Archive for July, 2022|Monthly archive page

Fairprice bread goes up again

In Economy on 31/07/2022 at 3:41 am

In mid July I wrote that Fairprice’s wholemeal bread had gone up to $1.95 from $1.75. Yesterday I found out that it was at $2.05.

My friend said

no choice but still cheaper than other types of wm bread

and bread is the cheapest form of breakfast

With this attitude, how not to get GST price rise in the teeth of inflation?

As the bandit chief in the Magnificent 7 said of the peasants he regularly stole from

If God didn’t want them sheared, He would not have made them sheep.


Millionaire PAP ministers got point on liking rich people

In Uncategorized on 29/07/2022 at 9:09 am

The rich keep the economy ticking along.

The wealthy play an outsized role in the U.S. economy, which skews the overall picture. The top 10% of earners, which the Census Bureau says aligns with an annual income of at least $200,000, account for about half of consumer spending read more . The bottom 20%, who make less than $30,000 a year, account for less than 10% of such expenses, and most of that goes towards basic needs like housing and food.

Vote wisely.

Hwa Hong: Ongs have no stomach for Mexican standoff

In Corporate governance, Financial competency, Property on 28/07/2022 at 12:36 pm

They raised the white flag and will tender their 29.26% stake in Hwa Hong to the consortium led by Ong Choo Eng, a previous MD of Hwa Hong.

So I’ve tendered all my shares.

Without the Ongs block, the consortium faced the probability of failing to achieve a stake of more than 50% in the company. And even if they succeeded, there would be about minority shareholders of about 40%. Hwa Hong: Mexican standoff in the offing/ Must be Asia Dymon again.

As it is, the bidders are likely to be able to take the co private.

So I tendered my shares.

Can’t really complain as the shares appreciated 42% since June. And I had collected a 1 cent dividend in May.

Double confirm: Study shows “Pay millions, still get monkeys”

In Financial competency, Political governance, Public Administration on 27/07/2022 at 8:43 am

We were also interested to read this new study on corporate pay, from Ossiam and Proxinvest. It found that the more executives and directors are paid, the worse a company’s share price performs.

Moral Money, an FT newsletter

Relevant extracts

Board Remuneration (-2.6%): our results suggest that high board remuneration consistently
penalises equity performance. In fact, if the fee paid by the company to the member as
compensation for being on the board is significant in relation to the member’s net worth, it can
become a subconscious factor affecting their judgment.


CEO Total Compensation (-3.1%): companies with low CEO total compensation significantly
outperformed companies that award their CEO with large total compensation packages. This
finding could suggest that excessive compensation signals an agency problem in a weak
governance structure that could negatively affect the company’s performance.
• Senior Management Bonus Cap (-4.7%): the result suggests that a lower bonus cap
arrangement can be a highly effective tool and hence contributes significantly to equity
performance. Setting and maintaining an appropriate bonus cap for senior managers can play an
important role in controlling management’s attempts to misappropriate company resources by
paying excessive bonuses.
• Compensation Package (Base Salary (-1.6%), Annual Bonus (-2.0%), Long-Term (-2.1%) and Other
Compensation (-2.3%)): our results show that whether we consider the base salary, the bonus,
long-term or other types of compensation, companies that have a more parsimonious
compensation policy and award relatively less to their senior managers tend to perform better.
Interestingly, the biggest gap is observed for the Other Compensation pillar, which tends to be
company-specific and may eventually hide sub-standard practices in CEO compensation policies.
• Compensation relative to Total (Base Salary (+2.8%), Annual Bonus (-1.0%), Long-Term (-0.9%)
and Other Compensation (+0.6%)): a clear pattern emerges from our results: companies that pay a
more significant part of CEO total package in the form of base salary show better performance.
Meanwhile, when an annual bonus or other form of compensation represents a significant
proportion of total compensation, equity performance tends to lag. This confirms the intuition that a
high base salary proportion of the total package can serve as well-deserved compensation to
effectively motivate the CEO, while avoiding managerial short-termism linked to inherently shortterm incentives (such as a bonus), which possibly has harmful effects on the company’s long-term

Actually no need for study. Juz look at the performance of PM, Tharman, Lawrence Wong, Kee Chiu, Queen Jos and the other millionaire ministers: die die must raise GST.

Want a wild ride on SGX?

In Financial competency on 26/07/2022 at 6:43 am

There’s iFast. Go check it out punters and FTs working in SGX. It’s been on a wild ride. Think Sea and Grab.

No need for SGX’s FTs to try to get Grab and Sea to list here to give us locals the thrills and spills of a wild, guts spilling ride on a tornado.

Singapore seeks tech listings boost
Singapore is lobbying its largest tech companies to relist in the city-state, arguing it is their “national duty” in an escalation of the financial hub’s bid to boost the appeal of its stock market. Over the past year, exchange officials have intensified attempts to persuade Singapore-based companies, including tech conglomerate Sea and superapp Grab, to return after completing IPOs in the US.

FT newsletter

Btw, the actions of SGX’s FTs show that they don’t know what’s here.

Something on iFast soon.

Was Temasek’s CIO whistling in the graveyard?

In Accounting, Financial competency, Private Equity, S'pore Inc, Temasek on 25/07/2022 at 5:33 am

He was very bullish in his remarks about Temasek’s unlisted assets: see below. Wondering out loud, because maybe being super KS (a PAP Hard Truth) now requires Temasek’s unlisted assets valued as at 31 March 2022 to be marked down by 30% to reflect present day reality?

No I’m not being anti-PAP or alarmist. I just read the international financial media and extrapolate what I read into the S’pore context. Something our constructive, nation-building media don’t do because they are constructive, and nation-building.

Let’s begin at the beginning.

A typical example of how our our constructive, nation-building media reported Temasek’s results:

Temasek Holdings’ net portfolio value reaches record S$403 billion, made up of mostly unlisted assets for first time

Going by the usual definition of “unlisted assets”, Temasek’s unlisted assets include investments in private equity, venture capital. property and infrastructure. Btw, the differences between these categories are often very thin. One category can morph into another and then another.

‘Mapletree Investments (property), the Port of Singapore Authority (PSA) (infrastructure), and the Singapore Power (SP) Group (infrastructure) are examples of unlisted assets.

In the past decade, this segment of the portfolio has generated returns over 10% per annum through IPOs, trade sales or from the performance of the businesses. The value of these unlisted assets has risen nearly four-fold from S$53bn to S$210bn. It was money for jam to invest in unlisted assets:

 Cheap debt is a red rag to private-equity bulls: around half a typical buy-out is paid for using debt, magnifying the returns to investors’ capital. It has played a critical role in each buy-out boom period; the present one can trace its genealogy directly to rate cuts by central banks during the global financial crisis.

So when interest rates rise, valuations fall.

Below is part of Chris Kuan’s FB post on Temasek’s unlisted assets. Read how Temasek’s CIO bullishly (Or defensively for cynics like me?) pictures what Temasek’s unlisted assets are doing for our reserves, and Chris K’s retorts. My take, if so good why die die must raise GST in the face of inflation?

But before you read it, here’s some analyses from the Economist and the FT on private equity investments (Remember the lines between the various categories of unlisted assets are often very thin).

If they are revalued today, they be marked could down around a third. Do remember that Temasek’s unlisted assets are valued as of as 31 March 2022.

The analyses of the FT and Economist are premised on the view that public markets are a useful window on the future of unlisted assets. The view on that premise is ugly, very ugly.


One index, which maps private-equity portfolios to their public stockmarket equivalents, is down by 37% this year.

Secondly, in the UK, investment trusts that invest in private equity are now trading at big discounts to their reported net asset valuations (NAVs), reports the FT. The average being currently well over 30%. The reason? Investors expect the value of a lot of the holdings will soon be written down in line with price falls in listed markets.

Unlisted assets benefit

from a fig leaf of illiquidity, resulting in a delay between real and reported fund valuations. In the absence of a liquid market to price investments, private-equity funds assess the current “fair value” of their portfolio based on the price an investment would realise in an “orderly transaction”, which should look similar to the valuations of comparable companies in the public markets.

But to be fair to Temasek, the situation is not be that bad for some (Or maybe most?) of its unlisted assets. The FT explains that “not all private equity trusts invest in the kind of early-stage growth businesses that are collapsing in value”. It goes on, “Some are focused on mature businesses and focused on profits and cash flows.” These should not see the same writedowns.

PSA, and SP Group are good examples “of mature businesses and focused on profits and cash flows” that should not see huge writedowns.

And do note that in the recent quarter, Blackstone (tua kee in unlisted assets: it started life in private equity) marked down its US$276bn portfolio of corporate private equity investments by 6.7%. And some funds tied to real estate and credit investments were also marked down. One fund had had virtually all of its investment gains wiped out. So maybe a 30% markdown is alarmist?

Let’s hope the bulk of Temasek’s unlisted assets are like PSA and SP Group, but as Chris K KPKBs, we juz don’t and won’t know. 

The CIO may wax lyrical about the “liquidity”, “steady dividends” and “insights” derived from unlisted assets, the fact that unlisted assets comprised the majority means Temasek’s portfolio is more illiquid, hence higher risk. The more fully owned assets it has, the more difficult it will be for the company to sell assets at a pinch and at a reasonable price. Add in the issue of price discovery for assets that has no ready market, you can see how risks have gone up. This is the asset liquidity issue raised by S&P a few years ago when the rating agency gave a much lower standalone credit rating that is apart from the implicit guarantee from the Republic (which by implication means Temasek’s AAA rating is undeserved if it were not for the implicit state guarantee).

Now becos unlisted assets are illiquid any asset manager investing in them needs to price in the illiquidity premium….. which is to say if the expected total return from a listed asset is 10%, that of an equivalent unlisted assets should be higher in order to compensate for the risk that it is difficult to sell and the price discovery is poorer. The CIO says the unlisted assets in Temasek more than compensate for the illiquidity premium but beyond words, no picture no sound. Here is the problem with unlisted or private assets – the manager of these assets have ample opportunity to fudge asset values. It is a well known trait among such managers, i.e. the private equity funds, to be slow in marking down asset values when stock market fall like presently but quick to mark them up when markets are rising. A clear example of the fudge can be seen when private equity assets have not been marked down or marked down little in comparison to the stock price of listed investment companies holding private credit assets which had been hammered (there is little difference between private equity and private credit). So what are the board of directors got to say about this – they obviously approve but are the returns justified by the increased risks and the increased non transparency of asset values. Someone did pontificate that Temasek generate “good risk adjusted returns” some years ago and yours truly wonder if the term “good risk adjusted returns” is really understood.

Chris Kuan

Having read this post, maybe you will share my very cynical tots that the CIO was defensive (rather than bullish)? And maybe he was whistling in the graveyard? He’s hoping not to write the obituary of unlisted investments in next year’s annual report. We should hope not. LOL.

GST at 15% to save our reserves from being the investments in unlisted assets?


Hwa Hong: Mexican standoff in the offing/ Must be Asia Dymon again

In Corporate governance, Financial competency, Property on 24/07/2022 at 8:32 am

Further to Reported NAV is a lot of BS, here’s more on the unfriendly takeover bid at Hwa Hong.

The current Ong directors and their immediate families, who hold 29.26% of the total number of issued shares, do not intend to accept the Offer. Going by precedent, they won’t be allowed by the authorities to change their minds.

The Ong that is part of the takeover bid was the MD of the company from 1989 to 2021. He was the guy responsible for the good payouts I talked about in Reported NAV is a lot of BS. But his brothers and half brothers didn’t want him handing over the running of the co to his son. They wanted their sons to run the co. Typical Chinese family squabble. Btw, there are those who think that the row between LHL and LSY is a typical Chinese family row along similar lines. LSY’s eldest son’s public comments seem to give credence to the allegations that he thinks as a PES5 Brianac he should be a future LEEder even if the other Brianac Lee did his NS (and is an officer).

Coming back to the bid, the bidders control enough shares to make their offer mandatory. But it remains conditional (more than 50% of shareholders must accept) and it’s hard going because of shareholders like me who are ambivalent about the bid. The bidders are buying in the market at 0.40 cents. Those selling want to take the 40 cents (less commission) and move on.

I tendered 58% of my holdings but I won’t be very unhappy if the takeover fails and my tendered shares get rejected.

Because then there’ll be a Mexican standoff.

The bidders will own anywhere between 30% to a shade under 50%, the other Ongs 29.26% and people like me the balance. A very unstable situation and all to play for.

Even if the bid becomes unconditional, the winners have a Mexican standoff albeit one where they have 50%+ of the votes. They have to contend with critical minority shareholders who will have at least 35% of the votes.

Interestingly, Asia Dymon is part of the bidding consortium. I own shares in Penguin Int’l which Asia Dymon and the MD tried to privatise in 2020. Although they now control the co, they can’t take it private because of people like me. We tot that they should have bid 15% higher. The illiquid shares trade above the takeover price. They stopped the dividend for two years but reinstated it recently at a higher level because presumably they need to finance their loans. A dividend yield of 3.31% is not to be sneered at even if S’pore Savings Bonds now yield 3%.

Asia Dymon never learnt that being a cheapskate is problematic.

Coming soon, never use OCBC to be your adviser when bidding. They can’t even communicate the facts to shareholders.

Err why no rental option?

In Property on 20/07/2022 at 1:48 pm

Just after the latest chapter of the AMK Sers fiasco (Social media and cyberspace went wild when LHY pointed out using a tool used by the govt, those who opt for the 30 or 50 year lease suffer the most from asset depreciation, I got this in my FB feed.

If I was living in one of these Sers flats, I would prefer to rent. I’m 68 and I’m aware I can die at anytime. My dad died around 65.

Private banking, the Asian way

In Banks on 18/07/2022 at 5:28 am

Asian private bankers are really casino croupiers, not private bankers.

Private bankers in Singapore and Hong Kong say that their Asian desks are heavily exposed to revenue from clients trading frequently as opposed to hubs such as Switzerland where banks manage money for the rich and get a regular fee.

Much of the wealth in Asia is in the hands of self-made entrepreneurs keen to make their own bets, while in Europe, it’s held by the second and third generation who want to preserve the wealth and task private banks with managing their money. In bull markets, transaction fees are a lucrative source of income, but in market downturns, they can quickly dry up.

Some context to Temasek’s Chinese bank holdings

In Banks, China, Media, S'pore Inc, Temasek on 17/07/2022 at 3:50 am

Backgrounder: Temasek owns 2% each of China Construction Bank and Industrial Bank of China as for 31 March this year, Temasek reports.


Chinese regulators rush to tame investor panic over mortgage boycotts

Homebuyers stop paying loans on more than 200 unfinished property projects

FT article on China

Chinese banks provide these mortgages.

Will the constructive, nation-building media ever link these facts?

Reported NAV is a lot of BS

In Accounting, Corporate governance, Financial competency on 16/07/2022 at 9:54 am

I own some Hwa Hong shares, the bulk of the shares since the early 1990s. It paid good dividends: regularly there were special dividends as the co sold off some or other asset. For the last 11 years, I’ve been collecting decent but unexciting dividends. Juz waiting for something to happen.

Hwa Hong is now the target of an unfriendly takeover orchestrated by a former MD.

The book net asset value as at Dec 31, 2021 stood at $0.2852 based on historical valuations. I always assumed that NAV was a lot higher, probably at least $0.37. Btw, the NAV has been around that mark for a long time.

So when the ex-MD, a member of the Ong family controlling the co and some outsiders bid for the co at $0.37, I wasn’t too surprised.

The bidders soon raised their bid to $0.40.

The independent adviser reported that the fair value surplus of these investment properties of $97.4 million represents approximately $0.1492 per share, which would result in a revalued NAV per share of $0.4344. Again I didn’t find this too surprising.

All the usual accounting smoke and mirrors. Nothing to get upset about.

But that isn’t all. Based on information provided by the management (who include other members of a member of the Ong family is an executive director, and other Ongs also happen to be directors: there’s only one independent director), Provenance says the adjusted RNAV as at Dec 31 is $0.5052. [Note this paragraph was amended for clarity on 20 July at 5am)

This is 77% more than the book net asset value as at Dec 31, 2021 of $0.2852. This I found amazing. Something is really wrong with the accounting profession which allows such vast discrepancies in what should be an objective, hard number. They shouldn’t be helping write fiction.

Hence this grumble.

This issue isn’t new here: Hyflux fiasco shows why “book value” is BS. There the shareholders also found out that the NAV was fiction. And so did the directors including Oliver Lum the founder and major shareholder. At least Hwa Hong minority shareholders can laugh all the way to the bank.

Coming back to the takeover, Provenance recommends that the offer is “fair and reasonable”, a call I can’t argue against.

More on the takeover soon.

Int’l financial centres: We only number 6

In Economy, Hong Kong, Media on 15/07/2022 at 5:32 am

Read or will this in our constructive, nation-building media? I doubt it. Especially since HK is number 3 despite all the dissing that the ang moh media has been heaping on it.

And we pay our millionaire ministers millions and get this “mediocre” result? It sucks that LA is bigger and SF is just behind us.

Worse we only third in Asia.

But be thankful for small mercies. A friend (and PAP critic) living in Tokyo must be mortified that Tokyo is only number 9, and worse just ahead of Shenzhen. LOL.

Read this in constructive, nation-building MSM?

In Media, S'pore Inc on 14/07/2022 at 6:19 am

S’pore only number 9 in Asia.

In a recent survey of “liveability” in Asian cities (which include those in Oceania) by the EIU, ranking is as follows

Melbourne/ Osaka









Not seen our constructive, nation-building media report this.

Those who have been in Wellington know it’s a pretty dismal place. And I’d put Auckland ahead of Brisbane, Adelaide and Perth.

But in Asean no-one anywhere is near us. Country miles ahead. So I’m surprised that our constructive, nation-building MSM doesn’t report this achievement of our millionaire ministers.

Coming back to the top 10 cities, case of ang moh tua kee?

How China is subverting Asean

In China, Media on 13/07/2022 at 10:21 am

Via TikTok

 [I]n Indonesia, Malaysia, the Philippines and Thailand, about half use the app for news. Young people, the most avid TikTokers, are more likely than others to get news from it. Mainstream media, meanwhile, use TikTok to promote their content


Fairprice: Penny wise, Covid foolish

In Uncategorized on 12/07/2022 at 5:02 am

Yesterday, after publishing Will Fairprice lower the price of its bread? , I went out to buy a roast duck using my CDC vouchers.

As it was a Monday, I also popped into Fairprice because I could use my 98-yr old mum’s Pioneer Card to get a 3% discount on goods purchased. The cashier gave me the discount (12 cents) but told me that the discount can now only be claimed in person. I said my mum was 98 years old and she needed a wheel chair when going out, hence my use of the card. She told me to collect a form from the information counter for me or the helper to get the discount.

Seems that we will get a card to present when we present the Pioneer card if the application form is approved. But we need a doctor’s letter saying my mum is immobile. I’m sure I can get the polyclinic doctor to certify this, but not all Pioneers get such certification.

Fairprice allowed family members and helpers to use the cards when Covid was a problem. So maybe with the lifting of restrictions, and rising prices maybe it’s right to insist on in person use? Us Merdeka card holders lost this choice a few months back.

But with the cases of Covid rising again (12,000 new cases as of last Thursday) will the anti-PAP mob KPKB when a Pioneer falls ill or dies because die die the Pioneer wants the discount?

I’m sure our millionaire ministers have done their calculations and reached the Pay AND Pay conclusion, like when they did in the ongoing AMK Sers debacle and the coming GST rises. Our 4G leaders are so predictable in their inability to understand the concerns of the plebs. Or is it contempt for the plebs?

Will Fairprice lower the price of its bread?

In Economy on 11/07/2022 at 4:30 am

Couple of weeks ago I bot a loaf of NTUC Fairprice’s wholemeal bread. It had gone up from $1.75 to $ 1.95. Fair enough given that the price of wheat had gone up because of Russian invasion of Ukraine.

But I juz read:

Wheat now trades at the same price as right before the invasion, and almost 40 per cent below the peak in May.


So can I expect the NTUC owned Fairprice to lower its price of bread? Because plebs eat bread and Fairprice and NTUC say that they exist to help the plebs.

I mean even the oil majors recently lowered petrol pump prices when the price of Brent fell sharply.

Coming back to the price of NTUC Fairprice’s bread: somehow I think pigs will fly before there’s a price reduction. Remember NTUC and Fairprice are part of the Pay And Pay complex managed by millionaire PAP ministers. They want to raise GST despite rising inflation that is among the highest in East Asia: Our inflation: Second highest in Asean.

Fighting inflation and Covid-19 the Chinese way

In China on 10/07/2022 at 5:38 am

Chinese are fighting inflation and Covid-19 successfully with its “dynamic zero-covid” policy. Too bad about the lockdowns, human suffering and economic slowdowns. LOL.

People power

In China on 09/07/2022 at 9:07 am

Even the CCP has to backdown when people are angry.

Int’l media reports that, following a backlash online, local authorities in Beijing dropped plans to require proof of vaccination for entering public venue. The city’s vaccine mandate would have been the first of its kind in China. Beijing residents will only have to show proof of a negative covid-19 test obtained within 72 hours in order to enter public venues.

So unlike the PAP. LOL. Die, die must raise GST despite public anger.

Seriously, the Chinese don’t do vaccination: Why China has to continue with its zero-Covid policies, lockdowns and all

Empire strikes back?

In China on 07/07/2022 at 5:25 am

Int’l media reports that China is rapidly censoring news of an alleged hacking of a Shanghai police database. The alleged hack can expose the personal data of more than 1bn Chinese people, in what could be one of the largest-ever leaks of private information.  The “hacker” says that the information had been retrieved from a private cloud service provided by Alibaba. Jack Ma must be shitting in his pants if true.

Already there are reports of offers to sell this data.

Maybe the Hegemon is telling China “What you can do, America can do better.”?

Our inflation: Second highest in Asean

In Economy on 06/07/2022 at 4:06 am

We pay our ministers millions for this and GST rises?

Yesterday it was Three Arrows, today it’s Vauld

In Cryptocurrency, Financial competency, Media on 05/07/2022 at 5:05 am

Another bad day in the office for the MAS, and our millionaire ministers.

Another crypto business based in supposedly well regulated and crypto-friendly S’pore tanks.*

Vauld, a S’pore-based crypto lender halted withdrawals and trading on its platform, int’l media reports. It said was looking at all options, including restructuring. It was offering clients annualised returns of up to 40% to lend out their crypto tokens, said clients had yanked almost US$200mn from its platform in the past three weeks as high-profile failures panicked investors. Doubtless our central bank allowed it to operate here because Coinbase exchange and billionaire investor Peter Thiel.

Let’s see if our constructive, nation-building media reports this breaking story. Remember this: Did our constructive, nation-building media report this?

*This sentence was added hours after first publication.

Easy come, easy go

In Uncategorized on 02/07/2022 at 4:24 am

From zero to hero to zero in three years.

Klarna valuation crashes to US$6.5bn from US$46bn. it’s a “buy now, pay later” fintech.

Only a year ago, Klarna was able to double its valuation to US$46bn after a US$639mn funding round. Softbank was the lead investor. The new valuation is based on a US$600mn investment by new investors. The new valuation would be Klarna’s lowest since August 2019, when it was worth $5.5bn.

It was buy now, regret tomorrow investment.

The real reason China is unhappy with Oz?

In Uncategorized on 01/07/2022 at 2:08 pm

It’s becoming Little India, not Little China

India has overtaken China and New Zealand to become the third-largest country of birth, behind Australia and England.