Saturday, September 29, 2018

3Q 2018 Investment Strategy Update

President Trump continues with his signature rant against China and follow-up with his second salvo of imposing 10% tariff on US$200 billion worth of China products starting 24-Sep, hoping that his threats and bullying tactics will force China to come back to the negotiating table and get consensus benefiting USA. This seems to work well with Mexico (as their economy (81% export) is hugely dependent on USA), but I doubt the same will work with China. China followed up immediately with retaliatory tariffs of 5% - 10% on US$60 billion worth of USA products. China imported US$129 billion of USA goods in 2017, while exporting US$500 billion worth back to USA. Trump seems to lack an understanding of basic economics and politics. If his threats fails, it is going to bring more harm than good to USA companies and it will accelerate China shift to get replacement alternatives from other sources instead of USA. The worse that can happen from this trade war is to force China to rapidly build up their technology and capability and compete in areas where USA currently dominates - robotics, artificial intelligence, biotech and more. China has made no efforts in making her ambition known with the unveiling of "Made in China 2025" strategic plans and the Belt and Road Initiative. This in fact has provide China a huge opening in shifting away from low cost production. USA industry seems to be alarm with Trump tactics getting out of hand. They have indicated any increase in cost will be pass on to consumers and nope, they are not bringing jobs back to USA as it does not make economic sense. I shall wait to see how the public views Trump in the mid-term elections - to give his party a vote of confidence to carry on, or to throw a spanner and say: "Hey President, this is not what we sign up for...." I will not be surprise if President Trump will tweet all his shortcoming  and failures to "Evil Democrats" and news media (Except Fox News) who are promoting "Fake News" trying to undermine him. -.-!

Back to finance news, riding on the wave of solid US economic results and strong job creations, DJI ended at 26458, a rise of 2187 points (+9.01%) compared to 2Q. For Singapore, STI ended 3Q at 3257, a decrease of 17 points (-0.33%) compared to 2Q. For Singapore, the USA-China trade war has a negative effect on the region emerging economy, particularly countries such as India and Indonesia who are facing huge debt issues. Investors are worried that should the trade war escalate and results in a decline in demands and consumption, the emerging economy are going to be hit hard and may be unable to pay back their debts. All these seems to have a spill on effect affecting investor appetite in STI. Another point to note is the increasing crude oil cost in this quarter. With the Iran sanction taking effect in Nov, oil price has been steadily on the rise, putting pressure on company operating cost. I have a feeling that the bull that has been driving companies to report record results will no longer last. 

Looking ahead to the final quarter of the year, I think the market will be trending sideways, with a negative tilt at least till the USA mid-term election is over. After which, I think investor will adopt a wait and see attitude on what actions will USA do. Will it be..."Un-friend China and impose more tariffs"......"OPEC is trying to harm USA by keeping oil price high"...."double down that global warming is fake news and sanctioning more oil drilling with less stringent environment regulation"..... Oh well....

For this quarter, I am focus on defensive stocks such as high yielding equity and opportunistic buys as below:

Transaction 1: Bought in a batch of Singtel in July.

All Telco counters are in a decline with the upcoming entrance of the 4th telecommunication company (TPG Telecom) in Singapore. Just a few days ago, Keppel and SPH has teamed up for a joint offer to privatize M1. Well.... if this is successful, Temasek will be a major shareholder (direct and indirect) of Singtel, Starhub and M1. What happens to the opening of market? Seems like Singapore Government still have much of a say. Well that is beside the point. I felt that the price of Singtel has dropped to the point that it starts offering good yield again.

Transaction 2: Bought Koufu IPO in July and sold off on the first day.

Just for the sake to earn some coffee money. Haha, but I think I will buy back in a year time once their new building is completed. Koufu operation seems quite steady and profits are sustainable.

Transaction 3 & 4: Bought a batch of Krisenergy in July and September.

Purely oil play. I just thought oil price will increase when USA effectively forced most of the major world economy to stop buying Iranian oil, removing about 1 million barrel oil per day of supply. Krisenergy will also start producing oil in their new Cambodia oilfield in 2019, which maybe will finally turn the company profitable. 

That is all for now. See you all in Q4 2018 update and thank you for staying with me. =)

Saturday, September 08, 2018

Premium Economy Class

Wider seat, better back incline, larger screen, softer pillow and a foot rest. All for $0 when the booking is open for check in.... fastest finger first.....

Wednesday, September 05, 2018

Crazy Rich Asians

Synopsis: The story follows native New Yorker Rachel Chu as she accompanies her longtime boyfriend, Nick Young , to his best friend’s wedding in Singapore. Excited about visiting Asia for the first time but nervous about meeting Nick’s family, Rachel is unprepared to learn that Nick has neglected to mention a few key details about his life. [Source: Golden Village]

As a start, the movie title itself already gives the impression that this is going to be a lousy movie, but..... I was proven wrong after watching the movie. Putting aside the simply ridiculous things that the super rich can do, the movie stays to its core in correctly depicting the family dynamics of a typical Asian family. Well, the whole movie did does a fantastic job in promoting Singapore tourism. Adding in bits and pieces of humor, no wonder this keep getting an almost sell out every session for the past 2 weeks.

Rate: 7/10