Interest rates are coming down – Singapore Savings Bonds

The Monetary Authority of Singapore (MAS) issued Singapore Savings Bonds (SSB) targeting at retail investors starting with minimum investment of just $500 with multiples of $500 up to a cap.

SSB started in 2015. It is issued monthly with different interest rates tied to a particular issue.

Data

When you hold the bonds to maturity in 10 years time, the annual interest rates paid to you are shown in the table below.

Issuance date Average annual rate of return %
Jan 2019 2.45
Feb 2019 2.20
Mar 2019 2.18
Apr 2019 2.16
May 2019 2.16
Jun 2019 2.13
Jul 2019 2.16
Aug 2019 2.01
Sep 2019 1.95
Oct 2019 1.75
Nov 2019 1.74
Dec 2019 1.71
   
Jan 2020 1.76
Feb 2020 1.75
Mar 2020 1.71
Apr 2020 1.63
May 2020 1.39
Jun 2020 1.05
Jul 2020 0.80
Aug 2020 0.93

Clearly the interest rate environment in Singapore and globally is low to accommodate economic growth during the Covid-19 pandemic economic crisis. Interest rates had been on the decline since January 2019 (2.45%). It became more pronounced from May 2020 onwards.

For the last two issues, the interest rates for July 2020 and August 2020 are below 1.00%. July 2020 is 0.80% and for August 2020 is 0.93%.

The local banks had also been slashing savings deposit rates.

Chasing for investment yields with your excess money has resulted in money flowing to stocks and shares (equities). As a consequence, stock valuations held up well despite the impending economic crisis.

Copyright © 2020, 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.

Posted in Financial Management

Singapore Equity Portfolio Stood up on resilience

I am curious on how my portfolio of Singapore equities stood up against the benchmark of the Straits Times Index (STI).

So I compiled the market value for each month and see the changes in the market value against the previous month. Similarly, I did the same in compiling the changes in the STI for each month. The table is below.

End of Month STI STI Change (%) Market Value Change (%)
Dec-19 3,222.83
Jan-20 3,153.73 -2.1% -1.9%
Feb-20 3,011.08 -4.5% -5.7%
Mar-20 2,481.23 -17.6% -1.2%
Apr-20 2,624.23 5.8% 5.5%
May-20 2,510.75 -4.3% -2.9%
Jun-20 2,589.91 3.2% 0.9%

My Singapore equity portfolio held up well against the STI, in particular in the month of March 2020. It moved in the same direction as the STI.

Copyright © 2020, 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.

Posted in Financial Management

Stock Markets at halfway mark of 2020

30 June 2020 at halfway mark of 2020, the Covid-19 pandemic is still raging in some parts of the world including the biggest economy of the world, the United States of America. There is no way we are seeing the end of Covid-19 anytime soon. The consolation is that global economies are opening up from economy-damaging lockdowns. In recent months we had been seeing positive upticks in equity markets. Is this justifiable? Time will tell.

The changes from a month ago for major stock indices are shown below.

Stock Indices 29-May-20 30-Jun-20 Change (%)
Mumbai BSESN 32,424.10 34,915.80 7.7%
Hang Seng (HK) 22,961.47 24,427.19 6.4%
Germany DAX 11,586.85 12,310.93 6.2%
Nasdaq (USA) 9,489.87 10,058.77 6.0%
CAC 40 (France) 4,695.44 4,935.99 5.1%
Shanghai Composite 2,852.35 2,984.67 4.6%
STI (Singapore) 2,510.75 2,589.91 3.2%
Australia All Ordinaries 5,872.20 6,001.30 2.2%
Nikkei 225 (Japan) 21,877.89 22,288.14 1.9%
S&P 500 (USA) 3,044.31 3,100.29 1.8%
Dow Jones (USA) 25,383.11 25,812.88 1.7%
UK FTSE 100 6,076.60 6,169.74 1.5%

Results may appear good, it is important to see how the stock indices moved since the start of 2020 when Covid-19 pandemic was just about to start.

Stock Indices 31-Dec-19 30-Jun-20 Change (%)
STI (Singapore) 3,222.83 2,589.91 -19.6%
UK FTSE 100 7,542.44 6,169.74 -18.2%
CAC 40 (France) 5,978.06 4,935.99 -17.4%
Mumbai BSESN 41,253.74 34,915.80 -15.4%
Hang Seng (HK) 28,189.75 24,427.19 -13.3%
Australia All Ordinaries 6,802.40 6,001.30 -11.8%
Dow Jones (USA) 28,538.44 25,812.88 -9.6%
Germany DAX 13,249.01 12,310.93 -7.1%
Nikkei 225 (Japan) 23,656.62 22,288.14 -5.8%
S&P 500 (USA) 3,230.78 3,100.29 -4.0%
Shanghai Composite 3,050.12 2,984.67 -2.1%
Nasdaq (USA) 8,972.60 10,058.77 12.1%

The Straits Times Index (STI) was the worst performing, down 19.6% from the start. Nasdaq was the best and the only index that had positive change, up 12.1%. This index was an outlier compared with the rest.

Copyright © 2020, 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.

Posted in Financial Management

More community cases in recent days – Covid-19

Do not think that it is now safe to socialise freely and to walk around in crowded places during Phase 2 Reopening.

Recent days of community cases had seen a spike:

24 June 2020 – 7 cases
25 June 2020 – 5 cases
26 June 2020 – 6 cases
27 June 2020 – 11 cases
28 June 2020 – 11 cases

Covid-19 coronavirus is still around us.

The Straits Times reporter Clara Chong took us through the risks of Covid-19 (24 June 2020). Her sources for her report came from Assoc Prof Alex Cook, Vice-Dean of Research at the NUS’ School of Public Health.

The factors which heighten risk are:

  1. Closed spaces
  2. Close contact settings with close-range communication
  3. Crowded spaces
  4. Duration and diversity of contacts

The risks get heightened further when all 4 factors are present.

It is poignant to note that social gatherings can be a source of concern. Take an example: You invite and meet 5 relatives from different families in your home for tea. Then you invite another 5 old school friends for catch-up. If you were infected with Covid-19, you have put 10 other households at risk. The number can multiply to 30 households two transmission cycles later. There is a real risk of a superspreader event where one person infects a large number of others. (Source: Clara Chong)

It is far better to limit going out of your home and also to limit social gatherings for the time being. If you have to, then take all necessary precautions to reduce the risk of catching Covid-19. Avoid crowded places as far as possible.

This is serious matter for the sake of our wellbeing and for other people’s wellbeing.

Copyright © 2020, limkimtong for Living Investment

Posted in Life Journey | Tagged

Economic Impact of Covid-19 felt keenly

Yesterday, I walked past two HDB shops in my neighbourhood. One is 7-Eleven Convenience shop and the other is Dream Café at Block 163 Toa Payoh. They were next to each other. One common thing about them was that these shops decided to close their businesses. I frequented 7-Eleven often and occasionally patronised at Dream Café.

It saddened me when I saw all empty white steel shelves in 7-Eleven and a dismantled shop of Dream Café. This is closer to home and more impactful than when I saw more shops in Toa Payoh Mall offering for rent.

Retail outlets are shuttering for good and I believe this was exacerbated because of the economic impact of Covid-19 coronavirus pandemic. You will never know what retail shop owners are going through to keep themselves in business. The cash flow and loss of revenue because of Circuit Breaker lockdown are simply bad for retail business. Sure there are rental rebates, Job Support Scheme, loan schemes, but without revenue business cannot survive for long.

Even with the opening up of the economy for these retail businesses, people are unwilling to spend. They rather save up because their take-home pays are cut or in case they are retrenched.

Headline news is broad brush of a bad situation. Numbers touted are mere statistical numbers at a high level. It means nothing until one is hit by Covid-19. Then it becomes personal.

Copyright © 2020, limkimtong for Living Investment

Posted in Life Journey, Social Issues | Tagged

Dividends and Coupons from stocks and retail bonds in 2020

In 2019, dividends and coupons (interest) from Singapore stocks and Singapore Exchange traded retail bonds came up to 3.43% for the whole year. In fact 2019 was better than 2018 (3.34%). Last year was a good year for me.

I continue to hold on to these dividend and coupon paying stocks/bonds quoted on the Singapore Exchange. It is my source of yearly income. At 3.43% income in 2019, it was a good investment return, much better than keeping money in the banks as deposits.

Then Covid-19 coronavirus pandemic hit us from the start of this year 2020. My dividends and coupon (interest) income at half way mark was 1.58% on my cost of investments. I am NOT going to see 3.43% come at end of this year. Almost all companies are cutting back on dividends to conserve cash to tie them over this difficult economic period because of Covid-19. There are only 30 June and 30 September quarters left this year to declare and pay out dividends in 2020.

At 1.58% payout for my investments right now is alright for me. Any additional payouts till the rest of the year will be bonuses. My portfolio of 18 stocks and bonds are ALL paying dividends except for SembCorp Marine. I intend to keep these investments despite having seen their prices dropped significantly. Overall portfolio had lost 24% so far.

Copyright © 2020, 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.

Posted in Financial Management

Singapore Stock Market the worst

On Tuesday 23 June 2020, the stock indices of some of the major bourses are shown in the table below.

The year-to-date changes from the start of 2020 are shown.

Stock Indices 31-Dec-19 23-Jun-20 Change
STI (Singapore) 3,222.83 2,634.92 -18.2%
UK FTSE 100 7,542.44 6,320.12 -16.2%
CAC 40 (France) 5,978.06 5017.68 -16.1%
Mumbai BSESN 41,253.74 35,430.43 -14.1%
Hang Seng (HK) 28,189.75 24,907.34 -11.6%
Australia All Ordinaries 6,802.40 6,069.30 -10.8%
Dow Jones (USA) 28,538.44 26,156.10 -8.3%
Germany DAX 13,249.01 12,523.76 -5.5%
Nikkei 225 (Japan) 23,656.62 22,549.05 -4.7%
S&P 500 (USA) 3,230.78 3,131.29 -3.1%
Shanghai Composite 3,050.12 2,970.62 -2.6%
Nasdaq (USA) 8,972.60 10,131.37 12.9%

We are in the thick of the Covid-19 coronavirus pandemic. Most countries are easing up on lockdowns and opening up their economies to get going. Singapore is in Phase 2 of Reopening. Still, Singapore stock market was not doing well. The Straits Times Index (STI) was down 18.2% from the start of year when the Covid-19 was just starting to spread round the globe. It was the worst performing stock market compared with the rest in the table above. All other major stock markets were also negative except for Nasdaq.

It shows that investors were not confident with Singapore economic recovery from Covid-19 since Singapore is heavily dependent on trade, tourism and constructions of infrastructures to grow her economy. Singapore does not have a sizeable domestic market to drive aggregate demands for her goods and services, unlike China and the United States. The outlook for Singapore is one of gloom in the face of Covid-19 pandemic.

Copyright © 2020, 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.

Posted in Financial Management

STI has been sustained above 2,500 points level

The Straits Times Index (STI) nosedived to 2,233.48 points on 23 March 2020. It picked up slowly to reach 2,800.57 points on 10 June 2020. It then came down and hovering at 2,650 points in recent week and days.

Looking at the STI chart attached, the STI was supported at 2,500 points level. Barring another shock such as Covid-19 pandemic deterioration or geo-political tensions such as North Korea-South Korea, China-India, China-US issues, the STI could be moving sideway. The economic impacts on global economies because of Covid-19 pandemic have somewhat been factored into equity prices.

However, the uncertainty is still far too great to be comfortable. I would rather watch and see by the side-line unless the STI falls through the floor of 2,500 points.

Copyright © 2020, 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.

From Yahoo! Finance

Posted in Financial Management

Being Father

Over the years, I had written about Father as a subject matter. Well I had a father naturally and I am a father to my daughter Shu. I have watched her growing up for more than thirty years.

Without a mother, there cannot be a father. Mother is more suited to be the nurturing one to take care of a child. Credits go to my wife. She connects with Shu at an intimate level.

I, on the other hand, am a father figure. Are there universal attributes of a father? Fathers bring home the bacon? Cannot be. Fathers are disciplinarians? Mothers can do it pretty well. I better not go down this road of comparisons. Parenting is for both mothers and fathers.

Some memories with Shu

I remember teaching her Primary school mathematics using algebra and equations instead of the Model method of teaching. I was so backdated!

Whenever Shu fell sick I would be worried for her. There was an incident when she was so dehydrated because of vomiting and diarrhoea that she could not get to see a doctor herself. It was a harrowing experience.

Each time when Shu did something really well, I would be so happy as if I was the one.

This is who I am as a father. Every father has his own ways of bringing up a child. That is fine when it is tailored for the good of his child.

Happy Fathers’ Day and do not forget the mothers too!

Copyright © 2020, limkimtong for Living Investment

Posted in Life Journey

First Day of Phase 2 of Reopening of Singapore economy

73 days of Stay-at-Home since the Circuit Breaker started on 7 April 2020. That is nearly two-and-a-half months. I had not taken a bus or MRT train since 7 April.

Phase 2 of reopening of Singapore economy starts today, Friday 19 June. Dine-in in F&B outlets/hawker centres and retail shops are finally allowed to operate again. Social gatherings of up to 5 persons are allowed. Parks, beaches, swimming pools, sports facilities are open too.

I took a bus this morning. I had a weird feeling somewhat surreal of sitting in a bus after a long while. There were passengers but not packed on Bus number 145 from Toa Payoh Bus Interchange during morning off peak hour. I felt that there were more people on the bus today. (Other days, buses were less crowded from street view.)

We decided to eat lunch at Heritage Foodcourt in the basement of Raffles Hospital. We did not do a sit-in meal at eateries/hawker centre until today. This foodcourt was pretty quiet. There was a group of 5 seniors sitting round a table. This is allowed under Phase 2. But one more senior joined at this table later making it 6 guys at the table. Not long, a staff member came along and told them of the rule. One reluctantly moved to the next table. Well a little excitement in this quiet environment.

I came back to Toa Payoh Hub. My goodness, are we back to normal so fast? The place was full of people and retail shops were mostly open today. The only visible difference was that all people were wearing face masks. People kept a safe distance from one another. I still feel uncomfortable with so many people around. I just did my errands and got out as soon I could.

People have been cooped up at homes because of Covid-19 stay-at-home measures. The feeling of freedom at last must be wonderful. Not complete freedom though like the pre-pandemic days. We have to adjust to new ways of lives. In this regard, we have to stay safe and avoid crowds as far as possible. It is better to be safe than sorry.

Take care and stay sharp!

Copyright © 2020, limkimtong for Living Investment

Posted in Life Journey | Tagged