The ghost of JBJ

Sumeone by name of Richard Tang has summoned forth the spirit of JBJ. Writing in TR, he has rattled the cage again abt what the present Sec-Gen of WP is supposed to have done JBJ: “stab him in the back”.

It provoked a response, and he responded to the response. Netizens joined in the row with gusto.

Who benefits? The PAP. Looks like in death, JBJ is still the PAP’s poster boy on what an Opposition leader should do. Split the opponents of the PAP.

I’ve been critical of WP (and indirectly of Low) but lest we forget, it was Low that turned WP into a grass-roots party, active all the time. When JBJ was the Sec-Gen, it was largely a collection of JBJ groupies, smoking the BS of human rights and “everything shld be free”. It was only active juz before an election, when celebrities joined him on stage. Then it was back to praising JBJ, cursing LKY and smoking BS.

OK I’m exaggerating, but that’s what I tot of WP. And before anyone takes me to task on my comments abt JBJ: When JBJ was hawking his books at Raffles City, I thanked him for his courage and bought a book, did you?

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The consensus for 2011

2011 will be another good year for stocks. Recovery continues in the West, higher inflation in the world, and more Eurozone problems.

Sounds alright then.

But a more gloomy view

https://atans1.wordpress.com/2010/12/23/noticed/

Remember at the end of last yr, everyone was expecting a troubled  yr for equities. And it was, until 4Q when the decision of the Fed to print money, led to a recovery of equity mkts. Here’s a view from NYT on why optimism among investors may not be a gd thing.

Consider how stocks performed in other recent periods of optimism. In October 2007, a survey by the American Association of Individual Investors found that 55 percent of investors were bullish; in the 12 months that followed, the S.& P. 500 fell 37 percent. Similarly, in March 2000, investor bullishness reached 66 percent. And a year after the fact, stocks were down 25 percent.

It just goes to show that by the time the market thoroughly convinces investors to be optimistic, most of the good news is already behind us.

Me: Investing is like playing backgammon. You can calculate only so much, the dice dictates what you can play.

Another macabre tale or two

After Kenny Rogers on investing and Bacchus on partying back to macabre tales. It’s the Christmas season, you know.

Horror of horrors: Posters on TR find it hard to accept that MM Lee has many fans in M’sia including M’sian dissent and blogger Raja Putra whose servers are based here.

They shouldn’t be. Many M’sian Chinese and Indians find MM’s “M’sian Malaysia” where meritocracy is the rule attractive because it is the opposite of the racially-based Bumiputera policy which gives Muslim Malays certain privileges. They also think that this meritocracy has made S’pore a better place to earn a living than in M’sia.

They also like the fact that he allows M’sians to work here, without insisting that they become citizens.

And finally perhaps they admire him for writing-out the Malays from S’pore? Remember he said in September, “We’re largely Chinese and Indians”. This despite the official statistics showing that the Malays are 19% of the population, the second largest ethnic group.

Now if it is true that the Malays are no longer the second largest ethnic group, and the official stats don’t reflect this fact, this a horror of horrors. Where else are the official stats no longer the reflection of the facts on the ground?

Seriously, back to MM. The New Testament is correct when it says”A prophet is not without honour, but in his own country, and among his own kin, and in his own house” and “No prophet is accepted in his own country”.

The neighbours see the feet of clay not apparent to those faraway?

The God of this season

No not Christ as the Christians would have us believe nor the PAP as SPH and MediaCorp are trying to spin.

It’s Bacchus.

Like Jesus … Bacchus … had a famous childhood …. When he became a young man god, he went around like Jesus with a following of disciples – in this case, hairy-legged satyrs, wine-crazed maenads and his ridiculous yet wise mentor, the fat satyr Silenus – who has a lot in common with Father Christmas.

In art, Bacchus and his followers are the heroes of misrule, abandon and ecstasy.

Err doesn’t all this sound like partying at this time of the year?

Kenny Rogers & investing

You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done

The full song

Property: What a minister’s salary can buy in 1957 and 2010?

Or why PAP ministers deserve our compassion in this season of gdwill. Another Christmas macabre tale. Who would think they deserve our compassion? But they do.

David Marshall said he was paid $8000 a month in the 1950s as CM. Taz $96,000. From what I hear* that could buy 3 bungalow properties in a then non-fashionable area in the East, say Frankel or Opera estates. He could have some change leftover.

Today, a minister earning $2m a yr, can’t buy even one bungalow in these areas with his annual salary. He could possibly get a two-storey terrace house for $1.5m. He has to borrow money from the bank to buy a bungalow.

Other macabre Christmas tales

https://atans1.wordpress.com/2010/12/25/freak-election-result-no-worries-mm/
https://atans1.wordpress.com/2010/12/28/a-ghost-city-state-or-why-fts-are-needed/

——–

*too young and can’t find written records. Have to depend on old people’s memories.  You know what can go wrong, I mean if MM can forget that the Malays are the second biggest group ….

A ghost city-state or why FTs are needed

In the English tradition of telling ghost or macabre tales during the Christmas hols, here’s one on how S’pore would look like if the PAP gave in to populist pressure and stopped the FTs flooding in

For a glimpse of S’pore’s future, a good place to visit is Yubari, a former mining town on the northern island of Hokkaido, which four years ago went spectacularly bust with debts of ¥36 billion ($315m). It is a quiet spot, nestled in a valley at the end of a railway line … 120,000 people lived there … and there are only 11,000 people left, almost half of them over 65.

The town hall is like a morgue, with few lights on. In the past four years the number of civil servants has been cut in half, their salaries have shrunk by a third and they now have to mop their own floors, they complain. The town has embarked on an 18-year austerity drive to repay its debts. The public library has already closed down. This autumn six primary schools merged into one. (Extract from Economist special report on ageing in Japan)

(Update at 11.40 am: some population charts that Grey Hippo found)

Another X’mas season ghost or macabre tale https://atans1.wordpress.com/2010/12/25/freak-election-result-no-worries-mm/

 

BTW, wonder if this will be picked up (and publicised) by the YPAP activists who are tasked to scout the Internet to counter anti-PAP stuff). After all sume of my stuff have found their way onto TR or is it NTR?

Our political parties’ Santa Claus

Last year things took a rather Dickensian turn when local news reported that Santa himself showed up at a school—but only to give presents those children whose parents had paid him. (Economist blogger on Christmas in Vietnam)

Hmm, the kind of Santa that PAP likes?

Got me thinking abt the other parties’ Santas.

SDP — No white bearded, white guy. It’s Santa Danny, the bear that loves teh tarik. As SDP has no money, he makes it up by teaching the kids to chant,”Scrooge is PAP, PAP is Scrooge” and “PAP is humbug”. The kids love it. And then he asks for donations for the SDP. He threatens them if that they don’t cough up, he will send in the clowns Chees who will have them chanting defamatory statements. The kids scream for the Chees.  The parents pay up to avoid getting sued by the PAP.

WP — No-one knows how its Santa looks like. Bit like the no-show by Sec-Gen or chairman at  recent opposition get-together. Suspect WP’s Santa was in previous incarnation a eunuch at the court of the Ming emperors. No, I am not implying that WP lacks balls, remember admiral Cheng Ho was a Ming court eunuch when he wasn’t sailing.

RP — Party has a problem. The patron saint of RP, JBJ, believed in goodies for all, and damn the cost. The present mgt believes in compassion but not freebies. So what is Santa going to do? RP members  compromise,  getting Tony Phua to blog on 24th December on tax and social welfare. And Sec-Gen goes eat SPP’s food at latter’s X’mas lunch.

SPP — Santa is getting on, so Mrs Santa takes his place. Some of the elves are unhappy. They think that one of them deserve to take Santa’s place. So they grumble a lot, trying to spoil Santarina’s début ride. Hope the reindeer pulling the sled are not the friends’ of the unhappy elves, but friends of Santarina.

NSP — Its Santa gives away”at-cost” HDB flats” for all those without a flat or other property, at one stroke transferring wealth from the landed class and those who paid “Market – less subsidy”.  Young and speculators who sold their flats are happy. Everyone else is angry. It’s OK for NSP Sec-Gen they say, “Meng Seng sold his HDB flat under the old system, making a killing. And now he can buy low.” Mah Bow Tan smiles.  NSP’s Santa is making life easier for PAP in the coming GE.

SF — As members are socialists, they don’t believe in Santa. And anyway, Santa is a big fat slop. SF want someone that can wear a speedo elegantly.

SDA — There is a Muslim party, so Santa is haram, even though  the Sec-Gen would make a gd Santa.

Hope the parties take this in the spirit it is meant: the spirit of meanness masquerading as the spirit of Christmas. )))))

“Holy Apples”: X’mas with Chinese characteristics

Christmas has become a festive season in China with “Holy Apples” being given as presents.

“China mainland’s acceptance of Christmas was passed from Hong Kong,” explains professor Kent Deng from the London School of Economics.

Because of historical reasons, Christmas is an official holiday in Hong Kong.

“After the Reform and Opening Up policy in 1978, mainland China has gradually begun to accept Western culture,” Dr Deng says.

This reminded me of Friday or Saturday last, when there were a couple of pages in ST on the ties between the CCP and PAP. If I recall (sorry I skim through such spin), it was all abt what the CCP had learnt from PAP. Strange that ST didn’t credit  PAP with teaching the CCP abt celebrating Christmas.

Seriously, the PAP teaching the CCP is a bit like LKY teaching realpolitik to the hegemon. The US was already a co-hegemon for yrs before LKY learnt geopolitics. Likewise the CCP came to power in China a decade before LKY came to power here. And the CCP had come to power after fighting the Japanese and the KMT. The PAP came to power in an election.

Back to apples. Apples for example, are sent as symbolic gifts. Known as Holy Apples, they cost five times more than usual and are packed as gifts to wish people a happy Christmas Eve. Now the guy or gal who tot this racket up is one FT we need here.

BBC article on Chinese celebrating Christmas as a time to give presents and party.

Freak election result? No worries MM

(Update on 27 December 2010: Juz realised I should have prefaced this by saying that this post is in the spirit of ghost or macabre stories that are part of the English Christmas tradition.)

Learn from Africa. Hold a “Klingon election”

Holding a  “Klingon election” is how the BBC’s African correspondent describes a situation where the incumbent party or president uses violence, or the threat of violence, as a convenient device enabling it/him to ignore the actual election results and cling to office thanks to some expensively, externally mediated “power-sharing” arrangement. Blog post.

Seriously, watch out for a coming post on why this or military intervention will never happen here.

An off-putting Christmas tradition

If you reading this, get a life.

Have a super festive season, and reading on-line shouldn’t be part of it. But since you are reading, might as well read: A “shitty” Christmas tradition.

It will put a smile on yr face.

YPAP: Cut, paste & adapt this

to curry favour with the politburo, since it seems brains are a rare commodity in YPAP, as is time: Why one party rule is betterest.

For those readers who have better things to do than brown nose, it’s a piece by a member of Egypt’s ruling party.  The party won an overwhelming mandate, though critics claim the election was “fixed”.

It’s advertising & marketing, Stupid

When analysing investments, never ever underestimate the power of advertising and marketing in generating sales and revenues. Safe drinking water is available from the tap in many countries, but bottled water is popular.

Through a confection of advertising and marketing, bottled water has become one of the biggest success stories in the modern food and beverage industry.

“The demand for bottle water has grown exponentially in the last few decades,” says Dr Peter Gleick, author of Bottled and Sold.

“It’s doubled, it’s doubled again and its doubled again.

“And the bottle water companies see enormous markets not just in the rich countries but also in the poorer countries.”

BBC Online article

Noticed?

S&P 500 is back at the level it was on September 12, 2008, just before Lehman collapsed.

So should we party even harder to celebrate a great recovery with more to come?

The other way to look at it is to say “Ground hog Day”.  Look at oil prices: it’s around US$91, near its post Lehman high. And look at the attempts to prop up Eurozone banks.

When I was doing NS, we were told, “Watch and wait”, when at range.

Let’s,”Watch and wait”.

To give us the appropriate gloom amidst all the brokers’ cheer for 2011 let’s turn  to Albert Edwards of Societe Generale (a big bad bear for many a year): I see yet another attempt from the authorities to levitate the equity markets to boost economic activity as I have always done; as an ultimately futile endeavour that merely produces bubble upon bubble and inevitably bust on bust – each one bigger and more dangerous than the last.

Keep calm, carry on — No need to rant against Temasek

Or write stories defending it.

This story, abt the possibility of the Indon authorities seizing Temasek’s assets there, is nothing to get excited about. Someone wants some money. Remember its Money time!

This blogger is bullish on Indonesian. But he has been around long enough to know that Indonesia’s ideas of good governance (public or private) is not benchmarked to global standards. It is uniquely Javanese.

A few years back, a foreign investor was involved in a dispute with the management of a listco. An EGM was called, and the investor’s resolution won the support of the majority of shareholders in a poll vetted by a major international accounting firm.

The next day, the investor read in the papers that he had lost, and management had won, the vote. When he sought an explanation, he was told, “The counters made a mistake”.

A senior US foreign service officer who was based in Indonesia once told me that Indonesian officials had demanded a bribe from him to process an application even though they knew he was a member of the US embassy there. The embassy raised the issue and were told, “Err misunderstanding brudder”. Still, by the time he left for another posting a few years later, his application was being processed.

So now that Temasek has asked the court if a judgement has been issued, sumeone will say, “You mean you never got it? We posted it months ago. We have sent another copy in the mail.”

BTW, S$13m is “peanuts” as Mrs SM could have put it, but didn’t.

SPH, MediaCorp: Give the criminal a break or is there another agenda?

The ex-scholar convicted in the UK for downloading child porno should not have his face continually plastered in yr newspapers.

He has been punished by a court, expelled by York uni and lost his scholarship.

Let it be. The sick and foolish man has suffered for his criminal and immoral actions. Leave it there.

(Aside: If you think he hasn’t been punished enough, don’t you time its time change the pix. You are showing his pix over and over again. It’s all the same pix. Be creative leh.)

Or maybe I’m wrong and that he is not the target. Are subversives in the newsroom reminding S’poreans that the system of selecting scholars is so flawed that our children are at risk? And that the PAP-dominated govmin machinery is so  incompetent that it gives scholarships to people with mental problems? Remember there is an election coming. And the Opposition needs all the help it can get.

Previous posts on possible subversive activities in the ST newsroom

https://atans1.wordpress.com/2010/12/14/sph-context-what-context/

https://atans1.wordpress.com/2010/10/07/sph-civil-war-in-the-newsroom/

Finally, I must say TR’s and ToC’s coverage has been very fair. There isn’t the constant barrage of the same photo to imprint his image on our collective memory. Err maybe thaz another reason why the subversives are playing up this issue. To show that ministers’ comments abt the superiority of “constructive, nation-building” media is not true.

Wheels within wheels.

BTW a gd NYT article on conspiracy theorism in the Arab world.

Update at 7.30am: reworked first three paras. I tot his scholarship had not yet been revoked.

Residential property: Unconvincing contrarian call

Brokers’ analysts are like lemmings, they move in herds. So it is nice to see Credit Suisse is bullish on Singapore’s residential property market when other brokers e.g. Nomura and CIMB are telling investors to give the sector a miss; and DBS and OCBC barely mention the sector. Sadly it is unconvincing though the call to buy CityDev makes sense in itself.

In a report last week Credit Suisse said that it expects home prices here to increase by 15% this year, and by another 5% in 2011 and 2012 each. Not much to peg bullish hopes on, I must say.

“The low interest rate environment, historical high rate of GDP growth as well as continued population growth should propel growth in the Singapore residential property market”. Err what abt less FTs being allowed in?

There were  risks such as capital inflow controls (Huh? What are they smoking or drinking at the X’mas party?) or more anti-speculation measures from the government.

But the average valuation of Singapore property stocks is still below the historical average, and the residential sector is “reaching the peak with decelerating growth momentum”. Now isn’t the latter a gd reason to avoid the sector?

Credit Suisse has an “outperform” on CityDev, target price of t $17.16.

“While … 37 per cent of its RNAV … is in residential, the landbank had been mostly acquired at low costs, and we estimate 56 per cent is in the luxury sector, which has lagged the mass market segments,” Credit Suisse said. Sounds a gd reason.

It also has “outperform” on OUE, target price of $4.20.

BTW CIMB has “underperform” on CityDev, but likes OUE and KepLand.

Time to see waz OUE all abt?

Why we shouldn’t punish juvenile delinquents?

Err they might grow up to be like Elim Chew

Elim Chew says people who start new businesses need to be rebels: “Being an entrepreneur is like being a juvenile delinquent… The more you tell us that we can’t do it, the more we want to prove you wrong.”

She is convinced that it is that defiance which has led to her success: “If we were to listen to people who keep telling us not to do it, then 77 Street would never have happened. Because in the early days everyone was telling us we would fail… Today we have proved everybody wrong.” BBC article on her.

And I tot as a law-abiding S’porean that the govmin was right in its harsh methods when dealing with  juvenile delinquents. “Spare the rod, and spoil the child,” waz what I tot.

Seriously  sumething has to give, given that the governing PAP doesn’t like “freak” election results, prizes stability, and wants to scold and social engineer S’poreans; but yet wants S’poreans to be entrepreneurs.

Either there will be instability (creative and prosperous, hopefully), if we have entrepreneurs like Ms Chew. Think San Francisco, London, Banagalore or Israel. Or we can have an obedient, Confucian society. Think Pyongyang. You can’t have Pyongyang in San Francisco or vice versa.

Or does the government plan to create entrepreneurs that are as obedient as North Koreans? Even the Chinese Communist Party has not succeeded in doing this.

DBS: Three gd moves in 2010

DBS seems to be getting its act together. In November,  the CEO (FT turned citizen) said he planned to improve return on equity by building businesses that cater to wealthy individuals and small companies, and by expanding in China, India and Indonesia. Well with two moves made in December, he seems to be keeping to his word.

It will take over Royal Bank of Scotland Group Plc’s retail and commercial banking businesses in China, it was annced last week. This is possibly a  high risk move but if things work out reasonably well, it would have added bulk to its China operations, giving it credibility with potential customers. The risk is that it will assume US$900m of structured notes that RBS sold to its depositors.  We know what can happen when DBS plays around with these deposits: customers lose wealth, and if they are S’poreans, get screwed https://atans1.wordpress.com/2010/08/06/what-abt-high-notes-sm-goh/.

Earlier in the month, it annced the sale of  its asset management arm to Japan’s Nikko Asset Management for S$137 million. DBS will then acquire a 7.25%  stake in Nikko Asset and distribute Nikko funds through its branches throughout the region. This move shows

NODX and general elections

What with the PM promising goodies in the Febuary Budget; the news that the supply S’pore citizenships and PRs was halved ; measures meant cool property prices and more to come if necessary; and with the “removal” of comrade Mah from the PAP politburo, it would seem that a general election is on the cards soon, possibly as soon as March.

But there could be an economic problem brewing, if the worse fears of a Bank of America Merrill Lynch analyst materialise, that could derail any plans for a March GE.

Last week, it was announced that Singapore’s key non-oil domestic exports (NODX) in November had its biggest monthly fall in eight years. The NODX fell 12.9% month-on-month in November, the largest monthly drop since December 2002. Blame it on pharmaceutical exports which are always very volatile.

So analysts are pretty relaxed except for one who has concerns.

A Bank of America Merrill Lynch economist noted that even if pharmaceutical export is removed,”the NODX’s slowdown in November contrasts with the robust export performances of South Korea (+24.6 per cent vs +27.6 per cent in October), Taiwan (+21.8 per cent vs +21.9 per cent in October) and China (+34.9 per cent vs +22.9 per cent in October).”

He raised the possibility of Singapore exports facing structural problems such as the “stronger Singapore dollar and stricter foreign labour policy”, but he said more indicators are needed to confirm it.

My guess is that if the December or January NODX numbers do not show a recovery from November’s numbers, the election will be further delayed. Remember the latest possible date is in early 2012.

A parting Parthian shot:

GLP: Third time lucky

If you can’t get yr excuses right first time, try and try again.

Finally Global Logistic Properties (GLP) got it right. As I blogged earlier it got its nickers in a twist when explaining why  its prospectus did not disclose a non-compete agreement https://atans1.wordpress.com/2010/12/16/glps-non-actionimplications-for-sgxs-bid-for-asx-spore-inc/

Last Wednesday BT reported,”[it] did not specifically disclose information about a non-compete arrangement with ProLogis because it didn’t see the US-based firm as a real threat to its business, sources close to GLP told the media yesterday … GLP had looked into whether ProLogis was likely to re-enter the Chinese market when the non-compete clause expires next February, and felt that the chance was ‘remote’ … it would be hard for ProLogis to restart its mainland China business, as it had sold all its assets and brand name in the country to GLP … They may still have a large operation elsewhere in the world. They may still have a large market cap. But they have no presence in Asia – that’s it,’ said the source on why the non-compete information was not material.

This reasoning I can buy. And it would seem, so does the market. On Friday it was +0.14 to 2.26. It was trading at 2.18 the day before BT had an article abt its non-disclosure. It then fell.

Why did it take so long to come up with a decent explanation  It wrote twice to the media spouting gibberish. Hope it

OCBC picks for 2011

Like other brokers, OCBC is bullish for next yr. But there are some picks that are unique to OCBC.

Our picks for 2011 are Ascott Residence Trust, Biosensors International Group, CapitaLand, DBS Group Holdings, Ezra Holdings, Genting Singapore, Hyflux, Pacific Andes Resources Development, Keppel Corporation, Mapletree Logistics Trust, Noble Group, Olam International, Sembcorp Marine, StarHub, United Overseas Bank, United Overseas Land and Venture Corp.

S’pore Inc’s coming EGM: Maybe I’m paranoid

I was looking at this photo on ToC (BTW well done Andrew Loh and TOC for organising the event) and something was bothering me, though I knew not what. No it was not the sight of Chiam and Chee sitting side-by-side, smiling. That made my day.  Nice to see that they were willing to put aside their differences for what both saw as the greater good. (BTW, I hope mama tiger aka Mrs Chiam didn’t give Chiam a hard time when he went home. ))))

No there was sumething else.

Then I readThe Workers’ Party had nominated Gerald Giam, the only non-secretary general, as its representative (it was decided by the party’s executive committee by ‘consensus’ … .

I can understand the WP not wanting to send its Chinese-educated Sec Gen, given that his command of English is weak when compared to the other Sec-Gens’: they are a pretty articulate bunch, while the WP Sec-Gen is a quieter guy. But surely the WP could send its very personable, pretty and articulate chairman? No disrepect to Gerald Giam (I’ve heard him speak before), but for the WP to send him to represent the WP is like a CEO skipping a meeting with other CEOs, and his company instead sending an ordinary and very junior (in senority) director.

It is a question of good manners and, more importantly, of respect for the other participants.

Could the WP be signalling that it sees itself as different from the other opposition parties? Could it be that it wanted not to show up (like the PAP)? But lacked the balls?

I hope that the WP has a reasonable reason for not sending someone more senior. If not I’m concerned about its willingness to work with the other opposition parties in wanting to badly hurt the PAP in the coming contest. Even Chiam and Chee are willing to put their differences aside for the sake of unity.

This is the best opportunity in years for the opposition to make a difference.

Many different people feel unhappy for different reasons, but they are all unhappy. The young, middle-age, and old are unhappy. So are the middle class, working class and poor. Like-wise the local-born Chinese, Indians and Malays. Can’t think of a time when the PAP has upset so many of us, self included.

Tribute to John Lennon

I prefer the Doors, The Grateful Dead, Carpenters and The Rolling Stones to the Beatles and I don’t like their rock-and-roll stuff: only the lyrical stuff.

Still they were a great band and according to this piece good businessmen. And Lennon bot NY property with his money

You can be creative, a gd investor and wealthy.

S’pore Inc: A rare victory and why is it so rare

It seems that the unhappiness felt by native-born S’poreans as articulated by the SingNetizens has resulted a reversal of what many perceived to be a key govmin policy: swamping the place with foreigners. There has been a sharp slowdown in foreigners getting citizenship and PR. (Though it would be interesting to see if the number of applicants have dropped.)

But assuming the number of applicants have not dropped, it would seem that shouting loud enough peacefully when a GE is looming,  the govmin has to listen whether it likes it or not.

Ever wondered why such victories are so rare? The last was in the mid 1990s 1980s* when the attempt to prevent us from withdrawing our money from CPF at age 1955 was abandoned. The people were angry. Even then the govmin got its way, look at the amount one can withdraw at 55.

In the main, we accept being treated like mushrooms, kept in the dark and having odious but nutritious stuff poured on us).

What got me ruminating on this topic (other than the news report) is an interesting piece (that I rediscovered while clearing my files this morning) drawing a parallel to the time when the people belonged to the state and the S’pore constitution which provides “every citizen of Singapore has the right to freedom of speech and expression”; however, “parliament may by law impose… such restriction as it considers necessary or expedient in the interest of the security of Singapore…”. Another big exception, not mentioned in this excellent piece, was that the constitution was subject to all existing laws (which incidentally included the right to detain without trial).

The author contrasts this with the US Declaration of Independence: … that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.

Back to mushrooms. The history of how we became an independent city-state explains why we willingly accept being mushrooms.

When S’pore was a British colony, the people (self included) were subjects of the queen of the United Kingdom. Technically we were her property. Of course, the unwritten British constitution, gave us some rights vis-a-vis her ministers and officials.

S’pore ceased to be a colony when it became a state within Malaysia. S’poreans were never given the choice of becoming an independent country. The elected leaders of the colony negotiated S’pore’s  entry into M’sia. As M’sia was and is a constitutional monarchy, we became technically the property of the M’sian king, with a written constitution giving us some protection against him, and his ministers and officials, oppressing us. 

HSBC: Returning to its Chinese roots

Remember the “S” stands for “Shanghai” and “H” for Hongkong.

Growth in China has averaged around 10 percent a year for the last decade and shows little sign of slowing. As trade flows with the rest of the world increase — HSBC says they will reach $5 trillion by 2015, which means growth of 13 percent a year — more of China’s cross-border trade will be settled in yuan.

On paper, HSBC is well placed to take a good chunk of business in that yuan-denominated trade. It is often one of the first foreign entities to win key licenses in China. It was the first to settle a cross-border yuan trade last year, the first to handle a yuan-denominated interest rate swap in Hong Kong in October, and it became the first international bank to complete yuan settlements in six continents with a deal in Brazil last month. …

Doing the maths

This is not a how to calculate an investment, but it’s a gd example that you got to do the maths. It’s abt how to calculate whether to give a discount to attract custom.

A worrying combination

A strong oil price and a strengthening US$.

Article

Who is “daft”?

In two instances, our thinking is along the same lines as  that Henry Mintzberg who is Cleghorn Professor of Management Studies at McGill University. He is one of the world’s top thinkers on management and business strategy. I came across a blog posting of his which show that we ordinary S’poreans are more in-tune with his thinking than are S’pore’s ministers.

Any chief executive who accepts a compensation package that so singles him or herself out from everyone else in the company is not a leader. Leadership is about conveying signals that engage other people in the company … There is an Israeli expression that a fish rots from the head down. So too does an enterprise.

One can reasonably conclude that he would have problems with ministerial salaries based on the logic of above.

A robust enterprise is not a collection of human resources; it is a community of human beings … Effective strategy, for

How China & India can be co-hegemons

India can provide China with millions of trained managers. China in turn can finance and build the infrastructure India needs.

Why this will never happen? Both sides don’t trust each other. Learning Mandarin is not easy. And democracy, corruption and the rule of law will mean the Chinese can’t bulldoze their way thru when building infrastructure in India.

Trade should leave China and India both winners.

OCBC likes S-Reits

In  a research report dated 10 December 2010, OCBC Research writes most of the Singapore real estate investment trusts (S-Reits) emerging stronger from the financial crisis, with healthier balance sheets, forthcoming acquisition proposals and more asset enhancement works.

Three Reits listed on (SGX) this year, Cache Logistics Trust, Mapletree Industrial Trust (MIT) and Sabana Reit. This was in stark contrast to a year ago when most of the S-Reits were burdened with deleveraging plans, decompressing cap rates and asset sales.

The FTSE Reit sub-index is up 15.9 per cent year-to-date. It has since recovered 145.1 per cent from its trough during the financial crisis in March 2009 and is 38.2 per cent shy of its peak in June 2007.

If we use 2006 levels as a benchmark, the FTSE Reit sub-index still has 25 per cent of headroom before reaching the 2006 summit, and it is only 9.2 per cent above of its 2006 nadir.

Stepping into 2011, we think there is still upside potential for the index to reach 2006 levels, and this recovery momentum is already playing out nicely among some of the S-Reits.

Despite being touted largely as defensive yield plays, we have witnessed some S-Reits (such as CapitaCommercial Trust, K-Reit Asia, Fortune Reit and ParkwayLife Reit) appreciating more than 25 per cent year-to-date.

Going into 2011, we upgrade our rating for the S-Reits from ‘neutral’ to ‘overweight’.

The persistently low interest rate environment is expected to stimulate the property market and continue to drive prices higher.

Together with ‘hot capital inflows’ pouring into Asia, it is likely that spot rental rates and asset prices will continue to be inflated.

At the same time, many Reit managers are capitalising on the recovery cycle for further asset enhancements initiatives and acquisitions.

Being an inflation hedge, we think investors’ interest in S-Reits is likely to remain piqued in 2011.

However, we noted that different sectors may experience different rates of recovery.

In our opinion, the recovery is likely to be more pronounced for the office sector, followed by the industrial sector as the catch-up potential is greatest for these two sectors.

The retail sector is likely to remain subdued with moderate rental escalation, new retail supply with additional 612,000 square feet of leaseable retail space in 2011, and lessened spending power from foreign visitors affected by the appreciating Singapore dollar.

Within our coverage universe, our preferred picks for large-caps are Mapletree Logistics Trust (‘buy’, fair value: $1.00), Ascott Residence Trust (‘buy’, fair value: $1.38) and for small-caps, Frasers Commercial Trust (‘buy’, fair value: $0.18), Starhill Global ( ‘buy’, fair value: $0.66).

GLP’s non-action:Implications for SGX’s bid for ASX & S’pore Inc

Global Logistics Properties has replied to a hack’s rant on why it should have disclosed GLP’s non-compete agreement with ProLogis in China and Japan in its prospectus. The GIC-linked company, which listed on SGX in October continues to contend that the “existence of the non-competition arrangement between the company and ProLogis is not material, and continues to be non-material to the ongoing business of the company”.  The quote is from its reply to BT who first exposed this agreement.

I won’t go into the legal issues involved except to say but I find the reply inconsistent. BTW the links to the  reply and rant may go walkabout in a few days’ time.

But what will SGX do? If it does nothing (putting the onus on the central bank: MAS approve prospectus leh), or investigates and then clears GLP, it will fuel Ozzies suspicions of the SGX takeover of ASX for two reasons.

S’pore Inc: This FT is best

… he has managed to survive such problems and his business has grown from nothing to 80 employees. Spotting a gap in the airfare market 10 years ago, Martin Symes left a career as an airline executive to move into travel e-commerce.

S’pore -based Wego has announced plans to merge with HolidayIQ, an internet travel firm based in Bangalore, India.

BBC Online article.

If FTs like this guy, I say FTs “Come in”.Technopreneurs are what S’pore needs, not a gun-toting playboy royal.

S’pore Inc: The kind of FT we let in?

… fired a gun during a drunken row

… Many people in Nepal suspected Mr Shah of involvement in the palace massacre, which stunned the world.

… Later in 2008, Mr Shah moved to Singapore with his wife and three children, but he has kept a home in Nepal and travels back and forth.

BBC Online article

Singapore Inc: Our diplomats’ heloo?

I was reading this about Richard Holbrooke, who died yesterday. He was famous for being an undiplomatic career diplomat who achieved great diplomatic successes, when diplomatic diplomats failed.

The tot struck me that our trio of diplomats quoted may have been trying to emulate him?

If they were, they forgot that the US is the hegemon, while S’pore is a “little speck” or is it “dot”? Holbrooke was the modern equivalent of a Roman envoy when the Romans ruled the West and the Middle East, or of admiral Cheng Ho when the Ming dynasty sent its navy to SE Asia. Today the US is the only military super power, and the spender of last resort for the global economy. Our diplomats should think of themselves as the envoys of vassal states to the court of the Roman or Chinese emperor.

But maybe I’m wrong. Maybe they were trying to emulate one LKY?

Update at 9.32an

It juz struck me. What were our diplomats doing telling the US abt what they tot abt our neighbours and regional powers? Sakkaing US or saboing our neighbours and others?

Nomura: Bullish on Indonesia

Nomura says Indonesia’s fundamentals are solid. Growth is strong, inflation is muted, and the central bank aims to keep the rupiah stable. And the government aims to kick-start infrastructure projects by making land acquisition easier.

So GDP growth is expected to grow from an estimated 5.9% this year to 7% next year. Nomura sees a 15 times PE for the equity market next year, with a possible re-rating to as much as 16.5 times PE.

The firm’s top stock picks in Indonesia are infrastructure providers. Commodity companies are also expected to do well. Coal prices are rising even as production volumes improve. A return to normal weather conditions will also boost

How to make $ online

Build sites on media, celebrity and sports gossip.

Build websites for people with $

Publish romance novels as -books

Ideas easy, execution difficult. LHL’s ideas in the economic plans of the 1980s and noughties were gd, but so what?

Casinos: Even better than govmin must have dreamed?

Analysts believe Singapore’s two casinos will produce gaming revenues of more than [US]$5 billion in the island nation’s first full year of legalized gambling.

… country’s leaders didn’t expect the popularity of gambling. The two casinos are attracting customers from throughout the region, including Indonesia, Malaysia, Australia, India and China.

Las Vegas Review-Journal article

I for one never tot it would be so gd, even though I’ve been for casinos for over 10 yrs. I tot is was an opportunity that GCT and LSL his economic $ financial czar missed. Better late than never.

Nomura: Bullish on M’sia

Malaysia is likely to benefit from a consumption boom says Nomura, “[T]he most powerful theme would be the consumption theme in Malaysia. We have added a lot of the middle class segment of the population. That really explains why we are seeing more demand for property, higher value property,”

Despite the KLCI having risen about 30% this year, Nomura analysts see 20% rise in 2011.

Nomura’s top picks in Malaysia are property, palm oil and bank stocks.Among the firm’s buy calls are CIMB, Maybank, AMMB, Media Prima, SP Setia, Sime Darby and Genting Malaysia.

SPH: Context, what context?

If I were the chairman of SPH, I’d commission a witch-hunt to root out the subversives in the Straits Times newsroom if I wanted it to remain “constructive” and “nation building”.

Yesterday, ST carried on its front page BG Yeo’s plea to read the leaked comments in context (which incidentally he hasn’t provided).

But go read yr SunT. On page three in the midst of a long-winded and gibberish article, there were three prominent pictures of S’porean diplomats and what the US cables claimed they said.  One got the impression that sumeone in the newsroom wanted to focus our attention on the alleged comments.

Now this was taking things out of context. And the ST proudly proclaims itself “nation building” and “constructive”.

Even the Oz newspapers who were criticised for writing articles taking the leaked cables out of context, didn’t do this kind of highlighting.

Shareholders of SPH have to be concerned lest newsroom subversives makes it lose its very profitable status as the cheer-leader for the government.

Remember a few months ago when its coverage of Mrs Lee’s death was undercut by its revelation that only about 5,000 people paid their respects. The other reports and pics gave the impression of a nation in deepest mourning. https://atans1.wordpress.com/2010/10/07/sph-civil-war-in-the-newsroom/

Seriously, as pressrun.net has pointed out, context is impt but as I’ve blogged yesterday George Yeo or his officials shld supply the context https://atans1.wordpress.com/2010/12/13/spore-inc-err-what-abt-giving-us-the-context-george/[Note this para was added at 8.55 am]*

BTW, the alleged comments ring true given the published and authorised public views of our diplomats and ministers. They can’t be accused of being double-headed snakes. At the most they were articulating official tots in undiplomatic language.

*And I’ve juz read this CNA report that MFA says it doesn’t comment on leaks. Pray then how can we be asked to judge the leaks in their context? [Update at 3.47 pm].

Nomura’s bullish abt S’pore equities

In a report issued by Nomura a few days ago, it said it saw a 10 to 15% market returns in Singapore in 2011. The drivers will be a strong currency, attractive-looking valuations and “the persistence of negative real interest rates”.

“As one of the few countries in Asia unlikely to impose capital controls, the Singapore market is poised to benefit from the easier global liquidity environment in 2011 against the backdrop of what look to be attractive valuations (14x P/E, 11 per cent market earnings per share growth and dividend yield of 3 per cent)”

US quantitative easing (inflating or stimulating the economy by increasing money supply or cutting taxes) – will be a key re-rating driver in 2011. This will benefit the banks, commodities and commodity-related sectors as well as the commercial property segment.

Banks will continue to be re-rated upwards driven by regional growth and steady net interest margins in 2011. The “buys” are OCBC and DBS.

“We are positive about upstream commodity plays like Golden Agri and Indofood Agri on rising CPO (crude palm oil) prices …  like Noble for its upstream coal assets and increasing contribution from its midstream investments.”

The offshore marine sector is expected to enjoy an upswing in rig upgrading/build cycle, on the back of stronger oil

S’pore Inc: Err what abt giving us the context, George?

Can’t agree more with our Foreign Affairs minister that the leaked comments S’porean diplomats and MM made abt neighbouring countries have to be seen in context.

Err what about giving us, and them, the context?

The funny thing is that once S’pore always assumed the US could not keep secrets. In the 1980s, the US approached S’pore and Brunei to secretly fund the “contras” fighting the pro-Soviet and Cuban government of Nicaragua. Congress had banned aid to the ‘contras”. Brunei obliged but S’pore said that it would not do so because the US could not keep secrets. S’pore was right. It became public knowledge that Brunei had funded the “contras” and that S’pore had refused, and its reason for so doing.

Update on 14 December 2010

The offending Oz articles

http://www.theage.com.au/world/top-singapore-officials-trash-the-neighbours-20101211-18thg.html

http://www.smh.com.au/world/big-fat-red-faces-for-singapore-leaders-20101211-18teg.html

http://www.smh.com.au/world/caught-in-political-sex-trap-20101211-18tee.html

StanChart: Shares fall 6% in 2 days

StanChart shares have fallen 6% since last Thursday when it told the market that costs were rising and wholesale banking revenues weak.

For StanChart, growth is proving costly. The British bank with a strong focus on Asian emerging markets said last Thursday that it had another record year to look forward to, predicting further growth in its pre-tax profit for both the consumer and banking wings of its business. However, such growth comes at a high price, and costs for the bank have been growing faster than it would ordinarily allow.

Its finance director said the bank would try to slow cost growth next year until it draws level with income growth once again.

Reminder: Temasek has 19% of StanChart and the bank is one of its best picks ever.

UBS’ views on region

UBS is bullish on China, Hong Kong and India.

UBS’ target for the Straits Times Index is 3,600 points – about 13% from yesterday’s close.  It assumes a 12-month forward P/E of 16.4x., mainly due to the prospect of long-term Singapore dollar interest rates staying very, very low as capital comes in in anticipation of the Sing dollar appreciating.

Other views:  “neutral” on Korea and Taiwan, and “underweight’ on Malaysia, the Philippines and Indonesia because it considers them expensive.  Surprised on its view on Indonesia. Other brokers e.g. Nomura like it. As for M’sia don’t they know that an election is coming and there are plans to spend, spend on infrastructure.

Casinos: Foretaste of the future?

This happened a few hours ago at the Venetian Sands, sister company of Marina Bay Sands, just before a visit by the owner Sheldon Adelson. Doesn’t say much abt Sands’ security. Let’s hope the authorities will be proactive in ensuring that such a thing doesn’t happen at Marina Bay Sands.

Police raided the Venetian Macau Resort and Casino early Friday morning, arresting 110 hookers and 22 suspected members of a prostitution ring responsible for pimping the women, according to a local newspaper.

Chan King-Hong, chief coordinator of criminal investigation for the Macau Judiciary Police, told The Standard that the raid began around 1 AM and lasted till 6Am, with a toll of 110 arrested hookers, suspected of being illegal immigrants, and 22 pimps. Apparently, the prostitutes were forced to pay “protection fees” of HK$800 to HK$1000 (between $100 and $130) to operate in the hotel, posing as guests of course.

Forbes story

There is a more chilling concern. If security is so lax, what chances some Jihadist planting a bomb? Remember MBS presses several Jihadist hot buttons: It is in S’pore, a member of the Coalition of the Willing in the Afghanistan; gambling is evil in Islam; Sands is an American company; and a Christian group uses a tiny part of the place on Sundays as a church.

from heaven’s dice-box fate’s dice chance to fall

And what a throw of the dice.

A vase found in a house-clearance in London was sold for £43m, thought to be a record for any Chinese artwork. The 18th Century Qianlong porcelain piece had been estimated to fetch up to £1.2m for the brother and sister who inherited it. BBC article

If it’s fated, it will happen?

‘Tis labor lost thus to all doors to crawl,

Take thy good fortune, and thy bad withal;

Know for a surety each must play his game,

As from heaven’s dice-box fate’s dice chance to fall.

And

Lament not fortune’s want of constancy,

But up! and seize her favors ere they fee;

If fortune always cleaved to other men,

How could a turn of luck have come to thee?

S’pore Inc:”delusion, amnesia, inertia and arrogance”

“I have warned that if we do not change, we are doomed … hit by four illnesses –delusion, amnesia, inertia and arrogance. All these weakness, especially arrogance, will make voters hate us,” said the son of a former PM, who is now PM himself, two weekends ago

No not our dear Lee  but the PM of M’sia. Interestingly both ruling parties held party conferences on the same weekend. UMNO has been in power since 1957 while the PAP since 1959. These are world records.

But it should have been our PM given the recent words or actions of some of his ministers and the CEOs of GLCs. I’ll give some  examples and you can add to the list, I’m sure

delusion

The Home Affairs minister assures us that our homeland protection system is functioning well despite allowing Mat Selamat to escape from detention, avoid capture for three days,  visit his brother’s flat unobserved and then floating out of S’pore undetected.

amnesia

When S’poreans were grumbling that some owners of private housing were driving up HDB flat prices by speculating in them, didn’t ministers rubbished S’poreans?

But then, didn’t the only wimmin cabinet minister say recently that the Ministry of National Development has “looked” into the matter and “realized” that it is caused by a “small percentage” of private property owners who speculate on the properties?

She also said, “So we decided to have the cooling measures… to cool the market down. And the starting point is meeting the needs of Singaporeans who would like to own a flat.”

And remember the National Development minister had said that there was nothing he can do to control property prices because they were due to market forces. But he later took “cooling” measures and said they were working.

inertia

The govmin slowed down building HDB flats and improving infrastructure (e.g. scheduling more frequent trains and buses)  despite allowing in a lot more immigrants. Where were the much vaunted pro-active policies? It took the bleating of S’poreans about higher HDB flat prices and overcrowded trains and buses, that got the govmin to take action.

Not taking action on a casino targeting heartlanders until there was public disquiet. This despite the authorities claiming after taking action that they were aware of the free buse services to Sentosa. Err so why wait?

arrogance

VivianB telling us that he goofed on the Kiddy Games Budget by $266m but even if he knew that it would have cost the $388m it finally did, he would have gone ahead.

The CEO of SMRT telling S’poreans that the public had to be responsible for SMRT security when a train depot was “raided”, carriages vandalised and worse SMRT taking several days to realise what had happened. (The last a bit like being raped and not realising it until days later. Beggars description or belief.)

She wants us to pay fares and guard the depots?

And could the examples of “amnesia” on HDB prices cited above, be examples of “arrogance”: ministers not forgetting what had been said, but thinking that they can rewrite history because we have amnesia? Or because the “constructive, nation-building” media will not point out the contradictions, which they didn’t.

And likewise the examples or “delusion” and “inertia” be examples of arrogance? “We are the best and brightest. We can do no wrong”.

Lest we forget: MM’s responsible for our greenery

What has having a green environment do for us?

Well A Dutch study suggests every 10% increase in green space can postpone health complaints in communities by five years. And a US study is regularly cited to suggest patients that have a view of nature through hospital windows recover better after surgery.

And as this is S’pore, where moneytheism  is the be-all and end all of life.

It is almost an accepted wisdom that a property positioned on a pretty tree-lined street surrounded by shrubbery is more appealing than its counterpart on a concrete-clad bare and barren road.

Some British and US surveys suggest a lush lawn or well-landscaped yard can improve property prices by as much as 15%.

BBC Online article

Younger S’poreans might not realise that in the 70s, one LKY started the green campaign, which included planting more tress. As an NS man, I was not impressed, weekends were burnt planting trees.

Sabana: Inshahallah

This piece of news (Sabana) in Monday’s ST did nothing to support the stock, because although it reported insiders buying at higher prices to support the IPO (issue price; 1.05), it also reported that a substantial shareholder had dumped shares. If this shareholder came in via the placement, if I were Sabana, or FreightLinks or other keystone investors, I’d be upset with the placing broker.

It went on falling. On Wednesday it closed at0.95, having fallen to 0.94 on Tuesday.

But SIAS research was quoted by ST as saying that at  last friday’s closing price of 0.975? Sabana was a buying opportunity.

Well SIAS Research is part of self-styled shareholders’ champ SIAS. But wouldn’t it have done better to point out that AIMSAMP industrial reit gives a yield of  9.5% and trades at discount to last reported NAV of 18%?

Me, I think Sabana is attractive at 0.81, when over 10% yield and a 18% discount to NAV of 0.99cents. As to whether it gets there

Know for a surety each must play his game,
As from heaven’s dice-box fate’s dice chance to fall.

BTW, I have no economic interest in AIMSAMP. It is on my “Feel like buying, but no hurry” list.

Related post

https://atans1.wordpress.com/2010/12/01/calling-all-muslims/

Welfare: Jam to-morrow and jam yesterday – but never jam today

When read I this “prudence and discipline” article last Friday* reporting a speech on S’por’e welfare system (past, present and future) by the PM, I was reminded of the conversation between Alice and the White Queen in Lewis Carroll’s book Through the Looking Glass and What Alice Found There”.

In the book the White Queen offers Alice “jam every other day” to work for her: “The rule is, jam to-morrow and jam yesterday – but never jam today … It’s jam every OTHER day: to-day isn’t any OTHER day, you know.

“[J]am to-morrow and jam yesterday – but never jam today” has since then become an expression for a never-fulfilled promise, which is what many think the promise to help the poor has become.

What annoyed me was that the PM  doesn’t understand the issue: saying we couldn’t afford European style welfarism. Trouble is no-one sensible is asking for this, certainly not the opposition parties or the do-gooders.

The ex-head of the civil service and now chairman of the Public Service Commission showed he “got it” when he said at a recent speech in the US to S’pore  scholars: “More and more citizens, especially younger Singaporeans, agonize over the fact that there are still poor people in wealthy Singapore.”

The issue is the smallish amount of welfare payments relative to the Budget. Take Workfare the govmin’s flagship programme. It  has the right idea but is too ungenerous.

The PM in November said abt Workfare: “[A] total of $1.65 billion in the last five years, or $400 million a year, to help 400,000 low-income workers”. The Finance Minister said in February this year that the enhanced Workfare scheme will cost the government S$100 million annually. So the spending on Workfare is now S$500m or 1.5% of the operating expenses in the latest Budget. Still peanuts. And yes I know that 1.65bn divided by 5, doesn’t equal 400m. Taz why I quoted the exact words.

And if the govmin is concerned that increased annual payments to the poor will lead to moral degeneration and the destruction of its “Work will make you free” philosophy (seriously though, there is the very human issue of rising expectations and politicians pandering to the voters), why not try Kaushik Basu’s solution? The Cornell University professor, and chief economic adviser to India’s finance ministry, says it is not enough that the income of the bottom 20% rise at the same percentage rate as the average. Instead, they should get an equal absolute share of the income the economy.

This would mean only a one-off transfer of S$3.1 billion to the poorest 20% of S’poreans. Less than Temasek’s realised loss on Merrill Lynch. Temasek could have lost as much as US$4.6bn (in 2009 March this would have been S$7bn) on Merrill Lynch. (BTW, March 2009 was not gd for Temasek. The much smaller loss on Barclays (800m sterling?, was then worth abt S$ 1.7bn ).

(https://atans1.wordpress.com/2010/10/13/minimum-wages-missing-the-point/ for more on these)

We got the money for more “jam today”.  We don’t need to borrow to fund enhanced Workfare.

CitySpring Infrastructure Trust: a TLC dog with fleas

As regular vistors to this blog will know, I’m a sucker for yield and NAV plays. So I was starting to think abt CitySpring Infrastructure Trust which offers a prospective yield of abt 7%. It is also a Temasek-linked trust and could possibly be trading at a discount to NAV.  An investing sweet spot.

Fortunately before I even got to reading up the basic data on the trust, I chanced across a Kim Eng Eng Research report dated 30 November, which called the trust a ” sell”.

To forestall a credit rating downgrade of the three bonds issued by Basslink, CitySpring Infrastructure will set aside A$20 million (S$25.4 million) in an escrow account for this asset before next January. Although this move may resolve the CreditWatch placement by Standard & Poor’s (S&P), a capital structure plan involving an equity cash call seems inevitable in our view. So, while the forward yield of 7.1 per cent based on the previous DPU guidance appears compelling, there is no denying the risk of dilution.

… The bonds, worth a total of A$866 million, face a potential ratings downgrade that will trigger a cash lock-up at Basslink and affect CitySpring’s distribution policy … CitySpring will still need to submit a capital structure plan that will satisfy S&P’s stringent risk assessment. It plans to do so by next September. As one of the options, Basslink’s cash flow may be applied to reduce debt … A capital structure plan involving an equity recapitalisation seems highly possible in our view, given the presence of other debt obligations, such as the $142 million corporate loan due in August 2011 and the $130 million City Gas loan due in 2012. Even if Basslink continues to pay a distribution, unit-holders’ yield may still suffer a dilution.

We cut our DPU forecasts for FY March 2012 and onwards from 4.2 cents to three cents to factor in the removal of Basslink’s contribution. Our TP is lowered to $0.52, reflecting our assumption of a capital injection of $100 million to reduce gearing. Downgrade to ‘sell’.

Looks like the perfect storm. And I’ve found out that it’s last reported NAV is 0.34cents.

But I’ll monitor the trust, waiting for the capital raising exercise which I agree must come. It might then be like AIMAMP industrial reit or Fraser Commercial* — gd yields and discount to NAV to compensate for the overhang of units created by the rights issue. BTW, for waz it’s worth, I read in Monday’s ST that OCBC’s reit analyst and DBS’s  head of asset-backed structured product like industrial and office reits.

Investors in the Mapletree s-reits may want bear in mind that this trust was once a high-flying investment trading way above NAV, and giving gd yields. Until it the managers went walkabout in Oz Outback. Being part of the Temasek stable doesn’t mean that one can “close eyes and buy and hold”.

*office and malls (here and in Oz)

S’pore 2011: Credit Suisse’s view

Sorry leh online political activists. This posting is abt the stock market. The purpose of this blog is investing, not local politics, though I admit it may sumetimes sound like a do-gooder, or worse, a rant blog.

CS sees strong economic growth, employment numbers and corporate earnings growth (who doesn’t) are lending support to an 18% upside for Singapore (STI target of 3,737) with corporate earnings expected to grow 14%  in FY 2011. The main drivers will be gaming, transport and agribusiness.

It will another strong year for tourism.  Cash-rich companies will “undertake aggressive capital management” next yr — I suppose this means M&A, paying bigger dividends, buy-backs and gearing up.

Return on equity (ROE) among Singapore companies is expected to improve from an estimated 11.5%  for 2010 to 12.7 % in 2011 and 13.1% in 2012 “with further upside expected to be driven by more aggressive capital management”.

It i s’overweight’ on capital goods, property and transport, and the higher beta top picks are Sembcorp Marine, Keppel, NOL, CityDev, and Olam.

And bullish on on Wilmar and  SIA. Mid cap ‘overwight’s are CDL Hospitality Trust, Wing Tai and M1.

But funnily S’pore is an ‘underweight’ on the basis of relative valuations within the region, which I take to mean that either other markets (Indonesia is hot, hot) will outperform, or it lacks confidence in its S’pore numbers, or both.

An interesting online investing innovation in US

Broker is getting VC funding to do something interesting:  do it yrself asset allocation and rebalancing.

Betterment lets users transfer money to their accounts and decide how much of it they want invested in the stock market and government-backed treasury bonds. Stocks are typically a little more volatile in the short term, whereas treasuries have a guaranteed yield but generate a much smaller return. The idea is to let users pick just how much risk they want to take on their savings.

Betterment chooses which stocks to buy and puts the individual securities into each user’s account … does not charge its customers a per transaction fee like most online brokerage accounts … charges a management fee of 0.9 percent of the average annual balance. Betterment accounts are as liquid as a savings account, with the money transferring directly to and from users’ checking accounts.

NYT article

Oil: Did anyone notice?

The price of oil on both sides of the Atlantic has hit its highest level since the financial crisis.

In Europe, Brent crude futures rose to $91.58 per barrel, while in the US, West Texas Intermediate hit $89.35 – the highest levels since October 2008.

Despite the market rally, prices still remain 40% below their pre-crisis peak.

Among the factors driving prices higher are rising demand because of the global economic recovery and cold weather in Europe, as well as the weak US dollar.

Meanwhile, temperatures are also expected to fall in the eastern United States, according to the US National Weather Service.

BBC Online story.

DBS Securities: Small cap suggestions

… don’t overlook the potential of the small caps. We have observed that the post-Christmas to pre-Chinese Near Year rally tends to stimulate retail participation in the market – and retail investors very often tend to focus on the small caps. Among the small caps, we favour capital goods and basic materials plays such as Ezion, PEC and Midas. We also see construction stocks such as Yongnam and OKP benefiting from the accelerated building of new HDB projects as well as several major transportation and/or infrastructure projects in the pipeline.

Extract from report issued a few days ago.

“In Singapore, people of different ethnicities feel they belong and fit in” Huh?

An unknown American author says S’pore is the happiest place in Asia. I won’t go throuhg his detailed analysis, you can read it in SunT.

But I cannot understand how he could come to the view that, “In Singapore, people of different ethnicities feel they belong and fit in”, given the feelings of S’poreans of all races and religions about the growing gap in income and the very liberal immigration policy.

The govmin’s policy of preferring growth over narrowing the income gap is in itself not destabilising nor will it lead to general unhappiness. “A lack of social cohesion and abundance of socio-political stability does tend to coincide with a high level of inequality. But that’s because a high level of inequality is generally the result of one group of people dominating and marginalising another, which is not a recipe for widespread amity and fellow-feeling.” (extract from  an Economist blog)

So by itself growing wealth disparity does not inevitably lead to social discontent or unhappiness. Phew! After all MightMind has told us that weath disparity will grow.

But throw into the simmering water of income inequality, the fact that one out of two people here, may on present trends, be foreigners (at present it’s about one FT to two residents, the latter term includes PRs), and a reasonable person can reasonably conclude that we will have problems.

Many more S’poreans will feel marginalised by the increasing income gap; and by the presence of FTs who the govmin uses to hot-house economic growth, be the S’poreans be prostitutes, service staff or executives, poor, or middle class, Chinee, Indian or Malay. E.G, how will true blue S’porean Tamils feel when asked their caste by self-styled high caste, fair-skinned Aryans? Believe me this has happened at SPH.

I’ve written before, I’m an quitter-in-residence. I have not quit physically for two reasons. One is that hotel services are pretty decent, even if I can find better value elsewhere.

How to maximise the effect of caffeine

A cup of coffee followed by with a 20-minute nap will double the caffeine effect. Try it.

What the SDP bear tells us abt ourselves

“Or the difficulty of choosing a unifying symbol in a multiracial, multireligious society”.

When Danny the Bear appeared, I guessed it was a take on the over-reaction of the authorities over an ad agency’s prank. The authorities were upset that they had to investigate whether a bear was on the loose in Ulu Pandan. There were mutterings of prosecution for wasting the time of officials, though to be fair no 0ne has been charged yet.

My next reaction was “Typical ACS boy stunt. A bear is so Ang Moh”. Dr Chee was from ACS. But, BTW, his sis doesn’t look like an MGS gal. I always think of MGS gals as tai-tais waiting for their drivers.

But then thinking about it (plenty of time, I am 55 going on 62), I realised that the SDP would have stepped on land mines if it had tried to use something more indigenous. Choosing  an Asian animal symbol is difficult in Singapore,where even though there is a dominant race, we pride ourselves on being (OK “trying to be” might be more accurate) a multiracial, multireligious society. This means being sensitive to the sensitivities (or perceived sensitivities) of other races or religions.

A dragon or panda would be too Chinese; an elephant or tiger would be too Indian; and a lion might get the SDP sued by the “Courtesy” police. And of course animals that have religious symbolism are also a no-go area because of religious sensitivities, or perceptions thereof.

What about the mouse deer? In Malayan and Indonesian folklore, Sang Kancil always outsmarts the bad and stronger crocodiles, tigers and elephants. And helps the other animals fight these bullies.

Hmm, looks like a good symbol for what the SDP says it is trying to do.

Rewriting the rules on what constitutes “insider trading”

The US forced the concept of “insider trading” onto a reluctant financial world in olden times.

So recent developments in the US deserve our attention. Legitimate research is in danger of being criminalised by the SEC.

[T]he CFA Institute’s standards and practices handbook, which declares: “The idea behind the mosaic theory is that each individual piece of information is nonmaterial by itself: an individual piece of information would not move the price of the security if disseminated in a public press release. Taken together, however, the bits of information can form a meaningful mosaic. This practice is perfectly legitimate.”

It would seem that the SEC is challenging this theory. If it is (no one outside the SEC is sure if this is the case), and wins, the financial world will be turned upside down.

The law as it stands https://atans1.wordpress.com/2010/12/02/what-is-insider-trading/

S’pore Inc: almost Finnish but more value for money

No not our overall standard of living or in innovation, but in educating our kids.

This chart from the Economist using data from a recent McKinsey report shows that S’pore’s education standards are just below that of Finland and, more interestingly, that it spends money on education more efficiently than Finland or HK. The x-axis shows the amount spent per student. Or for that matter, the Ontario state system (second in world after Finland) and  South Korea, both not shown on this chart.  S’pore is third after Finland and Ontario. For more of what the report says abt our education system.

What is insider trading?

What constitutes legitimate research?  When is the insider trading line crossed?

A light-hearted look. You will both be enlightened and amused. You might even laugh out loudly.

S’pore Inc: We got connectivity, so do we need the PAP?

MM recently said two weeks ago that connectivity to the rest of the world is what gives S’pore its edge.

Well we got so much connectivity that foreigners (businesses and people) are flocking here, and the government’s aspiration to be a global city is a reasonable one.

If so, do we need the PAP any more?

True the governing party since 1959 has played its part in getting S’pore connected to the world (MNC friendly, including the declawing and defanging of the unions; low taxes, the use of English and gd infrastrucure).  But that’s in the past.

Time to move on? Gratitude is not infinite.

After all none of the opposition parties are calling for an end to being MNC-friendly, the use of English or building infrastructure.

SDP and RP, try to convince us that things will be better for the vast majority of S’poreans if the PAP is made to move on.

Why did I leave out the WP? I somehow suspect that the party’s central committee will have a collective and massive heart attack and stroke, if come the day after the GE, the WP finds that it has more seats than the PAP, even after the WP called for a recount, after finding itself ahead.

As to the SPP and SDA, I somehow don’t see them as ready to govern S’pore unlike the SDP, RP or even the WP (if they get rid of their defensive mentality, and behave like potential game-changers).

Over to you, the Opposition.

Calling all Muslims

Sabana Reit needs yr help.

This is the first Shariah-compliant reit listed on the Singapore exchange (SGX), and the world’s largest listed Shariah-compliant reit by total assets. Looks like analysts were wrong to expect Sabana to attract Middle Eastern investors saying there are not many such Shariah-compliant REITs in Asia ( M’sia has three, and this is all it seems). Either they got no money, or there are more attractive investments elsewhere or in more lucrative products.

At yesterday’s closing price of 0.97  its first yr projected yield is now slightly more than the 8.22% at the IPO price of price of 1.05.

But it trades only at a “peanuts” 2 cents  above NAV of 0.99 in cash. But the properties to be injected in will only give an NAV of the 0.99.

For the time, being this infidel prefers AIMSAMP industrial reit which trades at a yield of 9.5% and an 18% discount to last published NAV. True gearing is at 35% versus Sabana’s 25%,: but the former has big Aussie insurer AMP as big brother, and the latter can only “borrow” from a limited number of “lenders” and via complicated structures. And I don’t have enough info to make judgements on its big brothers.

BTW looks like Temasek’s Mapletree industrial reit  has beaten this Shariah-compliant industrial reit performance-wise in IPO terms. They IPOed within weeks of each other recently.

Moral of the tale for pious folk of any religion: God may rule in heaven but on SGX, investors prefer to invest in a Temasek-linked reit, rather than a religious-compliant reit. The blasphemous (not I) may want to shout, “Harry rules OK” or “In S’pore, God takes advice from MightyMind”.

S’pore Inc:”Something this stupid generally requires teamwork”

So said a senior American official, referring to a balls-up* in Afghanistan which showed the failure of British, US and Afghan intelligence.

“We have good growth; we have good plans and that is what we should be going into the election for – to mobilise people to support these plans and support the team which has brought this growth to them,” the PM said a few days ago.

But he forgot that there were two serious security goof-ups which proves twice over that “Something this stupid … requires teamwork”.

Mas Selamat climbed out of a detention centre, avoided capture despite taking refuge in his brother’s flat, and floated out of S’pore. Now anyone can do the first undetected, but the other two? And what odds all three consecutively? And if he can float out undetected, Pakis can float in, undetected, with explosives and illegal drugs.

And we had the SMRT depot break-in, that went undetected for days Given the threat of terrorism, S’poreans (and the authorities) were surprised that SMRT’s security was so lax. SMRT not an ordinary commercial company, it is also a GLC and TLC.

And then there were the PR damage limitation exercises that resulted from these incidents. They were so inept proving that “Something this stupid …  requires teamwork” comes. We had the CEO of SMRT (an FT from M’sia) blaming the public, and MPs being told by the Home Affairs minister that that Mas Selamat could go undetected in the flat “was not a security lapse’ and that hundreds were probed. What weed were they smoking? Or drug they were taking? Or what alcohol were they drinkng? Or what combination of these?