Wednesday, October 09, 2019

SGX Securities Borrowing and Lending Enhancement Phase 2

Just received a letter two days ago from SGX informing Securities Borrowing and Lending (SBL) Program participants that they will be rolling out their phase 2 enhancement on 02-Dec-19. So what is this Phase 2 all about?

Following their Phase 1 enhancement which was rolled out 09-Dec-18, they have successfully increase the pool of shares available for lending by retail investors:
  1. For a security priced $1 or below, you must own a minimum of 10,000 units (previously 50,000 units) of that security; and
  2. for a security priced more than $1, you must own a minimum of $10,000 in value of that security.
(My own opinion: Yeah, they have increase the pool of shares available to short. >.<)

For Phase 2, they will be switching to variable rate pricing for the lending and borrowing fee. Currently, the borrower pays a fixed 6% per annum, while the lender receive 4%. SGX said in the letter that the 6% rate is generally higher than charged by other SBL providers, thus a deterrent for borrowers whose shares are kept at CDP. 

Under the new structure: Lenders will get a fixed 70% of the borrowing fee, which is higher than the current 66.67% (4% lending fee) of the borrowing fee. (My own opinion: Yeah, that is only true for borrowing fee above 5.75%. However, if they managed to entice more share borrowing by lowering down the borrowing fee, lenders will get to benefit as more of their shares are loaned out. That unfortunately, means that there is more shorting of shares. >.<)

With this Phase 2 roll out, will that means I will have more shares loaned out? Only time will tell.

Tuesday, October 01, 2019

3Q 2019 Investment Strategy Update

3 months drifted by pretty fast this quarter as we saw an unprecedented upheaval in the world news, starting with the on-going HK protest getting increasingly violent in nature, resulting in a plunge in the HK tourism and economy which of course, the HK stock market was not spared as well. This may work well for investor to scoop up shares which has dropped to an appealing level during this turmoil. For the USA, with the unpredictable Trump, the House Republican has formally started a Trump impeachment inquiry after a whistle blower complaint centered on Trump's phone call on Jul 25 with Zelensky to dig dirt on his rival, seemingly to aid his 2020 re-election campaign. With volatility, pockets of opportunities will arise. However, the problem is.... will you catch the correct opportunity, or will you catch a time bomb?

DJI ended at 26916, a rise of 317 points (+1.19%) compared to 2Q. For Singapore, STI ended at 3119, a decrease of 202 points (-6.08%) compared to last quarter. Stock market has generally been on a down trend for Q3, with news of China slowing economy, trade war between the world's 2 largest economy which does not seem to be ending soon and a growing negative view among the Federal Reserve. Defensive counter such as reits and high yield stocks, on the contrary, are recording all time high in Singapore, probably due to influx of fresh funds for less risky yields. With the outlook that the Federal Reserve are likely to drop interest rates further, reits are gearing up to pile on more debt for property purchase as seen from the recent acquisition deals from FCT, FLIT, MIT, MCT, Manulife US Reit, Keppel DC Reit, CapitaLand Commercial Trust and so on.....

For Q3 2019, I am focused on opportunistic stocks that have an attractive price to enter and hopefully sell them off when I deem their full value is matched. Concurrently, with the expectation that the Feds are going to drop their rates going forward, I am also into accumulating Reits / Business Trusts that have potential to further grow their DPU in future. Reason for doing so? Actually, it is pretty simple. Reits and Business Trust in Singapore generally have about 30% to 40% gearing. The lower the interest rate, the more money they can distribute back to shareholders, which will mean a higher yield, which will also mean a higher stock price. Some good counters I am looking at include Mapletree Industrial, Fraser Centerpoint, Manulife Reit, IReit. CDP lending continue to supplement some kopi money for me monthly as my China Everbright continues to be out on loan. Well, enough of my blabbering, below are a summary of my transactions for Q3:

Transaction 1: Bought in one batch of Amara in July.

Yup, you saw correctly. This is the brand behind the Amara hotels. Primary reason for the purchase was to make up my total holdings to at least 10,000 shares to join the CDP lending program. But on a hindsight, Amara is also transforming itself into a hotel hospitality and property landlord play. With the opening of its 100 AM Shanghai Mall in April 2019 and Office block in 2H 2019, they will have a steady stream of income, which will likely lead to an increase in declared dividend and hopefully stock price in the long term.

Transaction 2: Bought in one batch of HPH Trust in September.

HK protest did this counter no justice as it was hammered down with the on-going China-USA trade war as a back drop, plunging almost 25% over 2 weeks. Although its 5B HKD debt reduction initiative (2017 - 2021) still have 2.25 years to run, and there is a lumpy goodwill which I think they may write-off soon, I thought the drop in price is at a level which is attractive to consider entering. 

Transaction 3: Bought in one batch of Man Utd in September.

Poor form on pitch, forecast of a drop in revenue for next FY due to absence from the lucrative Champion League contributed to the drop in share price recently. However, as a brand, the Glazer has did well to increase its commercial value through Sponsorship, Retail, Merchandising, Apparel & Product Licensing. There has also been rumors now and then about Arabs royal family intention to buy over the club. Well, I see this as a buying opportunity. Man Utd cannot get any lower than now, and who knows, the Glazer might really sell if there is a tempting offer coming in.

That is all for now. See you all in Q4 2019 update and thank you for reading this long long post. =) Now, I need to think of the next 3 year plan (2020 - 2022) to grow my passive income.

Wednesday, September 25, 2019

Weathering With You

Synopsis: Three years after Your Name, Makoto Shinkai returns with his latest film, Weathering With You. When small town high schooler Hodaka Morishima makes a go at living on his own in Tokyo for the first time, it isn’t long before he finds steady work writing for a local magazine focused on all things strange and supernatural -- but the most interesting thing happening in the boy’s life is the unusual weather. Rain’s common enough in the city that at first, no one makes much of the recent torrential showers that never seem to end, but unbeknownst to nearly everyone, a young girl named Hina Amano who has the ability to control the weather walks among them. [Source: Golden Village]

Another good anime film by Makoto Shinkai. Striking similar style as "Your Name", good music and at times, moving plot will keep the audience captivated on the screen. I must say the English translation of the movie title doesn't do the movie any justice. Perhaps, "Child of the Weather" would be a more fitting title compared to "Weathering with you". Good movie to catch in this season of anime film feast. On a side note, perhaps the author is trying to make a point on global warming?

Rate: 7.5/10

Wednesday, September 11, 2019

Rascal Does Not Dream Of A Dreaming Girl

Synopsis: Sakuta Azusagawa is a second-year high school student living in "Fujisawa", where the sky and sea shines. The exciting everyday life with his upperclassman and girlfriend, Mai Sakurajima, takes a turn at the appearance of his first love, Shoko Makinohara. For some reason, "two versions" of Shoko exists—a junior high student and an adult. Sakuta is made a fool by “Adult Shoko” as he somehow but reluctantly ends up living with her. His relationship with Mai becomes strained. Meanwhile, Sakuta learns that “Junior High Shoko” is diagnosed with a serious illness and his scar starts to hurt again. [Source: Golden Village]

If you have not watch the prequel anime "Rascal Does Not Dream of Bunny Girl Senpai", do not catch this movie at all cost or else, you will end up being confused, see stars, don't understand what is going on, wandering why people start clapping at the end of the show..... like me. So yup, the only thing I can understand is the characters keep trying to go back to the past to save people...sounds like Stein Gate....hmm

Rate: 5/10

Friday, August 16, 2019

Technology - Helpful or Dreadful?

So it seems POSB has recently revamp and launched a new version of its online banking app. With auto update, the app was replaced with this new version yesterday on my iPhone. Happy with this new cool look, I log in to perform some banking transaction only to find out their digital token authentication doesn't work anymore. No matter how hard I try (even logging into the web version), there is no other way to switch and authenticate via physical token. With no authentication, no transaction can be done and I was simply stuck... Only way (Calling the hotline simply take too much time) was to go down to the bank physically and get them to reset and re-link the digital token again on the spot. Yeah so much for technology. Rely on them too much and it can backfire on you. What is wrong with using the good old physical token? Well, looking at the reviews, looks like all other users are also hit with the digital token bug....

Saturday, August 03, 2019

Trump has done it again

Barely 1 month after agreeing to a ceasefire, Trump has fired off a sneak attack again using tariff increase to impose pressure on China to make a deal. To escalate the scale of attack, the 10% tariff will now include all imports of goods from China, effective 01-Sep, just when the next round of trade negotiation is going to take place. I still don't think that Trump understand how China works. Pressuring and threatening tactics will only make them hunker down and employ tit-for-tat measures. I believe China will not stay silence. For a start, they will likely pull off September negotiation and impose similar tariff to all USA imports. Let's see how China will response. Equity market are likely to be a downhill from now on.

Update 05-Aug
It is not surprising that Trump's tactics in negotiation: It is his way or the highway.

China is running out of things to tax, primary because they are exporting much more than importing goods or services. They may instead try other ways to punish USA, such as currency devaluation (slowly), control of rare earth export, placing American companies on an “unreliable entities list”, stop buying Boeing planes. It will be interesting how American companies response to such maneuver. Time will tell which methods China will undertake in response.

China Retaliation
Well, China wasted no time in coming out some counter measures.
  1. China asked state buyers to halt US agriculture imports, after Trump threatens fresh 10% tariff. This is going to hurt the USA farmer base, which has actively supported Trump. Ouch! 2020 presidential election coming....
  2. China Hits Back at Trump by Weakening Yuan. The central bank attributed the yuan move to protectionism and expectations of additional tariffs on Chinese goods, while saying it can still maintain a steady currency. Yup, a great excuse and a straight face palm to Trump. In fact, it is like saying, what USA are not buying, we can sell to other country where our goods are now cheaper. We do not depend on USA alone.
  3. (Update 24-Aug) While China worked for three weeks on its multi-tiered tariff response, Trump's promised retaliation - which came in a signature tweetstorm - was announced in less than 10 hours
Oh well, that again basically tell us for President Trump way of negotiation, it is his way or the highway. I doubt he has asked his administration for their measured response on a retaliation framework on China tariff announcement on 23-Aug. 10 hours to worked out a measured response for a No 1 world economy? You must be kidding me. I pray for the citizens of USA.

Wednesday, July 31, 2019

Disney's The Lion King

Synopsis: Simba idolizes his father, King Mufasa, and takes to heart his own royal destiny. But not everyone in the kingdom celebrates the new cub’s arrival. Scar, Mufasa’s brother — and former heir to the throne — has plans of his own. The battle for Pride Rock is ravaged with betrayal, tragedy and drama, ultimately resulting in Simba’s exile. With help from a curious pair of newfound friends, Simba will have to figure out how to grow up and take back what is rightfully his. [Source: Golden Village]

Well, after Aladdin, I have high expectation for Lion King, but unfortunately, this movie remake is just average. Singing is not really outstanding and the movie has nothing much to offer except the extremely life-like depiction of African scenes and animals. Kudos to that. Well, I think if you are here for the songs, the Lion King musical may be better. 

Rate: 6/10