SgInvestments

Dec update

2011-12-14T08:15:00.000-08:00

Had a type 1 minimal displace fracture <2mm on my right hand on 25 sep . Could not bend nor straighten my right hand after trying to save my kid from falling off the sofa, went to ttsh a&e. 1week on half cast, 4 weeks on full cast. Was very itchy on my whole hand, and trouble bathing. Worse still it was the most busy part of my work.

Also I had planned a trip to hongkong, as my second son is just a week before 2 year old. With this, air ticket for 1 year old is ard 1/4 the price. We could also ask for extra baby cot in 1 room and did not have to book 2 rooms.
It was busy and sometimes difficult time in HK - had to push the stroller into crowded mrts, and carry the stroller above railings as there were only 1 or 2 exits where we could push the stroller through. 1 unforgettable experience was going up Victoria peak pushing the stroller from the mrt, really shack. Also the taxi driver and some passengers we ask told us the wrong station to get down. Luckily we asked several people to confirm, but nevertheless we went around a few station before finally getting to the right station.
But I simply love the food there. We went to tang dynasty for dinner and enjoyed the desserts. Then went to joy cuisine for dim sum breakfast - it was simply delicious- bird nest egg tart , chao sao boa ( with sause dripping out of the bao after taking a bite ) , hau kau , skew Mai etc.

After the HK trip my friends bought tickets for royal carribean - legends of the sea cruise. Overall it was an enjoyable trip as I enjoyed the variety shows, bingo game and the food was sueprisingly quite good. Besides my family, I also had 2 good friends accompanianship. I and a friend also team up to win the doubles table tennis competition haha..

Investment wise, I sold off sembcorp ind at 3.8 , a bit too early as basically the whole month of oct the stock market rally after 3-4 months of fall. I also sold off my risky stocks - sold off all my lithium stocks ( talison lithium 6% and orc 1% ) as I believe the electric car have too many hurdles before it take off and will need subsidy which prob may not be avail during crisis/ tough times .sold off boustead (cyclical), hour glass (did not like it's ballooning inventory), temp comp (Europe crisis), cerebos (Thailand flooding).

Have reduced my losses to 11%.
What I have left is ard 35%
- people's food (I believe it will improve profit after investing downstream - but may take some time as normally commercial farming takes place after the 4 th cycle where they are currently in the 2nd) . A play on agriculture where real assets are the one which matters. If hog prices goes down, it will benefit PF. If hog prices goes up, it will kill off other competitors. With its dorminant position, it should be well positiioned for growth.
Incidentally, I noticed that I first bought PF in 2003 at around 75 cents as well. for the last 8 years, the price has gone a whole cycle back to the same price. At these last 8 years, it has growth revenue 4 times larger, however profits has gone down because of high hog prices. With its huge investment downstream, I believe this willl rectify this issue and reap rewards in time to come
- Stamford land , where their assets are easily worth double the amount ard $1 as evident on a mou signed with a third party for some of their hotels, and contribution of the sold apartments in 2nd half the the fy due to the recognition of profit for property in Australia)
Will be looking for good profits in Q3 and Q4 (revenue recognition)
- sing holdings, mtq , smrt, popular , lkt.

Also took 55% against the market via HSI, Nasdaq, STOXX 50 Euro
Watch the Italian bond yields.
Gold has gone up straight last 11 years, it is no wonder it is breaking down, if not because of the Europe crisis, I would have shorted it.

Sep update

2011-10-05T08:46:00.000-07:00

Continue my hectic schedule where in sept I had to cover innoXX 3 days and had a business review in langkawi. I had to during the weekends conduct house viewing which burnt my weekends.

Unfortunately I believe I just miss the window to sell the property , it was v quiet during July the ghost period and the stock market dived due to the Greek potential default problems.

My maid also went back in aug for HR, and we got a new p maid, who does things vv slow ( take 1 HR to wash dishes), and my young boy (1+) don't want her. He wants us parents to bath, pat him to sleep, wash hands/legs, change clothed etc. This transition was rather difficult.

As expected, my work suffered, and overlook for promotion again (4yrs).

My portfolio has also suffered. Portfolio down 22%, where talison was cut by half within 3 months. I was deliberating cutting loss, but did not do so. In a bear market, risky assets will drop a lot.

I took profit in 2 of best co, Visa (after the debit charge ruling) - although I sort of regretted it . And APB at 29 as it shot up v high from 18.
I cut loss in infineon as I believe cyclically the co had its margins at a v high level.(9.8) after which it slide to 6.9 in a matter of 2 months.

I bought CBI when it was dropping from 40 to 30,in a month and then fr 32 to 28,, I entered in albeit a small amount and contra at 31.

From that on , I was about 60% vested and 40% cash. I invested another 10% SCI 3.28 ( learnt my lesson) the last bear market to buy big caps.

And looking to buy further .I also bought M n Cht for my parents 40%

3 down 2 to go

2011-08-04T23:13:00.000-07:00

As of now
1) MR lor ! Finally finished my 10 cycle, so it means no more struggling for my 2.4 km IPPT, which I feel is really taking a toll on my aging body.

2) InXX ½ Done. Finalised SP agreement for InXX, to be completed in 6 months (May to Oct). It is really taking too much of my time. There in the morning, evening. Now I am trying not to go back during weekends.

3) Finally after finding all the documents to explain the disposal of Assets& Liabilities, the officer processed the SO (by 5 months). Yeah !

4)PV ½ Done. I manage to get into PV with some help from my . Will do 1 year reading for young children which I feel is a very good thing to do

Left to sell the house, and complete the S&P by end October (3 more months – still need to get a secretary/maybe moving), and complete the PV by next year (starting 29th July).

Also settled getting our new maid as our current maid wanted to leave. She was a very great help during these 2 years and we could depend on her to take care of the little one, and also cook for both families at the same time. We wanted her to stay another year but her husband wanted her to go back and her mum wanted her to go back (as she felt her husband she work not her). We tried to increase her pay to 470, but to no avail.

Also my car aircon is spoilt. When we went for check up at Mazda center, they discovered that the alternator is spoilt as well (the battery light was on). They tried to charge 1900- 1300 (after discount). So I went to Sin Hwee Motor (they charge me 660, and change my aircon pipe 65).

Damm why doesn’t it just die itself

2011-07-19T01:08:00.000-07:00

I have been feeling very frustrated recently, to the point that I do not want to talk to my parents.
Besides this live company Inno, there is another dormant company ASE which has been giving me many headaches recently.

In mid-April, there was an email sent by ACRA to file its annual return by end April. When I checked it, it has not filed for 3 years since 2008.
So what the heck, I went to find out who its Accounts are, and from the last Audit report, the Auditor told me that they are only the Auditor, they are not the secretary nor the Accountant. They just brush me aside and say that just get an accountant next to ACRA to do it in International Plaza.

Later on when I called ACRA, they told me I have to file for 3 years and using XBL(?) system.
Ok then, when I looked at the reports, there is actually not much transactions (mainly FD interest). So I tried to do it myself using excel.

After awhile, I called ACRA again. This time the officer advised me that for every year I filed, I will get a penalty, so why not get it striked off ?
I discuss with my father, and told him to make a offer to AZJPN as we have already inform him of our intentions 1 year ago. The poor market and business sustaining losses since the start of the decade 2004 as more and more companies shift their base to China. Luckily within 1 month they accepted the offer.

I already had the experience of using Inno for the forms for the Transfer of Shares, so I retyped out the paper documents and got all Directors to sign (including my Uncle and Ishi (had to go all the way to Tuas). The difference is one is transfer of shares person & the other a company entity, also the company address is different, therefore I had to rewrite some of the documents to include a company chop, and certify that the company address had changed.

After this I sent the transfer forms to AZJPN by registered mail. In 2-3 weeks I receive them back with the signature and company chop.

So I proceeded to transfer the shares (as my Dad is the secretary) and when to IRAS website to get the e-stamp (Stamp duty).

My father meanwhile had wanted to hold the bank account as there was significant amount of A/R not received yet. However all these A/R were dated 2004 and earlier. I was v angry with my Dad. Here I am trying to clean up all the mess, yet he is still persistent trying to make things difficult as it is. I told me, if this was so important, he should have done it much earlier since 2004/2005. He wanted to get a lawyer to draft a letter to this customers. However first this will impact current business, secondly the accounts may already be paid back (from my experience of Inno where many accounts were not clean), thirdly it is going to be hard to get to get back the money after so long. I convince him that no way am I going to handle his already, I am already stretched to the limit !

Next I went to the bank to withdraw all cash/FD in my Father’s name. Now to close the account, it requires another signature from 2 directors. So I had to go to Bukit Timah to get my Uncle’s signature again, and to the bank another time to get it done.

Finally at end June, I applied for strike off. I thought I had settled another thing but 5 days later, the officer told me to account for all Ass&Lia disposal.

What the heck ! Now I have to hunt who the Accountant is / search through tons of paper to find all of these, and to make it worse even if we write off the Assets (taking a significant losses), we still had to account for the Liabilites.

June update

2011-06-26T13:39:00.000-07:00

Continue to remain X busy.

Personal -
1) had to settle my mom's maid (the first one did not want to come last minute, the 2nd Myammese failed the English test 3 times, finally settled on a transfer maid) - Wk2 Tuesday Eve

2) had to settle my Dad's car which gave alot of trouble of late. The power steering hardened and was spoilt, and had to be changed $1100 , many pipes have to be changed as they were leaking oil , timer belt (400) , workmanship (400), altogether ard 3000. The mechanic from Hock Hwa suggested taking out the engine to repair it. And the total bill went up to $4000

3) had to settle my son's parental volunteer in Kong Hwa School. It is extremely competitve now adays with even doing a PV, u need to go for interview. (30 applicants out of 100). After not qualifying for the interview, we had to find many other ways to get inside.

Business -
1) In the process of closing up ASE.
- Changed the ACRA shareholding structure, submitted Estamp (Share Transfer). (Wk1Fri leave)
- Sat AM went to the bank with my Dad, but was told I needed the Company Stamp, Board Resolution (2 sign to close the bank acc), meanwhile got the forms signed and changed signature
- (had to go all the way to my Uncle's house to get the signature for the board resolution (Wk2 Tues Eve)
- Closed the bank account (Wk2 Wed AM leave)
- In the process of setting up the Bank Dividend template
- Next strike off the Company
I can really be a part time corporate secretary

2) Innom
Still wasting lots of time on it.
Wk 1 took 3 half day leave to cover N went he went for KL Business trip
Wk 2 had to struggle the whole week to get the pricelist of rods updated, took WK2 Mon AM leave & Wed AM leave
Next have to get the Plunger Questionaire done
Next FY closing and getting in a sec

Property - after trying to hold garage sale a few weeks, I started to advertise and sell the property. Times are not too good and there were little offers. Will update in another month.

Share -
1) Actually bought some Camdemco as I felt the Uranium crisis was overdone, but cut loss the following Monday when Merkel came out to announce phasing out of Nuclear plants. Was actually very stupid as I still do not have time to do comprehensive study. PE was still v high >20, so should not have gone it yet. Prior to the Japanaese EQ the Uranium sector was overvalued

2)Bought some Infineon as I wanted exposure to the new Smart Grid, EV, High Energy Costs play. It is ard 13 PE with cash about 20% its equity. But I have to becareful of gross margins (assumption that it continues to hold) as now we seem to be on the high of Business Cycle

3)Portfoilio down 10% , need to get rid of unwanted work! and concentrate what I do best

4)EV is slow to pick up, but estimate is 2013 where

The fastest year I have ever had

2011-05-17T09:44:00.000-07:00

In May - Finally hit a milestone which was a relief - Manage to sell the company. Finish the 1st Share Transfer/Director Appt.& subsequent Bank A/C opening.

Next -
Company - Send Form C to Acct, Bank in A/C , collect $ from Carb/Skill/ Ikeda , source for carpet, Printer

Buy maid ticket (now her mother doesn't want her to work 1 more year)

Advertise for the house, sell the house

AS Enterprise (Do up the Share Transfer forms from the PB template, got Ishida to sign and Registered Post to Japan)

Staring June I Have to concentrate on my own career & and finally have some time ofr my Investment which has been horrible of late.

FY2011 Investment May

2011-05-10T00:51:00.000-07:00

I had restructered my portfolio abit to be more link to the upsurge of commoditity prices. However I let go of JJG, which was lucky as it was just before the sell-off. My investment temperement right now is not really in the right frame of mind now as I seem to be buying on the high side.

My portfolio changes -
1) I sold off most of my Talison in January around 6+ and bought back at 5+ and 4+ as the valuations was becoming streteched.
2) I also sold of Western Uranium (due to the Japanese Disaster).
3) I sold Lithium One at 1.66 in January and bought back at 1.3 and resold it at 1.79. I then bought back at 1.7, albeit a small quantity
4) I bought more of People's Food, Cerebos and added Stamford Land.
5) I also sold off Singholdings at 36 cents but bought back at 32 cents, also selling Hock Lian Seng as it had been rather long since they have new orders. Both counters I sold off after our Singapore Government introduced new stricter property rules. Eg. you can only loan 60% if you still have a housing loan.
6) I sold of Spindex as the company could not cope with the drop in USD exchange rate and it was likely to worsen. As of now USD/SGD has further dropped to 1.23.
7) I also sold of Super to take profit and valuations was getting expensive and trimmed down Boustead as the contracts was not coming in, and due to the write off at Libya.

Current May Portfolio
1 People Food
2 Talisum Lithium
3 Stamford Land
4 Visa
5 Cerebos Pacific
6 Boustead
7 APB
8 Lithium One
9 Sing Holdings
10 Hour Glass
11 SMRT
12 MTQ
13 Soup Res
14 Techcomp
15 Lee KT
16 TNR Gold
17 Celestial

YTD down by 8%. Invested 71% 29% cash.
There are a few things which I am still monitoring to put cash into good use as now cash is really rubbish. Commodiites will be interesting, however with the raising of margin limits to flush out speculators, there might be further drops. Lithium / Natural Gas / Industrial Conglomerate plays are looking promising.

And yes, for the very first time, my name appeared on the Annual Report of a listed company. This may or may not be a good thing, let's see how things play out :)

FY2010 Investment Journey

2011-01-01T09:57:00.000-08:00

Current Investment

1 Talisum Lithium
2 Boustead
3 People Food
4 Super Group
5 Visa
6 Spindex
7 Lithium One
8 Hock Lian Seng
9 Cerebos Pacific
10 Metro
11 Sing Holdings
12 APB
13 Hour Glass
14 SMRT
15 MTQ
16 Soup Res
17 Techcomp
18 Lee KT
19 Western Uranium
20 TNR Gold
The only inclusion in december was Visa and Techcomp. The small caps in Singapore do not really suit me now.

In 2010, I divested most of Hiap Seng and Broadway in May. The reason why was I feel that flash will be more and more a dominant component for computers. The Ipad is an early indicator. Hiap Seng has already completed most of its projects (higher revenue recocnigition and cash position). I also had to take out some cash for my property.

In May, I also completely exited my commodity trades. I might increase my portfolio gains by another 30-40% if I have kept my position in gold/silver as after my dad incident, I do not have the emotional capacity to hold on to volaitle position, there are already too many things on my mind.

Things that got away. I had actually 2 baggers which doubled that I was holding, AAC and Eu Yan Sang, but I got shaken out by 2 occasion. AAC was a play on the booming smartphones, but I did not had enough time to do much study. too bad

2011 going forward
Going forward Boustead should perform alright in the correct industry (Energy/ Water / Real Estate ). With capable leaders like FF Wong running the helm, and boosted by close to 40 cents cash board, I expect shareholders to continue to be rewarded

Super should do well with its additionaly plant in China, commitment to payout a high dividend and its Taiwan dual listing visibility

It is heartening to see after 8 years that I have something to show for. Since 2003 I have made 10 times my capital. I will set a target to accomplish another 100x in 15 years.

FY03 1.3743
FY04 0.882
FY05 1.6745
FY06 2.5514
FY07 1.36
FY08 0.94
FY09 1.09
FY10 1.42
10.19476939

FY2010 flashback

2011-01-01T09:24:00.001-08:00

It has been a very emotional , mental and physically draining year for me as Something happened to my dad which I had to take over his company. Effectively I am doing 2 jobs at a time, and my Mum who previously took care of my kids (4 and below baby) had now to take care of my dad, leaving my wife (who luckily can work from home temporarily) and me and at least my maid to take care of my kids. During this tough time, we also had to renovate our new house and pack/unpack our furniture.

The vivid impression that I had was the many evenings after work I had to bring along my 2 kids to look at furniture. One of the night we were looking for lights, and in the Balestier roads, we had to cross the overhead bridge with me carrying the baby up and down the bridge while my wife hold the eldest son hand, and after that I had to carry the pram up and down the bridge as well. It was really tough and no choice as there were no one to take care of my kids.

It is in such incidents where you really see who your true friends, family and relatives are. When I needed help esp from my in-law side to take care of my kids, my in-laws (my FIL did not want my MIL to come from Malaysia to stay with us and leave him alone), they only came sparingingly.

Fast forward this year, my wife needed to go back to work at least twice a week. I approached my Aunt (Dad sister) who is retired to help ( actually there is not much to do, as the maid will take care of the little one (feed/bath/make him sleep), is just to "See head See tail", when my maid eats, or cooks). She actually agreed, but her husband gave so many different excuses (eg, migrane lar, not well , have to cook lunch for her son and to do household chores etc). I got very fedup. If you do not want to help , fine.

Looking at the fireworks on New Year's eve from my new house, I had plenty of emotions running through me. It has been a bad year for me , even my eldest son fell sick (high fever 40C) on the last day of the year.

Looking back last year, there are still a few things that I could smile on
- My youngest son turned one year old
- we moved to a nice condo with very good view
- My family came closer
- I appreciated my wife who supported me during this tough time
- I manage through superhuman efforts to cope with my dad company (reduce A/C by more than 22%), manage to sell the company and lay out the strategic directions for next year

My dad is a very good Sales, however the Accounts were very bad. And at the same time my dad was on retirement mode, therefore Revenue has been fell quite badly in the last 2-3 years (albeit a slight rebound in 2010). The way I see to move the company forward is to explore overseas market (esp in Malaysia). And to turnover the company, it should not be too difficult as I feel that we just need to contact many old customers to increase revenue by 40-50% at least.

Investment Update

2010-12-12T23:20:00.000-08:00

A summary of my investments:

1 Talisum Lithium
2 Boustead
3 People Food
4 Super Group
5 Spindex
6 Lithium One
7 Hock Lian Seng
8 Cerebos Pacific
9 Metro
10 Sing Holdings
11 Hour Glass
12 APB
13 MTQ
14 SMRT
15 Soup Res
16 Lee KT

YTD up 34%, 92% invested, cash 8%

Oct Update - Move House and FInalise HDB Sale

2010-11-09T05:07:00.000-08:00

Celebrate my BD on 3rd Oct.

Reno- During that time although most of the furniture has been finished, there are still many small nitty gritty things

- Outdoor furniture, finally selected a affordable yet comfortable outdoor set from Woods and Woods. As my balcony is rather big, and have a nice scenary, I wanted to choose a nice outdoor furniture so that I can relax and invite friends over in the balcony. It was a 3+1+1 set with a table with a cost of 1850.

- hooks for toilets,

- my wife wanted to get decals (stickers) and we went to United Square twice at least, finally getting some flowers for the electrical cabinet

- choosing paintings - went to Balestier and a few places to look at drawings, finally settle it online

- kitchen ware

- sourcing for Movers, finally settled for Soon Seng Transport

- Got my outdoor furniture, and beds for my children's room in

Moved house on the 10 Oct - 10/10/2010 Yeah !

Really tough weekend, on Sat. Packed since morning with just so much work, which seemed never ending. It is really tough for us as we need to pack with 2 small kids around, especially the small one whom u need 1 person attention when he is awake.

My sil came in the afternoon to "help" take care of my kids while we packed. However in the evening, she conveniently excused herself to see her bf sister and was away from 5-9. This really pissed me off. When you commit to help, people really depend on you to help during the crunch time.

During the evening, as always there is last minute things to get. I went out to get monster cable, tape to tape the boxes (which ran out) and ice box to keep food while we power off the fridge for 1 night before the move. Only when my sil came back did we have time to pack again.

At night after packing the fridge, I removed the cables slowly from my TV set which was connected to the AM, Starhub, DVD, Mio TV. I really hate such messy connections especially when the wires are so short and connected at the back. The reason why we disconnect them is because we wanted to assemble the wires in the new place before the move. Once the movers move the TV, all they have to do is to mount the TV and we can just pluck the cables to the TV withouht much hassle. The movers will not bother about connecting the wires for you. At my new place, we spent close to 2-3 hours just trying to assemble the wires from the TV console. This took us close to 4am .

The next morning on Sunday 10th Oct 2010 8:30 the movers came. They sure are professional, moving boxes really fast. There were close to 5 of them, and wrap all our things very well . The only thing that took almost an hour was the deassembly of our master bedroom, which had a hydraulic lift.

By 12 noon, they finished and we started to unpack. It was a good relief that the tedious part was over. We also started to rewire the TV and took about an hour before getting the Starhub and Mio Tv & DVD working.

The next day the furniture came in - sofa/dinner table.

For the next whole week till 18th Oct, we got a hanger installed, got the decal person to come in to stick, and moved whatever leftover from the old house. The left over really took some time to move as we could only move bit by bit and took almost 10-15 trips. eg. clothes, fish tank, toys etc.

We finally signed the HDB 2nd appointment letter on 18th .

For the new house,
- the painting was mailed to our house, and I went to Balestier to frame it.
- we also got grills for the house and
- got shades as the afternoon sun is rather glaring.

I was especially busy with my office work as well
- 2 targets setting / QBR/BMR/ Results which lasted till late November.

Had a house warming on 2 dates + celebrating my youngest son birthday

Sep update

2010-09-08T23:15:00.000-07:00

Business
Looked for the lawyer, according to the one I approach it requires to itemized each item.
My Uncle mention to include a catch-all clause.

Search for the FY2009 Annual reports. After searching high and low in the house and office and couldn't find it, I asked the accountant to reproduce it and backdate it.

Did a Executive & Financial summary for InXX

Seach for product brochures and mailed to a prospective buyer.

Shares exercise - coporate secretery

House
- settled the old HDB. In the 1st appointment as I had no so-call agent, I represent ourselves. But basically the HDB officier just told us what to do
- if we use the HDB lawyer, just pay the conveyancing charges on the 3rd floor (300+)
- Pay the property tax at Singpost
- Pay the Services and Conservation charges at MP TC. ( and get the bank to remove the GIRO)

For the new place, there is still the nitty gritty things to look at - kitchen/ toilet accessories, better get it done before the ID contractors go off.
Also got the glasses with scratches removed/ balcony door fixed..still left the front door which has some cracks.

Executive View - Rights and Remedies of Minority Shareholders in Singapore

2010-09-07T01:53:00.000-07:00

Executive View - Rights and Remedies of Minority Shareholders in Singapore

Aug 2nd week update

2010-08-22T18:51:00.000-07:00

Mon - Wed Balestier/ Geylang to look at lights.
thur evening Designer to confirm design and choose paint
fri evening - confirm defects and went to Audio house (unfortunately closed after we finish our dinner and looking at other shops)
Sat morning- HZ class
afternoon/ evening - Designer (choose lights $1.6k /wallpaper and curtain $4.4k ) spent
Sun morning - visit Dad
afternoon - KIV lights yesterday , visit Lightcraft and then lighting.com.sg to confirm room lights.
evening - went to dad's office.

Update

2010-08-12T02:30:00.000-07:00

Tuesday -
Morning (Electricity Inspection)

Wedensday
Morning (Send Maid to Post office to send money)
Evening (went to see lights at Balestier)
Night (Write Business Proposal)

Thursday
(Check for Annual report)

Sat (Send Mum/Bro & Myself for Medical checkup)

Next confirm lawyer letter
Source for buyers

Bathroom + Kitchen accesssories

Tuesday (Choose Lights/ Curtains/ Wallpaper / review design again (balcony/ Master Bdroom (TV console/ Children's bed)

May- Aug Weekend burnt

2010-08-01T09:48:00.000-07:00

Every weekend is burnt, from May, all weekends burnt at my Dad's office (inventory check/sorting accounts) , that I dun even have time to cut my hair.

The previous previous weekend was mainly
-checking for defects at my property
- meeting up with designer (confirm design & material)
- busy chasing the property agent for property agreement

The previous weekend Sat was
- morning (Hsien Zheng's class)
- afternoon meeting up with the designer to confirm materials, designs etc.
- Sunday morning was breakfast
- visiting my Dad
- going to Parkmall to shop for sofa, finally got a satisfied German sofa from Castilla.

The last weekend Sat was
- morning (Hsien Zheng's class)
- afternoon went to Ubi to look at sofa and dinning set
- Later in the evening, went over my Dad's property for defects inspection
- and after dinner went to Furniture mall to get my dining set. (really super productive).
- Sunday morning breakfast
- visiting dad
- afternoon went to my dad's office to sort out accounts again and record payment.

Rental of Property

2010-08-01T09:32:00.000-07:00

Rental of property
My Dad actually wanted to rent out his new property, so I had to see what is the best way to rent out. I actually thought of renting out myself, but after seeking advice from my Uncle, it is best to leave it to an agent. Why ?
- my dad's property is a 4 bdroom, and usually those are expats from MNCs and these MNCs will employ property agents to do it
- at the end, after co-broking it is still the agents who will get the commission
- the agent will sort the SP Power (electric/water and Gas) transfer to the
Anyway I also posted in SingaporeExpats and was going to post in PropertyGuru and SPH (ST171??) and newspaper.
My Uncle advise is to try to get as much conditions favourable to myself (owner) as possible. For. eg. if there is any defects to be repaired, the bar should be at an individual case.

May- July Had to take over my Dad's business

2010-08-01T09:26:00.000-07:00

May Investment

Divested most of my shares (was caught by part of the fall) and shifted to gold & silver. After making some profits, my mind was affected by something that happend to my family. Anyway after clearing my Gold & Silver profits, I shorted Oil at 70 (Should have shorted S&P 1080), the lesson learnt (again) is to short the relevant one.

Portfolio July - YTD up 10% (excluding property taken as constant) - 20% Property, 40% shares, 40% cash

I had to take care of my family business.

1) First thing was to ensure I had the signatory authority so that my dad business can continue (pay supplier etc)

2) Check for outstanding payment - Eg. Singtel, CPF (pay by post), income tax etc

3) Next get the aging list and chase for outstanding payment from customers. Had to make sure cash comes in. My dad is an excellent Salesperson, but business-wise, he needs to convert this into cash, otherwise there are alot of bad debts. Some customers especially overseas are very hard to chase for payment. It is really tough to get money from customers. The accounts were terrible also, some payment were not recorded correctly and I had to investigate several times and correct them. There were also several bad paymasters and had to get them to commit dates to repay. After which many follow ups and even threatening for legal actions. We had to differentiate between

i) Bad paymasters and no business dealings already (Tough action)
ii) Bad paymasters and still have business dealings (Have to be polite but firm). Also have to withhold sending of goods unless they pay.
iii) Those overseas r the most headache

4) Other operations, - Tried to resolve the dot-matrix printer problem but unsuccessful - Removed a wuauclt.exe virus (takes up hugh memory as I thought that could be the problem) - Downloaded - ATF Cleaner, DrWeb, SuperAntiSpyware, booted up in Safe mode and removed wuauclt.exe not in Windows32 directory. - Get Epson dot-matrix printer (280 + USB printer) from SLS and assembed it to work The above spent 3 days ( had to take 2 half days)

5) Got company on-line statement (Compay registry had to prepare a resolution) so that we can track TT payments/ cheques bounce, otherwise we have to wait till end of the month to countercheck payment

6) Spend my weekends doing inventory checks.

7) Now to get Singtel Giro and continue to chase for payment.

Property Investment in April

2010-08-01T09:12:00.001-07:00

Shares

Divested my remaining SMRT at 2.16 and Best World. The visibility in Best world is really not there. And I feel that the startup cost for the circle line for SMRT will take a long time (at least 1 -2 years to recoup see NE line).

Property

- Bought my 2nd property at Dakota Residences. I was tempted to buy when I knew that Waterbank ( the property to be launched next to it was selling at 1200psf. So after much thoughts, I bought a 4-rm at Dakota at 1050 psf. Comparing around, i feel that it has more potential to appreciate comparing The Shore (1300 psf) which is not near any MRT/Shopping Centre, SilverSea (totally overhyped high end selling) at 1600 (no sea view)- 1900 psf. Also interest rate should be low for 1-2 years. + Dakota is next to the upcoming Sports Hub (Lifestyle and 2nd Singapore expensove Architectural Icon)

- Sibor/SOR Had to look for banks (Sibor/Sor) finally settled for OCBC (SOR).

SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (or interbank market).SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale money market (or interbank market).

The Swap Offer Rate (SOR) represents the effective cost of borrowing SGD synthetically through borrowing USD for 3 months and swap out the USD in return for SGD for the same maturity

The simple reason why I settled for SOR is I believe the interest rate in US will be ultra low for a long time. The low interest rate will not help the US unemployment rate and with unemployment rate still high, interest rate will remain low in US. Also SOR (abt 0.38 as of today) is cheaper than SIBOR (0.438)

I got a very good deal at OCBC (1st year 0.5 +SOR, 2nd year 0.75+SOR and 3rd year 1.25+SOR). Also I got a mortage broker to get a mortage referral to get some dough back. Ha ! It looks like my property agent course got its refund.

- Sold my HDB flat ! I also advertised in the newspaper and sold my HDB property 50+ K over valuation (in 1 day!). Had to spend time advertising SPH and find free online

cleaning up the house, paint (red wall & TV consle),
fix several items (lights/kitchen cabinet door).
And after that HDB inspection, had to fix up the aircon pipe to touch the basin(went to Lavender SimBH to buy pipes/ connectors and saws)

Jan - Mar Investment & Personal Update

2010-07-07T00:41:00.000-07:00

Jan - Finally Fixmarket got strike off

2009 is up a paltry 9% compared to the 40-50% gains by most markets.
The main culprit was my biggest holding 40% Celestial which went down 50% (-20% in my portfolio) which unfortunately had to sell at a substantial loss. Celestial did not have $$ to pay off its bond and defaulted. Cashflow & profit grind to a halt and its survival is in the balance.

Divested most of my SMRT (1.87 and 2.16) and CDL (1.78) and move into tech (already make some movement upwards) (Hiap Seng & Broadway, Best World)

For work wise, my business orgnanisation got a new head and everything got restructed, which means I had to work several weekends (burn CNY) for new reports / meetings etc, same as last year. sigh This continued till March

Personally, my 2nd kid Hsien Yi really a handful, making us having little sleep ( wakes every 3 hours) at night.

D.O.G on Oilpods

2010-01-11T00:13:00.001-08:00

WARNING: VERY LONG POST

For those thinking about Oilpods, here is some information that may prove useful.
1. Oilpods is a project of OL&M, Business International Pte Ltd, a company registered in Singapore. OL&M's website is: http://www.oilpods.com.

2. OL&M sells shares in oil and gas production leases, known as "working interests" in industry jargon.

3. Investors in working interests buy a percentage of all current and future oil and gas revenues for a particular project. An upfront payment is made, in exchange for a revenue stream tied to the sale of oil and gas from that particular project.

4. Revenue stops when that project's oil and gas is exhausted or uneconomic to extract. If the upfront payment is less than the NPV of the future oil and gas revenues, a profit is made. A loss is made if the converse is true.

5. The working interests are sold to OL&M by Powder River Basin Gas Corp, a company quoted under the code "PRVB" on the OTC BB in the US. OL&M in turn sells these working interests to investors. The websites for PRVB and the OTC BB are: http://www.powderrivergascorp.com http://www.otcbb.com

6. PRVB's business has 2 arms: a. Purchase of marginal / non-producing oilfields with the aim of increasing or restarting production; and b. Sale of 25% working interests in the above oilfields to generate working capital.

7. PRVB currently owns working interests on about 8,000 acres of land, in either 100% or 75% proportions.

8. According to the Form 10-K (available at the OTC BB website) filed with the SEC, for the year ended 31 Dec 2005, PRVB booked revenue of US$4,643,965 and net income of US$699,335.

9. The revenue breakdown was US$622,882 in oil and gas revenues, and US$4,021,083 from the sale of working interests.

10. The commission paid to outside investors of the working interests was US$482,500.

Some lay analysis:
PRVB sells working interests to OL&M, which then sells them to investors. Investors' funds flow to OL&M, which passes a portion of the funds to PRVB, which in turn books these as revenue.

As PRVB develops the oilfields and sells oil and gas, a portion of the revenues are paid out to OL&M, which in turn pays the investors. Therefore, the investors' income streams are dependent on the oil and gas production at the PRVB fields where they own a working interest.

However, we can see that PRVB sold only US$622,882 of oil and gas. Since it only sells 25% working interests and retains a 75% stake, the commissions paid to investors in the working interests should be at most 25% of oil and gas revenues i.e. US$155,720.50. However, the actual commissions paid were US$482,500. The extra US$326,779.50 paid out appears to simply be a return of capital.

In other words, it seems that PRVB may actually be operating an elaborate Ponzi scheme. For as long as it can sell working interests, it can generate cashflow, from which previous investors can be paid, regardless of whether it is actually selling any oil or gas.

Evidence:
FY05 administrative expenses were US$1,181,374, and lease operating costs were US$258,662. These expenditures supported the production and sale of oil and gas, yet the company only sold US$622,882 of oil and gas. The story is the same for FY04: adminstrative expenses of US$513,854 and lease operating expenses of US$97,025 were used to generate US$248,328 in oil and gas sales.

Clearly, the current cost structure of PRVB makes it impossible to actually earn any profits from selling oil and gas. It is deriving all its "profits" from selling working interests. These working interests appear to be overpriced with respect to the value of the oil and gas they appear to be producing. It is possible that PRVB is deliberately misrepresenting the true value of the recoverable oil and gas i.e. fraud may be occuring.

Implications:

So, back to Oilpods. If someone was to invest with OL&M, he would be buying a working interest directly from OL&M and indirectly from PRVB, and his future cashflow would ultimately depend on the sale of oil and gas from the corresponding field being operated by PRVB.

As shown above, the cashflow being paid out is coming from other new investors purchasing working interests as well as from the sale of oil and gas. For as long as PRVB can find new investors, current investors will be able to receive an income stream.

If, however, PRVB is unable to continuously sell additional working interests, based on its current cost structure, its oil and gas revenues alone will not suffice to pay the investors their due commissions. PRVB will then default on its payments to OL&M.

If OL&M is not able or willing to make good the payments out of its own pocket, it too will default. The investors can then choose to either write off their investment, or sue OL&M for misrepresentation, fraud, etc. Of course, their legal choices may be limited by any waivers that they signed when purchasing the investment in the beginning.

As usual, YMMV. The analysis above is based on public information only. It may be flawed and is not conclusive. IMHO anyone interested in Oilpods should visit the 3 websites (OL&M, OTC BB, PRVB) and do some reading, so that they can make an informed choice

D.O.G Investment Lessons

2010-01-08T22:35:00.000-08:00

1. When fundamentals deteriorate, sell NOW.

I wish I'd listened to myself in 2008. I would have ended 2008 with a lot more money! By the time 2009 rolled around the fundamentals were pretty much at the bottom. So it would have been time to start buying instead.For 2009 there wasn't much more deterioration in fundamentals so I was a net buyer.

2. The market leader is not always a good investment.

The market leaders in finance and property e.g. DBS, Capitaland and Capitamall Trust were also the ones who did rights issues. These were severely dilutive to existing shareholders. Those who managed to pick up excess rights ended up doing very well, but since their profits were at the expense of the original shareholders I think it speaks poorly of the company management to have given so much wealth away.I did much better with companies who were not market leaders but had outstanding balance sheets. No rights issues, no business risk, and many of them doubled anyway.I will continue to ignore "market leaders" in favour of what the financial statements tell me.

3. AGMs and EGMs are a valuable source of information.

I made it to a few AGMs and again, it was good to read the body language of the management and see how they answered shareholders' questions. In one case where I sat in as an observer, the management gave a reason for not paying dividends. I went home and counterchecked, and concluded the excuse was nonsense. I stayed away, and later in the year the company's results took a significant turn for the worse.I also made appointments to visit a few companies, and called some others. All very useful, and sufficient to seal the buy/don't buy decision.I continue to believe it is vital to meet management every chance you get.

4. The margin of safety must be sufficient.

A hard lesson here. I took an unnecessary 25% loss on a large holding because I thought a low price was sufficent to compensate for a so-so business. Nope. As it turns out, if I'd held on and sold later the strong market would have rescued me. But I was proven right about the business: fundamentals declined in the quarters after I sold out.

5. Beware companies in cyclical industries.

No kidding. The business decline for cyclicals like steel, airlines and shipping (both container and bulk) was not funny. Since I was on the sidelines here it was not painful, merely interesting.On the other hand, the buyout of SPC pointed to the importance of understanding replacement value. SPC couldn't be easily replaced, so even in the worst of times it had a value. Maybe this will be useful in future when looking at steel mills. But aircraft and ships are fungible assets so replacement value doesn't hold here.Property is also cyclical, and here I did well with the replacement/liquidation value method.

6. Dividends are important.

All hail the almighty dividend! Cash is indeed king. Dividend yield was a great screening tool in 2009. From the list of high-yielders, I bought the strongest balance sheets. Many yielded 10% and some over 15%. Low risk, high return. Best deal I'd seen in years.

7. Keep some spare investment ammunition.

I started 2009 with 47% in cash so it was a blessing to be able to invest on the way down (into March). If I'd been fully invested I would have been unable to take advantage of the fantastic prices.As prices went up I began to sell. I think it is good to keep some spare cashavailable at all times. You never know when you'll find something good.

8. Watch out for changes in the core business

None of the companies I followed had significant changes to their businesses. Only those who were floundering were trying to buy new businesses. Environmentally-friendly businesses like water treatment, waste treatment, solar energy etc seemed rather popular. Maybe that's where the next bubble will be.

9. Watch the gross profit margin

I looked into many companies and concluded that companies with a long-term trend of declining gross margins were headed for mediocrity. Declining gross margins point to severe competition as well as lack of pricing power. Good for customers, bad for shareholdes. Given the many bargains available I decided to reserve my money for companies that had demonstrated pricing power. At least those will have a fighting chance against the secular background trend of inflation.

D.O.G on REITS

2010-01-08T22:32:00.000-08:00

There is a sinister reason why Management are paid in units which I learnt in Wallstraits. Quoted from D.O.G

That depends on who the REIT manager is. For REITs where the managers were originally the asset owners i.e. virtually all the S-REITs, the owners have basically already divested their real estate at a good price in the REIT IPO. Any remaining stake is a call option, and it continues to pay out cash. So these ex-owners are having their cake and eating it - they sold most of their stake, and now they are slowly clawing it back via payment in units.

One analogy might be - I sell you a house for cash, and I manage the tenants for you. Instead of sharing in the rental, I am paid in shares of the house. So each quarter I own a few more bricks in the house. Given enough time, ownership of the house will revert to me. All this while, I get more and more cash from my increasing ownership of the house. So the net effect is that I get cash upfront from selling you the house, then I get paid to wait while the house reverts back to me. Nice deal for me, not so nice for you.

For REIT managers who were not the original owners of the REIT assets, payment in units does increase alignment of interest. However, if they then sell the units for cash (see: ARA Asset Management), alignment of interest is eroded.

Dec09 Personal - HYis borned , HZ sick and Fixmarket

2009-12-31T01:13:00.000-08:00

Wah a really exhausting 2 Months for myself.

Hsien Yi is borned:)
My second son Hsien Yi is born on 17th November 09 Tuesday, hurray ! :) (37+ week)
It was in the evening time (the day before) when my wife suddenly felt water flowing, and after awhile we realised it is not your usual unable to hold the bladder. At that moment, we were caught unprepared and started to panic. We were actually trying to schedule a surgery next week on the 28th December (another 11 days later). We quickly got my parents here to take care of my elder son (3 yr old) and got the bag (luckily prepared in advance) with my wife's clothes and medical stuff and went straight to the hospital. As I was quite unprepared for a waterbag burst delivery (my first son symptons was actually slight bleeding) , I quickly grap some towels and a plastic sheet from somewhere and placed in the car.

As my wife started contraction, we think it was good to try a natural birth. However though there were contraction, there were no dilation, and there was a risk that the placenta may drop first , endangering the baby in the process, thus our gynae advised us for a cesarean surgery. The gynae came just before midnight and started the operation. And quite a coincidence, it is the Chinese Chu Yi. According to the Chinese it is a Da Ri Zhi (Big day) and only people with the ming (fortune) - you can be very successful and be the other opposite.

At 12am, Hsien Yi is borned, weighing 3.41 Kg and measuring 51 cm long with a very big head (39cm) - 90th percentile. It seems that my kids have something with being big headed haha :)

Hsien Yi is extremely alert, with his eyes opening on the next day already. (unlike my first one who only opened his eyes 1-2 days after being discharged in hospital)

The next month was a hectic month for us. The nanny who came is very unprofessional, she has an attitude problem ( I asked her to wake up at a certain timing to feed my son, while she say if she can wake up she will do so) - it really pissed me off. She also do some things which really got on my nerve, for instance washing vegetable in the basin ( extremely dirty !) , and washed ginger in the pail that I put my clothes in ! During the day time, she will also chit chat with my maid, sometimes oblivion to my wife asking for help (still recovering). It was a fustrating month for us. And although we though of changing the nanny, we viewed it week by week and thought that she will improve and we tried to close 1 eye. Well so we did not change and endured the 4 weeks. Also although the nanny takes care at night, when our son cries, we also wake up, and when he cries continously we as parents will also wake up in the night to see what is wrong.

The worst thing was during that time, my old neck problem came back. It pains after siting for some time. This problem came because I was too tired taking care of my wife and eldest son, such that when I fell asleep and slept in an awkward postion trigering the neck pain ( and I though it went away after not feeling the effects for more than the last 6 months)

The pain finally subsided after 4 weeks and luckily just in time after the nanny left. My this son is really difficult to take care. He drinks every 3 hours, meaning to say after 12 midnight, we have to feed 3am, 6am. And usually it takes about 45min to feed him, and burp him. Also, he has a habit of vomitting out milk quite easily. And he seems very alert and after awhile he will get very agitated and seems frightened (big eyes and panting heavily and cries if not pacified).

The first day the gynae left, I took the night shift, and after feeding him at 11am, I tried with no avail to get him to sleep. In the process I gave him another 2 bottles of additional feed before the 2am as he seems agitated and will only cool down after drinking the milk. The problem now on hindsight is that probably he is getting used to me and I am still inexperienced. ( everytime he sleeps, and when I put him down he gets up again and refuses to sleep. He then gets frightend and agitated and the cycle repeats itslef). That nightmare finally came to a rest when my wife woke up at around 3 am and I asked her for the pacifier. That really solved my problem partially.
Partially because we found out the next few days is that although he gets pacified, when the pacifier comes out he gets agitated again.

I have been taking night shift so that my wife can recover from her maternity. I have taken leave/scheduled leave which will last till next year. (2 weeks after HY 1 month) . Every night I sleep about 4-5 hours or less. 1 hr b/w 9pm-12am, 1-2 hr b/w 12am-3am, 1-2 hr b/w 3am -6am, and 2 hr fr 6am-9am. Sometimes he doesn't sleep from 12-3am, really exhausted. And this has been going on for the last 14 days...really shack.

Okay, lets see and hope this kid get better after the 2nd month. My eldest son is coping well with the new additional member. of course there is the ocassionally asking for attention and throwing tantrums , but he is happy with the new addition the the family.

Hsien Zheng falls sick - gastric intestinal
Also, just the day after the nanny left, my eldest son fell ill (Thu/Fri). He vomitted in the middle of the night 2-3 times and had diahorrea, resulting in everybody not having enough rest. The next day I went to the clinic downstairs. At first, his vomitting stopped on Friday, but his diahorrea still perisisted. On Sunday when my in-laws came, HZ went wih my wife to Orchard road, and his vomitting came back. After a short rest, he seems to have recovered and wanted to follow his cousins to Mount Faber Jewel box to see the snow show. After coming back from there, he started vomitting again, and this time whatever we gave him (water, milk (soya bean)) he keep on vomitting. I quickly decided to send my son to the hospital (Mount E), as I am afraid it was something serious like food poisoning. At the hospital, the doctor (specialising in gastronomy- stomache) examined him and told us that his stomach is quite bloated (alot of air) and still do not seem to be very dehydrated. He gave us 2 options, either leave him at the hospital for drip or take medicine recommended by him. As he seems not that dehydrated, the doctor recommended the latter, as drip can be traumatic/painful even for an adult. And so, he was prescribed - Debridat ( for stomach pain), and continued with his lacteol fort sachet (antidiarrheal drug) , dramamine used for preventing vomitting.

Lacteol Fort - Lactic acid producing organisms ; Belongs to the class of antidiarrheal microorganisms. Used in the treatment of diarrhea, for patients suffering from the chronic intestinal disease known as irritable bowel syndrome. Patients show symptons of abdominal pain, bloating or gas, daily number of stools, etc

Fixmarket -Urghh ..I got a letter from ACRA to submit AGM, which I have to hold AGM withinin every calendar year . I am in the process of striking of the company which I applied in August, and unfortunately I believe the strike off process may run till January (5 months) the next calender year. After reading the website, I came across Section 175, Application for Extension of Time to Hold Annual General Meeting. Since I do not know when the strike of will end, I applied for 3 months (50 dollars per month). After reading further I saw Section 201, Extension of Time to Lay Accounts at Annual General Meeting under Section 201 of the Companies Act- the account must be laid not more than 6 months before the date of the AGM. Really pek chek and according to ACRA I have to sought legal advice to see whether I need to apply Section 201 as their ACRA officers are not empowered to give such advice. What the heck , I also applied 3 months extension. So I paid an additional 300 to the stupid cost. Vomit blood. I really hope to close this shit this year (or early next year).

Nov 09

2009-11-15T01:27:00.000-08:00

Continue my extremely busy schedule.

October was a very hetic month for me.
Firstly at work, this is my company's financial year end, there are monthly /quarterly/ yearly reports to be done.
Secondly, me, my son and my wife's birthday fall in this month.
Thirdly, as my 2nd son is due I have to take leave to accompany my wife to see the doctor, and have to take care of my 1st son more often.
Fourthly, my dad had to see a urologist due to a high PSI reading. I accompanied my dad a few times to Dr.Png for consultation and for a biosyss.

Investment wise, I have been going in and out of the market (scared of correction). Thus this year my results is just flat. I went into DBS as I was confident of it posting better anticpated results and last quarter I believe will see a MtM (mark to market) to MtM2 (mark to model) accounting by financial institution, will this give the market a further boost ?On March 16, 2009, FASB proposed allowing companies to use more leeway in valuing their assets under "mark-to-market" accounting, a move that could ease balance-sheet pressures many companies say they are feeling during the economic crisis. On April 2, 2009, after a 15-day public comment period, FASB eased the mark-to-market rules. Financial institutions are still required by the rules to mark transactions to market prices but more so in a steady market and less so when the market is inactive. To proponents of the rules, this removes the unnecessary "positive feedback loop" that can result in a deeply weakened economy.

I also made a few bad mistakes, going into Genting because of some rumors.

The lesson here is to stay in the market (unless there was a big disaster coming along), and to pick up undervalued/potential big giants from mid/small caps.

My investment now consists of SMRT 47% CDL Hospitality Reits 31% Boustead 9% , B/M/V make 5% of my portfolio, and unfortunately I have still 7% in Celestial which I probably have to write off.

My outlook - US market will be hit by 2 more monsters - credit card / commerical debts . Right now, the stock market is feeding itself to too much exubuerance. Cash is rubbish now. Heli Ben has made cash absolutely useless. The only way out of this financial crisis is to blow up another bubble....see the comparison after the dot-com....US blew up the housing bubble.....now it is back to basics 101.

SMRT
My rationale of keeping SMRT is obvious, in a downturn, it should hold as it is recession proof. In a potential upmarket, its current PE now is ard 13 (6.5 for 1st half), a complete steal for a monopoly. Look at its cash flow, it is at least 50% more. Growth will also come next year in terms of tourists growth due to the 2 IRs, circle line, and more economic recovery activities (more movement). Next 2 years growth should be ard 30% or so. I am also looking postively over the retails contribution next year (Doby Gaut / Orchard Xchange / Jurong East Exchange).
For more infor look at :http://singaporebuspage.wordpress.com/2009/11/01/next-stop-3-more-smrt-xchanges/

This is what I feel for more potential growth....although the governemnt is mulling over having a bid for the downtown line, I feel that XXXX. Y? the NE line already shows the stuXXX of the whole situation already, will the goverment still make another misXXX ? Let see a few years down the line how this get played out and whether I get this correct.

CDL
Its current yield is around 5.5 % at price 1.52 and 8 cents dividend. Next year I am very optimistic on the IR bringing many more tourists. There are actually many new tourists development being done in Singapore, besides the 2 IR/ F1/ smaller unnoticeable developments like manmade water surfing in Sentosa... bigger extension at the zoo - Wildlife Reserves Singapore Builds River Safari, Asia’s First River-themed Animal Attraction. CDL HR has shown it has weathered the downturn extremely well despite the recession and H1N1. It has managed to keep costs in check and has a sizeable hotel presence in Singapore which allowed it to have a certain level of economics of scale.

Boustead
At its current price, it should give a dividend yield of 5.5%. (4 cents/ 74 cent) I have faith in Wong FF for turning this gem into a bigger giant. It is credited for being forbes top 200 company. It will not reach last year's height as its real estate division will not sell of any of its properties this year unlike last year as this year most REITs are hit by credit crunch. I had bought Boustead much earlier on at 60 cents (30 stock split adjusted) and sold most of it at 1.1 cents (0.55 stock split adjusted) a few years back. It manage to ran up further because its profit YoY manged to grow and I did not expect it to manage to sell its real estate. This time, because of the low price, high cash (37 cents) , I expect it to provide a buffer for me.

Sep Update

2009-09-04T02:30:00.000-07:00

Have been rather busy
June -
1) took my son to the zoo
2) going over to KL

July - Aug
1) climatised my son to his new school -Pat's schoolhouse

2) Repaired 2 of my lights, 1 is the one in the kitchen, tha ballast was spoilt. After tinkiering for a while, I finally gave up and got the boss selling lights to come over to my flat to fix it. apparently it needed to cut 3 wires, and then connect it back. It came to about 40-50, and I think it is well spent as it was a very tedious job looking up for almost an hour to fix it.

3) Called the plumber to fix up my kitchen basin ...its leaking. spent about 200 to glue up the basin, change the tap...it came loose and the pipe below.

4) Got the confinement lady for my wife's confinement

5) Look around maid agencies and selected a maid...coming in a month's time. Smaller agencies are more personal then big agenices like Nation.

6) Got new furnitures...went furniture shopping/IKEA/Furniture mall/ and got a new cupboard so that we can store our newborn clothes, new shoe rack so that we can transfer our first boy's toys into the cupboard...now it is quite unsightly around. Sold our room's TV as it is the CRT and taking up too much space. Had also to move our furniture around and rearrnging getting our first boy's older clothes.

5) Manage to finally solved my Fixmarket problem !!!! I called Emmy to help me strike off the company. We compromised that I will settle Mr. Jiang's debt 2 years of accounting fee and she will help me do the strike off - full financial statements and audit for free.
So I paid up 2700! due mainly to my negligance....but bo pian...take it as tution fees
I went to IRAs to ensure that Fixmarket had no outstanding accrual to the government agencies and then went to ACRA to confirm that I can strike off the company w/o major shareholder approval. In the ACRA website, I meet all conditions to strike off except w/o major shareholder approval as Mr. Jiang is nowhere to be found.
According to Ms Lee at ACRA, I have to hold evidence that I have tried all means to contact him, and I can proceed ahead to click on the condiditon all major shareholder approve of the strike off.
This is a fantastic relieve after so many years (almost 9 years !) of trouble. It will take about 5-6 months to proceed.

June09

2009-06-06T01:54:00.000-07:00

Regional indices have been rallying and STI/HK is up 30-40% this year.

Unfortunately yours truely have been severly underperforming, portfolio is down 4-5% this year, although an improvement from the low of 24% in March, mainly due to my biggest holding Celestial.

I have divested most of my Celestial taking a sharp loss which will unfortunately although business is sound, may face a financial liquidity crunch, unable to finance its convertible bond.

I have also divested Darco taking a sharp loss. I also read the annual report of Darco, I did not like I see as its receivables/debts has been ballooning upwards.

I have also divested MIIF which I find that its dividends may be cut even further due to its debt and subsidary debt. Its parent is also selling of them.

I have shifted most of my funds to SMRT, CDL hospital Trust. Why ? Most blue chips have ran up, with the banks/SPH ard 15-20x this years PE. SMRT is ard 16x giving me a dividend of abt 5%. Growth next year will be the circle line and more integrated network making it the most dorminant transport infrastructure in Singapore. Next year will be boosted by more attractions in Singapore. Just think, it will be so easy going to the zoo, IR.

Why CDL ? The IR is aiming to attract high flyers, but I feel that the tourists mass will be fr SE Asia region like Malaysia/Indonesia/Thailand, people who will most probably fill up the 3-4 star hotels which CDL fit the bill. At 79 its dividend should be ard 10%. 1st Q2009 DPU is ard 2 cents.

In an article published in October 2008, the Singapore Tourism Board is said to be confident of a
recovery in the Singapore tourism industry by 2010. The industry outlook is expected to remain
positive in the medium to long term, as a result of a strong line-up of world-class events such as
the annual Formula One Grand Prix and the Youth Olympic Games in 2010. The two Integrated
Resorts (“IR”) scheduled for completion within the next two years and the doubling of Singapore’s
cruise ship capacity by 2010, when the new International Cruise Terminal becomes operational,
are also expected to increase passenger traffic to Singapore.
In addition, Singapore continues to draw international interest in the Meetings, Incentives,
Conventions & Exhibitions (“MICE”) space, including the APEC conferences to be held in 2009.
Having been voted as the “Top International Meeting City for 2007” by the Union of International
Associations in August 2008, the completion of new convention facilities in the two IRs will
enhance Singapore’s ability to attract a wide range of international events.
Continued low debt to asset ratio
On 30 January 2009, CDLHT had its properties re-valued at S$1.48 billion, down from S$1.63
billion previously. The re-valuation of its properties has no impact on distributions.
Notwithstanding reduced property values, CDLHT continues to enjoy one of the lowest gearing
ratios among Singapore REITs with debt to assets of 18.2%. Furthermore, CDLHT continued to
demonstrate strong operating cash flows of S$102.8 million, and a healthy interest cover of 11.1
times. CDLHT is also proactively managing its portfolio and financing risks, with discussions in
progress to explore various options to secure refinancing of its S$273 million borrowings due July
2009.

key differentiating factors for commercial office properties

2009-05-24T20:18:00.000-07:00

...this is a reply from dydx on the wallstraits forum on the commercial office property which I find it useful for evaluating commercial office property investment

I am no property expert, but I believe some of the key differentiating factors for commercial office properties are -

1. A good location - e.g. Raffles Place; close to a key MRT station; being part of an integrated development (e.g. like Suntec, where the shopping mall and convention centre elements make the offices there desirable, even though the MRT is quite a long walk away). This usually makes a property become "Prime" in the location sense.

2. A good architectural design, with big-enough floor plates, up-to-date techinical specifications, and high-quality furnishings, suited for large modern offices. All these make a property "Grade A" in additional to its location. In this aspect, new buildings are always one-up against the older buildings. That's why big some companies or banks have no qualms in moving their main offices every few years - especially when the economy is looking up and their businesses are expanding - going for the best and cheaper deals.

3. Property owners giving naming rights of the building to key tenants. Some big companies or banks like the idea of having their rented building carrying their names, and for that they are willing to sign a longer lease and perhaps pay a premium rent.

Notwithstanding the above, commercial office rental rates are ultimately governed by supply/demand forces, be it for Prime, Grade A, or other lower grades. On the demand side, the main driver is the state of the economy, and whether the foreign banks and other financial institutions, coporates, and related providers of support services, are expanding. At the end of the day, companies and banks hire more staff and spend or invest in new offices because of business requirements - i.e. there is business to be done, or at least a strong likelihood of it happening.

On the supply side, the main driver is the completion of new office buildings in particular locations. E.g. When the currently under-construction new Straits Trading Building and Keppel Towers are completed, total supply of Grade A office space at Raffles Place will increase significantly. Unless demand continues to grow in the short term to mob up the new supply - unlikely under the current scenario - office rental rates in Raffles Place will come under serious competitive pressure and will have to fall, so the the new supply of space can be absorbed within a reasonable period of time, giving the owners of the new buildings a chance to collect some rev.

Another point to note, when big companies do not make money, it is entirely possible that the management will downgrade their offices from Grade A at Prime locations, even into their factories/warehouses in Jurong! And we must not forget most of the large banks are moving their back-end operations to Tampines or other offside locations in order to cut rental expenses and place such units in more longer-term premises.

Singapore tycoon sues Citi over $684 mln losses-paper

2009-05-24T20:03:00.000-07:00

SINGAPORE, May 19 (Reuters) - Singapore-based businessman Oei Hong Leong has sued Citigroup's private bank for negligence and misrepresentation after he lost S$1 billion ($684 million) on foreign exchange and bond trades last year, the Straits Times reported on Tuesday.

Oei's lawsuit said Citi, with which he has a 30-year relationship, repeatedly gave him an inaccurate picture of his trading exposure, which led him to take on more positions than he would have taken otherwise, the newspaper said, citing court documents. It said Oei declined to comment about the court case.

A spokesman from Citi told Reuters in an email: "We believe that the claim is without merit and we fully intend to defend our position vigorously." It declined to comment further on the matter.

There was no immediate comment available from Oei's office.

Oei was ranked Singapore's 29th richest person by Forbes last year with a net worth of $210 million. Forbes calculated Oei's wealth based on his stakes in publicly traded companies and in private company filings.

According to Straits Times, Oei claimed he felt compelled to close his positions at an extremely volatile time in October last year, taking huge losses, as he felt he had no choice after discovering the full extent of his exposure. Some angry Asian private banking clients have filed lawsuits after losing money on complex financial products battered in a global market meltdown last year, forcing the industry into damage control.

.....My thoughts :
1) Again my advice, Banks are never your friend ! Don't get mesmerized by being a so call priority or private client of a bank. It just throws a veil over you...make you important and happy.... so that they can sell you financial products.

I remembered being tried to sell a product, which gives you 7% interest annually, but is tied to the worst performnace of 3 global indices (S&P, Nikkei & Euro market) in October 2007. Once any market drop 30%, I will have to absorb the loss ! Investors sold on the 7% interest will have a nasty shock. My RM was telling me ...oh stock market correct 10-20% the most, so you have a high chance of getting 7% annually, just put a token sum inside. What rubbish. The signs of the housing market in the US and financial orgy were already cracking.

Be investment and financial savvy and treat the bank as a partner. Only you youself is accountable to your own well (wealth) being.

2) OHL case is just an example that you may be accumulating wealth for many years, but just need a single wrong step to set you back sevealy. It is very easy to go down, earning back is 10x harder.
Lesson learnt is that one must always be guarded, treat every single cent/ investment extra cautious.

Price cuts draw buyers to 3 condo relaunches

2009-05-18T20:12:00.000-07:00

May 19, 2009
Price cuts draw buyers to 3 condo relaunches
By Joyce Teo

Three prime condominium projects that struggled to generate interest last year saw a surge of buyer activity over the weekend after developers cut their prices.

The freehold 19-storey Parc Centennial in Kampong Java Road - where all 51 units are served by private lifts - sold 32 units at $1,115 per square foot (psf) to $1,233 psf, or from $1.27 million to $1.93 million. This price level is about 20 per cent lower than last year's $1,450 psf, and the interest absorption scheme is included.

Developer EL Development sold only six units in April and May last year when the project was originally released for sale. And at a private preview in March this year, it sold a 2,486 sq ft penthouse unit for $1,005 psf.

It held a preview this past weekend and has now sold all the two-bedroom units, which start from 1,098 sq ft. The three-bedders increase in size to 1,572 sq ft.

Managing director Lim Yew Soon said he had raised the prices of the remaining 12 three-bedroom units at Parc Centennial by 2 per cent.

Over at the 302-unit Martin Place Residences in River Valley, a soft launch over the weekend saw sales of 80 units at $1,450 psf on average, out of a total of 100 units launched.

Developer Frasers Centrepoint Homes said the 'attractive pricing' drew buyers. It released units priced from $1,260 psf to $1,700 psf, compared with the initial 28 units sold at $1,700 psf to $2,000 psf last year.

Singaporeans made up 62 per cent of the buyers at Martin Place Residences, with the rest being permanent residents and foreigners.

Earlier, CapitaLand had reported strong weekend sales at its 173-unit The Wharf Residence. About 95 per cent of the buyers chose not to take up the stamp duty waiver and interest absorption, preferring a straight 8 per cent price cut, it said yesterday.

Prices started at just below $1,000 psf for units with private enclosed space and many of the weekend deals were done at less than $1,300 psf, industry sources said.

Attractive price cuts, coupled with the recent stock market rally and a fear of losing out, are some of the key factors spurring buyer interest, experts said.

Compared with the situation late last year, buyers are more confident and developers seem to be taking advantage of improving sentiment to relaunch projects at attractive prices, said PropNex chief executive Mohamed Ismail.

.............Coincidentally, I went over the weekend to enrol my son into Meyer Road Pat School House. It costs about above 700+ for a half day course. The other school I saw was Modern Montesorri which cost about 600+. PS has a ratio of 1:7 while MM a ratio of 1:12. Furthermore, PS has a classroom of muscial instruments.

This is my thoughts... I have colleague who place their kids into church school which costs around 200+, but this does not include school holidays. So effectively they have to find ways to take care of them, also they enrol them for Chinese+Music+Art class which will cost another additional 200-300+. In PS, you have everything in 1 roof, which will save time/effort too.

PS anyway has very good reviews and I think it is time for my little one to learn some independance and some skill sets which we as parents/grandparents may be hard to instill.

....Anyhow, after registering my son, we visited a new classy condominuium "View at Meyer". Its has a very classy architectural building with private lifts. It is sort of a boutique condo. But wow, the price was also classy. It range from 1250 psf (3th floor) to 1450-1500 (9th floor) and 1700 psf at 20+ floor. A 3-bdrm is 1600+ sqf and 4-bdrm 1790 sqf. Thus the price is ard 2.2- 2.9 million. Well according to the property agent there, this is considered a boutique condo, and this is the price to pay. Nearby condos like Esta/Seaview/One amber is ard 900 + psf, but there are easily few hundred units there. I suspect there might be traffic jam just trying to get back home.

I am thinking, at the end of the day, convenience is still my top prority. Getting food is a breeze to me, at my current place, I can get good food within 3 mins walk.

It is also next to a upcoming central MRT. If I were to stay in those Condo, I will have missed out on all these convenience. When my kids grow up, I need not fetch them up/down frequently. My Uncle who lives in Bukit Timah Coronation road, although is considered prime land, he has to be a full time chauffeur as it is so inaccessible.

At the VaM, I also saw Zhou Chu Ming. He seems to have bought a 1-bdroom trying to rent out at 3.5K. Well good luck.

Property seems to be picking up, due to pent up demand and sentiment. However the avalanche of TOP property next year and the wave of expatriate going back home only means that supply is still in abundant. I am not optimistic of property prices in the next 1-2 years, which had not corrected much.

2009 Arsenal EPL review

2009-05-17T02:46:00.001-07:00

It has been another lously year for Arsenal, 4 years without a trophy, and is a tough pill to swallow for Arsenal fans.

This year without Arashavin, Arsenal may still be fighting for 4th place. I feel that this year Wenger has got many of his tactics and strategy wrong.
- not fielding Arashavin in the FA cup, the only realistic cup to win
- persisting with Diaby who is crap and even worse playing him out of position
- in the 1st championship match, Walcott was already in Evra pocket, with of little use, in the 2nd match Wenger still played him in that position....poor decision. I will have moved Bendtner there who played much better in the 1st leg after taking over from Walcott, and placed Walcott central striker instead of Van Persie. The space & penetration in the final third was lacking. Van persie is more technical, but had no speed and thus no space. Walcott would have been better as a second striker feeding of Edabayor.
- In the last match vs Man U, we see that they have improved vastly, maybe because Man U was also cautious.
So what next, I feel that Arsenal although has progressed, is still lacking as a top club. They lack speed which only maybe Walcott is providing. Nasri is a central midifielder and playing him wide is a bad choice as there is little speed. He is not like Pires who gets into very dangerous position in the final third and scores lots of goals. Nasri playing wide does not get into dangerous position in the final third, usually outside the box.
1) Maybe they should get a natural wide winger with speed like Ryan Babel, 2) a more tenacious midfielder and and 3) tall capable defender. 4) And definitely a speedy tall & techinical striker to replace Edabayor who has lost interest and ineffective.
Bendtner although tall, is not good technically. Look at simple 1st touch which he hopelessly miss. Will he get better as he is still young? Although his goal tally is good for his age, it has to improve. If not he should be let go sooner, it is a waste of time, and waste of future precious points.

Well it is time to look for next season, hoping the next experience players get recruited, and definitely will look forward towards Arashavin, an improved Walcott, Educardo and Rosicky fighting for next season.

Confession of a S-Chip CEO

2009-04-29T02:46:00.000-07:00

The speculation is that the writer is the ex-CEO of Fibrechem and he was referring to the D&H team. I have no idea how "authentic" this email is but i have to say that i am "not surprised" by the contents of what was alleged in the email. It is an interesting read for the "IPO" market. If you want to "read" only the gist of the story, start from "Then my life-changing incident took place." in red below

THE CONFESSION OF AN S-CHIP CEO

We are victims as well!!! Let me tell you the story. By the time you read this article, it would reached have hundreds of investors, bankers, regulators and journalists. My purpose was to shed some light on the “dark sides” of the business of S-Chips (Chinese companies listed on Singapore Stock Exchange), so as to help prevent more financial losses in the future hurting the ordinary people on the street. From this angle, I wish to redeem myself somewhat.........

It all started some 6-7 years ago. My colleagues and I were just a few of the million of entrepreneurs in China struggling to make ends meet at the textile fibre factory that we bought from the government. Some of our older colleagues had laboured for more than 20 years before having the chance to “privatise” the state-owned textile fibre factory in Fujian Province that we have worked for since the day we left school under the Premier Zhu’s “government retreat, private sector advance” scheme, literally at a song. We thought we were going to be very rich very soon. Little we knew that when the local governments of the various counties and villages decided to “retreat”, we end up! with thousands of “privately-owned” textile fibre spinners that competed ever more aggressively. Despite ever rising revenue, margins were disappearing fast....... Sometime, we just wonder why we have worked so hard only to earn next to nothing. Perhaps, our only reward was meant to be “the master of our own destinies”...... But we never really gave up hope...... One day, we shall strike gold.......

1990, the year after the TianAnMen Incident, was really a very difficult year. Many of our clients, the textile manufacturers who were enjoying the initial euphoria of the burgeoning export demand, went belly-up within a short 2 years of economic contraction. However, we pulled through all the vanishing receivables and anguish cashflow-balancing exercises.

By 1993, we were off for the biggest boom ride of our life-time. Our textile fibre business blossomed as China becomes the clothing factory of the world, benefiting not least from the one-off Renminbi devaluation that the Chinese government engineered in 1994. Those were the good old days, where sufficient numbers of our competitors were eliminated by the TianAnMen-induced recession, and the world began to look to China for every piece of garments stretching from the heads to toes.

Money was easy......and we expanded our production capacity as quickly as we could, limited only by the fact that the state-owned banks were not really very keen to lend money to private enterprises like ours, and we just have to borrow from our villagers at some 15% interest rates!!! Nevertheless, we did good business and our leader, the general manager of the factory, could even afford a chaffer-driven Santana. In any case, he was too old to learn new trick, even as simple as driving itself. I was the rising star which had to bide my time, as I was the only person who speaks decent English. I was meant to be the tongue of the company in dealing with the external world. But I am getting impatient. For while the company was booking increasing profits, we never seems to have cash to be distributed as any excess cash generated from the business was never enough to cover the capital expenditure needed to expand the production .

We just owned an ever-growing production business. Unfortunately, good profit margins never last in China. Good demand quickly attracted new entrants into the business as the barrier of entry is relatively low. At the same time, some of the so called “obsolete capacities” came back from the grave and soon, we found ourselves struggling to churn our profit. It was like working for free again......lots of revenues but just no profit!!!

By the middle of 1990’s, we were doing great business selling to our customers in different areas of the coastal areas. In 1995, we suddenly found ourselves having to deal with fast rising cost pressure. However, the market was buoyant enough for us to raise our product prices to pass on the cost increase to our customers. Then, we realized that we must move ahead in term of technology and product offering. Like everyone else around us, we took advantage of the tax concession offered by the government to the so-called joint venture companies. We recycled our “cash” to Hong Kong, set up a “foreign company”, which in turn pumped back the cash to Fujian in the form of a joint venture entity, using the cash to purchase some second-hand German equipment to produce the chemical fibre! s needed in all kinds of fabrics and artificial leathers.

However, luck did not really favour us, at least thus far. Soon, we were told that our economy was experiencing very high inflation rates and soon, the then Premier Zhu Rongji stepped a hard brake on the economy, cutting the bank credit to many state-owned enterprises which were producing things that no consumers wanted. While as private enterprise we did not enjoy the benefit of bank credit, its sudden massive contraction hurt us as bad as the state-owned enterprises who received such reckless loans. We were entangled like the other enterprises in what we called the “triangular debt” problem, where everyone owes the next person money and there was just no money at the source for anyone to get paid.......!!! The situation last for quite sometime as we lived from hands to mouths, sometimes having to send out local thugs to chase for receivable payments from cash-strapped clients. Then again, what else can we do? We had so much or our friends’ and relatives’ money with us investing in all these machinery now that the only road for us is to struggle forwards......turning back would have made us the “outcast” of the village....... By the time the rest of the Asian economies cracked in 1997 amidst the so called Asian Financial Crisis, we were already becoming numb to bad news. I remembered there were days that I wished I had not joined the textile industry, or any industry at all......for making money out of making something is so darn difficult....... I thought I might have just wasted my youth. Somehow, we managed to pull through as a group. The general manager of the factory, who is now getting seriously old, made his sacrifice along the way by selling his Santana in order to keep more mouths fed. We all had no where else to turn to but to continue pushing hard to sell our new product, the chemical fibres.

Finally, by year 2000, the economy began to recover. Our hard work and persistence were also beginning to get paid off handsomely as China had become the centre of all textile, shoe and furniture manufacturing in the world, and all these products required some forms of chemical fibres. We were beginning to rake in cash beginning 2002!

Then my life-changing incident took place.

One fine day in late 2002, I was introduced over the dinner table to one Singapore “Deal-maker” who was to become one of the richest men in his country in the next 5 years. Mr D was still a “relatively” poor deal-maker at that time. Just like many so called “deal-makers” running around China at that time, they hope to make small fees introducing companies to capital, or vice versa. Mr D claimed that he had successfully engineered a number of private equity transactions in China, helping companies with so called “mezzanine” financing to prepare the companies to be listed in stock exc! hanges outside of China. He was fully aware of the psychology of Chinese entrepreneurs and their deep dissatisfaction with the bias of the Chinese government in allowing only state-owned enterprises to list on the local stock exchanges. To us, having a listing status in China is like having acquired the right to print money. One just has to cook up a nice investment story and he could get Chinese investors to subscribe to the right issues of a listed company at any price. It was so much more an elegant way to make some money, rather than to have to toil for a few cents selling chemical fibres....... Mr D went further to claim that he had taken some of the invested companies public in both Hong Kong and Singapore Stock Exchanges and given his investors had made some money, he always have a group of ready-investors willing to back all his “stock picks”. He went on to ask quite a number of detailed questions on the operating conditions of our companies over the dinner, jotted them down carefully on a small note book along the way. Later on, we adjourned up-stair the restaurant for a KTV session. I must admit that I remembered clearly Mr D was a good Chinese song singer, having sung some hot-off-the-chart songs that I heard my niece hummed sometime shortly before the incident. His smooth handling of the KTV girls, which he asked for two concurrently, also showed that he had been around.........

The next time I met Mr D was three months later, quite unexpectedly as I had thought he could have decided to give our company a miss given our relative small size. He requested for a factory visit which, after having consulted our old general manager, I accompanied throughout. As usual, no serious business until after dinner and getting slight tipsy after a few drinks forced down by the KTV girls in the evening. I must admit that Mr D is a seasoned operator. He was quick to recognise that I was an impatient young man to take over the operation from my older colleagues. Throughout the entire evening, he was trying to convince me to move the gear one notch faster to accept some private investors into the company, beyond which he was confident to help us to get the company listed in one of the foreign stock exchanges, where everyone will be able to cash out their profit if they so ! chose. I pretended to be sceptical while deep in my heart, I need no convincing as I have known many Fujian entrepreneurs shot to fame and riches, 2 of them by turning large tracts of collective land into vegetable farms and the other bending float glasses he bought from state-owned factories into auto wind-screens and sell them to car manufacturers. I never doubted that one can make a lot of money from car wind-screen, but I could have never imagined striking it rich planting vegetable.......!!!

Mr D and myself both agreed later that we need to convince the other older colleagues of mine to approve such a scheme, and over time, move them aside to allow someone young and dynamic person like myself to be the face of the firm to cater to the likings of the investors, who were mostly English speaking. In the meantime, my task was to convince the existing shareholders to allow a group of Mr D’s friends into the shareholding first, while paying Mr D a “structuring and introduction” fee along the way. The easy part was, as Mr D coached me on how to present to the rest of the shareholders, his fees will not be in “cash” but rather in equivalent value of “shares”. He said that was to assure everyone that he could only make money should he be able to engineer an eventual listing of the company on a stock exchange, after another year of lock-up period for promoter shares aft! er listing. All interests would be aligned, as he put it.

Mr D was indeed an experienced operator. He had anticipated all the concerns of the “older” colleagues of mine, who feared that this was another one of those “leather-bag-company” deal-makers that was trying to make money out of no commitment. So he got through the first “hurdle of trust” after my carefully orchestrated presentation to the “board” of the company.

However, there was still one important issue we could not resolve amongst the board members. The finance manager correctly pointed out that the company indeed, did not need substantial amount of cash at this moment as we were not expanding aggressively anymore. The market place for our products was relatively stable right now with demand and supply growing organically. We will not be able to drive higher sales without sacrificing our margins by cutting prices. In short, we can only grow organically at around 10% ! per annum, which was probably not the most exciting story for the investors. In fact, the board members did not see the need for new capital. However, the idea of getting listed did appeal to them. They too had many friend who had become “paper millionaire” after the companies got listed. They too were looking for the big-pay-off day. So I was tasked to come up with a solution. In other words, there was a “green-light”! I did not expect my luck! Almost immediately after the board meeting, I called Mr D to tell him the outcome, as well as the issues raised. Again, I thought he must have expected the outcomes. As he explained calmly over the phone, the first round investors (which he called angels) will not put in a lot of money so that they would not dilute the existing shareholders very much. These angels are the “connected persons” that will come in with their own money (through Mr D’s personal vehicle) that will help cement the way for some of the well known direct-investment funds to step in at a slightly later stage, which would provide the company with the credibility, other than funding, to convince the stock exchanges to allow the company’s listing, and the subsequent active participation of other institutional investors during the IPO. Mr D went on to explain that the process of getting a Chinese company list! ed was in fact, an art. There were not many people like him that could have the trust of many influential people to conceal their names behind his vehicle to invest in a company, not unless they have been working on other cases together before and having developed deep working relationship. These angels will see the company through the process from getting “restructured” to “listed”, rendering their helps in one way or another through exerting subtle influences on counter-parties, bankers, regulators and other investors. Mr D’s vehicle will participate in the shareholding of the company first, where they will invest up to 5% at book value. In other words, they demand for very cheap entry. Mr D will only take his fees later after having brought in the money from direct investment funds, in larger quantum, in the form of shares of the company at book value before the entry of new capital. He wanted 2% worth of the amount of money he would bring in from the funds in such shares. Subsequently, he went on to explain that this was the modus operandi these days as he could introduce us to the senior executives of the companies who had done business with him for further due diligence on his reputation. In particular, he emphasized that my colleagues should not be worried at all given the fact that it was going to be his and his friends’ money that will be in their hands, rather than the other way round. My older colleagues did find some solace in this argument later on.

As for the use of money, Mr D simply pointed out that we will have 6 month to a year to come up with a new plan on spending the proceed of investment, in the form of new technology and new products. “Aren’t you guys always looking for money to upgrade production machinery to produce new stuff for the market? It the same bunch of the customers anyway......”, so he quipped. So the decision process took a few months, where in between, Mr D sent in some accountants and lawyer to conduct some checks on our operation and accounts. We had nothing to hide then as we had no reason to fake anything. Everything was ours.......then. Subsequently, the “angels” came in, followed by, indeed, a number of reputable direct investment funds a few months down the line. We got a whopping US$20mn to put up a new plant to produce a new type of artificial fibre, the machinery of which was to be imported from Germany. The new product was in fact, attractive to a lot of customers. However, none of them were going to buy a lot of it at the beginning as they were not sure their customers were going to like the new types of yarns made of this new fibres. Business was not as brisk as Mr D had! hoped for.......

On the other hands, Mr D seemed quite keen that we could move forward in our listing process. He began to educate us the process and requirement of the stock exchanges for listing. We paid visit to Hong Kong and Singapore, talking to bankers and exchange officials, attending seminars, as organised by Mr D. We were all psyched up to be a rich millionaire once the company is listed. However, there was just this little problem.....our new products were not accepted by the market as fast as we had wished for. Most of our customers operate under very tight cash flow situation. They only have working capital to provide for the acquisition of raw materials to produce the yarns ordered by their customers. No one was going to spend a lot of money buying our new fibres, prod! uce large quantity of products to purvey them in trade shows, despite they all fed back with good comment on the potential of the new fibres. Very quickly, Mr D came up with an idea. In order to boost our sales numbers fast, he will raise another US$20mn of money from all the direct investment funds in the name of working capital need. As he explained, they often did the same tricks with those companies they listed before. They will raise new capital to produce the new products to sell to customers, encouraging them to help push the new products by offering them more favourable and longer payment terms. With the increased sales and profitability number, he could get the company to list very quickly to get more money to help push for more sales....... He claimed he had done it many times before and it had always worked out. The economy was recovering quickly in 2003, nothing was to going to go terribly wrong. When I asked whether that would be considered “artificially inflating sales number”, he laughed and quipped, with the capital markets on your side, you can engineer self-fulfilling prophesies!” Of course, this article cannot be complete, at this juncture, without citing Mr D’s favourite quotable quote. “Water enough money into any company, even a fake one could become real some day.” He believed so much in this that I thought one day, this could cause his downfall. So we went ahead, sold the new shares at higher valuation to another bunch of investors Mr D arranged. He took another round of commission in the form of shares. We were beginning to admire Mr D. Money flows through his hands like water and he did it so effortlessly.

We were no less impressed by his connection to some of the richest and most influential people, particularly in Singapore. You see, he was viewed as a successful Singapore entrepreneur made good in the vast land of the North. Through diligence and perseverance, he carved a niche for himself identifying promising Chinese companies to groom for listing on the Singapore Stock Exchange which was losing out in race to Hong Kong Stock Exchange as the Chinese! state-owned enterprises were encouraged to list in Hong Kong. Mr D was their hero, directing promising private Chinese enterprises to list in Singapore and along the way, enriching many “angels” and local investment banks in Singapore. I chanced upon many of these angels as well.

There were occasions Mr D would have called me to help arrange for some transport and accommodation in Xiamen for groups for “secret” visitors. They are usually small groups of 4-8 people. I would generally put them in comfortable Buick mini vans, receiving them from the airports, ferrying them to golf courses, restaurants and night clubs. They would usually visit one of two factories invested by Mr D. From my impression, these were the angels behind Mr D, which for obvious reasons, he had to please. There were bankers, lawyers, other deal makers, stock brokers, fund managers and people that do not have a job, simply because they were so rich already. Occasionally, there were ex-CEOs or Chairmen of large government controlled enterprises in Singapore. Once, I even met a supposedly ex-member of parliament in Singapore.

It was obvious to me that Mr D entertained them in separate groups at separate times, taking pains in ensuring that some of them were not aware of the involvement of the others, for some reasons. I was always invited to all these golf and night entertainment events for a simple reason: I speak English and Mr D wanted to be seen as having someone like me to watch over his investment in this part of the world and helped him to tap into different kinds of local relationship. The other Chinese entrepreneurs may not be comfortable in dealing with the whole bunch of English speaking Singaporeans.

One common trait of all these trips was that all these guys from Singapore seemed to love the night clubs in China. The daily programme always ended in some night clubs, where these guys would party till the wee hours, every night they were there. Mr D would sometime, when he was half drunk, tell me that he had again “nailed” some key relationship and one of the travellers in the group would soon be in his “Club”. He would whispered that someone in the group was the senior partner of an investment fund, or someone in another group was connected to the so-and-so in Singapore, or someone was closely associated with the chiefs of some Singapore banks, or someone had “influence” over the listing approval process of the stock exchange, and some would just be some new investors that he was trying to woo to invest in his pre-IPO projects or the shares in the companies that he sponsored the IPOs.

When I asked why they were all so tireless in their nocturnal activities, Mr D laughed, “This is what I call pent-up demand. You know these people cannot even come 100-meter close to any KTV in Singapore because of their social status. The opening up of China is probably the best thing that happened to all these Singaporean men, for they can at least release their “valves” once in a while........ Do you know how boring Singapore is? I have a permanent KTV room booked up in one of most posh KTV in Singapore, costing me half a million Dollar at the minimum every year. Guess what, the only important guests I have using that rooms are from China!” Watching Mr D in action, I finally understood the true meaning of “club”. He had managed to combine the “social club of friends” and KTV clubs so well that I thought every successful Chinese businessman should learn. And in so many ways, the “club” in Singapore is really not that different from the “club” in China........ So finally, we got our act together to attempt a listing towards the end of 2003, after much of the financial twisting and engineering to make our company look like a well-funded high-tech textile fibre company on the verge of experiencing explosive sales take-off. In truth, we produced a lot of the new fibre products and literally give them to our customer to produce new fabric for marketing purposes, with the promise that we will not collect money until their products are sold. Nevertheless, we book these as receivables.

To the dismay of Mr D, my older colleagues had insisted on listing the company on the Hong Kong Stock Exchange, rather than the Singapore one, where Mr D has greater control on the process. They felt that the company would probably be accorded higher valuation in Hong Kong. Besides, they were not comfortable with Mr D’s influence in Singapore fearing the ultimate loss of the control of their company. Mr D went along grudgingly, helping to smooth the way to facilitate the IPO. We got a small investment bank to underwrite the IPO. The big ones were really not interested in this small piece of business. We went on to file the application to list to Hong Kong Stock Exchange, who was equally high-handed as Hong Kong was flushed with quality large size state-owned enterprises queuing up to list there. Being relatively uninterested in small size listing and more experienced in evaluating the quality of smaller Chinese private enterprises, they were quick to notice the sudden expansion of account receivables on our accounting statements. They followed up with a number of questions with the clear purpose of delaying our listing, probably to see how these receivables will behave given longer period of time. In short, there would be no quick IPO for us.

Mr D was quick to use this delay to his advantage. He hinted to everyone on the company board was that one of the reason for the stock exchange delay was due to the lack of a convincing younger manager helming the company, and that our senior colleague was already too old to project a “dynamic” image to the Exchange and the investors subsequently. He wanted me to be promoted to the CEO position while our existing GM to become the Chairman of the board. With his insistence, my appointment was pushed through the board, which made one of my older colleagues very angry as he was supposed to be the next-in-line in seniority. But heck, he should have spent some time learning English! Mr D, being truly worried about the age of the receivables on our book that would become increasingly dubious as days go by, pushed us to shoot for a Singapore listing where he feel, with his broad relationship will help a smooth IPO. This time round, my older colleagues obliged grudgingly. So we quickly filed an application to list in Singapore. It proceeded relatively smoothly and we went through an initial hearing very quickly. The market was in relatively stable conditions and we felt we could get the IPO proceeds quickly at the turn of the year. With lot of money, like Mr D’s famous words, a fake company can become real....... To be fair, ours was not really a fake company. We were just doing what the Chinese proverb describes: Accelerating the growth of the seedling by pulling it up a little everyday...... To our surprise, we got a letter very soon from the stock exchange questioning us the reason for the failure to disclose to them we had applied to the Hong Kong Stock Exchange earlier. They asked whether we had been rejected previously and on what ground we had been rejected. Just as we wonder how they found out so quickly since one could safely assume due to competitive relationship, these exchanges should not be talking to each other on micro matters like this, Mr D came storming in over-night. “Someone wrote a poison letter to the stock exchange”, so he explained. “Someone who knows the situation very well and who is not very happy with the whole thing”, he concluded. We were fortunate, he went on to exclaim, as he felt that given the Hong Kong Stock Exchange never really rejected our application, he could still salvage the situation using his relationship and influence. While there was no hard evidence, we nevertheless took the precaution of asking for the early retirement of the senior colleague who was passed over for the post of CEO as we suspected him to be the whistle-blower. We made sure he was well compensated in monetary terms as we thought that would sooth his anger, with promises to allocate more of the shares to him so that he would share our desire to see a successful IPO. Then we went on to reply to the stock exchange disclaiming the fact that we were previously rejected, citing our need to access capital markets fast as ours business was expanding rapidly. Hong Kong was just going to be too long a wait for us.

On the other hand, Mr D worked his network and “club of friends” to sooth the nerves of the exchange officials, who were working hard to promote Singapore as the “second board for China” The launch of “second board of China in Shenzhen” hit a snag when the National Peoples’ Congress decided that the Chinese investment public was still too unsophisticated to handle investing in non-State-controlled enterprises that even the Chinese government may not be able to police effectively. So after 3 month, we were informed that we manage to secure the final hearing. Mr D and some young lawyers and accountants spent a few days preparing me to handle the questions “correctly”. I saw the signs of satisfaction on the faces of the officials during the hearing. One of them even went on to comment on the fluency of my English...... Mr D was right again. My Chairman could have fumbled and rumbled on just like any other Chinese CEO during such occasions. They were just the hardworking mulls that built the foundation of the Chinese’s manufacturing might. I belong to the generation that would take the company to soar higher as we understand and speak the language of high-finance, in English! The battle to IPO was hard won. We got listed in 2004 and to our pleasant surprise, some of our customers came back to pay down the receivables and asked for more of our new chemical fibres. By now, China has become the “factory of the World” that churned out all kinds of consumer and industrial products so cheaply that the Americans and the Europeans were so addicted to. The stock markets and physical property markets in the world were becoming buoyant and everyone was beginning to feel wealthy and began to spend more. Our new fibre products found more commercial uses and we bought more machines using the IPO proceeds to produce more products to cater to the booming demand.

Again Mr D was right. Pour more cash into the business and you will get a real company.........just like the pig-farmers l! isted on the stock exchange.......as he put it. Sensing potential to make a lot of money out of the good performance of the company and the buoyant market conditions, Mr D descended into town one day and asked me out for a dinner. As usual, we headed to his favourite KTV after dinner. After a few drinks, he leaned over and whispered to me, “Hey, this is your chance to grow really big very fast. The IPO proceed was not enough to fund your growth. Now that we are listed, we can place more shares out to raise more money to accelerate the business expansion to capture more customers before the competitors in China could replicate our capabilities, which always happen in every industry and business in China.” I was reluctant to agree to help sell the idea to my old! er colleagues as their shares were still in lock-up period and I imagined they would hate to see any dilution of their interests further at this juncture. Mr D went on, “I really needed your help as I need to get the shares placed out to some of those who helped us through the difficult times just not too long ago. We need to let them make some money as we are entering a bull market soon. In any case, the issuance of more new shares will give us more power to cement your position as the number one man in your company as we all support you rather than your older colleagues.” As usual, we kind of half forced the issue through the board with my older colleagues grudgingly approved some kind of convertible issue to assuage their fear that the new institutional investor would not be able to sell before they were allowed to.

In Mr D’s effort to consolidate his hold of the board further, a new director from the institutional investor group was appointed to the board. I had known him earlier as one of those that visited our plant before the IPO, when Mr D was just beginning to restructure the company shareholding where this new director was once introduced to me as an “angel” investor. Apparently, they were good friends that “make money together”. By 2005, the Chinese economy had entered into another “boom era” and our business was literally flying, just like any other businesses in China. Profit margins were good while sales expanded quickly, and our share prices rose more than 3 to 4 times from the IPO price. Many of older colleagues sold their shares and retired happily into the sunset in 2006, only to regret to see the shares they sold almost doubled again in 2007. Being the new helmsman, I could not easily sell my shares as it would have been construed as management not having confidence in the business. By then, Mr D had become one of the richest men in Singapore. Leveraging on his experience and the capital he accumulated from earlier successful IPOs he conducted, where in some case he made more than 50 times his capital, he exploited his new reputation as the “preferred deal-maker in Singapore” to the maximum.

His “club” became increasingly larger as many people with money and “influence” joined the “club” to participate in this unprecedented “Chinese feast”. He doled out hot IPO share allocation through investment banks to repay old favour and to cultivate new relationship. Success begets success and money begets money. It all seemed so easy and so natural. Everyone got what they wanted. The Chinese companies got their money to expand their business (which at a later stage, no one is really sure which company really had any business to start with), the entrepreneurs were handsomely rewarded for the risks they undertook, the deal makers got their fees, the angels made their killings, the bankers collected their fees and dished out new loans, the lawyers and accountants recruited more young graduates to cope with the record work volume, the stock exchange got their “new mandate as the second board of the Chinese companies”, the investors got their hot-and-sizzling China concept stocks and above all, the rich and the influential members of the “invisible clubs” were all happily enriching their own pockets......

The reason why Mr D was successful, I realised, was that he always try to help the people who helped him in one way or another to become richer. Despite the fact that I could not sell my shares, I got the help of one of his banker friends to obtain some financing by securing my stake in the company to join in the biggest “Chinese feast in Singapore”. Just like all the Chinese entrepreneurs Mr D helped, I became one of his “angel investors”, taking stakes in promising new companies through his vehicles, got allocated hot IPO shares and reaped substantial gains within short span of time. I too, was becoming not only asset, but also cash rich. I took advantage of the Singapore immigration rule and got myself a per! manent resident by purchasing a property in Singapore. I wanted my son to study in the English school in Singapore and grow up as part of the establishment there. In any case, I would be able to help him join the “club” and he will be taken care of the rest of his life.

As for Mr D, he was purchasing properties in the form of “tracts of land” as he moved to diversify his assets from stock holdings to land holdings, with a sight to become a serious property developer. The Singapore property market was getting sizzling hot by the middle of 2007 and it seemed nothing could go wrong, particularly when 2 casinos were being constructed in an otherwise very conservative society. For myself, Mr D was going to be my role model. I went on to fund entrepreneurs and Chinese companies directly, hoping one day to bring these companies to someone like Mr D, and make more than the Singaporean deal-maker, at least equal........ Oh, I forgot to mention that the Chinese local stock market went through the roof as well. To take advantage of this, I needed no advice from Mr D. My friends in the local banks helped me secure the capital easily just like what they did for thousands of state-owned enterprise officials. They took the company’s cash as “invisible lien” to lend money to the managers of these companies to punt in the stock markets. The profits of such stock market speculation go directly into the pocket of the managers.

However, only in hindsight after the stock market collapse at the end of 2007 that it became obvious a lot of Chinese companies’ cash in the bank vanished into thin-air alongside the stock market bubbles. Our worlds began to unravel at the end of the third quarter of 2007. By then, the Sub-prime Crisis, as we knew it now, had hit the U.S. economy. We were still busy feasting in the spoilt of the capital market excesses, unaware of the impacts of such a crisis that originated from the housing bubbles in a country so far away. We were blind-sighted by the ease of making money from stock markets and at the peak of the markets in the middle of 2007, we all felt like the “masters of the universe”.

The first sign of trouble amongst the Singapore listed Chinese companies appeared when the share price of a Chinese steel company got sold off aggressively. In good times amidst a vibrant economy, this company presented to the investing community a story of their ability to turn in good profit margins by buying hot-rolled steel coils, coating them in zinc and sell them to car and consumer durable makers. One analyst, whom everyone ignored when the stock prices were rocketing, did question its business model as firstly, such production method is highly inefficient as most modern steel mills produce zinc-coated plates in one continuous process, and secondly, the investing world also knew that the prices of hot-rolled coils became excessively expensive as there was a preponderance of such downstream ! processing plants who got squeezed by the few integrated steel giants who have the capability to smelt iron-ore. Then there was the rumour of the company being privatised by a foreign steel giant seeking easy entry into the China market and its stock prices shot up before the trading of this steel company was suspended one day.

Rumour had it that it had been reporting fake profits, an official report of which the investing community is still awaiting after a few months. It was so obvious an insider job to cash out their position to the retail investors and apparently, the company management was not contactable anymore! By the second half of 2008, I believed many Chinese company CEOs were having tough times struggling to keep their business afloat amidst the most serious and swift crisis in memory as the credit situations around the world got frozen up. Worst, many of us were facing more serious issues in our personal finances. All our investments in stock and property markets were plunging in values amidst the so-called sub-prime crisis. Worse, we could not sell our stocks and properties as the transaction volume of these investments just vanished quickly together with the confidence of the investors globally.

While we busy feasted in the spoilt of the capital market excesses over the last 2 years, we did not realise that we were piling on quite a fair bit of leverages as we secured our investments for more bank loans to attempt to reap more profits, when it all seemed so easy. We never thought we could have any problem of repaying any of our borrowing as we were sitting on a lot of gains on our investment holdings. There was only one easy way out for all the Chinese company CEOs and that was to dip into the honey jugs. We all understood the importance of having our closest allies to be the finance managers of our companies so that any small “problems” could always be ironed out. In this case, I just “borrowed” some cash from the company accounts to fill some of the “margin calls” from the banks outside of China, which financed my “investments” in the stocks listed on Singapore Stock Exchange, as these foreign banks were ruthless in coming to seize the underlying security when the “margin calls” were not met. In some cases, I just pledged more of my personal assets to the foreign banks. I was becoming very stressed by all these happening and was not sleeping well.

Mr D was not having a good time either. He too was suffering from exactly the same problems as we were just emulating his investment styles and leveraging activities. I heard of incidents where he turned to some of other more cash-rich companies that he invested in to “borrow” some cash to bridge through some “margin calls”. He sold down quite a fair bit of his investment holdings to some “friendly hands” in a series of stock placements. At this moment, the goodwill and friendship he built over the years came to his rescue in these moments of “illiquidity” as the market transaction volume just dried up almost completely. However, the market prices of the stock holdings we used to secure our financing continued to drop by the days. Some of our friends and fellow “angels” were selling their holdings........and may just be in the same kinds of troubles as well. No one trus! ted each others at moments like these. Those that were selling their investments would not pre-warn their “fellow investors” as everyone would rush to sell at the same time! It was a time where everyone was for himself! My anguish did not escape the attention of the “director” on our board that Mr D posted in earlier. He flew over one day and was visibly concerned about the situation of my finances and of course, more importantly, that of the company. He sensed troubles as he knew that I too, had quite a fair bit of personal investments that were vanishing into the thin air in values.

By now, at the end of 2008, I was becoming desperate. Our company was going into the “audit season” and obviously, there was a large cash deficit that we would not be able to explain to the auditor. In the past, we could have just “arranged” for some cash to be credited into the bank account for a brief period to satisfy the auditors’ check. However, there was no such “temporary cash” to be found at any price as the sub-prime crisis had now developed into a full blown credit-crisis around the world. China was not spared in the process. With no where to turn to and the audit dateline closing in, I took the risks to “brief” the director of the true situation and asked for his help. I was surprised that he was not shocked by my confession. He had probably guessed it! In any case, the director asked me to remain calm while he would consult Mr D to seek some kinds of new financing to help bridge this difficult period. He asked that everything remained confidential as the last thing we wanted the world to know was the “missing cash” in the company accounts. H told me that quite a number of the S-chip CEOs were on the same boat and some of the “funds” that used to backed their IPOs have been able to extend some credit directly to them ease the pressure from the foreign banks, secured by again, stock holdings of the CEOs. Little did he know that my assets had almost been entirely secured by all kinds of creditors already!

Then the irreparable damage struck. I had borrowed some money from the local Chinese banks to punt in the local stock markets. The arrangement was such that I had to return such cash to the Chinese banks at the end of the year because they too, were subjected to annual audit. I had carefully maintained sufficient cash in our company accounts, which served as the “collateral to the conscience” of my friends in the Chinese banks. As I began to use them to fund the “margin calls” of the foreign banks and the amounts got further depleted by operation losses of the company amidst the worst economic crisis the world was now facing, my “friends” in the local Chinese banks were not going to take a chance on their own fate. They were definitely not “friends in need”. They simply deduct the amount I owed personally from our company accounts two days before their auditors came in, w! hich was of course, a few days before our company auditors came in. The rest was history...................

The auditor, which was an international firm, was not going to take a chance with their reputation. They formally informed our board of directors in early 2009. In other words, they were warning the board that the financial statements they were going to publish would be “disastrous” and could cause a serious enquiry by the regulators. I think some insiders proceeded to sell some of their shares before any official announcements were made but most of us were warned not to do anything with our holdings as that would be considered “insider trading”. Of course, all my older colleagues and company directors hated me as a consequence. I was asked to absent myself from all their meetings as they attempted to come up with a solution before the mandated result announcement date stipulated by the Stock Exchange. I was very scared. I had no one to turn to as even Mr D had stopped answering my phone calls. Everyone was trying to distance himself from me and it became obvious that I was going to be the “scapegoat”.

To protect myself, I seek the advice of some lawyers in China who in turn, consulted their friends in Singapore. To my relief, I was advised that should I be found guilty in the Singapore courts for misappropriating company assets, there was no established bilateral treaty as yet for Singapore court to extradite me from China. The China Securities Regulatory Commission, the securities regulator in China, had never once recognised their responsibility to regulate the S-chip companies listed in Singapore. In fact, the Hong Kong Stock Exchange had faced similar issues for decades in their attempt to regulate the P-chips, which were Chinese private enterprises listed on Hong Kong Stock Exchange, to no avail. In other words, as long as I refrained from stepping my feet on Singapore soil, nothing could be done to me. In any case, I thought given the hatred I faced from all my older colleagues and friends in the hometown, I should be taking some long overdue holidays. I relocate my family to a Chinese seaside town.

Although I was now an ordinary citizen, I was glad that my wife kept quite a far bit of the money I gave her along the way and that should be enough to last us a life time, at least in China. Through internet, I came to know that the company finally disclosed the incident to the Stock Exchange and the stock was suspended. They appointed an investigator but I was no where to be found. So it would be interesting on how the story could turn out post the investigation report. In fact, a number of S-chips suffered from the same problems and were suspended from trading soon after us. Inevitably, there were cases of over-stated revenues, fathom receivables, missing cash, over-leveraged financial positions of the founding entrepreneur who mortgaged away their own stocks, as well as outright manipulation of stock prices. In many cases, I suspected the irregularities had begun right from the very beginning, before the companies were even listed. Many were not real companies at the first place. My friends in the know told me that a few more had been discovered as suffering from “missing cash” and jokingly commented that the Exchange had to arrange for a smooth sequence of announcements just like the way they schedule result announcements of listed companies. With all these irregularities exposed and more promised to appear, the stock prices of all S-chips have literally collapsed. All my friends and their “club members” must have suffered tremendous losses. Some dealmakers and their syndicate members apparently were facing margin calls on daily basis and some even declared themselves bankrupt. It must have been a very trying period for everyone. However, I did not seem to have much sympathy to all these people. I witnessed how some of them became filthily rich in a short span of time without having to work hard, while other enjoyed a good ride in fortune just because they (or their friends or relatives) were in position of influence.

I was the only one that would be made a “scapegoat” and had to live a life of “exile”, while these guys could still just lick their wounds secretively and continued on with their life. I do not sym! pathize those institutional investors who lost their money as if they did, they were simply either incompetent or someone had benefited personally along the way in having committed their funds’ money in such investments. Curiously, I wonder who will speak on behalf of all the many ordinary people in Singapore who came to believe the investment potential of these S-chip companies after all the beautiful “packaging” the dealmakers and entrepreneurs wrapped around them, and went on to invest their life savings in the S-chips, only to find out one day that all these were worthless! So when dust finally settles one day, we shall all look back and evaluate what had gone wrong and who are to be blamed. I am sure all fingers will be pointing at the Chinese entrepreneurs such as myself, who are usually labelled as “greedy and unscrupulous”.

There is a ring of truth to that accusation and I admit I am guilty. But how about those dealmakers, who taught us how to cook the books? How about those angels, who hid their identities behind some dealmakers and exerted influences to assist them to succeed in their schemes? How about those institutional investors who trifled with the money entrusted to them? How about those intermediaries and professionals who were not vigilant enough to protect the interest of the investing public? I would like to end with a comparison. The Ming Dynasty collapsed only after the General (Wu San Gui) they sent to defend the border against the Manchurians opened the gate voluntarily to allow the Manchurian’s army to come into the Great Wall. General Wu did that probably out of a promise to be made a king later on and be endowed tremendous amount of riches by the Manchurians. Of course, the historians would like to add that he also needed the help of the Manchurians to defeat another general that had taken his favourite concubine. In short, the thieves and robbers are only usually allowed in by the insiders..........

If you have read the story till this part, I am sure you are either a victim or someone who is deeply interested in the development of the S-chips going forward. Please help to forward this email to any many such interested parties as possible. We need to put an end to all these irregularities lest more ordinary people on the street suffer unnecessary losses. In the process, you will help me to partially clear my name...... For I am not the only one to be blamed.................

Note:

1. Not everything is true in this story that I have just presented in order to protect some friends that still remain friends. In particular, the story before 1995 was inserted in only to give you a perspective of the difficulties that most Chinese entrepreneurs went through, and how they eventually all came to resent the ease and ruthless manner in which people like Mr D made great fortunes leveraging off their hard work.

2. At the same time, I sincerely hope that the investigation report that was pending in the case of my company comes out being at least “fair” to me. Otherwise, the more “real truths” will follow in subsequent emails......... hahahaha, the power of internet........

....My thoughts.... this is the dark side of capitalism. I am familiar with this dark side as I was involved during the fund raising when I set up by dot-com venture, trying to raise cash. I met up with different people from differnt walk of life, meeting up with many angel investors will be trying to cash out at IPO, disguising normal companies and pruning companies to be appealing to investors.

...My general guideline for those interested in S-chip, forget about textile companies (China Sky, C&G, Sinotec Fibre etc) , forget about companies whose receivables are ballooning and little or negative cash conversion (the shoe companies China Hongxin, China Eratet, Hengxin come to mind) ....forget about companies who are cyclical (Cosco, YZJ etc) , choose only companies with profit at least 100 RMB (or SG 20 Mio) annually...get companies who have been audited only by top 4, this will reduce your selection to only a few companies. In investing in S-chip, it is high risk high return, and do sufficient due dilligence.

I see no difference between shares in overseas companies like Wilmar, Indofood and Golden Agri vs the S-Chip companies. Only right now, quite a few S-CHip companies are really rubbish which drag down valuation of all S-chips. Separate the wheat from the chaff, find unpolish raw diamonds and you will get a multi-bagger.

Celestial Nutrifoods AGM

2009-04-29T01:59:00.000-07:00

Attended the CN AGM yesterday.

- Biodiesel project on track, I poised a question on the prospects of Biodiesel, and according to Ming DQ, the project is viable, as it is using low quality and recycling waste oil. It should be running by next month

- on why CN continued to spend on Capex although the CB conversion is about 8-9 months away. According to Ming DQ, when they embarked on the plans it was before the financial crisis hit and there was no way they anticapted this. There is no way they could stop/cancel the payment as the projects have already started.

- On the CB (Zai Quan) topic which was a very hot heated topic, CN is still negotiating with banks for refinancing (rong zhi). Overseas banks are short of funds themselves, and although China banks are willingly to lend, the process is quite long, and may require tedious process on endorsement from government/state. They are now discussing and the chockpoints seems to be the valuation of the company to be used for collateral. (eg, roads and capital equipment have less/ little value) , interest rate etc.
They have been instructed to update every month to the SGX on the progress. When prompted further, they seem reluctant to say too much, maybe because they wanted to make a public disclosure first which will be out the next day or so.
The board have been trying different ways to including raising capital (gu ben) through rights, unfortuantely with the share price so low now, that option is absurd. Although this is also in the AGM, this is just going through the motion.

- when asked whether he had pledge his shares, Ming confirmed that he has not done so.

- when asked why he had not bought more, he says that if anybody lend him money now, he will do so...... I think that he has also been affected by the financial crisis, with his money maybe tighted up with some other things (property / other business ventures)

My thoughts: Ming seems to come across as rather an honest person, and sometimes we have to use out gut feeling to sense out the character of a person. If Ming and the other board members are dishonest, they will not have come for the AGM.

I also asked Zhou CN on the protein Milk schedule (dan bai nai), it seems it should be ready by next year end. This product future seems good as there are many Chinese in China, and the milk may not be enough to support the population. Throw in the Milk Scandal, and also Asian who are more lactose intolerant, I think they can penetrate and gain market share in this.

Some thoughts also, I have been looking at Celestial Nutrifood top investors, Cheung Wai Kwok was a major investor previously. ( >5%) and he has presumely sold out. He is also a chairman of Shenzhen Skyto Investment & Development Co, a company engaging in investment in PRC. Presumely, with the financial crisis, he had to cut his stake in this valuable company as well.

As investors, sometimes we have to use certain risk reward ratio and intelligent guessing to see whether it is worth investing when the future is murky and with short term setback. With risk appetite coming slightly back, Celestial price has been going up. The advantage to retail investor is that we can go in right now, but for many funds, they cannot do so unless they can ascertain a bright future for their invested company (and when this is so, the price has already gone up alot)

Celestial Nutrifoods Some thoughts

2009-04-14T22:42:00.000-07:00

Celestial Nutrifoods reported its FY0809 earnings in Feb 2009.

CN at the point of announcement came from a postive cash to a negative cash balance (after taking into consideration the potential convertible bond 1200+ RMB) . This is mainly due to the heavy investment for the Protein Milk product. Some thoughts here....

Some points
1. China Milk Scandal from Wikipedia

2008 Chinese milk scandal was a food safety incident in the People's Republic of China involving milk and infant formula, and other food materials and components, adulterated with melamine.
By November 2008 China reported an estimated 300,000 victims,[1] six infants dying from kidney stones and other kidney damage, and a further 860 babies hospitalized.[2][3] The chemical appeared to have been added to milk in order to cause it to appear to have a higher protein content. In a separate incident four years before, watered-down milk had resulted in 13 infant deaths from malnutrition.[4]
The scandal broke on 16 July, after sixteen infants in Gansu Province who had been fed on milk powder produced by Shijiazhuang-based Sanlu Group were diagnosed with kidney stones.[cm 1] After the initial focus on Sanlu - market leader in the budget segment - government inspections revealed the problem existed to a lesser degree in products from 21 other companies, including Mengniu, Yili, and Yashili.

Here we see the China milk scandal breaking out in 16 July.

2. In an announcement 28 August, Celestial announced that there are spending 700+RMB in 100k tonnes in protein milk.

Over here, I believe Celetstial has already done its due dilligence for at least last month and has done enough due dilligence to see a great opportunity to go into. So within 2 months after the Scandal broke out, it committed to spending a high capex despite the knowledge of the impending bond conversion.

The CB issue while posts some risk, is in my opinion will be a walk over. Besides the points from my previous posts, lets look abit into its history. In 2005, Celestial was the only soya bean related company to be invited by the Daqing government to invest into the Soya Bean Tech high zone and had a interest free loan. Here it show strong links with the government (at least the last 1-2 years).

It has been going up by virtue of the recent rally. I believe it is apotential big retail consumer giant in China in the making, and with a PE of 1.2 I will continue to hold. It has been shorted heavily and I believe short covering fuel and once the CB issue is over, it will continue to attract stronger hands.

Mar09 update

2009-03-27T23:36:00.000-07:00

I Have been rather busy the last 2-3 months
1. RT, or reservist training, this requires you to go for a physical mass exercise at the army camp twice a week for phase 1 (total 4 weeks) . If I fail, I need to go for phase 2 - 3 times a week . Having my neck injury last year prevented me from training for my IPPT.
And being not fond of running, I failed my IPPT the first time (after 3 weeks, 1 week was CNY). I passed all my station except my 2.4 km running which was 14:04.
Well running 3 km everytime really trained my physical fitness, and I improve leaps and bound. Finally on the 2nd time (the 2nd week of RT phase 2 - total 5 weeks), I manage to clear my 2.4km at 12:48. I really had to push myself very very hard to pass. I remembered when I ran my 5th round, my timing was ard 11:05, so I almost sprinted throughout my last lap to the extent of vomitting.
There were 2 things which helped me pass IPPT. First, I really trained and push myself during the RT to train up my physical fitness. It is really our own determination and preseverance whether we want to put any effort during the RT. One can just go to RT and waste time, but I prefer to make full use of it.
The 2nd thing, (maybe it worked for me only) I took some red bull before my run. I felt it boosted some of my strength and feel less fatique during the run.
Well the incentive of passing is that I pass last year and this year !

2. My MIL was feeling rather depressed after her ops, and so she came to my place for recuperation. At least over here, she will have less things to think about. So she was here for about 3-4 weeks. And this made me rather busy as I had to take care more of my son with my wife taking care of her.

3. My wife was involved in a car accident and 2 months after the accident, the other party issued a legal letter to us claiming medical fees and legal fees. These people are really greedy and unscruplous. My wife car hit their car from a stationary postition (both cars was stationary before my wife pressed on the accelarator), It was my wife fault (she was really very stressed during that time with work and her mother operations) and we agreed to pay for the car repairs which came out 4k ( their toyotoa corolla) . Our car was only slightly dented.
During the settlement, we agreed that there were no injury. This was also stated in the report filed to the insurance. However 2 months later, they wanted 8K -10K a person (3 person) and 3k of legal fees each !
In the medical report, it just stated there were only soreness detected. No X-ray no MRI. Of the 3 person, only 1 got 1 day MC, the rest went home the day itself !
We could either reject their claims and fight legally or negotiate with them. Our insurance company suggested the best way was to negotiate with them, as the legal fees at the end of the day might be more than the negotiated amount. I agreed with the settlement although I felt rip off because my wife would be the person who has to spend the time if we go to court. At that time, her mother was having depression and her company was going to retrench people. I think the best thing to save hassle is to settle this. If this happened to me, I will go to court against them. Money is not an issue, If they want to play punk I will play along, it is a matter of principals, I do not want to get rip off and stamp upon.
Well at the end, through the insurance company advise we settled this at 4.5 K a person (including legal fees). What a rip off!

4. My company I am in is doing badly. We had a restructuring where our section was badly hit (20%). Then, 1 person left on his own with no replacement coming in. His job responsibility was assigned to me, and effectively I am doing 2 persons responsibility. I had to work several weekends and even during CNY, I had to work till 2-3 am to finish my work. Also to make it worse, with the restructuring many things/personnel heads were new and had to start from scratch (Business reports and Sales incentives calculations)
Things at least came down quite a bit, with some negotiating some of my previous work (1o%) to my manager, and setting up certain guidelines and framework already , I also manage to automate some stuff.

As a result, my shorting of the market was disastrous. I actually wanted to short the market in Jan (860+) when Obama was giving his speech, however I fell asleep as I was really tired out and I missed the opportunity. S&P dropped to 660+ before rebounding. It rebounded 5% when Citigroup announce they are operational profitable, and futures was postive, and I went in to short (721). It was really v emotional and stupid. After shorting, actually I knew I was v wrong, but I was hopeful that it was a short bounce. Wrong, it went up till I finally covered at 771. Actually I should have considered cut loss quick and change to another position (higher reward risk ratio).
Risk reward ratio was not really there shorting. It was a costly mistake.

I have to really learn from my costly mistake, when I do not have time, do not short (trade). Emotion was also running high which made me into an errenous mistake. What was I thinking ? I was thinking maybe S&P may hit 600... but the risk reward was really not there. Really dumb of me.

Is this the bottom ? Nobody knows, but S&P after 2-3 weeks is around 815+ ( a rally of >20% from its low).

Where to go from here ? Obama and the FED are committed to spent and spent their way out. Is it sustainable and will this lead to the recovery ? I believe yes, but at a costly price of hyperinflation with things to come. Oil has already recovered fr a low of 34+ to 53+. A bit late to get inside.

My portfolio has also took a beating down 30% with Celestial dropping fr 37 to 10 cents. Its PE is now less than 1 (0.7) and P/B of 0.1/0.7. A steal and is really a golden opportunity. Why did it hit so low ? Many China companies are facing accounting scandals, inflated cash (FibreChem), receivables cannot be reconcil, suddenly bankrupt although record profit the quarter before (Ferrochina), owners who pledge their shares for loans suddenly have to pay up (beauty China) and they do no have the cash.

Also, it has a convertible bond that they might potentially have to pay back (1200+ Mill RMB) in June 09. With their full-year report, they are net cash of 810+ cash, short of 400+ if we consider full conversion. This risk was also highlighted by PWC auditors.

There are some risk here, however this is what I feel
1. Many scandals in the US lately (Madoff) are caused with dubious/ficticious auditors. At least PWC has audited them and cleared their financial balance sheet.
2. This is the worst scenario of 100% converesion. I will expect prob 60-80%.
3. When they announce their soya bean zone which costs 1bil RMB, they had only 0.1 bill annual profit. They had pulled through risker projects before and I believe they should be able to pull this through
4. Although credit is tight, banks in China are still lending ( recent reports show China banks lending increase last few months). Banks generally will lend you money if you show that you have little issue of paying off. With strong cash flow of 500+ RMB a year, and Net tangible assets of 2-3 bill RMB, I believe banks will lend to them.
5. I have read some forums of the risk of transmitting RMB/other currency overseas. This is overblown as I see it. Many multnational companies have to do business overseas, it will just take longer (some custom declartion) to transmit the legitimately overseas.

All these cause Celestial to become dirt cheap now. Most people are now keeping clear of China companies . I have been buying because at this price it is really a 20-30 bagger in the making.

What are Celestial future plans ? In end Q1 they are rolling out the 100 K tonnes biodiesel business - a opportunistic time with hyperinflation (I expect oil to be the first one to shoot up) coming. They are also rolling out protein nutrional beverages 15K and 5K of powder. With retail products the contributing 56% or revenue and almost 72% of gross profit, I believe with their brand name and distribution scale they can quickly scale this up.

I am formulating some plans now to see my next step.

Meaning of Life

2009-01-06T01:42:00.000-08:00

This is a part of a post in the newspaper about capitalism and materialism from the perspective of a upper-middle class. This provoked some inner thoughts in me.....

"But if one is blinded by materialism, there would be no end to wanting and hankering. After the Ferrari, what next? An Aston Martin? After the Hermes Birkin handbag, what can one upgrade to?

Neither an Aston Martin nor an Hermes Birkin can make us truly happy or contented. They are like dust, a fog obscuring the true meaning of life, and can be blown away in the twinkling of an eye.

When the end approaches and we look back on our lives, will we regret the latest mobile phone or luxury car that we did not acquire? Or would we prefer to die at peace with ourselves, knowing that we have lived lives filled with love, friendship and goodwill, that we have helped some of our fellow voyagers along the way and that we have tried our best to leave this world a slightly better place than how we found it? "

In our pursuits of material weath, we should not forget the true meaning of life, what is important to us. To me, my family (my wife, son, parents and sibilings) is very important to me and I should spend quality time with them and help them in whatever I can.

Last year was a bad time for me where I injured my neck. This year, I will make conscientious effort to take care of my health, eating more healthly, having adequate sleep, doing more housework to make my house clean and conducive for me and my family.

FY2008 Summary & Review

2009-01-01T15:56:00.000-08:00

FY2008 is characterized as a tumultuous year, nothing short of explosive incidents. The Housing bubble in the US and the financial greed in Wall Street caused great mayhem in the Financial Institutions all round the world, with many of them going under. Great names like Bear Sterns, Lehman Brothers and Merill Lynch became nothing but a footnote in history as they went under or forced to seek refuge. Even countries like Iceland (had to be bailed out with loans of 2.1 Bill from IMF and 2.5 from othe Nordic countries) and Turkey need IMF infusion.

Many billions and trillions were lost in this year as we see many stock market crashed in one of the worst financial crisis and looming economic crisis.

DJI 13044 8776 -32.7%
S&P 1447 903 -37.6%
Nasdaq 2610 1557 -40.3%
Nikkei 14691 8860 -39.7%
HangSeng 27560 14387 -47.8%
STI 3461 1761 -49.1%

As we see that even though the Financial crisis emanated from the US, everywhere else is hit as liquidity dries up, and export roriented economies like Japan/China/Singapore gets hits badly.

I had already anticipated the a big downward movement in the stock market last year (see my post in August/September 2007), cashing out most of my stocks. However I was lured in March again when stocks dropped 20% (STI) and some stocks I was eyeing dropped 30-40%.

It was a bad move, as with PE of 5 was not a sufficient buffer, where companies can drop to a PE of 2.5 ~ a 50% drop.

My portfolio in FY2008 is down 5.9%, ending with a 43.5% in stocks, 11% in FD and the rest in cash 44%. However, my performance should not mask my longs which was massacred, down 50% to 80%.

My biggest company 39% Celestial is now priced at 37 cents, at a PE of 2.5. It is fundamentally sound and although it is expected to be hit with the current downturn, I believe it is a multi bagger in the making. It has a strong brand recognition in the retail market for their beverages and nutrifood. With its new investment in candies and protein milk, I believe it can capture greater market share and propel to greater heights. In a downturn, I will probably have to aim for PE of 3 for small caps.

My next company is SMRT 3% now price at 1.65. I was holding it and expecting to average down but did not due to its PE is still high 15 . However it is recession proof which will give me a dividend 4.7%. Some things to consider, tourists numbers are falling, in recession, more people will stay at home in Singapore. Some people may give up their cars for public transport.

Macquerie now consists 0.6% of my portfolio, dropping from 1.02 to now 0.295 . It is indeed a horrible drop. I have thought that with a infrastructure fund, it is relatively recession proof. What went wrong ? This is actually a fund investing in infastructure. Thus, it has a debt of its own + its investment have extra debts of their own. In a credit crisis, it will have a double whamming, where both the parent fund and the subsidary itself will have to face risks of refinancing. Where to go from here ? MIIF has indicated that it will pare down debt and reduce its payout ot 3 cents half yearly. This translates to a dividend of about 20%. I have not made too much movement because by the time I realise this, it is a bit too late. At this price, it is not worth selling. If this goes down further, I may contemplate averaging down. Lets see what 2009 brings.

Darco dropped 83% from my purchase price of 34 cents to 6 cents. It has a high visibility of book orders and have been making inroads in Middle East. What went wrong ? A poisonous convertible which is highly disadvantageous to Darco. The agreement lets the issuer convert shares at a discount at at the market and they can just dump it in the open market. The conseqences shows that the share price plunging with itself a not very liquid stock.
Why did they go into such an agreement ? I have really not much idea, maybe it was hard to raise money. This consists 0.2% of my portfolio.

My strategy this year was to keep most of it in cash, but divered to buying stocks and shorting futures. My latter strategy did not do too well, as my longs was around 60-70%, and shorts around 30-40%. My longs also dropped about 50% while my shorting of indexes only dropped 30-40%. What helped me was a trading strategy and pure luck where I was able to hold my shorts where they made the most movement. It is luck as there were many times I wanted to close my shorts when the stock market went down quite alot. For eg, I was luckly to have a position in place when the FED initially did not approve the 700 billion bailout. The major markets dropped 6-7% that night.

Since last christmas it has been rallying on low volume. I closed my short (from the announcement of the Auto bailout S&P 890) at 868. I expect that stock market should recover after a horrible Aug till Nov. With volume light, stock market might be trending up. Anyway the risk is getting higher for shorting and I have to be careful about shorting.

For 2009, I believe we are not out of the woods yet. It will be another challenging year and expect another volatile season. Obama will be inagurated as President of US on 20 January, and will be expecting Congress to sign the stimulus package.....

Here wishing my family and friends a Happy New Year.... good health and prosperity

Transactions Dec W2 - oil

2008-12-22T08:25:00.000-08:00

Oil dropped from a high of 147 to a low of last week of 40 a barrel.
It then went up about 47 dollars last week. On Friday last week it dropped to 44.7 (Dec contract) and 47.75 Jan Contract due to the saving of Big 3 automobile manufacturers did not go through in congress.

This was my thoughts - they will definetly pass them, Tuesday Fed will cut rate, Wednesday OPEC issued that they will cut supply heavily to balance the ideal price for oil.

So I bought on weakness, with Friday night ending at 46.7+. Monday it rose to above 50 dollars but crash downwards after US release dismal manufacturing data 45 dollars +. Tuesday Fed cut rate to 0.25. Initially it rose, together with US stocks market hitting 4-5%. However, oil slid further to 43.8.

What the heck, Wednesday when OPEC agreed to its biggest supply cut ever (2.2 mill barrels ), it rose a bit then tanked further. Wednesday was my trading date to pull out. Before the OPEC meeting, I just put a price at 47.8 and it got hit.

I was lucky to scrap this flat. From how I see, speculative trades are still in play. with Dec futures ending that week, most people are closing their positions. So we see a long squeeze andthere is a big gap in the next month's contract. (<3-4 dollars)

Lucky in the sense that I initiated the later contract, which was not played that badly and did not fall badly. Things to learn is that 1) I should still monitor US economic news. 2) I should learn to grap big profits even though I have a deadline to exit.
Things that I did well... at least I cut before the OPEC announcement.

Another bad move, the Singapore Share I shorted is Wilmar. Why ? Because it did not decline as much as other blue chips, and palm oil prices are down by more than 50%. Its results have been supported by financial hedging and not real profits. Anyway as I expected oil to rise, I close this at a loss 2.9 fr 2.65.

I am waiting for the automobile bailout and rise in Euphoria to short again.

Last Friday as I was going on a trip, I place an order as I believe it will drop further and I think with the recent rally, it has some sufficient margin. The automobile bailout came that night, too bad, US market rose about 2% but ended flat.

Lets see how things play out.

thoughts on crisis

2008-12-08T00:49:00.000-08:00

1) Many countries are spending huge on infrastructure
Developing countries will benefit more from this. Why ? Infrasture building will create jobs for devleloping countries, and once these infrastructure are up, they will support growth for other industries eg. airport -> Travel, highway -> Trade ,ports->trade etc
How would Developed countries benefit, as I can see nothing much. first, jobless bankers will not be construction workes, 2nd infrasture building have less effect on future growth in other industries.
That is why I am holding tight on my China shares.

If I was the govenment in US, to stimulate growth I will be investing in high tech R&D, alternate energies, space travel (new industries) etc.

2) Companies now should be relooking into their business, shortening their account receivables,wary of giving too much credit (means that companies are lending money), credit reviews on customers which are in bad financial shape.

3) An interesting thing now is that alot of companies convertible bonds are trading at discounts on the dollar. For example, Noble which issued bonds at a high price, can pay a discount to buy them back. This mean that financially stronger and more sound companies can buy back their bonds on the cheap. I will do more analysis on Celestial bonds on a later stage.

4) This recession is set to last as banks horde cash, drying up capital to business. Credit card crisis will hit next year.

Transactions Dec 08 W1

2008-12-08T00:28:00.000-08:00

I closed my shorts in early november at 919, and was resisting it (S&P is down 34+ % YTD) . It was a horrid Sep & Oct. However, S&P US market went down further, excaberated by the financial worsening. The auto big 3 companies in US was also facing bankruptcy. I expected them to be bailed out, but as always, the US congress needed some fighting before it got approved. S&P sank to 750+, just before I left for my trip. WHen I came back, it was going up almost every day (5-6 days continous) till 890+.

I shorted 10 at 870 on Monday evening. I was deliberating till the evening as I was busy with work to think through. But after going up for so many days, it was ripe for a fall. US unemployment figures was going to be released on Friday.

Monday dropped 8+% wipping of most gains the last week, Tuesday, it did not break and recover to 840+ and Wednesday 870+. I was thinking of covering, but heck wait till the unemployment data came out. Thursday it drop to 848 which I covered 5, and covered another 5 at 828 once the unemplyment figures came out. It was expected bad, and I quickly covered the rest. As expected, US market rallied on bad news to close at 870+.

I have to be very careful with shorting.
i) The market is now rallying on bad news with the short term low at 750.
ii) I expect the auto makers to be bailed out
iii) Obama wants to spend the greatest amount on infrastructure - Deficit is not important...big words
iv) 22 Jan is Obama ascendancy to his presidency... I expect a good rise till then
v) I find that those who have sold have already sold already, leaving inexperienced shorts.
vi) Things are likely to get worse with more bankruptcies on its way
vii) Just some personal feeling, experiencing the Christmas festival in the city, gives me a good/sombre feeling. Even if I have shares, I will not sell even if I was in a bad shape - next year willl probably be different

Portfolio down 6.8% this YTD. Celestial (my biggest holding) is now 36 cents, PE of 2.8. Longs 44%, shorts 5%. (A singapore share)

Celestial 2008Q3 performance

2008-11-17T18:38:00.000-08:00

Key Highliights:
• Sales rose 28.1% to RMB581.7 million
Growth in sales volume of industrial products
Overall increase in selling prices
• Net profit up 54.6% to RMB162.1 million
Due to unrealised exchange gain of RMB63.2 million
• Maintains healthy financial position and cash flow
Net cash provided by operating activities of RMB205.1 million
Cash and cash equivalents of RMB1.4 billion
• Trial run for biodiesel facilities commenced in late October

Singapore, November 14, 2008 - Mainboard-listed Celestial NutriFoods Limited (天圜营养集团有限公司) (“Celestial” or the “Group”), a leading soybean protein-based food & beverage products manufacturer in the PRC, today announced its results for the three months ended September 30, 2008 (“3QFY2008”).
The Group posted a 28.1% growth in total sales from RMB454.3 million in the three months ended September 30, 2007 (“3QFY2007”) to RMB581.7 million in the quarter under review. Net profit surged 54.6% to RMB162.1 million from RMB104.8 million in 3QFY2007.

In 3QFY2008, the Group maintained a healthy and satisfactory financial position and cash flow, with net cash provided by operating activities of RMB205.1 million and cash and cash equivalents of RMB1.4 billion as at end of this quarter.

Outlook and Future Plans
Due to overall concern on food hygiene, sluggish stock and property markets and the uncertain domestic economy in the PRC resulting from the global economic downturn, the Group believes that retail sentiment will continue to be depressed. In addition, managing the costs of raw materials will remain challenging for the Group despite the fairly stable raw materials market in the quarter under review.
“We will continue to observe market trends and raw material price trends closely, and take necessary actions to sustain our competitiveness and our leading position in the industry. We also hope that the economic stimulus measures announced by the PRC government will boost economic growth in the country, as well as improve consumer confidence, and in turn, induce
higher domestic consumption,” said Mr Ming.

My thots.........
It reported a credible performance of 25 RMB or profit of RMB 162 Mio.....notice the way they made the announcement. They have no intention of hiding that the quarter performance is boosted by foreign exchange rate on their convertible bond.... this is a testament of honest management. Other companies may not even highlight this.

It also reported that no dividend may be given in this Q3. I believe this is prudent, and also shows the candid and honest relation with shareholders . It could have waited for Q4 and just remove the dividend.

I believe all economies and companies will face great challenge ahead in 2009. However, I believe the strong management will manage to continue to deliver satisfactory performance, and will boost strong growth when the upturn comes. China is in one of the best economy to weather this global recession. It has one of the highest foreign reserves, and has the economic power to stimulate its economy with stimulas package on infrastructure and cutting interest rates.

Celestial price is now 36 cents with projected PE of 2.4 . I will continue to hold and add to my holdings at opportunistic down prices. It is now trading at depressed valuations and has the potential of being a multi-bagger with a market cap of 230 Mio (636 Mio shares outstanding). I will compare this vs Want Want which has a market cap of a few billions dollars, and has the potential to reach its height.

Portfolio now down 8% with 44% vested. I have been a good boy, closing my shorts position as I think Oct has been a torrid month. At the same time, I am also going for a short holiday in Gold Coast. This cost me 4-5 %, but bo pian.

I think it is rather risky to short now. However, last week Japan went to recession, Germany also showed a strong downturn. US data is also horrid.... Lets see, I am resisting temptation to short....

What I will do is to wait for a major change, a major bankruptcy and deploy 15 %.

Novemeber 1st Week Transaction

2008-11-08T08:55:00.000-08:00

As October was a bad month, I was waiting for a re-entry. US elections was round the corner, and US market will rally with any moderate move.

On Tuesday, US market rally with anticipation of Obama winning. I entered at 996.75....yes lousy again. I also use this opportunity to close my Soyabean futures 972.( buy at 970 and went down as low as 933). I also sold SCI at 230.4

Why I entered Soyabeans ? China is a top importer of soyabeans, and last week commodity prices was rising. With the milk scare in China, it could possible create demand for soyabean products. However, I was wrong as usual, with deleveraging still going on. The BDI index was also plunging from 9000+ to 1000+ in a matter of 3 months. Better keep my commodity speculation to a minimum first. maybe wait for it to stabilise within a ban +-10% in 2/3 months before making my move.

I also closed my US futures on Friday. Wednesday+Thursday plunged by about 10% to 905. With good money, better zao. Dun be greedy. Friday may be a bounce even though the work employment numbers are coming out and GM + Ford reporting as well. STI bucked the trend and stayed flat ! Astonishingly.

Weekly Recap - Week ending 07-Nov-08
It was a tremendous week in our country's political and social history, even if it wasn't a tremendous week for the stock market.

On Tuesday the United States made history, electing its first African-American president in Barack Obama while holding true to the longstanding, democratic principle of a peaceful transition of power.

As remarkable as that proud fact is, it unfortunately doesn't change the fact that the U.S. economy is in a slump that is pressuring earnings prospects and stock prices. Accordingly, the stock market didn't spend any time basking in the monumental history that was made Tuesday, which also included the biggest Election Day rally ever in the stock market when the S&P 500 surged 4.1%.

It became evident in no time at all that the market's economic concerns weren't assuaged in the voting booth. Over the course of the two trading sessions on Wednesday and Thursday the S&P 500 dropped 10.0%.

The decline followed an 18% gain over the preceding six sessions, so it was understandable that there would be some retracement of those gains. However, the scope of the pullback made it clear that there was more behind the selling than simple profit taking.
The item that got the market's attention turned back so quickly to the ailing economy was Wednesday's ADP employment report, which estimated 157,000 jobs were lost in the private sector in October, the largest decline since November 2002.

This report followed some dismal auto sales reports for October on Monday and set a very nervous tone ahead of the government's employment report for October on Friday.
Several other economic reports compounded the selling pressure in the middle of the week. In particular, September factory orders declined 2.5%, the October ISM Services Index at 44.4 slipped below 50.0, which is viewed as the dividing line between expansion and contraction, Q3 productivity slowed to a 1.1% growth rate from 3.6%, and continued jobless claims of 3.843 million were at their highest level since 1983.

The disappointments weren't confined solely to economic news either. Another wave of cautious-sounding guidance from corporate America also factored heavily in the action.
Tech bellwether Cisco (CSCO) led the pack of disappointments with a warning that its fiscal second quarter revenues were expected to decline 5% to 10% as most enterprise customers across all industries it serves are facing a very challenging business environment.

Separately, influential banking analyst Meredith Whitney of Oppenheimer & Co. suggested in a CNBC interview Wednesday that she felt big banks were going to be in the position of having to complete more capital raises in coming months and that she felt many of their stocks still had a lot more downside risk in them. She feels that Citigroup (C), for one, could trade into the single digits.

On the heels of her bleak assessment, retailers on Thursday posted some lousy same-store sales results for October, with the exception of price leader Wal-Mart (WMT), which reported a 2.4% gain. Overall, same-store sales declined 0.9% (and 4.2% excluding Wal-Mart), according to the International Council of Shopping Centers.

In the midst of the reports from the retailers, it was learned that the European Central Bank cut its key borrowing rate 50 basis points to 3.25%, as expected, but that the Bank of England stunned everyone by cutting its key rate 150 basis points to 3.00%.

The move by the Bank of England was so aggressive that it was scary. Central banks simply don't cut rates in this fashion, unless they feel they are way behind the curve with the appropriate monetary policy as it relates to economic prospects.

The Bank of England for its part said there has been a marked deterioration in the outlook for economic activity at home and abroad and that it took the action it did to guard against inflation undershooting its 2.00% target.

It deserves pointing out that the annual rate of consumer price inflation in the U.K. was 5.2% in September or just ahead of the 4.9% growth rate in the U.S. where the fed funds rate is now 1.00%. From the market's vantage point then, the Bank of England, as well as the ECB, still hasn't cut rates enough to help forestall a protracted, global economic slowdown.

This brings us to Friday's employment report, which didn't contain any good economic news.
Nonfarm payrolls declined 240,000 (consensus -200,000) and the prior month was revised to show a decline of 284,000 positions versus an originally reported loss of 159,000. Job losses were seen in all areas in October, with the exception of modest gains in education and health services and government.

The unemployment rate rose from 6.1% to 6.5% (consensus 6.3%). Hourly earnings were in line with expectations, up 0.2%, as was the average workweek at 33.6 hours.
1.2 million jobs have been lost over the first 10 months of 2008, but tellingly, over half of those losses have occurred in just the past three months.

Ironically, in the wake of the worst economic news of the week, the stock market rallied on Friday, jumping 2.9% in a broad-based effort. The upside move was even more striking considering Disney (DIS) had disappointing earnings, Qualcomm (QCOM) provided fiscal first quarter revenue and earnings guidance well below current consensus estimates, and both Ford (F) and General Motors (GM) posted massive third quarter losses while showing they were burning through their cash.

Ford used $7.7 billion in cash in the quarter while GM used $6.9 billion. GM went on to say that, looking into the first two quarters of 2009, the company will fall short in capital unless economic conditions improve, it can gain access to capital markets, can sell assets, or can secure government funding.

That the market would rally on this battery of bad news indicated it had already accounted for it in the prior two sessions when it fell 10%.

It would be remiss not to add that President-Elect Obama gave his first press conference during afternoon trading Friday in which he summarized a discussion he had with his economic advisory team. He mentioned four initiatives he would pursue immediately upon entering office in January: (1) a rescue plan for the middle class that would include a new fiscal stimulus package, which will be his first priority (2) working to stem the spread of the impact of the crisis on other sectors of the economy (3) reviewing the current administration's implementation of the financial program and (4) laying out policies that grow the middle class and strengthen the economy for the long term.

When Obama acknowledged that he doesn't officially take over until January and will stand by to let the current administration see things through to the end of its term, the stock market gave back over half of the day's gains. However, the session ended on a positive note as a late rush of buying interest left the indices near their highs for the day, which were seen just before President-Elect Obama started his press conference.

So, while President-Elect Obama has made it clear that he wants to bring change for the country, it was clear that things remained the same for the stock market, which had another volatile week of trading.

The volatility is a by-product of the uncertainty about the timing of an economic recovery and a nettlesome belief that consensus earnings estimates for the fourth quarter and 2009 still haven't been lowered enough to reflect the economic deterioration.

In brief, there was a lot of emotion during this historic week, yet it was fundamentals -- or the perception at least that fundamentals are weakening -- that seemed to be driving the market.

--Patrick J. O'Hare, Briefing.com

**For interested readers, the S&P 400 Midcap Index, which isn't included in the table below, declined 5.1% for the week and is down 37.1% year-to-date.

Oct W4 Transactions

2008-11-03T01:24:00.000-08:00

Portfolio YTD down 1% with the Celestial now up reaching 45.5 cents. PE now 3.4 still cheap cheap :). Celestial just released a report on 31 Oct that they will release results at 14 November. With this, I believe their results should not come too bad. (no profit warning). I hope for a pleasant surprise as some upside might be seen with a better results after the earthquake in Sichuan on 12 May. I suspect it will be around +-10%.

I closed my S&P shorts at 936.25, (from 945... yes I went in again...and yes I let a potential 100K off when it was down 10% to around 830...., the ASIAN market distracted me, I thought with ASIAN markets plunging, US market has to do the same, and I was waiting for the big captitulation which did not happen) the day after the big surge.

I was deliberating whether to close my shorts after previous day 10% surge (yucks). After a few hours, the US market was deliberating between negative and positive, so I believe the sellers who want to sell have already sold. With this, I close my shorts as it has been a terrible October for stocks, and VIX had been reaching precendedly high of 80+. DOW had not had a positive through day till the last 2 days of October. I was actually deliberating whether to close my shorts the day before as it had been going down about 5 days in a row. Last Friday, S&P ftures hit a down of 855, however it closed 2+ percent down. STI closed on Friday down 6-7%.

1 Lesson learnt here is in the global crisis, emerging market will be hit more even though the orginator is in the US.

In October, the Dow Jones industrial average fell 14.1 percent and the broader Standard & Poor's 500 index lost 16.9 percent as the panic over a now-easing freeze in credit markets shifted to fears of an acute recession.

Transactions

2008-10-19T09:26:00.001-07:00

After a big crash last week of almost 15% (recovered on Friday -6% to -1.9%), US equites rebounded 13% on Monday night. STI on Monday went up to 6 % and another 7% on Tuesday. I sold 3 SIMISCI at 272.2 (Fr 255), SGX 30 contracts at 6.12, 4 S&P 1043 and 6 1053. Long 10 Nymex mini-oil at 82.9. I had expected a long overdue rally on Monday. So I went in to short on Tuesday STI. S&P futures was positive also. It went as high as 1059 as Paulson went live to talk on the bailout package.

My idea is a pairing where I long oil and short S&P, where if markets go up, oil long will cover my shorts. If markets drop, I expect markets to drop harder than oil.
Very wrong, oil dropped faster than S&P futures. I cut oil at 77.9 as it was speculative. At least my S&P drop could compensate my losses. Why I long oil
- oil with less supply than demand is still a bull market for oil

Why I cut oil and my conclusion.
- entry is important
- oil with reduced demand due to recession
- speculative positions will be cut
- trading firms are now getting their credit lines cut, therefore cutting their position further
- 55 dollars is a good entry point

I also close all my short positions on Friday.
SGX 5.61 (Thursday - very stuipid)
SIMSCI 241.2
S&P 946
Why I close my shorts, did not want to lose a winning position.(more emotional than any logical thinking)

My thoughts right now
(-) things will probably get worse
(-) credit card crisis will be next
(+) LIBOR credit swaps are getting slightly better
(+) FED will purchase 250 billion of shares in Financial institution
(+) Warren Buffett is buying
(+) VIX very very high (70+)
(+) Oil is dropping
(+) Bad news follows a drop before rallying. The situation could be changing to rallying on a bad news. Sentiments are really bad now which is a contarian indicator.

I am anticipating a mini short volatile movement up. Lets see when VIX drop to 50+ or S&P at 99+.

Portfolio down -16% now. with Celestial at 30.5 cents with PE is now 2.2 with expected earnings of 14 cents. Soyabean futures now trading at 905 dollars down 40% from high of 1500+ . It also declared on 13 Oct that its products is cleared of melamine.

My thoughts on S-shares.
Sentiments are quiet bad now on S-shares. My thoughts, it is only in extremely bad sentiments that stocks get battered so badly. China will be the next superpower, and good sentiments will be back, so no worries. We have already seen RMB appreciated 10% against S$ the last 1 year. A lot of people also condemn the S-shares here mentioning that HK shares are much better. Well, this is what I think - HK shares are mostly big blue chips and growth will be quite limited. S shares on the other hand have smaller capilization and growth for 5-10 baggers are there. But saying that, I agree alot of S shares here are very poor quality. No matter how attactive the PE (even 1) or PB (some even below cash value) of textile or capital intensive industries companies or cyclical companies, cashflow negative companies, I avoid them like a plaque.

My investment is still on solid companies with sustainable advantage, continuous growth, continous innovation, management who align themselves with shareholders.

My China Milk divestment was with the same principals. Even with record profits, it did not give a dividend and although it gave a dividend in Q1, it was a puny 0.5 cents. If they could justify with investment within that year, I could still give it a benefit of doubt. Thus, I sold out and reinvested back all in Celestial.

Besides Celestial, there are also a few worth investing, a cosmetic company, a shoe company, a company selling pork, and a bottle manufacturing company. All of these copmanies PE (around 3-4) is still higher than Celestial 2.2, thus I have no urgency to invest in them yet.

The week after the Black week

2008-10-19T09:11:00.000-07:00

Weekly Recap - Week ending 17-Oct-08
Does it get any crazier than this past week? Letâs hope not, unless of course the end result remains the same.

In the week that just concluded the S&P 500 managed to record both its largest, single day point gain ever as well as its second largest, single day point loss ever. Meanwhile, the intraday swings throughout the week were epic.

The S&P moved in a 9.5% range in Thursdayâs session alone. For some perspective, consider that the S&P gained 3.5% for all of 2007.

The volatility was a by-product of a host of factors that ranged from reports of forced liquidation by hedge funds to reports of strains easing in the credit market after massive liquidity injections by central banks.

To be sure, the week got off to an eye-popping start as the market soared 11.7% in a snapback rally from greatly oversold conditions.

Word that Morgan Stanley (MS) completed a deal to receive a $9 billion capital injection from Japanese bank Mitsubishi UFJ, central bank plans to provide as much dollar liquidity as needed for short-term funding markets, and news that several European countries were guaranteeing interbank lending provided the spark for Mondayâs rally.

In addition, speculation that the U.S. Treasury would be making a direct capital injection of as much as $250 billion in U.S. banks, that it would guarantee bank debt, and that the FDIC would guarantee deposits in non-interest bearing deposit accounts also fueled the buying efforts.

The speculation turned to fact Tuesday when the Treasury formally announced like measures. In particular, it said it would invest $125 billion in the preferred stock of nine, major institutions â Goldman Sachs, Merrill Lynch, Bank of America, Wells Fargo, JPMorgan Chase, State Street, Bank of New York Mellon, Citigroup and Morgan Stanley â and direct another $125 billion toward other banks in a capital injecting initiative that mandated curbs on executive compensation for participating entities.

In the wake of Mondayâs surge, however, the market stumbled Tuesday on some profit taking activity and lingering concerns about the economic outlook.

The economic concerns came home to roost on Wednesday in a battery of worrisome updates.
Specifically, it was reported that retail sales declined 1.2% in September, with declines seen across all discretionary spending categories. That news, combined with a downtrodden Beige Book report that revealed slowing activity in all 12 Fed districts, and a reminder from Fed Chairman Bernanke that the economic recovery wonât happen right away, even with a stabilization of the financial system, helped drive the market 9.0% lower, marking one of its worst percentage declines in history.

An escalation of selling interest late in Wednesdayâs trade gave life to reports that there was forced selling by hedge funds.

That selling carried over into early trading Thursday. The S&P 500 fell another 4.6% and the volatility index (âVIXâ), otherwise known as the fear gauge, spiked to an all-time high.
Then, in an instant, sentiment shifted and the market began a furious recovery effort that left it up 4.3% at the close.

That rally saw retailers and transportation stocks bounce back sharply with oil prices dropping below $70 per barrel at one juncture. The drop in oil prices followed a weak industrial production report and reflected underlying concerns about the prospect of a global recession.
OPEC is slated to meet Oct. 24 to discuss oil prices and it is expected that the cartel, having seen prices plummet more than 50% from the all-time high reached in July, will announce a production cut.

Fridayâs session was another roller coaster ride.
The S&P 500 swung 7.2% between its low and high points of the day amid alternating feelings surrounding the weakest level of housing starts reported since January 1991, Warren Buffettâs acknowledgment that he is buying American stocks for his personal portfolio, and encouraging others to do the same, and a heavy load of expiring options on stock indexes, stocks and exchange traded funds.

In the midst of all that transpired, weâd be remiss if we didnât mention that the third quarter earnings reporting season kicked in to full swing this week.

Financial and technology companies led the barrage of reporters that included the likes of Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC), Merrill Lynch (MER), Johnson & Johnson (JNJ), PepsiCo (PEP), Intel (INTC), IBM (IBM), Google (GOOG) and eBay (EBAY) to name a few.

Third quarter results themselves were largely mixed, yet the key consideration for the market was that few, if any, companies really extolled their near-term prospects. Several companies bemoaned a lack of earnings visibility on account of the economic environment.

So, both the earnings results and economic data this week were fairly unimpressive, yet the market still managed a 4.6% gain.

Then again, with the market plunging 18.2% in the prior week, some bargain hunting activity was to be expected.

Signs of improvement in the credit market aided in the buying efforts.
The overnight Libor rate dropped to 1.67% from 5.09% last week; overnight commercial paper rates fell to 1.05% from 3.50% last week; and the TED spread, the difference between 3-month Libor and the 3-month T-bill, narrowed 100 basis points from last week to 3.63%.

However, the fact that 3-month Libor rates didnât come down nearly as much as overnight rates (only ~40 basis points from last weekâs peak) contributed to a sense of uncertainty about the pace of recovery in the credit market.

Until that uncertainty is removed, the stock market is expected to keep trading in a rudderless fashion as emotion, more so than fundamentals, will steer the action.

--Patrick J. O'Hare, Briefing.com
**For interested readers, the S&P 400 Midcap Index, which isn't included in the table below, gained 0.9% for the week and is down 35.3% year-to-date

Black Week (Monday- Friday)

2008-10-12T08:37:00.000-07:00

This whole week was one of the worst week ever for US financial markets.
US market has been dropping 6 consecutive days, with the last 2 days dropping 7% on Thursday and Friday futures was actually -6% before recovering to -1.5%.

Having closed my S&P shorts at 975 (And I thought I was very greedy already from 1300), my portfolio is also suffering. It is down 23% now. (in fact down 15% last 2 days). My strategy did not do well even though I know a big bear market is coming. My strategy was to buy undervalue stocks but to sell futures. what went wrong ?
1) My shorts was not enough to cover my longs. My shorts was only 25-40%, while my longs was 50-80%
2) In a bear market, one should sell and hold, However, I traded in and out, missing some big movement.
3) My strategy ideally is to cover at a reasonable down point, and buy when it dip, however this time when I really decided to close my shorts, I left 2 big days of down movement (~10%)
4) Will have to review my strategy again.

One of the worst hit is my main investment Celestial now at 28 cents. It is now trading at a ridiculous PE of 2 and dividend yield of 7%. Anybody who buys this now definely make a ton in a few years time.

Recent news on Ferrochina's bankruptcy and China Printing and Dyeing's scandal has caused china S shares on a downward spiral with no respite. The baby is thrown out with the water basin, Is this justified ?
1) Celestial has a net cash of 300+ Mio RMB after deducting its CB and loans. (About 10 cents per share)
2) It has already spent the majority of its capital infrastructure (ex inventory I think) for its immediate expansion (15,000 ton beverages, 5000 ton powder,10,000 noodles, 5000 pasteries) lauching 2008 year end. Thus its cash position is alright
3) Being granted as a sole company in charge of the soya bean technology zone speaks volume of the trust and due dilligence done on Ming Dequan (the Chairman) and Celestial, not your Tom/Dick/Harry China textile company.
4) It has exciting plans for the company expansion, which I believe it will grow to be one of top brands in China and not in a downward spiral. Yes I think the tainted milk incident will pass in 6 months time (as in SARs ) and yes most importantly milk is not soya.
5) Why I persist in continuing buying (maybe I am stupid) is that the only companies for exponential growth you can buy is in China and not local Singapore companies (maybe 1 or 2 Raffles Education locally)

Lets see Celestial performance in the coming quarters. Soya Bean prices have been trending down almost 40% from its peak. It probably will affect industrial products like soya oil however I think it will be positive for its retail products.

I will hold my shares and see how it performs in 3-5 years time. It should give me a few baggers by then. It is a no brainer now to average down.

Capitulation ...Blood on the street

2008-10-08T19:56:00.000-07:00

Wednesday.
STI is now down to 2035 (down 125+ points) on 9 October.
S&P has been down 5 consecutive days, and down about 15 % just last 5 days.
VIX has also reach a high of 50+.
European banks are now feeling the heat, with the Iceland nationalizing 2 banks. UK spending 1 trillion to prop up banks. UK is now down 5% to 4300. There was blood in the street, and reaching capitulation level.

I closed my S&P shorts at 978. I had wanted to hold it but the futures profit was too good.
I also closed my SGX shorts at 5.61. I expected a rally coming soon.
I closed my SIMSCI at 262. I actually put an order at 255, but the stupid DBSVickers call me and say cannot reach my price in the morning which was 263 (fr 268). This distracted me and emotions overcame me. I should have waited as after being down so long, and Dow went down another 4% yesterday, capitulation will reach in the afternoon. SIMSCI close at 252. Next time, think for 10 seconds and call him back.

Went into DBS 14.88 (fr 15.6+), Keppel 5.61 (fr 6.1)...it has actually been dropping 18 % last 3 days. (fr 7.2), Swiber (0.78) and Celestial (0.43).

Lesson learnt, go for big caps... for small caps have to catch extreme (10%) at least.

Portfolio End Sep08

2008-10-01T01:33:00.000-07:00

Kept closely to my short term trades and sold off C &BC for a small profit. Also sold off my CM (0.4), a bit emotional on my part but I find that the next few months milk demand will go down. So even though it is an innocent party, it will still be affected. After I sold, it rebounded as it was at a depressed price...sigh.

Shorted S&P on 1208 on Tues ....wanted to cover on Friday as I thought the Bill is going to be passed, however I overslept...in the end covered at 1210.5. A small loss

On Monday...wanted to long SIMSCI as STI has been dropping from Tuesday to Friday last week. Long 10 SIMSCI at 299.3...it reached till 302.8 before dropping.... In the afternoon, I was deliberating whether to wait for the bailout news to be announced as SIMSCI was still dropping. I close it at a lost at 294.3. Furthermore Dow futures were dropping. My rationale is that in a bear market, longing is very dangerous especially it is speculative, so I cut off my loss.

On Monday, Fortis and some banks in UK were going belly up. Their CDS doubled within a week and had liquidity problems. Fortis had to be partly sold and nationalised. In the US some banks were also having issues. I shorted S&P in the US morning at 1176 (down 44 points) I was feeling rather naked in a bear market. What if I am wrong...I can still hold. If I don't short, my position will be quite bad. After I shorted, I realise I might be shorting at a low position, so I put a cover at 1169. After which, I made an order at 1176 again.

Somehow or rather, I could not sleep very well. My order was filled at around 3am. I went to turn on the TV at around 4-5+... wah I thought I saw wrongly...S&P at 1107.... Dow had drop 777 points as Congress did not pass the Bill.

In the morning, I tried to make a sell order for SIM SCI at 281.8 (fr 291), unfortunately futures only reach 281.7 ! So morning it went as low as 275+ before making a restounding recovery to 291 ! There was more fear in me, that is why I did not do too much. As most shares rose back, I bought Celestial at 0.53 (-0.05). I also closed my S&P short at 1129. (VIX over 40+ and big fall)

Most shares recovered , but not Celestial. I think it is not justified. Probably some big funds are still trying to unload.

Celestial is now trading at PE of 3.7. With the milk scandal going on, will it get affected ? My view is that sales might slow down, however, it will be buffeted by some people who switch from milk to soya bean. This will probably last 3-6 months (1-2 quarters), however I think this will be a good opportunity to grab an excellent company.

CN has shown over the years to increase revenue and profit. It posses strong branding which is one of the top 500 retail brands in China. It also posses top technology evident by the government decision to award it the Soyabean technology zone, as well as its additional industraial products it has diversified to. Is it shareholder friendly ? I believe its dividend policy is much better that other China companies. I will continue to hold and add to much position if it goes down further.

Well, Dow (4%)/S&P has rallied on Tuesday after the big slide on news the bill may be reinstated. Let see how things work out.

Fixmarket sep 08

2008-09-20T00:42:00.000-07:00

I wanted to clean this up last year...but did not. This has been fustrating me time and time again...and I want to end this stupid nightmare.

Now Mr. Jiang has run away. His greatforce website became a porn website. His company and personal handphone has been disconnected.

With me as a local director, I cannot run away. I went the seek Emmy's advice..

THis is what she told me... there are 3 scenarios now
1) force the company to close (strike off), this involve legal fees and lawyers and a potential wopping 10K
2) wait for 7 years before closing. In the meantime , every year has to hold/sign AGM as well as publish audit reports for ACRA. Since it is dormant, we will request next year not to publish audit reports to ACRA. This should save some fees
3) execute the following plan
- 1) email Mr. Jiang a few times and get his no reply
- 2) send a registered mail to resign as a local director and request him to contact me
- 3) send another registered mail saying that he has not contact me and I reference my resignation date, and stating I have discharge my duties as a director
- 4) Tell him that I will close the company if he does not get it touch with me in 4 weeks
- 5) Issue him an ultimatum that I will close his company in another 4 weeks.
- 6) Go to ACRA and plead ...most probably have to wait another 1-2 months.....

I have done 1-2....in mid November I will do 3, start Dec - 4, End Dec -5, Jan -6 go find ACRA.

Why we are doing this is because we do not want him (if he is ever able to) to have a potential court case against me, which I am closing the company against his wish. Emmy is right, in whatever we do, we must make sure there is no possible hold against me.

For Emmy's case, she made Amy sign in the contract that the "jewellery" case has nothing against the Emmy's account company and her personnel. This is to absolve her of any liability. Previously, Amy tried to involve Emmy and the company stating that she hid her gold in the company and Emmy was involve in the gold hiding,

Really have to protect oneselve against some of these illogical people who might harm you.

Portfolio Sep 08

2008-09-20T00:35:00.000-07:00

with the massive roller coaster....I manage to clear out my shorts....maybe left the last big chunk of meat but too bad. The big movement out also went in too little....should just have wacked ....VIX was around 36, and 2-3 major bad news + already down 3-4 months......

What to look out for next ....3-4 months down + VIX above 33 + 2-3 major events already rally but failed....and blood on the street..... last 5 day downs 8%....

Portfolio down 5 %.
Longs 57 % + 5 % just added, cash 43 %. No shorts.

Short Term Plan
i) clear my short term investments
ii) start shorting
iii) clear my longs

With what the FED has done, it has prolong the downturn....so I see another 2 more years (total 3) of downturn till 2010...... Strategy....cover shorts in 2010...boost equity in 2010 100%..... and leverage if neccessary....and next year buy commodities.

Capitulation & Massive recovery Sep 08

2008-09-19T23:08:00.000-07:00

Recounting Capitulation & Massive recovery

2 weeks ago

Freddie/Fannie Mae required a bailout, massive rally followed follow by dropping again and drop further

1 week ago,

Lehman brothers had some issues, they had the weekend to find a buyer, failing which they have to file for chapter 11. At that point of time, I felt that with the Fed digesting FN/FM, they would not have appetite for this.

Monday,

STI started dropping early in the morning. I covered 7 S&P futures which was down around -30 points at 1212. I quickly shorted SIMSCI at 7 lots 304. (went down 4 + points )

Monday Night, Lehman file for Chapter 11, Dow crashes 4 % to 1190

On Tuesday 16 sep, I covered at 6 lots 296.4. Made an order the same day sell 4 lots at 301 and got it as STI recovered. As you can see, my shorts was getting smaller and smaller..... cannot be too greedy.

As I know with STI dropping already 20+% since June to Sep (4 months) the odds are great that a rebound was coming. I know I am getting overwhelm with fear. I would probably have capitulated if not for my shorts shoring up my longs.

On Wednesday, Dow was flat the previous day. So STI recovered. I also covered back 301.6 at a small loss.I wanted to change to the DOW as Dow futures were up 18 points around 1220. I wanted to change to Dow shorts, but I put an order at 1222. So, I did not get it unfortunately.

Wednesday night, AIG ran into trouble.....they have 1 day to sort out to refinance their capital. Fed was unwilling to bail out AIG, and was pushing the banks to help bail them out. S&P crash 4.5% to 1155. I watch in unbelive as my potential profit of 37K vanished !

So how.... I was overwhelm with fear and pek chek..... so now... I have to buy from blood on the streets. I put in several orders... Hong Guo 0.18 (0.22), Beauty China 0.445 (50.5), Hi-P 35 (38), Swiber 1.03 (1.14), Celestial 0.485 (0.55) DBS & SGX (did not want to put as the minimum bid that can be placed is 10 points which is little). In the end DBS 15.50 (16.14) ...I wanted about 80 cents shortfall and it has a daily buyback in place.... and SGX 5.55 (6.04) one of the most shorted stocks.... SIMSCI 282.2 (297)

Thursday...as expected STI crashed 100+ pints or 3.8% in the noon.... a few things happened......unfortunately a friend was distracting me asking me for investment advice...this made me not monitor the SIMSCI closely...also I had to settle FixMarket stupid issue again....

In the morning, I got 100lots BC which dropped 13%, in the afternoon I saw STI climbing already...so I quickly bought 100 lots celestial. In the end only about 5 % bought ( 90K).

In the afternoon, with Central banks intervention pumping in 100 billions of money into the financial market, most Asian countries made an astonishing rebound !

Thursday night , AIG got bailed out and massive 400 point for the DOW. After Britain's Financial Services Authority (FSA) imposed a four-month ban (January 16 next year) on short-selling financial stocks on Thursday the U.S. Securities and Exchange Commission followed suit on Friday with an immediate 10-day ban (799 Financial stocks till Oct 2)

Friday STI went up an astonishing 135 points (5.4%). DOW also went up another 300 points. What a roller coasting week !

What is next...I expect something postive to happen over the weekend or next few days probably Morgan Stanley.... massive shorts covering and novice investors pouring in should boost market up another 2-3 % at least.

STI 2559 (SIMSCI 317.15), DOW (11388) S&P (1255)... SIMSCI 324.4 will look nice, S&P (1280)

DBS High Notes investors at risk Bank warns they may lose entire stake in Lehman-linked product

2008-09-19T22:34:00.000-07:00

SOME local investors of a product linked to bankrupt investment giant Lehman Brothers have received late-night phone calls from DBS Bank warning them that their entire stake may be wiped out. The investors have their cash in a product called DBS High Notes 5 that the bank offered wealthier clients last year. It came with a promised annual return of about 5 per cent.

But Lehman's collapse on Monday means the product will be unwound and investors may only get a portion of their investment back - or none at all.

One 52-year-old customer told The Straits Times: 'I received a call from my relationship manager late Tuesday night. He told me that...my investment may amount to zero.' The man had invested $50,000 - savings he had earmarked for retirement.

A customer in her late 40s said: 'My relationship manager called and told me to be prepared to receive a letter from the bank...[it] would say something to the effect that my investments in products like High Notes 5 may be totally gone.' She invested $50,000 and US$30,000 (S$43,000) in two separate transactions.

Investors are mostly clients of DBS's priority banking unit, DBS Treasures.

The product - DBS High Notes 5 - is a 5-1/2 year structured product linked to eight underlying shares, including Goldman Sachs, Morgan Stanley, Merrill Lynch, Macquarie Bank and Lehman.

Customers who invested in Notes 5 said they were sold on the relatively high 5 per cent annual payout by DBS. But now they just want their money back. 'What we do not understand is: How can the fall of one bank cause our funds to just vanish when there are seven other stocks within the product that are still trading?' said a man whose elderly aunt invested $50,000 in DBS High Notes 5.

According to a person familiar with the matter, the largest single investment made on High Notes 5 was $2 million, although this could not be verified by DBS.

DBS confirmed that it took immediate action to notify customers once it learned of Lehman's chapter 11 bankruptcy filing.

'As soon as the news broke we immediately started communicating...to our retail investor customer base,' the bank said in an e-mail reply to The Straits Times. 'We are very concerned and understand the anxieties our customers face as they wonder what will become of their hard-earned money.'

DBS said the Lehman collapse has triggered a 'credit event' and the bank called for a redemption of the notes on Monday. It said unwinding of the product has begun and it will be at least 30 business days before clients learn of the final payout. But DBS also confirmed that investors in High Notes 5 may - 'in the worst-case scenario' - not get back their entire principal amount invested.

The product's prospectus also indicated that in a credit event such as bankruptcy, the notes 'will be terminated and the investor will receive zero payout'.

The bank said the product does not contain a guarantee that the principal will be protected. It also told The Straits Times it would 'fully investigate' claims by some customers that High Notes 5 was in fact sold on such a promise.

Meanwhile, UOB and OCBC Bank said that though some customers have invested in Lehman-linked products, the volume was 'modest' and 'negligible'. 'Since news of Lehman filing for Chapter 11 broke, we have taken a proactive approach in updating clients on the latest developments,' said UOB's spokesman.

My comments, ever since I lost almost 50% in a unit trust (albeit small around 5K invested) I never trusted bank products.

Always remind ourselves this rule : Your banker is not your friend

Something I found funny

2008-09-17T02:20:00.000-07:00

Stock Market Definitions

Bull market: a random market movement causing an investor to mistake himself for a financial genius.

Bear market: a six- to eight-month period when the kids get no allowance, the wife gets no jewellery and the husband gets no sex.

Momentum investing: the fine art of buying high and selling low.

Value investing: the art of buying low and selling lower.

Broker: poorer than you were last year.

Stock analyst: idiot who just downgraded your stock

Stock split: when your former wife and her lawyer split all your assets equally between themselves.

Market correction: the day after you buy stocks

Cash flow: the movement your money makes as it disappears down the toilet.

EBITDA : earnings before I tricked the dumb auditor

EBIT: earnings before irregularities and tampering

CEO: chief embezzlement officer

CFO: chief fraud officer

EPS: eventual prison sentence

Investment/Sentiment Sep 08

2008-09-17T02:05:00.000-07:00

STI crashes from 2600-2450 around 5 %. due to Lehman brothers collapse.... Now AIG is next....I see panic selling and blood on the streets...butDow is still very high at 11000 down 15% from 13000 YTD.

I have caution myself for buying shares, but somehow or rather I was seduced into buying...maybe overconfident

In a extreme bear market, PE 6 to PE 3 is a 50% loss..... so even PE 6 may not give you a sufficient margin.

Right now, every upday is followed by 2-3 days of crashing, so every upday is an opportunity to sell. People thinking of cashing into the upside have fallen flat.

Now, many people are anticipating the market to come down even further. When it does, people will think that they are lucky to have avoided the market.

When there is a mini rally, people will think that it is a bear rally.“It will fall further.”And usually, it really does fall further.

Again, it makes people feel that they are right not to buy.It will go up and down until a point where even the most bullish person turns bearish.“......this will repeat a few times till people believe..."Oh its another bear rally"......that is when the finally the bull will turn up.

Even me right now, my shorts have not been covering the longs.... Lately, my shorts were 40% and Longs 55%. And what I learnt,
1) don't trade shorting in a bear market. In a Bear market, sell and hold.
2) Consider the US market vs the Singapore Market. Eg, Lehman did not secure fundings over the weekend. US futures very negative, but STI not that negative yet....can cover US and short Singapore futures. As when US market open, STI may drop further.
Eg 2, US rally the previous day, and futures up the next day. It is better to cover and short the US futures.

2008-09-15T02:22:00.000-07:00

Dear Mr. Buffett:

First off, I would like to thank you for meeting with me and my Lehman Brothers team earlier this week. The opportunity to outline our plan to you personally was the highlight of my professional career. I know that it has been a few years since you had an office in Manhattan, and we aren’t asking you to take a chair and a desk, but your steady hand at Salomon Brothers is an example of what all of us on Wall Street are so desperately seeking in these difficult times.

As I clearly outlined during our meeting, I firmly believe that an investment in Lehman Brothers by Berkshire Hathaway is a classic opportunity for your great company to, once again, buy a fabulous global franchise at a very fair price. This isn’t at all like the situation that John Gutfreund put you in, and I recognize that you are wary given your previous experience. Wall Street has changed dramatically since 1991, it is far more of a franchise business that relies on capital than the “people” business that you were once used to. As you mentioned, the $700 million Salomon deal was the single largest commitment of your career at that point; and I take your point that such sums are now just the bonus pool for the commodity division

But much has changed. Over the past year, our firm’s market capitalization has shrunk by more than $30 billion (about 75%). All of the shareholder wealth that we’ve created over the past 10 years has been completely erased in a matter of months, and yet our firm has never had brighter opportunities nor a stronger safety net. This is the investment opportunity that we see for you and the rest of the Berkshire family. You have the opportunity to invest in the brokerage industry at prices not seen for a decade.

Our firm is poised to return to greatness, and many of Bear”s clients are coming our way.

Just the other day, a survey of U.S. institutional investors by Greenwich Associates found that “among the largest players, [Lehman and JP Morgan] scored highest in providing their [fixed income] clients the best support and understanding during the market turmoil.” This survey, conducted between February and April, also found that while JPMorgan was found to have slightly more institutional trading relationships, Lehman Brothers had slightly more market share.
What this survey will confirm for you is that our trading desk has continued to serve our many international clients, even when other brokerage firms were pulling back. This bodes well for the next Bull Market.
I have spoken to both the Treasury Secretary and Chairman Bernanke, and they are prepared to assure you personally that Lehman will continue to have access to the Fed’s discount window for many years to come, if so required. As such, our firm cannot fail in the traditional sense. The federal government’s balance sheet is impregnable. This is an investment circumstance that rarely presents itself in the lifetime of any investor; even one as successful as your own.
We are very reluctant to raise capital at this juncture. Our recent $6 billion equity raise was intended to help us weather even the worst storm. I understand that some intermediaries reached out to you at that time, and that you rightly advised that your modus operandi was not to invest in a club format. I regret that anyone troubled you with the idea back in May, and recognize that by passing then, as you said in our meeting, you avoided suffering the 44% drop in our shares since that deal was announced on June 10th.
Your wisdom is clear. But this time it will be different.

As we discussed, approximately $145 billion of long-term debt is outstanding including current year maturities of $18.5 billion with $8 billion of commercial paper. We have a plan to deal with these debt tranches, but recognize that a partnership with you would be a tremendous asset when we return to the debt markets. My Treasury team advises that we could save in excess of 200 basis points on our medium term paper if Berkshire agreed to be our strategc investor prior to commencing our current year debt refinancing activities.

The investors who joined our shareholder group in June recognize that much of what has happened over the past 5 weeks was unforseen. But no one likes losses, paper or otherwise. That being said, they will be elated if you join their ranks, let me assure you of that. That old saying, “dilution is your friend”, rings all the more true when the name “Buffett” is involved in the dilution.

My partners and I are prepared to consider a $5 billion convertible preferred investment, paying an 8% annual cash yield, with redemption and retraction rights in, say, 20 years. Our stock rallied yesterday on the back of the positive news out of Wells Fargo. But, with a sensible discount to yesterday’s closing price of $16.65, your firm would own approximately 33% of our Company, at closing. Naturally, we would very much want you to consider joining our Board of Directors at the earliest opportunity. Other names would be welcome as well.

As we both know, an announcement that Berkshire had agreed to invest capital in our firm would propel both LEH shares and the broader bank index. If yesterday’s rally is any indication, you could earn a 25% return in a single day merely on the news of your financial commitment to me and our franchise.

I appreciate that you have been displeased with the role that you believe Wall Street has directly played in the credit crisis of the past 12 months. I noted that, during our meeting, you specifically named Lehman and Bear Stearns as two of the financial institutions that were at the forefront of the growth in the CDO, CLO, ABS, subprime and credit swap markets.

As you know, the job of an investment bank is to bring to market the products that the market wants to buy. Although we pride ourselves in our Top 5 ranking in the M&A tables, the fees generated on advisory assignments pale in comparison to the revenue that flows from the underwriting side of our industry, whether it be equity, structured products or debt. I took your point that Wall Street must play a “quality control” role in the process of selling products to our clients, and I strongly believe that we did our utmost on that front.

We were so convinced that these vehicles were money machines that we bought them for the accounts of our own captive hedge funds. We put our money where our mouths were.
I understand that you are also dubious about the long term capability of the hedge fund industry to produce returns that exceed your sense of market norms. I have two points to make on that front.

Hedge Funds are a key revenue driver on our trading desks, and excellent Prime Brokerage clients as well. Up to 40% of our daily block trades are done for hedge fund clients. Moreover, our ability to create our own hedge funds has generated substantial fees from institutional investors and pension funds around the world. Although the recent SEC push to curtail some of the more attractive trading strategies of hedge funds such as ours may hamper our ability to beat the index, the fee streams that our funds generate are extremely valuable. Particularly at times, such as now, when the underwriting and advisory revenues are weaker than we would like.

However, if you would like a commitment from me to exit the hedge fund business, I will certainly recommend such action to the Board should you agree to our investment proposal. Although I am the leader at Lehman, I am always open to well-reasoned perspectives.
In summary, let me again thank you for agreeing to meet with us. I believe that you’ve been presented with a unique investment opportunity, and one that is sure to be successful. Your hallmark is to invest in top notch management teams, and I humbly submit that we’ve demonstrated that we can navigate difficult waters.

With your financial commitment to our firm, the sailing will be smooth, and the entire U.S. financial services industry will benefit from the rising tide that would surely follow a commitment from Berkshire. The positive impact that would have on the economy is clear, which would directly beenfit the rest of the Berkshire Hathaway portfolio of companies. This is the way that America can exit the recession that you believe we are experiencing right now.

Thank you, in advance, for your time and consideration. As Senator McCain said himself, and I passed along to you, “the country needs you”, and we are honoured that you are considering this opportunity.

Yours Sincerely,
“signed”
Richard Fuld,Chairman and CEOLehman Brothers Inc.

My take - act of desparation.....with FED swallowing FN & FM have enough indigestion on their hand..... its bye bye to them

Investments update

2008-08-14T09:06:00.000-07:00

Haven't been updating so far as I have been extremely busy with work.

So what's new....as writing now, DOW is 11,640 up 100 points after reporting houses plunge by 7.6 % and foreclosure surge 55 %.... this is also 2 days after the FED's decision to close naked shorting period is over. DOW was actually down 10800+ 3/4 weeks ago with various news that a banks Freddic/Fannie/ Merill Lynch are going kaput
....so a suckers rally so far up 800 points....

My portfolio is up about 2 % ( it was up 13% highest in end May when Celestial hit 93-94 cents)...
Most of my profits is coming from my shorts
Trades so far
- 6 lots City Development from 11.6 - 10.5..... within 1 month
- 7 SIM SCI from 390 to 370.....left it to early.... mistake....should hold till blood in the street...no blood yet what for cover ?
- 10 contracts 356 to 353..... SIM SCI rebounded for 2 days from a low of 346 and I went it ....also mistake... after going down for so long and FED made the move, should wait for 1 week+ at least as it went to a high of 363...... here emotions have been affecting me as it has been sliding 3-4 weeks...
- shorted 20 lots Captialand 5.73 to 4.98 and covered.... Capitaland has more meat than City Development....CD is more astute having cleared most of their properties and less agreesive at the top.... their land bank is relatively cheap as seen in Lividia in Pasir Ris which was got really cheap in 1999 I think 200-300 psf only.
- 10 contracts from 357 to 347...... 1 mistake is that I should cover probably in the early morning if I expect a National Day/Olympic rally on Friday... here DOW was closing down 3 days and the it went down 200 points the day before..... If SIM SCI contracts is down a good portion in the early morning (at 8:45 it was trading around 343 down from 347), I should just cover
- now SIM SCI is 344 and STI has not been participating in the latest rally, so more meat is in the US market.... my current shorting is 7 S&P mini at 1300.45
- went it for a speculative play buying SGX from 7.45, cut loss at 7.05.... was expecting oil to drop....but oil did not drop till 1-2 weeks later, and the US market more important news were the bankruptcy of the banks. I was actually deliberating between SIA and SGX. I expected SGX to be more shorted, thereby more short fuel rally....this is being greedy....next time, take the safer and more direct theme related bet.... I would have earned at least 10 K and not lost 10 K if I were to employ this....knock my head..better learn

Stock portfolio wise
Celestial 51 % price now 72 cents
China Milk 13 % price now 69 cents
SMRT 3% price now 1.84 (my 2nd best gainer from 1.71....regretting did not add up)
Pokka 3 % price no 65 cents ( up 70% still in the process of a General Take over by its parent)
Maqurie Infrastructure 1%
Darco 0.6 %
S&P 7 contracts short 1300.25

Celestial reported 2nd quarter earnining...will update some of the business development.... I think it is doing rather well considering its revenue was affected by the Chengdu earthquake which affected its most profitable drink business... its profit is up 11% YoY.
I think it is an excellent business with PE around 5.8 FY 0708 and 4.7 FY 0809, which can grow sustainably with stable growth 10-20% next few years. Sentiment is quite bad now, but I am confident Mr. Market will rerate this excellent business with excellent business management.
I think I can get a 2-4 bagger in 2-4 years time. Lets see.

Neck pain

2008-08-14T08:44:00.000-07:00

Haven't been feeling too good lately..... after sleeping on my kid's stuff toy, my neck which was unsupported became rather painful.
After that I went for a Kenko massage, and cutting my hair in Malaysia, I also had a short massage. This time, the pain got worse.....
I also continued to carry my baby kid, and the camel back broke when I carried my kid quite a far distance from the carpark to a restaurant in Alawad/Arab Street.

I went to my clinic downstairs ( on a saturday morning) and the Dr. prescribed some medicine. During the medication, the pain was numbed.... when the medicine effect wore off, the pain came back.

(This was 4 days later Thursday evening) I then visited Eu Yan Sang clinic for a Chinese therapy hoping it will help... this made matters worse.... I underwent acupunture around the lower back and head...and under some electric stimulating under some warm lamp...this did not help....the Physician then tried to turn my head a few times....this really made my head worse.....
Nevermind....She gave me some medicine to take...(in powder form)....since I tried it ( and it cost S$90+ including the acupunture)..... lets see the whether there is any help

4-5 days later by Monday, the pain was quite bad... (from a sitting/lying position to a standing/siting position, there is acute pain at the right neck all the way to my head)... I went to my corporate clinic for a referral. The doctor seems quite sceptical (maybe it is the same with all corporate doctors)... and gave me some medicine..... as what happened previously once the medicine was taken, the pain was numbed...once the medicine wore off, the pain came back.....that was around Thursday.
I wanted to see the doctor again on Friday, but the stupid policy means no doctor in the afternoon......

I went back the following Monday, and the refer me to the orthopedic for referral... and they gave me a date 1 week later on Tuesday.
This time, I think I will visit the private doctor which my Mother-in-law is visiting this Saturday...
Suffering for 4 weeks is no joke....I just want to get well soon...have been missing a lot of fun with my boy lately, and my poor wife has to take care of him and carry the heavy stuff....

My lesson now is once you have a slight neck pain,
- never go for a massage
- never carry heavy things more than 2 kg... no laptop...no carrying of kid
- never walk more than 100 metres if possible
(today I was actually feeling better in the morning, but the afternoon there was a stupid all hands meeting which I had to walk all the way to 168, and sit in a very uncomfortable position for 1 and a half hours repeating what has already been known)

US property - Update from US colleague

2008-06-09T20:14:00.000-07:00

A friend of mine who is a LT delegate to US is in town for some training.

I had a short discussion with her and this are the takeaways
Property related
- She is staying near San Jose
- US home property has been dropping - very obvious
- US rent market is creeping up - from US $ 1100 to 1240 for a 1 bedroom - abit surprise, accd to her, because ppl cannot afford housing or foreclosed will rent instead
- People tend to move nearer the city now due to oil prices
- US property still quite ex. eg US 400 K for a 2 bedroom
- I am referring to property in/near San Jose. For central the property are dirt cheap.... US 400 K can buy a bungalow
- Banks are restricting funds and more prudent, eg. for Jumbo loans (above 500K) interest rates are higher

Polictics related
- Obama if elected will have more trade restrictions
- according to my colleague, they are likely to have stricter rules with regards to FTA. For eg. they will only look at FTA if the other party have the same policies (like free labour laws etc)

My take
Looks like the turmoil will take at least another year to drop as houses are still expensive~ maybe drop at least 10% and due to inventories . Recovery will be fast as supported by higher rents. But definetly, will have to look at economical activities to pick up. Mood in US is still rather sombre with little jobs ard.

Banks see plunge in home prices in next two years

2008-05-23T00:02:00.000-07:00

ST 21 May, 2008

Banks see plunge in home prices in next two years

New homes, rising vacancy rates, unsold condos and fewer rental deals cited as reasons

By Fiona Chan, Property Reporter

THE slowdown in the Singapore housing market has prompted two banks to predict a dramatic plunge in home values in the next two years. In two starkly bearish reports, Barclays Capital and Credit Suisse have forecast drops of up to 40 per cent in home rents and prices, as demand and supply dynamics move in favour of buyers.

The reports, issued in the last two weeks, pointed to the malign cocktail of a flood of new homes coming on the market, climbing vacancy rates, a rising number of unsold condominiums and fewer rental transactions. They also raised concerns about the possible dumping of units by speculators. Barclays said that should this happen, private home prices could slide 28 per cent to 30 per cent by 2010.

Credit Suisse predicted a possible 40 per cent drop in rents and prices. Its analysis showed that sub-sale prices recently started to dip at several developments. Both banks also noted that developers were now more generous with price cuts, stamp duty rebates and agent commissions in an effort to move units.

They warned that smaller developers were likely to 'break' first. 'Just six months ago, City Developments and a few others gave zero commissions to agents,' Credit Suisse said. By March, most were giving 1 per cent to 5 per cent, an increase of three to 10 times in just six months. 'When Singaporean developers start to reach out to agents with higher commissions, you know they are feeling the pain,' it said. The pain is coming from slower growth in home rents and prices, as the effects of the United States sub-prime mortgage crisis takes its toll on market sentiment in Singapore.

Private home prices rose a smaller-than-forecast 3.7 per cent in the first quarter. Even then, Barclays analysts said this could have been boosted by a handful of high-priced transactions and 'may not reflect the depth of pessimism in the market'. Sales and launches of new homes also fell sharply last month, extending the slump.

Mr Colin Tan, the head of research and consultancy at Chesterton International, agreed with the Barclays report about a correction in prices. As more new homes are completed over the next few years, he said, rents will feel the pressure and prices will start to fall.

Not all property analysts, however, have such a gloomy take on the housing sector. Kim Eng analyst Wilson Liew believes the oversupply situation may be overstated. While there are 32,000 units being built and 42,000 more in the pipeline, current market sentiment could help slow the rate at which the planned units come onstream. 'It is likely that most of these units would be deferred indefinitely until sentiment returns or when construction resources ease,' he said. Developers could also keep lands in their landbank rather than develop them if there is no demand, suggested Macquarie Securities' head of Asean research, Mr Soong Tuck Yin.

Both he and Mr Liew believe the upcoming integrated resorts will give Singapore a boost and, while there may be a temporary weakness, home prices are unlikely to collapse. Mr Soong also said developers had stronger balance sheets now than in previous market troughs, and the current low interest rates and high inflation could lead people to buy properties as a hedge against inflation.

The Credit Suisse report, however, said negative real interest rates - often touted as a driver for property purchases - had not historically helped home sales. It also said that even with construction delays, actual completions had usually come in higher than forecast.

Steven Molnar Real Estate Mastery Course

2008-05-20T02:36:00.000-07:00

Steven Molnar Real Estate Mastery Course

Two days ago, I was at Singapore Expo for Steven Molnar’s Real Estate Mastery Course. The event was scheduled to run from 9am to 9am. Real estate investing is something that I’m inexperienced in, so I had hoped to learn something useful from the course.

The morning part of the course was a bit slow starting. We were taught by Steven about wealth and he also scratched the surface on some financial planning.

Then he gave an overview of different investment options, using “7 commandments” to highlight why property investment is a good option. It wasn’t quite what I came for and at times, I was close to dozing off.

Steven next shared a ten year plan whereby we could make an income of $180k from property every year. The plan works like this:

- Buy a 300k property with a 100% interest only loan.
- Pay the interest with your rental income.
- In 10 years, the price of the property would have doubled.
- Refinance at 80% to extract $480k from property.
- Pay off the loan of $300k and you would be left with $180k in cash.

If you can repeat this every year for 10 years, you would have cash coming in every year.
The refinancing option allows one to extract cash from the property without having to sell it. This would be good for avoiding the payment of capital tax gains. In Singapore where there is no capital gain tax, we could possibly just sell the property and pocket the entire $300k instead of refinancing it.

In my view, the success of this plan would depend on a few factors:

- Rentals must be able to cover your interest. Periods of vacancy might be risky if you cannot service the loans.
- The property must double in price. This might or might not happen. If you buy at a high point, you might be stuck with very little capital appreciate even after 10 years.
- Banks must be able to lend you as many as ten loans.
- Getting a 100% loan.

The 10-year plan would probably be too risky for most investors, but trying to do it for one or two properties might be viable.
How is it possible to buy property with no money down? We can’t obtain a 100% loan in Singapore but Steven suggests a few methods:

- Making use of credit lines for the other 10% that needs to be funded by cash.
- Making use of vendor finance. This is something that is new to me.
- Borrow or go into joint ventures.

A few other tips I picked up from Steven include:
- Always do your own independent valuation.
- Amateur investors look at price.
Useful list of real estate websites (mostly for Australia):
www.realestate.com.au
www.residex.com.au
www.domain.com.au
www.hia.com.au
www.abs.gov.au
www.reia.com.au
The last part of the seminar was on some of the risks of real estate investing.
- Vacancy
- Property damage and bad tenants
- Loss of income
- Rising interest rates
- Market collapse
Steven also promoted his 5-day Advanced Real Estate Mastery Course and an upcoming property development project to us. Are they good?
If you recall my earlier post on Steven Molnar, there seemed to be a couple of websites with negative feedback on Steven. Most of it was directed to his association with Henry Kaye.
However, if you look carefully at the posts in this forum, most of the negative posts were made by people who were new users to the forum. It seems that their sole purpose in registering seems only to discredit Steven Molnar. I can’t confirm this though.
Other than one other site, I couldn’t really find much feedback on Steven Molnar or his Advanced Real Estate Mastery Course. That site gave a good review for the course but a negative feedback on Empowernet. You might find them interesting:
Review on Free Real Estate Course
Review on 5-day Advanced Real Estate Mastery Course
Empowernet shine wears off
Some news from Empowernet
Undesirable customer service

With regards to the Ecoville project that Steven was promoting, I can’t really comment much on it without more research. If you are considering to invest in it, do check the valuation of the land (among other things) to make sure you are not overpaying for it. Remember what Steven taught us - do your own independent valuation.

Personally, I don’t like the idea of depositing $1k just for the chance to find out more about it.
I would like to end this post with a small bit of advice.
Attending a real estate course does not automatically make you an expert at real estate investing. Nor does it guarantee you wealth. It forms just one part of your preparation. The knowledge you acquire has to be put into practice and continously worked on for your saw to be sharp. This is no shortcut in investing. Great investors always do their homework.
Good luck.

May review part 2 / Living with the Enemy

2008-05-16T09:08:00.000-07:00

It is around 2 months since the rebound of the low in march.

Mistake 1
- went in puts too early. Oil has been inching up last 4-5 days. (coincidentally DOW also went up).
I was expecting oil to drop bringing in another rally from DOW. Unfortunately Oil went up again and Dow went down. I went to short it, thus shorting not at a high. Should have waited as Oil is up another day 6 days, chances are oil will go down, brining another up day.
....emotions running high
Mistake 2
- tikam to sell off celestial at 80.5 cents (75.5 previous day). Another mistake I repeated 2 years ago. Should never have sold off my best investment. PE around 5 and business up 40-50% this year. Worse still, that day I was in meeting whole day and the proxy hang up during that time. before placing an order, check how busy u r the next day.
Mistake 3
- bought back Celestial at a high of 88 cents. emotions again.... but should be okay long run.
Mistake 4
- I should have realise Celestial will be my big winner. I should have switch other stocks to this. too slow to recognise this.

What I did right.
Bought big (all available cash) when I realise Celestial made a superb business performance. At that time nearly 40% cash (10 % FD).
Entered in when fear was greatest. Did not let go of most shares/or started shorting until 2 months.

Strategy Next
- living with the enemy. I have not still an open position on SIM SCI and City Developments. Lets see how this plays out.

May 08 Portfolio

2008-05-13T23:27:00.000-07:00

Portfolio at May 08

1. China Milk 0.77 1240000 49%
2. Celestial 0.75 800000 31%
3. SMRT 1.81 32000 3%
4. Pokka 0.49 85000 2.15%
5. Macqurie Infrast 0.875 36883 1.67 %
6. Darco 0.215 55000 0.61 %

7. Short 6 lots of CDL at 11.64
8. Short 7 lots SIM SCI at 391.3
200K FD

Almost 99% vested.

China Milk at PE 7 and a good play on agricultural theme. Going forward it can grow double digits in next few years.
Celestial Q1 4 cents. It was a very good quarter as I was expecting flat earnings due to Soya bean commodity price being sky high last quarter. Its ability to navigate such a tough environment shows pricing strength/power and I expect to grow further.

2008-04-22T20:39:00.000-07:00

April 23, 2008, The Straits Times
Deferred payment scheme: Up to 4,200 homes may be dumped No URA figure on units sold but experts say 30% could be offloaded
By Jessica Cheam

THE hugely popular deferred payment scheme (DPS) - scrapped last year - may now be a thing of the past, but what sort of shadow will it cast on the Singapore property market going forward? This has been the question on market watchers' lips since the Urban Redevelopment Authority (URA) revealed last week that as many as 29,250 homes offered under the DPS, including 5,760 unsold units as at the end of last month, will be completed from this year to 2013.

The concern is that speculators who bought homes under the DPS could dump their units at below-market prices, and this could drastically drag down overall sentiment. But just how many units are at risk of being sold, and how big will the impact be?

The URA said while it has the number of units approved under DPS, it does not have data on how many units were actually sold under the scheme. But four property experts The Straits Times spoke to estimated that up to 30 per cent of homes sold under the scheme last year could be held by speculators who may offload homes as the completion date nears. This translates to roughly 4,200 homes, going by a back-of-the-envelope calculation.

That is because out of the 23,490 units approved under the DPS and sold, only about 50 to 60 per cent - or roughly 14,000 - are likely to have been sold under the DPS, say property consultants and agency bosses from Knight Frank, Savills Singapore, HSR Property Group and PropNex. The remaining 40 to 50 per cent were not bought under the DPS. Either developers did not eventually offer it, or buyers chose to pay via progressive payments, because buying a home with DPS usually means a further 2 to 3 per cent added to the price.

Next, property experts estimated that of the 14,000 or so homes sold under the DPS, about 20 to 30 per cent were probably sold to short-term investors or speculators. This means that as a group, speculators could be holding on to as many as 4,200 units.

Why are speculators prone to selling their units as they near completion? The DPS allowed buyers to pay just 10 or 20 per cent of the sale price upon purchase, with the rest due only when the unit received its temporary occupation permit (TOP) on completion.

Speculators would, therefore, typically opt for the DPS and hope to sell their units for a profit before the TOP. Any later and they would have to pay up for their homes by arranging for bank loans or other means of financing.

Industry experts were, however, divided on the impact these 4,200 homes would have on the market. Some maintained that panic selling is not likely, given Singapore's strong economic outlook, which is backed by upcoming mega projects such as the integrated resorts and the 2010 Youth Olympics.

Mr Eric Cheng, HSR's executive director, noted that homes set to be completed this year and next are less likely to be sold indiscriminately, since their owners are probably sitting on healthy gains. But those who bought at the peak of last year's buying frenzy, from April till October, are most likely to be at risk. These homes are likely to be completed after 2010.

Mr Ku Swee Yong, Savills' director of business development and marketing, said the sell-off will likely be staggered, because investors have different levels of holding power. Also, investors have bigger coffers compared to the last property peak in 1996, he added.

But he warned that if too many units in a single large project get dumped at below-market prices, overall market sentiment may be hit. Mr Colin Tan, Chesterton International's head (research and consultancy), thinks that the potential risk created by the DPS is relatively high.

He added that data on homes sold under the DPS should be collected and made public, so investors know 'what they're getting themselves into'. Yhe DPS was scrapped abruptly last October after a decade-long run to remove excessive speculation and ensure financial prudence in the property market.

'Don't indiscriminately buy S'pore property stocks' - Insider Apri08

2008-04-21T01:22:00.000-07:00

Our article highlighting the BCA Research report has drawn a counter-view from a reader, who is a property industry insider. Interestingly, it is his personal take and it differs from his company's.

1. Even at current low interest rates, property buyers are not tripping over themselvesto buy physical properties in Singapore - look at the low, low URA transaction volumes.

2. Physical property prices on average have gone up 100% (e.g. East Coast - Fort Road 99-year leasehold condo price has shot up from $850 psf in 2005 to $1,600 psf in 2007) but our salaries have not doubled. So BCA's chart 3 (see below) on affordability index is very questionable.

3. The 100% surge in property prices is a result of high rental rates that force expats to BUY rather than to RENT. Genuine buyers are being forced to buy homes at 2x the price because there have been speculation, en-bloc sales and the presence of private equity funds with the financial muscle to hold on to assets for the long-term.

4. Higher-end property assets have seen prices fall but mass market is up in simple terms, as follows:
a. High-end $5,000 psf in mid-2007 to $3,000 psf in mid-2008.
b. Mid-end $2,500 psf in mid-2007 to $1,600 psf in mid-2008
.c. Mass market $800 psf in mid-2007 to $850 psf in mid-2008.

5. The reality is:
a. Property prices have surged in a short span of 2 years (2005 to 2007) because of liquidity & not affordability.
b. We are seeing prices correcting to a decent level (But what's decent, we don't know)
c. The sub-prime woes in the US are a mirror reflection of Singapore property in allowing free liquidity to result in price upside, so please be circumspect.

6. Let' not get smitten by the monthly change in property data. We have to be realists in this market:
a. Interest rates are likely to go up, not down, to combat inflation.
b. Singapore is globally exposed; any stumble in the US economy, we’ll feel the heat.
c. What we don't know: Buyers who bought property at, say, $1,600 psf could be trying to sell at $1,300 psf but there are no takers.
d. Supply, supply, supply in 2009: We expect rents to come down and property prices to weaken (by how much, we don't know)
e. Property stocks are not exactly cheap compared to Apr 06 levels. We think the high Apr 07 prices are anomalies and the result of greed. Apr 08 prices are fair.

8. We are not bears, just being realistic. We do like property stocks with regional exposure (Capitaland, KepLand) and mass-market exposure (Allgreen). So be very selective and avoid the high-end property stocks because there will be more bad news than good coming out from the US sub-prime saga.

Milk Nurtures Success

2008-04-02T02:38:00.000-07:00

Hot Growth in Asia November 20, 2007, 7:59AM

Milk Nurtures Success

Capitalizing on China's growing taste for milk, the dairy company bought 970 head of cattle—before the ban on imports of U.S. and Canadian beefby Chi-Chu Tschang The outbreak of mad cow disease in Canada and the U.S. in 2003 knocked the North American cattle industry on its back. The largest importers of U.S. and Canadian beef, including Japan, South Korea, and China, banned the import of beef from North America. But for China Milk Products, the restrictions proved to be a blessing in disguise. The privately owned raw milk company had already purchased 970 Canadian Holstein cattle. Its state-owned rivals failed to import as many cattle because they had to navigate government bureaucracy to get bank loans.

Today, China Milk owns the largest herd of Holstein cattle in China and ranks 50th in BusinessWeek's annual Hot Growth rankings of Asia companies. Liu Shuqing and five partners started China Milk in the summer of 2001 to produce raw milk, after recognizing China's demand for milk was outstripping supply. As Chinese families become wealthier from the booming economy, more parents are buying milk for their children. China traditionally has not been a milk-consuming country, so local cows were not bred to maximize their milk production until very recently. Chinese dairy cows produce roughly four metric tons of milk per year, about half the yield from U.S. and Canadian Holstein cows. Monopoly on Bulls.

To narrow the gap in production, China Milk began importing Holstein bulls and cows, first from Canada and then, after the import ban, from Australia to breed with Chinese cows. At the same time, the Heilongjiang Province-based company also set up embryo-transfer and semen-extraction facilities to breed cows producing greater yields of milk. Once China banned North American cattle, China Milk cornered the market on bull semen and cow embryos from Canadian Holstein cows in China. "We used to love the import ban because no one [could] compete with us when we started in the industry," says Martin Choi, chief financial officer for China Milk. "But right now, we really want the import ban to go because it's stopping us [from importing] the cows." Any rancher wanting to breed his cows with a Canadian Holstein has to go to China Milk. The company charges its customers $9.50 per sample of bull semen from a Canadian Holstein, compared with $6.75 from Australian Holsteins and $2.70 from Chinese Holsteins. However, Chinese ranchers are still willing to pay a premium for Canadian Holsteins, especially after receiving a little help from the government. Starting this year, the Chinese government is giving Chinese ranchers a subsidy of $2 toward each sample of bull semen. The sale of bull semen accounted for more than three-quarters of China Milk's sales this year. The company's revenues have gone up more than fourteenfold, to $57 million, while profits have risen more than elevenfold, to $51 million this year, since 2003.

Persuading China to Lift the BanChina Milk's virtual monopoly on North American Holsteins won't last forever. American and Canadian trade negotiators have been trying to persuade their Chinese counterparts for years to lift the import ban. The restrictions were originally supposed to be lifted in 2007, but several more cases of mad cow disease were found in Canada and the U.S. this spring. China Milk Chief Executive—and son of the company founder and executive chairman—Liu Hailong now expects the ban to be lifted in late 2008 or early 2009 at the earliest. "Once they lift the ban, we will probably import the first batch of the best bulls and cows from the U.S. and Canada to China. Our other competitors will still be far behind us and won't pose a threat," he says

.....it has the biggest Canadian Holsteins in China... almost monopolistic nature
....another strength is in terms of financial strength which will pull it ahead of other competitors even when the ban is lifted
........ as of March 2008 there is still mad cow disease uncovered in Canada...http://www.medicalnewstoday.co.../50402.php
....with quaratine of a few months....this makes the advantage even more pronounce

Residential rents seen rising further 2008

2008-03-31T22:58:00.000-07:00

Published March 27, 2008
Residential rents seen rising further

En bloc sales and population increase caused by influx of foreigners will continue to fuel demand, writes LEONARD TAY RESIDENTIAL rents bottomed out in 2004, recovering until 2007 when they staged an extraordinary rise, surging by more than 40 per cent within the year. This was the highest rate of increase in Urban Redevelopment Authority's private residential rental index since the index started in 1990. And 2008 is likely to see continued strength in rentals, although growing at a more modest pace of 5-10 per cent. Rents rose a negligible 0.2 per cent in 2004, and then a stronger 3.1 per cent in 2005, according to the URA private residential rental index. But as the residential sector recovered strongly from 2006 onwards, rental values rose more steeply. The non-landed residential segment, which forms the bulk of the leasing market, chalked up rental growth of 15 per cent in 2006 before sky-rocketing 43.1 per cent in 2007. A key reason for the supernormal growth in rents was the population increase as a result of immigration. Singapore's total population rose from 4,401,400 in 2006 to 4,588,600 in 2007, an addition of 187,200, of which Singapore residents made up 57,200 while foreigners constituted 130,000. This is a 14.8 per cent rise year-on-year and is the largest increase in the number of foreigners seen in over seven years. The foreign population refers to professionals, workers, students and their family members. This is the first time the total has crossed the one-million mark. The increase in 2006 was 9.7 per cent.

Main attractions The positive run in the economy, growth prospects for the country and an attractive living environment brought many here, leading to the surge in demand for housing accommodation. The foreigners chose Singapore because of the job opportunities here and its connectivity to other major cities in Asia. Generally, they formed the bulk of the tenant pool and the prime districts (Orchard, Holland and Bukit Timah areas) were their favourite locations. However, due to the recent escalating rents, more expatriates have opted to move out of the prime districts for cheaper accommodation elsewhere. Some have even gone ahead to buy their own homes instead of renting. The swelling demand was further fuelled by the number of residential projects that were sold on the collective sale market. A number of displaced home owners have rented in the interim while waiting for their new replacement homes to be completed. While rents have increased islandwide, some regions are ahead of the pack. Rents in the Core Central Region (districts 9, 10, 11, Downtown Core and Sentosa) lead the market with a median rent of $3.86 per sq ft per month, going by URA's median rent numbers at end-2007. This is followed by the Rest of Central Region with a median rent of $2.74 psf per month and the areas Outside of Central Region with a median rent of $2.01 psf per month. Using CBRE Research's basket of properties for the luxury, prime and island-wide segments of the leasing market, average rents have reached even higher levels. The average rent for luxury residences ended 2007 at $6.10 psf per month, having risen 36 per cent during the year. Properties in this luxury class include the top 10 to 15 completed condominiums located in the prestigious areas around Orchard Road. Average rents for prime residential properties were $4.50 psf per month, having increased by 55 per cent in 2007, while islandwide rents were $2.65 psf per month, after rising 33 per cent in the same period. As rentals at prime and popular locations become more expensive, both local and foreign residents have been moving further out; first to the city fringe and eventually along the east-west axis of the MRT lines to the suburban areas. A comparison of non-landed median rents from the URA's Realis system in December 2006 and December 2007 shows that the most significant increases have not been restricted to the central areas, but have been seen in the eastern and western parts of the island. It should be noted that although districts 9 and 10 remain the most popular among expatriates, these districts have a range of old and new residences, leading to a relatively lower median rent compared with those in district 4. The residential landscape in district 4 (Telok Blangah/Harbourfront) is generally more homogenous and comprises newer developments that can fetch a premium. Outlook for 2008 The leasing market is expected to remain firm in 2008 and rents will continue to rise, albeit at a more moderate pace in line with the less aggressive growth projected for the economy. The same phenomenon experienced in 2007 will continue into 2008 as fringe and suburban areas become more sought after by occupiers who find the higher rents in the prime central areas prohibitive. The spillover from the central area would cause rents to rise in other parts of the island and lead to overall growth in the leasing market. At the same time, as Singapore continues to attract the well-heeled from around the world, rents for luxury and city living condominiums in the popular areas around Orchard Road and the CBD will continue to move upwards. Average residential rents are expected to increase by about 5-10 per cent this year.
BT Leonard Tay is a director of CBRE Research

China's milk hunger - China's milk production February 11, 2008

2008-03-27T02:36:00.000-07:00

ARTICLE
China's milk hunger - China's milk production
Lior Yaron
Published: February 11, 2008
The Chinese dairy industry is expanding very rapidly to meet the demands of the rapidly changing dietary requirements of its huge population.
Local production will continue to increase but not at the same pace as demand, so import of milk products will continue.
The main limiting factors in Chinese milk production are: industry chain remains long and complicated, lack of experience and technology, land and climate limitations (central and south of China).
En

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Introduction
There are about 1.3 billion people in China, 745 million in the countryside and 555 million in the cities. The standard of life is increasing year by year, trying to reach that of the western world. The Chinese government considers milk to be an important part of the young person’s diet, and this, combined with the increasing western influence, is bringing a 10% yearly increase in dairy production – albeit from a relatively low base. Dairy production in China is changing rapidly and it will continue to do so in the near future. Milk production continues to grow rapidly in response to domestic demand, mainly in the urban sector.
Milk consumption
Twenty years ago China was not among the countries that were mentioned when we talked about milk consumption or production. The reasons for that were no tradition of milk products in the diet, that it it was an expensive product and the local people had low incomes, and lack of cooling facilities in the marketing chain. However in the last few years it has all changed dramatically. The urban population is growing rapidly, urban people have higher incomes which will be spent on high value food like milk. Government support for school milk and changing consumption habits. The average milk consumption in Beijing is about 46.2 kg per capita; even if only in the big cities people will reach this average, an additional 16 million tones of milk will be needed, equivalent to the total current New Zealand milk production (source: IFCN).
Milk production
There are today about 14 million dairy cows in China producing about 34 MMT of milk. The growth rate in cows and production is about 10% to 15% per year which comes mainly from increasing the number of cows. China is still importing a lot of dairy products mainly from the US, EU, Australia and New Zealand. The main regions for milk production are the North East, Central North and North West of China while in the meantime the main consumption areas are in the east and the south of China.
There are three different units of production:
1. Small private units – one to ten cow farm units are very common (60% of the cows) but at the same time there are also 50 - 100 cow units in this sector. The logistics problems with such small units are being resolved by a unique solution in China: a) Village Milk Centre (VMC) – in the middle of the village there is a milking centre and each farmer brings his cows to be milked there by a professional milkman.b) Hotel farm – all the farmers in one village bring their cows to one big dairy farm. They are shareholders in this operation but not working in it.
2. State owned farm – typically with 800 to 2000 cows. They normally require advanced equipment. They represent about 8% of the dairy cows.
3. Large dairy farms – owned by large dairies –typically with 1,000 to 10,000 cows. They normally require advanced equipment and they represent about 3% of the dairy cows.
The main challenges that the dairy industry will have in the near future are:
1. Milk quality – since the demand is much higher than supply the quality issue hasn’t yet come down to the farm level. Most of the dairy farmers are backyard farmers with other farming business and dairy is only one of them. Most of those farmers are new to the business with low levels of understanding of the dairy business; especially what milk quality is all about, cow comfort and nutrition of dairy cows.
2. Feeding cows – most of the know how about it came from mono gastric animals like pigs and chickens, there is lack of understanding of the importance of forage and forage quality in ruminants nutrition, and the farm structure is such that it is very difficult to get enough forage close to big cities. The increases in feed prices are creating big debates regarding crop production compared to milk production.
3. Support units for the farm and farmers: right now it’s very difficult to find any support units which can solve problems at the farm level: no extension service, herd book system, farmer association, dairy cattle breeder association, milk quality and mastitis control laboratory, or feed and forage laboratory.
Summary
The Chinese dairy industry is expanding very rapidly to meet the demands of the rapidly changing dietary requirements of its huge population.
Local production will continue to increase but not at the same pace as demand, so import of milk products will continue.
The main limiting factors in Chinese milk production are: industry chain remains long and complicated, lack of experience and technology, land and climate limitations (central and south of China).
This article was presented at the International Dairy Farmers' Congress 2008 in Berlin

Yishun condo site draws record bid of $213.5m

2008-03-26T23:54:00.000-07:00

A YISHUN condominium site drew a higher-than-expected top bid when its tender closed yesterday, belying expectations of a property market slide.
Developer MCL Land offered $213.5 million for the 99-year leasehold plot, which works out to about $350 per sq ft per plot ratio (psf ppr) - believed to be a new benchmark for Yishun.
HIGH BID = HIGH HOME PRICES?
Property consultants said the higher-than-expected offer by MCL Land could translate into the finished project selling at record prices for Yishun, even as home buyers are now holding out for lower prices in a subdued market.
Property consultants said this could translate into the finished project selling at record prices for the area, even as home buyers are now holding out for lower prices in a subdued market.
Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the end units for the Yishun project could be priced from $830 psf up to almost $900 psf.
This would be almost double what the 99-year leasehold Orchid Park Condo down the road is fetching. Four units at the 14-year-old development have been sold there this year at an average price of $460 psf.
MCL Land's bid pipped four others and came in almost 70 per cent higher than the next bid, from Peak Green, at $127 million, or $208 psf ppr.
Frasers Centrepoint, Sim Lian and Hong Kong's Cheung Kong also tabled offers ranging from $57.7 million to $109.7 million, or $95 to $180 psf ppr - which some consultants said were 'unrealistically low' bids. They had predicted bids of between $200 and $300 psf ppr.
But Mr Li Hiaw Ho, executive director of CBRE Research, said the response was 'fairly robust' and signalled 'developers' confidence in the suburban segment despite the current lukewarm response to new projects'.
'Should the United States enter a mild recession and the sub-prime problems clear up, sentiment for suburban homes should improve after June, bringing demand and upward price momentum back to the market.'
Experts described MCL Land's offer as 'extremely bullish' and suggested that the developer may be short on land bank in the mass market segment.
MCL Land said in its latest financial results that it bought some sites last year, including Holland Hill Mansions and Dynasty Court Garden 1 in Sixth Avenue. Its land bank can now yield 780 units with a total gross floor area of 1.4 million sq ft.
The Yishun site is at the corner of Yishun Avenues 1 and 2, and is 10 minutes' walk from Khatib MRT Station. It is next to Yishun Stadium and overlooks Lower Seletar Reservoir.
'The site is good in that frontage to the reservoir is fantastic,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. 'I agree you should pay a premium for this site, but this seems to be a very significant premium.'
Separately, HDB yesterday put two more sites up for sale through its reserve list system.
One is a 182,986 sq ft plot at Jurong West Street 42 for executive condos, while the other is a 244,341 sq ft condo site at Chestnut Avenue in Bukit Panjang.

Fund tops Serangoon site tender with $801m bid Located above MRT station

2008-03-26T23:53:00.000-07:00

Fund tops Serangoon site tender with $801m bid Located above MRT station, it will be used for a mall and new bus interchange. -->
Joyce Teo
Thu, Mar 27, 2008The Straits Times

THE sleepy Serangoon area received a huge vote of confidence yesterday when a fund bid a sky-high $800.9 million for a land site, which will be used for a mall and a new bus interchange.
Six hopefuls lined up for the 99-year leasehold plot above Serangoon MRT station with four bidding over $660 million - well above the figure some people in the property industry thought the plot would attract.
The $800.9 million bid came from Pramerica Real Estate Investors (Asia) but was submitted under the name Gold Ridge. It reflects a price of $850 per sq ft (psf) of gross floor area.
This was 10 per cent above the second bid of $727 million from Serangoon Community Developments. Another bid came in at $401 million and one was a distant $215 million.
The site - launched by the Land Transport Authority - is destined to be a hub with Serangoon MRT serving as a junction station for the new Circle Line. Any development must include a new bus interchange integrated with the enlarged North-East and Circle Line stations.
The strategic location also offers enormous retail opportunities, say property experts.
'Serangoon Central is not a heavy residential area but there are no major malls within a 3km to 5km radius,' said Mr Danny Yeo, Knight Frank's deputy managing director.
'A mall can be a regional centre. The only tricky situation is that there can only be slightly over 200 carpark lots.'
Pramerica intends to build a full retail centre. It manages the Asian Retail Mall Fund I and II, which own several malls here, including Liang Court in River Valley, White Sands in Pasir Ris and Century Square in Tampines.
The Serangoon mall could have a net lettable area of around 600,000 sq ft, said CBRE Research executive director Li Hiaw Ho.
That would make it of similar size to Parkway Parade in Marine Parade and IMM in Jurong.
The plot is designated a white site, meaning it can be used for different functions, such as residential or commercial, but a full retail mall would bring the highest profit margin, said Savills Residential director Ku Swee Yong - and the highest risk in terms of cash flow.
The site has a gross floor area of 87,527 sq m. Consultants said a mall could probably bring average gross rent of up to $14 psf.
Assuming rent of $12 psf to $13 psf, the developers could expect a net income yield of about 5.5 per cent on a stabilised basis, said Mr Li.
Those who placed the lower bids were probably looking at a residential component, which could eventually sell for $800 psf to $900 psf, consultants said.
While the residential space would help with cash flow, proceeds from apartment sales should not be used to fund the retail mall, said an industry expert.
This is to avoid paying heavy taxes when the developer eventually sells the mall.
Meanwhile, the Urban Redevelopment Authority made available two 99-year leasehold sites yesterday. Interested developers can apply to have these reserve list sites put up for tender.
One is a 0.55ha plot at the junction of Clemenceau Avenue and Havelock Road, which is designated for a hotel of up to six storeys.
Another is a 3.07ha residential plot in Upper Changi Road North.
Mr Nicholas Mak, Knight Frank's director of research and consultancy, said the first site could accommodate a three- to four-star hotel with up to 270 rooms. If it is put up for tender, its land price is estimated to be $75 million to $81 million, or $600 psf to $650 psf of gross floor area.
The second site could have up to 400 condo units and fetch between $83 million and $111 million, with new units commanding $650 psf to $720 psf.
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Higher housing grant for singles who live with parents

2008-03-26T23:51:00.000-07:00

GOOD news for singles who want to buy a Housing Board flat to live with their parents.
They will get a higher CPF housing grant of $20,000 - from the current $11,000 - from April 1, the HDB announced on Thursday morning.
This higher-tier singles grant will also apply to eligible singles buying flats under the Design, Build and Sell Scheme (DBSS).
The catch is: the eligible single must commit to living together with his parents in the resale flat for at least five years.
Within the five years, the parents cannot buy or take over the ownership of another HDB flat, or invest in a private property, said the HDB.
Under the single Singapore citizen (SSC) scheme, single Singaporeans aged 35 years and above can get a CPF housing grant of $11,000 to buy a HDB resale flat if they satisfy the eligibility conditions.
Minister for Prime Minister's Office, Mr Lim Boon Heng, announced the higher singles grant in Parliament on March 8.
'It is a pro-family initiative to encourage children to look after their parents,' said the HDB.
The higher-tier singles grant will apply to resale applications or booking of DBSS flats from April 1.
All other prevailing policies such as the income ceiling, minimum occupation period for resale, will apply.
For enquiries, the public can call the toll free Sales/Resale Customer Service Line at 1800 8663 066.

China giving greater support to agriculture to cool inflation

2008-03-26T22:51:00.000-07:00

China giving greater support to agriculture to cool inflation 2008-03-26 21:33:08 BEIJING, March 26 (Xinhua) -- China promised on Wednesday to increase financial support for agricultural production as part of a larger effort to cool an inflation surge blamed on food shortages. "Reinforcing agriculture has a pivotal role in maintaining sound and fast economic development, curbing inflation and safeguarding stability," the State Council, or the Cabinet, said in a statement. The Cabinet agreed in an executive meeting chaired by Premier Wen Jiabao that China would "immediately" increase the subsidies for farmers' purchase of production materials and seeds, and raise the government's purchasing prices of grain. The move was meant to "mobilize the initiative of farmers to plant crops and ensure an adequate supply of agricultural and sideline products," it said. The announcement added to a string of efforts to end shortages of pork, China's staple meat, and other basic commodities that pushed the inflation rate to a near 12-year high of 8.7 percent in February. Pork production fell dramatically last summer on breeders' dampened enthusiasm due to rising feed costs in addition to a massive pig cull after the outbreak of blue-ear disease in some regions. The unusually harsh winter weather also dealt a serious blow to vegetable and rapeseed crops in many areas and killed many pigs and chickens. The central government's budget earmarked for agriculture, farmers and rural areas reached 562.5 billion yuan (79.2 billion U.S. dollars) this year, 130.7 billion yuan more than in 2007, according to the government work report delivered by Wen earlier this month. The sum included a subsidy of 48.2 billion yuan for production materials purchase, 4 billion yuan for farm tools and 7.07 billion yuan for seed. Editor: Du Guodong

...more financial support for agricultural products.... at present there are already a subsidy abt $2 per straw for bull semen :).... although not mention I think there might be more subsidy :)
...The raw milk condition is worsen by the pig problem (B E disease)... with culling of some cows. (most prob low yielding or older cows)

Property Debt comfortable level

2008-03-23T22:44:00.000-07:00

A good article on Wallstraits by Dennis on property loans advice

Below is what I shared at another forum, warning Forumers the dangers of over-borrowing and Never, Never, Never Over-borrow.

Cheers!Dennis Ng

If a person or household earns $5,000, keeping Debt-service ratio at 35% (or max Housing Loan instalment of S$1,750), and assuming a 25 years loan period, and an interest rate of 4% (it's better to assume a higher interest rate to be Prudent), the Maximum Housing Loan a person should take (assuming NO other debt) is about S$331,541.85.

Assuming this person takes a 80% Loan, max purchase price of Property is S$414,427. I read somewhere that the average Household income is over S$6,000 (not S$5,000). Using S$6,000 to calculate instead, max Purchase Price of Property is S$500,000. It does appear that current property prices are above what a person can comfortably afford, according to Prudent Personal Finance Principles. Note: banks are comfortable with 40% Debt-service ratio, if we use 40% instead, the max loan would work out to S$454,686 and max purchase price of properties would be S$568,357 instead.whether based on Median Income or Average Income, if we use Prudent Financial Principles as a guide, I agree that property prices are currently above the prices what a person can comfortably buy and comfortably borrow. I would advise a max loan financing of 80%.

If people NEED* to take 90% financing, they are buying/borrowing over their means. We should NEVER, NEVER, NEVER over-borrow. Over-borrowing can lead to a person's Financial Demise. *Note: this is different from a property investor who CHOOSES to take a 90% financing to minimise Cash Outlay but who have the Financial Means to make a 20% downpayment.

Another thing people should note is that current property prices are already much higher than say, 2 years ago, and as prices move higher, risks increase instead of reduce.And the economy is slowing down and there might be retrenchments in future due to economic uncertainties. Thus, anyone buying a property should standby Cash/CPF sufficient to pay for at least 12 months to 24 months of Housing Loan instalment as a "Safety Buffer". This will ensure he/she can continue to service the Housing Loan even if he/she lose his/her income. If they cannot afford to do what I advise, suggest that they NOT buy a property, they should continue to save some more money so that they can meet the guidelines I shared.

Cheers!Dennis Ng

Happy Good Friday

2008-03-23T20:49:00.000-07:00

Went over to my sis-in-law for their house warming in Selangor (Bukit Jelutong).
I quite liked the spacious garden - brazilian trees/ palm trees, white and black big pebbles flooring at the porch and carpet grass. It is 7600 sq feet, very hugh. I also liked the high ceilings - giving it a cosy homely feeling. Also the AV hi-fi room was very professional. - with pre amp/ power amp, CDs and big speakers. The yellow lighting and carpet and sofa made the whole room very professional. I heard the house is about 1.4 Mio RM.

Visited Datuk's house in Bangsa - another high end residential district. What I liked was the curving / ovalish flooring. It has a fantastic view as well.
What did not look too good was that it did not have a spacious garden, and the ceilings was too short.

Another high end condominium popular with Singaporeans is Mont Kiara

CLSA: Sell The Milk And Milk Processors

2008-03-19T03:16:00.000-07:00

CLSA: Sell The Milk And Milk Processors Positions must be cut entirely on pure Milk re-sellers like Anik, Modern, Heritage and Kwality Dairies, while exposure reduced to Britannia and Nestle.
China's Milk Dairies are sinking deep into the Red as Raw Milk prices rise, and the PRC Government imposes price controls on Milk and Milk products sold in Greater China region.
-Local Dairy Associations in Inner Mongolia, Heilongjiang and Shandong provinces have reported tight supplies of Raw Milk, with no signs of supply shortfalls easing in the near future.
-As price of Grain and Feed Stuff rises Breeding of Cows has been stopped in most Milk producing regions of China, with many farmers resorting to Culling the cows.
-As a pure statistic the number of Cows in the Shandong province have declined by 50 per cent in the period 2003-07.
-Very surprisingly new Milk processing plants have been set up in Shandong, Yili, Mengniu adding to the fierce competition that prevails in procuring Raw Milk.
-Raw Milk prices have consequently risen 67 per cent in the past 2 years, most of the price increases have not been passed on to consumers leading to a massive reduction in operating margins for Dairy producers.
-As a thumb rule, if Raw Milk prices rise by 5 per cent operating margins sink by 31 per cent.
A similar scenario could prevail in India as well, which is seeing the price of grain and raw feed prices going up in rural areas with direct and indirect price controls being imposed on Milk prices.
Positions must be cut entirely on pure Milk re-sellers like Anik, Modern, Heritage and Kwality Dairies, while exposure reduced to Britannia and Nestle.

With 150 tonnes of raw milk processing setting up in March by China Milk, look for further upside.
What about the bull sperm business ? It should be relatively unaffected as with the demand for raw milk, and limited land in China, there should be steady demand for high yielding bull sperms.

Agricultural Commodity Stock - China Milk

2008-03-13T23:29:00.000-07:00

Something I find interesting and the price very appetising.
It has with other China stocks badly beaten up, dropping ( 60%) from a high of 1.63 to now 67 cents.
1 - cheap

2 - recession proof

3 - good ride on agriculture commodity play. Agricultural commodity run is in its infant stage. The metal commodities with all the infrastructure boom has started from 1999 to now. For Agricultural Commodity, I believe it started around 2003, which means it has 4-5 more years to run to catch up with the metal commodities. And at presently, AC is at 1st of 3 stages.

4 - a recent report which mentions that funds have the intention to put 10% of their money to agricultural commoditiy stocks.

5 - A remark by China's prime minister Wen Jiabao: "I have a dream - a dream to be able to provide all Chinese, especially our children, with half a litre of milk a day." The result has been a huge increase in milk consumption in China and demand is growing at a rate of around 25% a year. China’s milk consumption continues to be spurred by consumers demanding healthier and more nutritious foods. With rising affluence in the world’s fast-growing consumer market, there is a rapidly growing penchant for international food and beverage concepts which use a lot of milk and milk products. The PRC government has also been promoting the need for nutrition as evidenced by the government’s nation-wide School Milk Programme.

Why China Milk,
- With limited pasture land, China cannot continue to increase the number of cows to enhance its milk supply. China has much to catch up in terms of improving the milk yield of its cows.
- Based in the Heilongjiang Province, our subsidiary is the largest company specialising in the production of bull semen, dairy cow embryos and raw milk in China *
* According to China Dairy Industry Association

- It is building a 150 000 tonnes raw milk processing factory. They have signed a contract to provide OEM with raw milk, As of Jan qtr report, it has installed the milk machines by early march and will commence trial production for 1 month.

- The outbreak of mad cow disease in Canada and the U.S. in 2003 knocked the North American cattle industry on its back. The largest importers of U.S. and Canadian beef, including Japan, South Korea, and China, banned the import of beef from North America. But for China Milk Products, the restrictions proved to be a blessing in disguise. The privately owned raw milk company had already purchased 970 Canadian Holstein cattle. Its state-owned rivals failed to import as many cattle because they had to navigate government bureaucracy to get bank loans. Today, China Milk owns the largest herd of Holstein cattle in China and ranks 50th in BusinessWeek's annual Hot Growth rankings of Asia companies
Any rancher wanting to breed his cows with a Canadian Holstein has to go to China Milk. The company charges its customers $9.50 per sample of bull semen from a Canadian Holstein, compared with $6.75 from Australian Holsteins and $2.70 from Chinese Holsteins. However, Chinese ranchers are still willing to pay a premium for Canadian Holsteins, especially after receiving a little help from the government.
Starting this year, the Chinese government is giving Chinese ranchers a subsidy of $2 toward each sample of bull semen.

- China consumption of dairy products is about 20kg in 2006. It is a low base compared to other countries. With a greater awareness of nourishment with drinking of milk, and better life style (ice cream/butter/ yoghurt), demand will continue to increase

- Tourism will continue to be strong after the China Olympics. With more Ang mos visiting China, they will want their daily milk, butter, pasta, yoghurt, boosting demand.

2008-02-21T22:19:00.000-08:00

A good analysis of Singapore property from a writer Qiaofeng from Channelnewsasia
Quote:
Experts say Grade A office rentals to continue rising in 2008 By Pamela Almeda, Channel NewsAsia Posted: 22 February 2008 0054 hrs

SINGAPORE : Rentals of Grade A offices in Singapore are expected to continue rising this year. According to property consultant Savills, average office rentals here may even nudge above that of Hong Kong's, currently the highest in the region. They added that Singapore's office property sector will continue to remain buoyant despite worries over the US sub-prime crisis. "Even in the current environment which is rather uncertain, we noticed that the financial services community is continuing to grow in Asia. And we noticed this in HK and in Singapore, so demand remains very strong here. That is going to continue to push up rents in the grade A office market," said Simon Smith, Deputy Managing Director, Savills Valuation and Professional Services. Savills is expecting prime office rents in Singapore to jump by 15-20% this year, down from the 90% jump in 2007. Vacancy rates for offices hit as low as 0.2% late last year. Savills said Singapore is attractive to overseas investors looking at the office property sector in the region. Robert McKellar, CEO (Asia Pacific), Savills Asia Pacific said: "Office is primarily very attractive. Of course, (there are) very few assets for sale and that makes it very difficult for any overseas investor to get access to stock. Nevertheless, if the opportunity arises, then definitely we'll go for a secure investment in Singapore. "For example some of the German open-ended funds that are increasingly wanting to have a bigger slice of the Asian real estate markets; they see Singapore as an attractive market because of the fact that its lots are risk-free. "They are looking to have a base from which to invest into the region, and (it's) ideal for them, acquiring an asset in Singapore which is risk-free, which has stabilised market, strong economy and low taxation." Meanwhile, another property consultant CB Richard Ellis (CBRE) is estimating that about 10.1 million square feet of new office space in Singapore will be completed by end of 2012. Some 67% of the supply coming into stream within the next three years is expected to be Grade A office space. This means a doubling of prime office space. CBRE said monthly rentals for prime office space averaged S$15 per square foot from October to December of last year, up 92% on year. It is expecting these to average S$17 per square foot by the end of the year. Meanwhile, luxury residences will also see prices jumping between 8-12% in 2008. - CNA /

Who to believe? Savills and CBRE...says Supply is catching up with demand and they say Office rentals will still rise.... as much as 15-20% this year.... CitiGroup....Wendy Koh .. plays contrarian ....... and says Supply will exceed demand... and cites oncoming demand averaging 3.2 m sq ft per year....... Who to believe? Careful study of the CitiGroup figures reveal they are using historical demand of 1.5 m sq ft per year....... So they are using historical demand to compare with future projected supply....Somehow the logic ......just don't jive...... but the report by CitiGroup seems to carry weight........ An update of current demand and a projection of future demand will be more enlightening.......

Quote:
Oversupply Looms In Singapore Office Sector: Citigroup 28/11/2007 It downgrades two stocks with key exposure to sector - KepLand, CityDev. Singapore is in danger of seeing an oversupply of office space from 2010 onwards, Citigroup is warning. The bank’s research unit has also downgraded two Singapore stocks with significant exposure to the office market here - Keppel Land and City Developments. ‘The market is underestimating the potential supply of new office space in 2010 and beyond, in our view,’ said Citigroup analyst Wendy Koh in research report dated Monday. ‘Based on our estimates, occupancy rates are likely to peak in 2008-09 and decline thereafter with the impending supply.’ Since May 2007, six new sites with a total gross floor area of 5 million sq ft have been awarded amidst fears of an office space crunch. These sites could add some 3 million sq ft of new office space in 2010-11, Citigroup estimates. Altogether, on average, 3.2 million sq ft of new supply could hit the market from 2010-12, the bank said. This compares to a historical average demand of 1.5 million sq ft per year. Supply estimates could rise even further with more government land sales in the first half of 2008, Citigroup said. All this will mean that buildings in core Central Business District will be competing for tenants. Key projects that are scheduled to be completed in 2010-12 include Marina Bay Financial Centre, the redeveloped Ocean Building One Financial Centre and the South Beach Road and Marina View land parcels. In response, Citigroup downgraded its ratings on office landlords Keppel Land and City Developments. Keppel Land was downgraded to a ’sell’ from a ‘hold’, while CityDev was rated a ‘hold’, from a ‘buy’ previously. ‘Going forward, we expect Keppel Land to face keen competition while marketing the remaining space at the Marina Bay Finance Centre and One Financial Centre,’ Ms Koh said. She cut KepLand’s revalued net asset value (RNAV) estimate to $7.83 (from $8.85) and target price to $6.26 (from $8.97). For CityDev, Citigroup cut its RNAV estimate to $14.47 from $15.28 and target price to $15.90 from $18.00 to reflect lower capital values of office buildings. Other analysts however said that all the new projects coming onstream will not cause an oversupply - rather, they will ensure that supply catches up with demand. ‘I think that there will be significant pent-up demand for office space that will only be satisfied when supply hits the market in 2010-11,’ said Moray Armstrong, CB Richard Ellis’ executive director for office services. This pent-up demand means that demand in 2010-11 will be significantly higher than the historical average, Mr Armstrong said.

Source: Business Times

Looking at CitiGroup's figures..... one wonders if URA and SLA..... are releasing too much supply...... and are missing the total supply picture? Or are they deliberately planning for the higher supply...... given that they are in touch with current projected demand? So Is City Dev.....Kepland......a BUY ing opportunity or a SELL...... U decide..... I was reading Capitaland' 2007 FY report and they have CBRE's figures.... in their report.... I have gleaned some figures from the Capitaland report released today… Source: URA, CBRE & CapitaLand Research (Jan 2008) • Average annual supply ('93-'07)…………….1.14 mil sq ft • CBRE projected annual take-up for 2007-2012 ..... 1.6 mil sq ft • Some future supplies have already been pre-committed, e.g. 1.6 mil sq ft in 2010 (MBFC) So lets look at the Overall picture..... Supply and Demand Forecast Figures by CBRE………taken from the report....
………….. … ….Supply………………….Demand……………Diff
 2007 ……….- 0.5* mil sq ft …………...0.9*…..……….-1.4
 2008………… 1.0 mil sq ft ……………...1.6………..…...-0.6
 2009………… 1.4 mil sq ft ……………….1.6…….…....….-0.2
 2010………… 2.7 mil sq ft …………… 1.6+1.6**………-0.5
 2011………….3.8 mil sq ft………………. 1.6………..…...+2.2
 2012………….1.1 mil sq ft ………….... 1.6……..…..…..-0.5
Total…………...8.4mil sq ft…….…....8.9……….…….-0.5

*Estimates from graph read-off **1.6 m sq ft pre-committed in MBFC So we see supply trying to catch up with demand until 2011...when supply exceeds demand....... then a reversion back in 2012..... Note these are estimates...and properties .....due to long gestation and construction periods ...have huge lag effects.... Nevertheless..... the whole scenario depends on the outlook....... that one has for the government globalistion plans for Sg The Remaking of Singapore into global city.... are U optimistic.....? - Will current growth in our efforts to be a regional financial centre pan out.....? - Will current trends like the Open Skies Treaties lead to better air connectivity and hence enhance Sg desirability as a regional centre.... - Will the Quality of living.....IRs...F1...YOG....Sg Flyer... New Botanic Gardens.....Enhanced by vibrant arts and entertainment scene...think Collyer and Boat Quays..... and Museums...lead to a higher desirability for expats to stay put..... and more HNWIs to relocate here....? For now CBRE is still projecting 10-15% rental growth and Savills ...see previous article by BT ...is projecting rental growth of 15-20% for prime office space... ...which will underpin capital values.....and Savills is saying German open ended funds...outlook on demand for ownership of Office properties are still strong.....showing high pre-commitment interests in future projects.... So maybe.... the Office Property scene is not as dour as CitiGroup......is projecting....... in its contrarian take on the Sg Office mkt.....

Happy Chinese New Year - Good Food

2008-02-14T19:32:00.000-08:00

May the year of the Rat bring health and prosperity to everyone :)

I went over to my in-laws place on the 2nd day.

We went to "Fei Cui" Crystal Jade at Pegarang - Sungei Ringit.

The good food include Lobster (with herbs), Hor fun, and Fish(Assam and fried/baked).

I remember just before reaching there, go right (at the slight Y diversion road), right again , coming to Shell then turn left.

Investments Strategy

2008-02-05T01:24:00.000-08:00

Wallstraits forum has a thread about investment strategy.

I think this is mine.

I will consider mine as Growth Investing (Certain level of Moat) taking into account Macroeconomics environment coupled with short term trading.

Now the macro environment is bad and will get worse.
1) There was already a bull run from 2003 to 2007 (5 years)
2) The property bubble in the US has burst (It is in the news)
Someone will say if it is in the news, the share price has already discounted it. However I feel that is the tip of the iceburg and will be a self fulfilling prophecy making the housing market spin into the downturn, as from the peak it only drop about 1 year. It is still long way off. At least 1.5 - 2 years.
3) The CDOs in the finanicals are weapons of mass destruction. This will cause at least 1-2 major banks to crash.
4) The US property crash, the financial crash and after China olympics, investments in China will slow. Property markets in UK, Spain, Ireleand will also crash. The India economy which is highly dependant on the textile industry (about 50%) will also slow. China stock market is a bubble. I have heard stories that as there are many people playing the stock market, the company who employ them will hire someone full time so that the employees can concentrate on working.

What is my investment strategy now ? I guess cash (95%). I have made more than 7 times (600%) my investments from 2003. I was already cautious last year. This time is the 3rd time I am making the call that the downturn to be true.

Money can be made in the best times. In the worse times, I do not have the confident to make correct judgement calls. It is the best to stay in cash, and play my short term play.

Jan 2008 Investments

2008-02-05T01:10:00.000-08:00

Was around 35 % vested going into the New Year. With China Milk and SMRT my big counters.

But the last day I saw Dow dropping heavy. Jia Luk, looks like it was a foreboding warning for me. I quickly pared down my holdings on the opening of 2008 to 14%. Looks like my hand itchy is getting me into trouble.

As expected, Dow continued dropping the next 2-3 weeks from 13200 to 11800+.

STI dropped from 3400+ to 2780+ about a drop of 20+%. I was already itching to go in, but I was waiting for Dow to drop before buying the next day. Monday was a US holiday you see, and STI drop 6% on Monday and about 5% on Tuesday but recovered to about 1.5%.

Well, helicopter Bernake in the early morning cut interest rate by 75 basis points to 3.5%, limiting losses to Dow. The next 1-2 weeks Dow rebounded to 12800, having 4 out of 5 days positive. STI also rebounded to 3100.

I tried to enter UOB the next day as I expected limited downside. little expect as the banks staged a late rally the day before, UOB after 1 hour + dropped into the red. I panicked and quickly cut of, sustaining losses (17.06 to 16.86). This shows that emotions is still running and affecting me. I should just wait out at least 1 week. It rebounded to a high of 18.6+...sigh.

Lesson learnt, control emotions , wait for 1 week at least. (Short covering, + oversold position. Any stable news will surge upwards)

Portfolio down by 1.3 % as compared to STI down more than 10 %.

Singapore will spend 20 billion Singapore dollars (US$14 billion; ?9.5 billion) to double its railway network

2008-01-31T19:51:00.000-08:00

SINGAPORE - Singapore will spend 20 billion Singapore dollars (US$14 billion; S$9.5 billion) to double its railway network by 2020, the city-state's transport minister said Friday.

The new lines will also triple the network's load from 1.4 million journeys a day to 4.6 million, said Minister for Transport Raymond Lim said.
"The government has decided that all these rail projects are a necessary investment to ensure that our transport infrastructure meets the needs of a growing population and an expanding economy," Lim said.
Together with rail lines currently under construction, the new ones will double the network length from 138 kilometers (85 miles) to 278 kilometers (172 miles), he said.
A new line will be built to connect Woodlands in the north to downtown Marina Bay, where one of Singapore's two casinos is being built, while another line will be built to connect Marina Bay to the eastern parts of the island, along the coast.
The existing rail lines that run north to south and east to west will also be extended, he said.
"By 2020, people who live or work in the city and those who shop and find enjoyment there will be able to reach an MRT station within 400 meters (437 yards) on average, a mere five-minute walk," Lim said.
The Southeast Asian city-state projects its population will increase by more than 40 percent to 6.5 million over the next 40-50 years, based on current demographic trends. Leaders have urged land planners to explore new ways of creating space to accommodate the potential increase

Portfolio 2007 Review

2008-01-20T23:11:00.000-08:00

This is the year where I was very cautious. Most of the time I had only about 50% invested.

My YTD performance is 35.55 %. Nothing fantastic, but satisfied. Most forummers I know have achieved 50-80%. Well, what to do if I extrapolate my performance with what I invested, it is around 70% ...yeah IQ jing shen.

Even though I tried to stay out of the market since Sep 07 as I knew things will get worse, I itchy hand went to buy China Milk and Darco. They have respectively fell and cut down my portfolio by 30+K.

Lesson learnt - Discipline means discipline. When you have decided the course of action, whether the market moves up, you should disregard it. Treat it as bo pian, ming bu shi ni de.

My biggest winner in terms of cash this FY is CSC, which more than doubled and contributed half of my gains . It is indeed a speculative stock, but constrution was in doldrums in the last few years, and with the government initiative to revamp Singapore with 2 Integrated Resorts, Sports Hub, Circle line and property boom in singapore, it was a strong beneficiary. It was cheap and it was a good play.
I bought mostly at 20 cents and sold most at 43 cents. A good thing is that I did have discipline and was not greedy. Make money - sell.

My next big winner is Pan United Marine. Although I bough at around 50+ cents a year ago, I have been entering and exiting it a few times. My cost this FY is around 1.6+ and was unfortunately had a mandatory take over by Dubai Drydocks. I sold it around 2.41 a cool 50% gain. It still had lots of cash, strong book orders till 2009 and generous dividends.

I had other good winners like Techcomp about 50% (32 - 50 cents) Ecowise (Doubled) and Superbowl (50%) but wasn't bought at big quantities to have much impact.

Now my failures.
i ) Longcheer, which I did not fundamentally understand its business landscape and competitors. I made the investment because of the 3G license which did not materialse. Its business model became focus more and more on low cost handphones and their profits plunge. Also, handphone makers also spin off their internal R&D departments and buy from this spin-offs. The cash cow perios was over.
ii) Memtech, also a play on 3G. It also has a high dividend rate, but I don't understand why it is still languishing.
iii) China Milk - still smarting because of high PE 13

Lessons learnt
- Be more discipline
- Research more into the companies businesss landscape before investing
- Given a choice buy companies with stronger pricing power

KL Trip

2008-01-08T00:50:00.000-08:00

Took a 3 day holiday trip to Kuala Lumpar. Was one of the few breaks I was looking forward to.

Arrived at Sepang Airport, and our sis-in-law fetched us to her house in Bukit Jelutong at Shah Alam Selangor. It took about 40 mins. At the airport, it is closed to Putrajaya, which is the new administrative centre of Malaysia. The prime minister office and other adminstrative offices are moved there.

Bukit Jelutong is one of the high class area in Malaysia. It is a property development which is outside the busy KL and has many rows of rather luxurious houses. It is a nice place to stay.

We went to Restoran Green, the place famous for their LobsterLong Xia shen mien. Really yummy :) You can really taste the lobster taste in the noodles.

The crab was also quite good, with Hei Bi (Prawn paste) taste. But my personal preference is still Long Beach.

The 2nd day we went to Klang to take their their claypot Ba Ku Teh. The soup as usual is very delicious. The soup is boiled for a long time and you can really taste the pork taste in the soup.

We then went to a shopping centre (The Curve)The Curve at Mutiara Damansara.

The 3rd day we went to Bangsa area for lunch. Bangsa area is another very high class area in Kuala Lumpar. We then went to Midvalley a megamall where we bought some of my CNY clothes and my toddler son's clothes. It was very crowded and rather modern. It looks like Malaysia retail is doing well.

Fixmarket - Life Experience

2007-11-04T21:54:00.000-08:00

This Fixmarket thing return to haunt me. This Mr. Jiang still has not paid 2 years of auditing fee for Fixmarket.

I am really quite fed up and I want to close this chapter this year. Either he appoint another foreign director and I resign or he close the company.

Emmy also told me to beware of Amy. This teaches me a lesson on how far you can extend your friendship to people. Apparently, Amy asked Emmy (when she was an employee of Amy) to help her pack her things. And this CID (Amy's boyfriend) did not let her into the house. At the end, only the packers came into the house to pack her things. This apprarently saved her as Amy was suspected of stealing Diamonds and Jewellery from her father-in-law. If she had entered the house, she will be suspected of stealing the goods. Apparently she told the police that the goods were stolen along the way when the goods were packed from that house to another location. If Emmy were allowed into the house, she would be the prime suspect.

She also warned us not to help Amy to carry her things.

Happy BD to YY -Dinner

2007-11-04T21:19:00.000-08:00

Happy Birthday to my wife :)

We went to Oosh at Dempsey road for dinner (yeah quite Suah Ku) . It was one of the rarest time we managed to come out to a a new dinning place for dinner after having our 1 year-old son. I know that if we do not make the effort today, it will be quite long before we go to another dinining place.

The ambience was 5 star at Oosh. It was very big, with a band, and a resort like ambience, with trees and sofas around.

We were at first directed to a sofa place, but as we had HZ with us, it will be more appropriate to have a proper dinning table. Also, they do not have any baby seats. I guess all these restaurants cater for the working professionals who are having a great party time there.

We had Lamb rack ($35) which had a great sauce and Scallop Tempayaki ($30) which tasted normal.

Before and after the dinner, we drove around. It was quite pack, and I believe it will be a nightmare to park during Fridays and Weekends. They had several restaurants, and my wife told me that the Korean restaurant and the la something (French) restaurant was quite good. When I drove around, there was also a place called Wine Network, it looked like a great place for partying (alot of AngMohs there too).

Best Financial Advice

2007-10-29T20:32:00.000-07:00

Gary Belsky, co-author of "Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics":

"Be afraid when people are greedy, and greedy when people are afraid. It's basically, 'Buy low and sell high.' In general, I've been doing better than market averages when I've been handling my investments. I've basically done that by being conservative when the market is frothing and aggressive when the market is down."

Wayne W. Dyer, Ph.D., author of "Your Erroneous Zones" and "It's Not What You've Got: Lessons for Kids on Money and Abundance":
The lesson "for me was, first, pay yourself," Dyer says.
While in the Navy stationed in Guam, Dyer saved 90 percent of his pay over the last 18 months he was there. "So I came home with enough money to pay tuition for four years of school and a car. Even today I pay myself first. If you want to be financially independent by the time you're 30 years old, pay yourself first.
"When you get your paycheck, take a percentage -- between 10 percent and 30 percent -- and put that away," Dyer says. "You'll be rich enough to be financially independent within a short period of time."

Neale S. Godfrey, author of "Money Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children," and chair of the Children's Financial Network:
"Step away from the television and the magazines. All they serve to do is show you how stupid you are because you've missed whatever they're talking about. It's old news. It's already happened."
The advice came from her financial adviser, she recalls. "I used to call him and say, 'Why didn't we ...?' He'd say, 'Stop it. Step away from the television. It's done.'"
She realized that he was right. "By the time you see it or read it, it's done; it's happened," Godfrey says. And if you listen and follow the hot news, she says, "You will buy at the top and sell at the bottom -- exactly what you're not supposed to do."

George Kinder, Certified Financial Planner, author of "The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life," and founder of The Kinder Institute:
"It's about the meaning, not the money. If my investing is not really deeply tied to what I think is most important in my life," he says, then, "the asset allocation, the estate plan, the retirement plan might as well be thrown out the window."
His best advice: "Hire a Registered Life Planner (a financial planner with additional training in helping clients identify and reach life goals) to help you through this," Kinder says. "Nobody can do this themselves."
A life trainer, he says, "is trained in how to elicit from a client what is meaningful and how to keep their eyes on the prize."

Robert Kiyosaki, co-author of "Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money -- That the Poor and Middle Class Do Not!":
"My rich dad gave me lots of advice. One of the better ones: There's good debt and bad debt. Bad debt is debt you have to pay for and makes you poor. If I use credit cards to buy new shoes it makes me poor. Good debt makes me rich and someone else pays for it."
One example: "I'm closing on a $17 million property and financing $14 million. That $14 million is good debt. It makes me richer every month by putting $20,000 in my pocket."
Rieva Lesonsky, co-author of "Start Your Own Business," and senior vice president and editorial director at Entrepreneur magazine:

Lesonsky's best advice "was from the owner of our magazine, Peter Shea," she recalls. "He said, 'Housing prices have gone up -- get a second mortgage and pay off your debt.' I did, and I'm debt-free."

Peter Navarro, Ph.D., author of "The Coming China Wars: Where They Will Be Fought and How They Can Be Won," and associate professor of economics and public policy at the University of California, Irvine:
"Take every piece of advice you get from any investment adviser with a barrel of salt. Most are trying to sell you things that you probably don't need or want. Think for yourself."
Navarro says he learned that lesson after a bad experience with a financial adviser. "I lost some money, then took control and never looked back," he says.

Dave Ramsey, author of "The Total Money Makeover: A Proven Plan for Financial Fitness" and host of a nationally syndicated radio show focusing on personal finance:
"A friend of mine who is a billionaire told me that he reads a book to his grandkids and I should read that book. The book is 'The Tortoise and the Hare.' Every time he reads the book, the tortoise wins. Slow and steady wins the race, and consistency matters. Get-rich-quick never wins.
"If you try to impress other people, you'll lose the wealth race, as well," Ramsey says. "It sure did give me a nice metaphor. It's a good reminder to somebody like me to keep me in check. It has implications for debt, for mutual funds, for budgets -- an overlay for everything."

Lonely

2007-10-08T02:07:00.000-07:00

I am so lonely, standing aside when the party is going on.
STI has moved up another 15 % when I decide to leave the party. Sigh....
It seems that the stock market has disregarded any problems which ever exist.
Are things better ? I don't think so. Will things get worse, likely so. Watch ... the USD is crumpling.

YTD portfolio 39%.

There are only 1-2 counters worth accumulating.

What am I optimistic on... commodoties.

Fed cuts 50 basis points to 4.75%

2007-09-18T23:59:00.000-07:00

Berneke saves the day!

Urgg...As I expected Helicopter Ben pays scant regard to the inflation topics and saves the stock market. I should have known that to protect his reputation (he will not want to be the first Fed on watch with a crash in the market), and being handpicked by Bush, he will resort to more drastic measures.

Sigh... I was more or less out of the market, so in the morning I put some orders for the banks. They are quite beaten up, and the Fed move will benefit the emerging markets better. The banks will be definetly be a good short term play.

I learnt my lesson prevously, and entered the blue chips this time. (Small cap do not impact my bottom line)

Went in UOB 21, exit 21.3. (yest close 20.5, down 0.3)
Went in DBS 19.7 exit 19.9. (yest close 19.3, down 0.2)

New lesson learnt, 1) do not overpay (~2% premium). 2) UOB with share buy back is a better play. 3) have to lift my credit limit in account.

I will wait their further bad news. Lehmann Brothers results were good, posting a slight decline even after writing down 700mio in subprime mortages.

The other big investment bankers will be reporting soon. Somehow I think Goldman Sachs will show a slightly bigger decline. Beware, DBS is another time bomb, possibly writing off some value in its 3rd quarter earnings.

Portfolio and Sep07 Sentiments

2007-09-16T22:06:00.000-07:00

Most of the stocks when further up when I sold.

I again sold off more of my stocks. I am almost 95% in cash. Portfolio YTD is around 37%.

Only thing I have left is QAF.

I guess I look like the lonely guy now who have left the party early. I have been rather conservative since late last year, thus reducing my performance.

I think the writing is already on the wall why I think there is a downturn.

Although I am bullish on the Singapore economy, being an export oriented economy and closely tighted to the fortunes of the US, I think it will go down with it.

The US housing has lots more to go down. People always mention subprime, but I believe it is as much as 30 % US housing which has a problem.

People will always save their house first, thus consumer spending will slow down tremendously.

Housing/Developers will be hit, Housing agents will be hit, Finanical Instituions will be hit, Retailors specialising in Housing/Furniture related stuff, Consumer slowdown, I believe it is the perfect storm coming. The lightning and thunder has flashed, it is just waiting for the storm to come....

Investment Strategy and Sentiment Sep07

2007-09-04T18:54:00.000-07:00

Investment Strategy
After the recent rebound, I was not able to particpate fully in the recovery. On the following day after the Fed rate cut, I entered extra 13% in ASL Marine, CSC and Hiap Seng. Although it gave me decent returns, it was insignificant compared to my portfolio.

I discover that I have to refine my investment strategy due to my size of my portfolio. My past investment strategy on looking at small caps is not as effective as I cannot enter and exit as easily.

1) I cannot concentrate on small caps, but have to look at the mid and blue chips right now. The small cap volumn is too small to go in or out.
2) Each entry will have to have at least 13% to be effective.
3) With my bearish sentiment, I will have to have a hit and run strategy on the blue chips. What are interesting ? UOB (Share buyback) 18.2, OCBC (Ningbo IPO) 7.6, Keppel Corp 9.8 (Oil Rigs), Singtel (Bharti)

Investment Sentiment
With the elections coming in 2008, I believe Helicopter Berneke will pay lip service on the inflation topic, and flood easy money to the economy. He is handpick by Bush to take over Greenspan. Will he cut this sep18 ? Although that is the worst option, I believe he will.

I think the US economy will tailspin into stagflation, and while US Stock market may go higher, I prefer to stay in the sideline. Like what Warren Buffet mention,

...Orgies tend to be wildest toward the end. It's like being Cinderella at the ball. You know that at midnight everything's going to turn back to pumpkins & mice. But you look around and say, 'one more dance,' and so does everyone else. The party does get to be more fun -- and besides, there are no clocks on the wall. And then suddenly the clock strikes 12, and everything turns back to pumpkins and mice."

Portfolio Sep07

2007-09-04T18:45:00.000-07:00

After the recent volatility and rebound, returns YTD is 36%. Although the STI in general rebounded, I had about 30% in equities, and did not enjoy the rebound.

The Fed cut the discount rate to the FI by 25 basis points on Friday (after 2-3 weeks of downturn) , causing Wall Street to boom almost 2%. I had wanted to go in the next week Monday, but the Fed disrupted all my plans.

Anyhow, I trim back on my portfolio even further to 15%.

I sold off SMRT, Darco, most of Techcomp. I sold of part of ASL Marine, CSC and Hiap Seng which I bought on Monday (The day STI rebounded after the Fed cut).

Not a good price, but right now I think it is time to be conservative.

This is my current portfolio

ASL Marine 4%
Metro 4%
QAF 4%
QAF Warrant
TechComp 1 %
Gen Mag 1 %
Cash 85%.

Portfolio Aug 07

2007-08-12T01:42:00.002-07:00

The headlines the last 2-3 weeks was the sub-prime news in the US. While this was a known issue and my portfolio was conservative with 40% as cash, my portfolio declined about 7% from its peak.

Last month I sold off CSC (43 cents) and Genting (93 cents) which I considered my speculative counters. I was lucky as I sold them before the big sell off. Just last week, I sold off Ecowise (71 cents) and Kian Ann (41 cents) and then later China Milk (1.17) and some Metro (92).

I think CSC has made its run from 3 cents plus to 49+ cents. While it will continue to benefit from the construction boom, its main Shareholder Tat Hong will be eager to cash out after getting their shares at about 5 cents. They sold around 10% of outstanding shares at 45 cents.

With the UK changing their stance on super casinos, (Genting was a strong forerunner with its subsidary to clinch a casino contract), the returns on Genting looks less attractive. I believe Genting is artificially supported now as they are raising cash with rights issue. I think Genting may fall at least 20% after the rights issue.

Sold Ecowise as my investments were small and they spiked up from 62 cents upwards. My gains were about 120%. I also sold of Kian Ann as their PE was no more attractive.

Later in the week, I decide to be even more ultra conservative. I wanted to have some ammo when the recession hits. I sold off China Milk (I did not take into account their financial costs) and some Metro.

YTD Porfolio is now up 37 %.

My portfolio is now 70% cash and 30% equities.

Portfolio is now

SMRT
Metro
TechComp
Darco Environment
QAF
QAF Warrant
Gen Mag
Food Junction

Portfoilio July07

2007-07-04T22:55:00.000-07:00

My portfolio is now up 45% YTD. It is underperforming the Sesdaq as I am still mostly vested at 60% with 40% left as cash. Counting just investments only, I will be up 75%. Well, that is the price to pay for being conservative.

My portfolio is getting more and more like a zoo. Usually when I purchase, I do it part by part because of my investment size. Usually the price zooms off before I finish the accumulation, and I have to start to source for another gem. I have been busy with my property agent job and that cause me valuable research time, missing out a few gems during this time.

From my last update, I have sold off Full Apex (due to oil), Pan United Marine (Being Bought over) Superbowl ( went up >50% in a few weeks) and added in Genting, Kian Ann, China Milk, QAF, Hoe Leong and Gen Mag.

This is my portfolio at half time.

CSC
Metro
Genting
SMRT
China Milk
TechComp
Darco Environment
Kian Ann
Ecowise
Gen Mag
QAF
QAF Warrant
Hoe Leong
Food Junction

I will be Hong Kong next week on a business trip.

INTERVIEW - Singapore's CSC Holdings eyes Indian, Vietnamese markets 6/8/2007 1:25:00

2007-06-10T09:07:00.000-07:00

INTERVIEW - Singapore's CSC Holdings eyes Indian, Vietnamese markets 6/8/2007 1:25:00
PM SINGAPORE (XFN-ASIA) -

CSC Holdings Ltd, a building foundation specialist, is looking at opportunities in India and Vietnam because it expects these two countries to accelerate their investment in infrastructure in the next few years, CSC president and group chief executive See Yen Tarn said. See told XFN-Asia in an interview that setting its sights on opportunities overseas should give the group balanced growth in the future, should the construction boom here falter -- although at this stage it was likely that the boom would continue. "We have a clear visibility in the domestic market in the next 3-5 years," See said. The construction industry here is busy building casino resorts at Marina Bay and on Sentosa island, new shopping malls on Orchard Road, the Marina Bay Financial Centre and upmarket residential condominiums in and around the central business district. CSC's latest results reflect the industry's rapid growth. In the financial year ended March, CSC's net profit surged 127.6 pct to 8.6 mln sgd as revenue rose 18.1 pct to 126.7 mln sgd and net profit margins widened to 7.3 pct from 4.1 pct. Growth in the next few years will be underpinned by the group's order book, worth about 380 mln sgd, which includes a 240 mln sgd contract secured by CSC's wholly-owned subsidiary L&M Foundation Specialist Pte Ltd with the Marina Bay Sands casino resort. See said CSC's capacity was almost fully utilized now, given that Marina Bay Sands, which opens in 2009, and other projects here will keep the group busy in the next few years. See said that he would focus on finishing projects already in the pipeline rather than go after new projects vigorously. "We should be able to secure a few more jobs, but we do have capacity constraints," See said. The tight supply of specialized construction equipment and labor are among these constraints. See said his company would begin taking opportunities abroad only next year or after. He believes the next construction booms will be in India and Vietnam, because both countries have under-invested in infrastructure and the economic growth there in the past few years has put a strain on infrastructure. He reckons CSC will be able to seize opportunities in Malaysia much more quickly than in Vietnam or India because it already has a foothold in Malaysia. In March 2006, CSC bought G-Pile Sistem Sdn Bhd, a Malaysian provider of hydraulic jack-in piling services. "G-Pile will be our platform to expand into Malaysia," See said. There are also a number of infrastructure and property projects in Malaysia, notably the plan to transform the Iskandar Development Region in the southern state of Johor into an industrial and tourism hub.

Pan United Marine / Superbowl

2007-06-03T08:21:00.000-07:00

Sigh... 1 more gem being taken over. There was a takeover offer of 2.38 from Dubai Drydocks World. I think I have not much to comment but it is too low which I expect to reach 3.00. Ex-cash, it is about 10-11x PE. Looks like the Ng family will like to enjoy their fruits of labour early. What I am puzzled is why are they selling so low unless they have a better investments around ?

My entry price is from 50 cents + and even accumulated in Feb around 1.7. It gave me very good returns as well as big dividends. I will miss this one. I sold everything at 2.41, which I was quite surprised someone took. Either something is still brewing or someone did not do his sums right. Well.....

I am looking at some of the other oil counters and another 1-2 counters right now to replace this.

Superbowl - it shoot up about 50% from my buying price, while this may continue, I think it is good enough for me.

Old Airport Road property

2007-06-03T08:14:00.000-07:00

I am helping a colleague to source for property around where I stay - Old Airport Road. Wah the property here really sells like hot cakes. When I tried to source and co-broke, most of the flats were sold. The only ones left were low floors or Non-Chinese.

She wanted to have a flat here where is near her in-laws so that travelling to-fro to collect her 1 yr old son from her in-laws will be much more convenient. Now, it is a bit of logistic nightmare as she lives quite far. Also she is targetting the Kong Hua school for a son.

I have been enquiring around and the transacted price here is also also about 20% above valuation. That means about 50-60K cash uprfront. Well, that is the price to pay for the convenience and location - school and when the MRT circle line comes in.

Shanghai Metro and XinTianDi

2007-05-28T07:51:00.000-07:00

I was in Shanghai last week and went to Metro Shanghai and XinTianDi. Metro Shanghai is located in Xin Jia Hui, one of the most popular crowded area, like orchard road in Singapore . It was very crowded even in the weekdays.

It is a famous IT complex outside Xin Jia Hui Station.

On my other day, I met up with my China friends at Xin Tian Di. It is a high class night entertainment area with alot of foreigners. It has very colonial background and according to my China friends, the land in XinTian Di went up from 8-10 K to 40K RMB per Sqm once Shui On announced the builidng of the site.

I am quite optimistic on this gem as Metro is still trading below NAV of 1.2+ and I believe once Metro Beijing comes onstream, profits will continue to roll in. A China Reit could be in the offering as well :)

INTEGRATED RESORTS PROJECT AT MARINA BAY

2007-05-21T07:37:00.000-07:00

Something made my day today and tomorrow ! :) Clinching the Marina is a fantastic results! Next Sentosa will be much easier as the contracts will be farmed to local contractors.

I have full confidence this will continue to reach greater heights. With Tat Hong as a strong backer, look for it to go into Middle East. Vietnam will is in the infancy stage of industrailization will be next. $1 ? let's see.

The Board of Directors (“The Board”) of CSC Holdings Limited (the “Company”) wishes to
announce that its wholly owned subsidiary, L&M Foundation Specialist Pte Ltd has been
awarded a contract by Marina Bay Sands Pte Ltd for the Marina Bay Sands Integrated
Resort Development, Package 2220 – Construction Contract for Piling and Diaphragm Walls
(Podium North).
This contract sum is approximately $240 million. Works are scheduled to commence in June
2007 and expected to be completed in February 2008.
This contract is expected to contribute positively to the financial results of the Company and
its subsidiaries for the current financial year.
None of the directors or substantial shareholders of the Company has any interest, direct or
indirect, in the above contracts.
By Order of the Board
Lee Quang Loong
Company Secretary
Date : 21 May 2007
About CSC Holdings Limited (“CSC”)
CSC is a foundation and geotechnical engineering specialist. CSC offers a full range of
design-and-build capabilities includes Large Diameter Bored Pile, Diaphragm Wall, Driven-Pile,
Jack-in-Pile, Micro Pile and Soil Investigation & Instrumentation.

Intelligence not linked to wealth, according to US study

2007-05-09T09:56:00.001-07:00

WASHINGTON (AFP) - Intelligence has nothing to do with wealth, according to a US study published Tuesday which found that people with below average smarts were just as wealthy as those with higher IQ scores.
"People don't become rich because they are smart," said Jay Zagorsky, research scientist at Ohio State University whose study appears in the Journal Intelligence.
The US Bureau of Labor Statistics survey included 7,403 Americans who have been interviewed repeatedly since 1979. Based on 2004 answers, people who are now in their mid-40s showed no link between brain- and earning-power.
"Your IQ has really no relationship to your wealth. And being very smart does not protect you from getting into financial difficulty," Zagorsky said.
The study confirmed previous research which has shown that smarter people tend to earn more money, but pointed out there is a difference between high pay and overall wealth.
"The average income difference between a person with an IQ score in the normal range (100) and someone in the top two percent of society (130) is currently between 6,000 and 18,500 dollars per year," it said.
"But when it came to total wealth and the likelihood of financial difficulties, people of below average and average intelligence did just fine when compared to the super-intelligent."
An irregular pattern of total wealth as well as financial distress levels -- such as maxed out credit cards, bankruptcy and missing bill payments -- emerged among the various degrees of intelligence, the study said.
The study measured intelligence based on scores from the US Armed Services Qualification Test, a general aptitude test used by the Department of Defense

First Deal as Property agent

2007-05-09T09:50:00.000-07:00

I signed up as a property agent with Propnex a week ago. Propnex by the way is the biggest property agency in Singapore.

And quickly after spreading some leads via SMS, I was pleasantly surprise to have a return SMS. It was from my NUS friend's brother, who is looking for a Orlando condo in Toa Payoh.

I quickly replied contacted him to get his needs and perference and start to source for potential units to meet his criteria.

Wish me luck

Soccer - European Championship AC Milan 3- Man U 0

2007-05-03T09:09:00.000-07:00

Stayed up early morning to catch the soccer game.

AC Milan was simply breathtaking, superb passing, 1 touch football and simply fast.
Kaka was amazing ghosting pass defenders, and precise strking.

Man U on the other hand played misery.
1) Man U always looked half a step too slow. They played as if they had weights on their legs.
2) They were tactically wrong also. They played both wingers Giggs and Ronaldo at opposite flanks. You can confuse teams at lower rungs but against top notch team like AC Milan, you are simply giving them a handicap. What is Ferguson thinking ?
In the first half, the flank by Ronaldo was simply non-existance, I think both goals started from there. Ferguson only realised this in the 2nd half, but by then the damage was done.

I guess luck has to play a part too. Man U had to play Everton just 3 days ago, while AC Milan rested their key players as Inter is already the champion. Man U just look jaded.

Going forward, they should get at least 4 top players if they still want to challange for top European honours. 2 players to replace Giggs and Scholes (both above 30). 1 more defensive midfielder and a top striker.