dow Jones (USA) 30,606.48 35,455.80 15.8%
Germany DAX 13,718.78 15,851.75 15.5%
Australia All Ordinaries 6,850.60 7,760.10 13.3%
UK FTSE 100 6,460.52 7,148.01 10.6%
STI (Singapore) 2,843.81 3,080.77 8.3%
Shanghai Composite 3,473.07 3,522.16 1.4%
Nikkei 225 (Japan) 27,444.17 27,641.14 0.7%
Hang Seng (HK) 27,231.13 25,407.89 -6.7%

On a year-to-date basis, Hang Seng Index was the worst performer, losing 6.7%. Singapore ranked 4th from the bottom (+8.3%). It lost its shine in recent months.

Copyright © 2021, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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Living a new normal – Covid-19

My family went to Bugis Junction to eat lunch at a restaurant there on 24 August. We did not know that a Covid-19 cluster was developing. We got to know that Bugis Junction had 20 Covid-19 cases of staff working at the mall the following day. We could have avoided Bugis Junction if we knew the new cluster earlier. It was a day late. Since Tuesday, the number of cases had grown to 148 cases in just four days.

As reported in today’s newspapers (27 August), two new clusters had formed at Toa Payoh and Punggol bus interchanges. Toa Payoh bus interchange has 25 cases and Punggol bus interchange has 11 cases. It is getting nearer to home. Many commuters use bus interchanges for their commuting and they are usually busy with people passing through or just sitting around.

Coming back to Bugis Junction cluster, MOH advised visitors to the mall to monitor their health closely. We did not receive any notification that we are close contacts with the infected people. However, people can book an appointment for free swab test at regional screening centres and other venues till August 31. We did just that this afternoon through the appointment booking system via MOH homepage. This is our first encounter with PCR test. Our experience with the swab test was not too bad. Now we have to wait for results of the swab tests.

As I see it, we have to live with Covid-19 coronavirus spreading in the community. It is not going to be zero infection case. We may just be passing through or be at the place where a cluster is forming. Whether we get infected or not, swab test will be key. What we can do is to always be vigilant, wear a face mask, sanitise our hands before we take our food, limit social interactions as much as possible, and avoid crowded places. These are basic health hygiene.

Update: Our PCR test results came back Negative. We were informed by SMS late this evening.

Copyright © 2021, limkimtong for Living Investment

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Looking at old photographs

I decided to collate photographs taken since 2002, about 20 years worth of photographs. Digital forms of these photos were kept in Compact Flash, SD cards and on mobile phones. They are now in one place using Apple Photo App kept on-line in iCloud.

Looking at these photos taken so long ago brought back memories of those days. Most were taken during overseas trips with my family. Some were photos of my work places. Honestly, I have forgotten some names of my colleagues. Seeing them on photos again reminded me of them whom I had worked with. Those were the days.

These photos were date-stamped and hence fall into chronological order. I can see transformation over so many years. I have grown older.

I am amazed that we had travelled to so many places, both overseas and in Singapore. Some photos were Instagram-worthy kind of shots. I am glad I did this exercise.

Copyright © 2021, limkimtong for Living Investment

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