Archive for the ‘Financial competency’ Category

Tai tai forgot this

In Financial competency, Financial planning on 24/01/2021 at 5:31 am

Remember Tai tai’s luck runs out, heading for Woodbridge?. She took a big loss on the SPH shares her then 50-yr old husband gifted her on their marriage when she was a 25 kampong gal. She bot DBS shares and then sold DBS shares because she tot UOB paid better dividends (it doesn’t, DBS pays dividends quarterly, UOB semi annually) only to see DBS shares fly.

I tot of the arrogant, clueless tai tai when I read this

It is not about having lots of money, it’s about knowing how to manage it.

Private banker quoted in the FT

Btw, the tai tai told her “best” friend she knows to manage money better than professional managers when said friend suggested she made a mistake in not entrusting her $ to a professional fund mgr.

She said that they cost $ and only buy blue chips. She said she also know this.

When asked why then did she didn’t diversify out of her SPH shares given to her on her marriage by her husband, even after it started losing $ on its media operations in 2017, she said she was confident the govt would “help” it out.

PAP govt played her out.

Tai tai like this? Perception Is Reality: The Looking-Glass Self,,worth%2C%20values%2C%20and%20behavior.

Why I avoid commercial office Reits and developers

In Financial competency, Property on 17/01/2021 at 10:06 am

About 55% of employers said they expected staff to work from home at least one day a week after concerns about the virus passes, a PWC survey found. And more than 80% of employees said they supported that idea.

Analysts say such a shift could have widespread implications, reducing demand for office and residential properties in expensive city centres. Rents in New York and San Francisco have already dropped.

ESG is bullshit

In Financial competency on 13/01/2021 at 5:15 am

One of the UK’s best stock pickers (His funds outperform), Terry Smith on Environmental, Social, and Corporate Governance (ESG).

ESG refers to the so-called three central factors in measuring the sustainability and societal impact of an investment in a company or business. ESG criteria are a set of detailed but flakey standards for a company’s or business’ operations that socially conscious investors use to screen potential investments.

ESG investing a marketing tool to extract fees from gullible investors.

Sorry back to Terry Smith:

Your sustainable fund seems to take quite a common-sense approach, but what are the advantages and risks of factoring ESG into stock selection? How useful are ESG ratings here?

There are several problems with factoring ESG into stock selection. One is that so many ESG approaches look at many of the most obvious factors, such as carbon footprint, hazardous waste, use of water, use of plastic, sources of energy, etc, but fail to take into account the fundamental and financial viability of the business. We think you should also look at things such as innovation, product development, revenue growth and return on capital. There is not much point in having a business that scores highly on conventional ESG factors, but that fails financially or in terms of its products or service.

Another problem I would suggest is a mindless box-ticking approach. The mantra of ‘comply or explain’ too often gets transmuted into ‘just comply’. Take Philip Morris (US:PM), for example. We think it is making a major contribution to the welfare of smokers with its Reduced Risk Product, but we daren’t include it in our sustainable fund as it will just be met by people hissing ‘It’s a tobacco company’. Yes it is, but maybe it’s also part of the solution to conventional smoking. It would be more productive to have a real debate

Lots of other gd stuff in the article.

Time for our SWFs to buy into sports teams?

In Financial competency, GIC, S'pore Inc, Temasek on 10/01/2021 at 4:34 am

In the West, the latest investment fashion is to buy into sports teams. Private equity is rushing to buy into European football teams. Italian clubs have put up “For sale” signs.

“Sports assets have shown a low correlation relative to the broader market, with teams selling for record values through the 2008 financial crisis and Covid-19″, said Michael Kenworthy, head of sports investment banking at Goldman Sachs. He added that some valuations had outperformed other traditional investment benchmarks, such as the S&P 500.

“If you’re thinking about what’s the best way to construct a portfolio and you want to diversify, there could be, potentially, merit having sports assets in that portfolio,” he added.

Well the A-Rabs led the way. Many moons ago,

Sheikh Mansour bought Sitty for US$360m in 2008. Now a Chinese consortium led by China Media Capital is to buy a 13% stake in Manchester City* for US$400m. That puts City’s value at US$3bn.

Too bad for us HoHoHo doesn’t do footie

An almost 10X increase in valuation in about 8 yrs is not to be sneered at.

Time to buy British?

In Financial competency, Financial planning on 09/01/2021 at 3:50 am

The FT 250 is more UK centric than the FT 100 because the latter has int’l miners and int’l conglomerates.

Achtung: Buying the dips in low yield world could endanger financial health

In Financial competency, Financial planning on 05/01/2021 at 5:10 am

The Nikkei closed on December 30 above the 27,000 mark. It was the index’s highest close since 1989. But the index is still 41% below its 1989 peak.

If valuations of risk assets only required ultra low interest rates then Japan would have been in a raging ‘bull’ market, someone commented in the FT.

Must have lessons for us investors in S’pore market about buying the dips.

Sounds like entry price, profits growth, corporate governance and financial engineering matter. LOL.

Sounds like an extreme example of reversion to the mean too

Akan datang: food inflation

In Commodities, Economy, Financial competency on 04/01/2021 at 7:10 am

Remember you heard it first here that food prices will be going up as we recovery from a recession

Food prices have surged in recent months. The UN’s Food and Agriculture Organisation reported a 6.5% increase in its food index in the 12 months to November. This was the largest monthly increase since July 2012. Cereal prices were almost 20% up on a year ago because of poor harvests and stockpiling because of the pandemic. Rice is in short supply due to poor harvests, stockpiling and bottlenecks.

FYI in Cynical Historian: Our very own Exodus story. From the “Land of milk and honey” to the Wilderness of the desert: Workers’ Paradise no more: Devan Nair at work in the 1960s.

The market relapse didn’t happen, did it?

In Financial competency on 28/12/2020 at 7:03 am

There were a lot of people on FB predicting the collapse of equity markets in February and March. Then when the market reversed around end March, they said they would wait for the W pattern to form before buying: the market would collapse a second time, and then it would time to buy. They even drew charts on FB explaining when they would start buying.

Well they are banging their balls in frustration waiting for the relapse that didn’t happen. And when they start BSing, the best way to get them to sit down and shut them up is to remind them about their predictions about the W.

FYI in Cynical Historian: Aristocrats (natural?) cut and ran when the Indonesians invaded

Why bears think a bust is on the way

In Financial competency on 27/12/2020 at 5:07 am

Hence they think there’ll be a reckoning like the dot-com era meltdown.

Inflation, what inflation? Why Bitcoin is flying?

In Financial competency, Financial planning, Gold on 18/12/2020 at 3:51 am

So it’s not surprising that serious investors are joining the chase for Bitcoin . Remember the supply of Bitcoin is limited, unlike that of gold, the usual inflation hedge.

Even DBS is trying to get onto the Bitcoin wagon:

Local brokers missing a trick/ Time for Temasek to let SGX be foreign owned?

In Corporate governance, Financial competency, S'pore Inc, Temasek on 17/12/2020 at 7:23 am

Local brokers are still dying even if retail punters are returning because Covid-19 lockdowns (Sorry “circuit breakers”) mean bored S’poreans e-trade. They should learn from Robinhood. No not free brokerage (It’s Pay And Pay Land here) but providing lists of trades that were the most popular among its customers in an effort to encourage trading on its app and site. And when trades are completed on the platform, customers are sent emoji-laden messages prompting them to purchase additional shares.

As to foreign ownership, after all FT’s run the place even if the CEO is the token local.

Seriously look at this chart

See how concentrated the ownership is. And “Others” include a couple of Chinese King Kongs: HKSE and the mainland exchanges.

Time for SGX to join the world: sell itself before it becomes irrelevant. Pigs will fly first though.

For the record: Over 20% of SGX shares are held by SEL Holdings, a special-purpose company wholly owned by Temasek Holdings under Singapore’s regulations that restrict the exercise of votes attached to shares of financial exchange companies. 

I’m not using this Big Brother Service

In Banks, Financial competency, Financial planning on 15/12/2020 at 11:42 am

S’pore residents can now view financial information from various banks in one place, with launch of new tech structure


The authorities on Monday launched a tech infrastructure called the Singapore Financial Data Exchange (SGFinDex). It uses SingPass — the national passcode system for e-government services — and a centrally managed online consent system that will help individuals access their financial information across different government agencies and participating financial institutions. 

Deputy Prime Minister Heng Swee Keat (The guy with THE plan for his East Coast GRC which many residents didn’t care for: the PM in waiting nearly lost the GRC winning only 53.4% of the votes) said that the process to consolidate finances is often onerous. But this new underlying technology allows data from each source, which is encrypted, to be transmitted through SGFinDex without being stored, Singaporeans and foreign residents with a SingPass will be able to view their consolidated financial information.

Whatever, as I understand it, whoever is providing the user with the consolidation can see the data. This means the banks and MoneySense (A Singapore Government Agency Website) can see the consolidated numbers, if I’m correct.

I don’t see any advantage for someone like me. It’s so easy via e-banking to see how much $ I have in my various accounts with different banks. And transfer.

I also don’t want any one bank or Moneysense to see how rich I am to suka suka market to me. I assume that if it wants to, the ISD or the police can access details of all my accounts but that’s a different matter. That’s the price of living in S’pore. But I don’t have to make things any easier for millionaire ministers.

Riding the melt up tornado

In Financial competency, Financial planning on 06/12/2020 at 4:00 am

Goldman Sachs said it believed the US S&P 500 equity index would go as high as 4,300 by the end of next year: 20% more than present level.  But some of its clients balked at the 4,300 target, arguing it should be even higher. others say 3800, 5% more

But some felt it was too bullish, unnerved by the potential for rising inflation expectations push up government bond yields and in turn chip away at equities.

Jeremy Grantham a well respected fund manager thinks a melt up is happening: markets have smashed past the “full bull” stage and are in a late-bubble “melt-up” phase that rivals the two biggest bubbles of the past century.

Btw in late 2019, he was predicting a melt up this yr. When the market fell in March 2020, he looked silly.

Diabolical: When healthtech and fintech combine

In Financial competency on 04/12/2020 at 4:23 am

When my mum was hospitalised in Raffles (Bill: Private hospital treatment, public hospital fees ), the bill would have been about $15,000 for nine days’ stay and treatment. Thanks to the PAP govt, she paid “peanuts”: a few months earlier our dog’s hospital bill was more, more a lot more. I joked that the Gods saw how well we treated our mongrel that they gave my mum a treat when she was hospitalised. How she struck Toto: Private hospital treatment, public hospital fees.

But in future, need $ to pay private hospital bill?

Patients of India’s Apollo Hospitals can use an app to get drug refills, tele-consultations and remote diagnoses—and even secure a medical loan through Apollo’s partnership with HDFC Bank.

30% are really stupid as are 52%

In Financial competency on 02/12/2020 at 5:01 am

No I’m not talking of the 30% who die die must vote for the likes of Lim Tean.

Around 30% of people in the West get this question wrong in multiple studies:

“Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?”

• More than $102
• Exactly $102
• Less than $102
• Do not know

This question is part of three financial literacy questions

1) Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?
 More than $102
 Exactly $102
 Less than $102
 Do not know
 Refuse to answer
2) Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?
 More than today
 Exactly the same
 Less than today
 Do not know
 Refuse to answer
3) Please tell me whether this statement is true or false. “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”
 Do not know
 Refuse to answer
  1. Source: Lusardi and Mitchell (2011b)


1 More than $102

2 Less than today

3 False

Are S’poreans any better? I doubt it because we could be a lot worse

Only 48 per cent of households have signed up with a new electricity provider two years after the market was liberalised

Those who did not switch said they found it troublesome to compare prices and are worried a new provider might close down


Silver bonds: HK govt loves its old people

In Economy, Financial competency, Hong Kong on 30/11/2020 at 10:44 am

As someone who has problems diversifying cash generated from dividends and capital gains (Can’t put into my CPF account but topped up my 98 yr old mum’s MediSave to the full amount. It pays 6% interest per annum.) into non equity assets, I wish our govt would have something similar to what HK has for oldies with cash.

HK at regular intervals issues “silver bonds” for oldies

The HKMA announced the issue of the fifth batch of silver bond targeting Hong Kong residents aged 65 or above. It will be available for subscription from 1st December.
• The tenor will be 3 years and the minimum guaranteed interest rate will be 3.5%, the highest since record. The total issue amount will be HK$10 billion and could be increased to as much as HK$15 billion, depending on the response. This is much more than the previous issue amount of HK$3 billion.

OCBC Securities

HK like us has an old age problem. It’s even worse there.

OCBC says that HK’s population aged 65 is about 1.38m and accounted for 18.3% of total population as of mid 2020, up from 15.3% as of mid-2015 and higher than the 17% for OECD members in 2019. Population aged 65 and above (% of total population) here was reported at 12.39 % in 2019, according to the World Bank.

OCBC says that Given the worsening aging problem in HK, “it is good to provide some asset management tool for the elderly to grow their assets to ease future financial burden.”

Dare say this HK but dare not say this about S’pore. LOL.

Btw, the issuance of silver bonds are not for the purpose of financing any budget deficit but mainly for promoting the development of retail bond market. Like govt here, HK govt has lots of cash.

Give me decent interest income from govt bonds, not freedom to riot. Here Pay And Pay means neither alternative is available. SAD.

Tai tai’s luck runs out, heading for Woodbridge?

In Financial competency, Financial planning on 21/11/2020 at 7:19 am

DBS shares are really doing well while UOB’s shares juz doing OK reminded of the misfortunes of a tai-tai.

Earlier this yr, a 50-something tai-tai I know sold her DBS shares and bot UOB shares because she said UOB paid more in dividends. The brainless twit (not that brainless because when she was in her 20s, she married an ATM twice her age) didn’t realise that DBS pays its dividends quarterly, while UOB pays its dividends half yearly.

To be fair to her, she was most probably also shell-shocked when she did the switch because during the market collapse in March, she finally sold SPH shares that her ATM machine gave her many yrs ago and bot DBS shares in their place. She remained more faithful to her SPH shares than to her ATM machine: she’s estranged from her hubbie for years.

Her latest problem: the ATM machine stopped paying out.

She’s trying to stay sane by insisting that men still desire her and that she’s a savvy investor not to have sold her SPH shares until recently. Talks of her guardian angels, despite not believing in God or Gods.

Time to be warded in Woodbridge. She may not have the $ to pay for private treatment.

Tai tais’ guide to banks’ earnings

In Banks, Financial competency on 13/11/2020 at 10:02 am

Every tai tai and her toy boy have invested in our banks because of the yield.

But when the results come out, they don’t understand what they mean.

Here’s a cheat sheet. Look out to see if there’s

A rise or fall in net interest income

A rise or fall in fee income

A rise or fall in provisions (allowances) for loans turning bad

A higher or lower cost to income ratio. The cost to income ratio measures the level of expenses the bank incurs to its revenue.

Finally is the CEO optimistic, guarded or worried about the prospects for the bank until the next reporting

Btw, I’m wrong so far in being bearish on our local banks: Can local bank stocks fall by 37%? (cont’d) and PAP a socialist party again?/ Banks doing NS.

Related post: Weath mgt is not the treasure chest local banks think it is

53% of households as stupid as Tan Kin Lian?/ How to help them

In Energy, Financial competency, Financial planning on 17/10/2020 at 11:16 am

2nd Minister for Trade and Industry, Dr. Tan See Leng rightly encouraged households to consider switching to fixed-price plans offered by electricity retailers under the Open Electricity Market (OEM), as fuel price fluctuations are expected to continue into the months ahead.

From the comments online and the fact that the majority (53%) of households have not switched out of Singapore Power (SP), it is apparent that many people are still skeptical, ignorant, or confused about the benefits of switching to a retailer under the OEM.

One of the chief complaints is why SP can’t just match the pricing of OEM retailers. There are good reasons why SP is not in a position to match the pricing of OEM retailers but I’ll not go into the matter because it’s a very technical and dry subject, involving boring stuff like competition, price discovery and SP’s role.

Whatever, these comments 53% remind me that presidential candidate TKL (Remember he lost his deposit and KPKBed about the loss) a few yrs, KPKBed that he was confused about choosing an OEM retailers and he wondered SP couldn’t just match the pricing of OEM retailers.

As an educated man (OK, OK he only finished sec4 in RI and has an actuarial qualification) TKL was soapboxing. As I said above, there are good reasons why SP can’t do this.

To save the 53% households and in particular TLK from their stupidity, these households should be assigned a retailer other than SP to get the better rates. Who they get is the luck of the draw and they’ll be given six months to move to another retailer without penalty. Actually all the rates are pretty close,

Btw, what some really smart S’poreans did: Some householders laughing all the way to the bank. Even with the recent price rise, they are ahead.

Related post on the rates juz before Covid-19 when MSM was spreading fake new: Why MSM no kanna POFMA for spreading fake news?

Finally, thinking about it TKL and his campaign manager, one Goh Meng Seng, are really dumb. If 53% of households are as stupid as he is, he should have been elected president. Happily he and Meng Seng can’t organise as orgy in a brothel.

How many here prepared to trade-off more unemployment benefits with higher taxes?

In Economy, Financial competency, Political economy on 16/10/2020 at 5:15 am

Not many, see below. Even got some (luckily only 12%) “disagree with unemployment benefits, as they believe there are enough training and job opportunities”. Queen Jos and other millionaire ministers must be smiling. These people must also be part of this group: Sia suay! 24% of S’poreans are more PAP than the PAP on our reseves)

When posed with a scenario of paying higher taxes to fund unemployment benefits:

Only 31% of Singaporeans feel those unemployed should receive financial support while looking for work, even if it means paying higher taxes. But support is higher among Gen Zs (37%) compared to the older Baby Boomers (23%)

12% of Singaporeans disagree with unemployment benefits, as they believe there are enough training and job opportunities

57% of Singaporeans believe in giving financial support to those unemployed, but not at the expense of themselves having to pay higher levels of tax (Yes, Yes I know this was done in August)

S’poreans are a selfish lot. They deserve a Pay And Pay government.

What do you think?

IMF is now into Robin Hood economics

In Financial competency on 14/10/2020 at 7:01 am

The IMF’s chief economist says said that in the coming years governments may need to tax richer people more and ensure companies could not avoid corporate taxation.

The ethnic Indian (yet another socialist mama) says the pandemic will wreak “lasting damage” on people’s living standards across the world hence the need to steal from the rich to give to the poor.

There was time when the IMF was like the PAP govt “Feared by the poor, Loved by the rich”. Now it wants to be “Feared by the rich, Loved by the poor”. SAD.

Ballad of Robin Hood

Robin Hood, Robin Hood, Riding through the glen
Robin Hood, Robin Hood, With his band of men
Feared by the bad, Loved by the good
Robin Hood, Robin Hood, Robin Hood

He called the greatest archers to a tavern on the green
They vowed to help the people of the king
They handled all the trouble on the English country scene
And still found plenty of time to sing

Robin Hood, Robin Hood, Riding through the glen
Robin Hood, Robin Hood, With his band of men
Feared by the bad, Loved by the good
Robin Hood, Robin Hood, Robin Hood

Got six properties but driving Grab to earn $?

In Financial competency, Financial planning, Malaysia on 07/10/2020 at 6:41 am

Give me a break pls from this kind of BS, constructive, nation-building MediaCorp.

OK. OK the properties are M’sian, not S’porean but this sounds like a lot of bull.

It reports

Retiree SK Quek leases five of his six properties in Malaysia and used to put up two of the houses for short-term rental on Airbnb.

And while he has no issues with collecting rent from his long-term tenants, the 64-year-old who is now driving for Grab in Singapore said he loses about RM8,000 a month — his usual earnings from Airbnb — for not being able to list his properties.


Can’t stop laughing is disbelief that a six property man (I assume he also has something here even if it’s a three room HDB flat) is driving Grab to earn a living. Must be BSing about his properties. What do you think?

As for the other S’poreans mentioned in article KPKBing that they got two properties etc to maintain, they should sit down and shut up. Btw, I’m sure pre Covid-19, they were sneering at S’poreans who didn’t stay in M’sia and commute here regularly.

They made their choices, and gotta live with the consequences. But so typical of Singkies: vote for PAP but then KPKB about kanna Pay And Pay. Reminds me of what the Mexican bandit leader said in the Magnificent 7 about the peasants he regularly shook down: “If God did not want them sheared, He would not have made them sheep.”

Likewise it’s something the PAP could say, but hasn’t yet.

The mighty HK$ thanks to Ant and other Red IPOs

In China, Currencies, Financial competency, Hong Kong on 02/10/2020 at 6:45 am

OR “Investors give ang moh tua kee activists and ang moh human rights activists the finger”.

Hong Kong has recorded inflows of almost HK$55bn (US$7.1bn), forcing the HK Monetary Authority to intervene almost every day since September 14 to keep the currency within the pegged trading band of 7.75 to 7.85 to the US$.

Why I’m into industrial reits?

In Financial competency, Property on 26/09/2020 at 6:40 am

Rock-bottom interest rates, rising inflation expectations and negative real yields are boosting the present value of future cash flows from real estate. Ultra-low interest rates are also supporting property valuations.

But not all real estate is equal, some are more equal than others.

The less equal than others: Covid-19 has accelerated the growth of online retailing with retail, and especially shopping centres taking the largest hit; hurt the hospitality sector and thrown the future of the office into question. On the last: Derwent, a London UK property co says the true impact of Covid-19 has yet to be felt and warns us to expect sweeping changes to the way we work. 

As for housing, got no money how to buy that condo?

But industrial properties are expected to perform reasonably well. Remember that they are not only used for manufacturing, but for warehousing all the goods ordered online, and as cheap “office” space.

Yields are good if one avoids the TLC industrial reits. They attract a premium whether justified or not.

S’pore equities: Why buying a dog is a gd thing

In Economy, Financial competency on 18/09/2020 at 4:27 am

According to OCBC’s head of research Carmen Lee (We once worked in same firm, she as analyst, I as dealer/ saleman), S’pore stocks “could prove a safe harbour to tide over stronger headwinds in the face of more attractive stock valuations.” 

“While the Singapore market underperformed during the recent uptrend, it is also less volatile during the Sep 2020 market downtrend, making it ideal as additional holdings to a diversified stock portfolio,” she writes in a 14 September report. She points out that while the S&P 500 fell 6.7% from its September peak, the STI only lost 2% — a relatively small correction vis-a-vis most markets. 

She also writes, “We continue to favour companies with strong management or sponsors, good market shares, well-established businesses or brand names and companies with a more defensive stream of earnings.” 

Favourites include the usual DBS Group Holdings Ltd, Capitaland Mall Trust, Raffles Medical Group, ST Engineering, Sheng Siong Group, Singtel and Starhill Global REIT. 

Nice try Carmen. LOL.

Why we need to know PAP govt’s projected investment returns and why it’s a secret

In Financial competency, Financial planning, GIC, Political governance, Public Administration, S'pore Inc, Temasek on 25/08/2020 at 11:34 am

Look at this table

It shows that its assumed return targets are BS. Fyi, Calpers is the California Public Employees’ Retirement System, a major global investor. As of 2018, the agency had U$360 billion in assets.

Before I go further, some defining of terms. From shumething I wrote in 2018

[O]ver the last 10 years, Singapore’s net investment returns (NIR) contribution (NIRC) to the Budget has more than doubled from S$7 billion in FY2009 to an estimated S$15.9 billion in FY2018.

Waz this NIRC and NIR BS?

NIRC consists of 50 per cent of the Net Investment Returns (NIR) on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek Holdings and 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets.

In other words, we spend 50 per cent of the estimated gains from investment, and put the remaining 50 per cent back into the reserves to preserve its growth for future use.

Associate Professor Randolph Tan is Director of the Centre for Applied Research at the Singapore University of Social Services, and a Nominated Member of Parliament.

Under PAP rule will S’pore become like UK or Venezuela?

Now to why I think we need to know PAP govt’s projected investment returns. In 2016, a reader asked

A Qn: The NIR used for the budget is projected returns. If the projected returns did not materialize, then how? It seemed like insurance agent selling us a policy on projected returns which never materialize.

Am I comprehending the NIR correctly? Because this seemed to me that there might be hefty tax increase down the road if the projected returns did not materialize. This will also affect all the social spending currently on Singaporeans

NIR, Budget untruths, & the President

That is why we need to know the projected Net Investment Returns (NIR) on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek Holdings. Remember NIRC — Singapore’s net investment returns (NIR) contribution (NIRC) -consists of 50 per cent of the Net Investment Returns (NIR) and 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets.

For your info this is what ex-TOC star commentator, Chris Kuan (Today, he seems to be too objective for the team running Terry’s Online Channel: they look to be the ST of S’pore’s cyberspace), wrote:

Your reading of the Constitutional NIR rule is correct – the NIR Contribution is calculated on the expected long term real rate of return (LTROR) on the government’s net assets (assets in excess of its liabilities). Pls note it is REAL returns we are talking about – that is the actual dividends and market valuation of the net assets minus the inflation rate. Therefore not all returns are spent. Then the rule limits the spent to 50% – therefore more than half of the actual or nominal returns are re-invested. Again pls note this is nothing unusual, Norway’s GPF and university endowments permit up to 100% of the returns to be spent.

NIR, Budget untruths, & the President

As to why the PAP govt wants to keep the projected Net Investment Returns (NIR) a secret, I’m sure you are thinking what I’m thinking LOL.

Trump supports ESG investments

In Corporate governance, Environment, Financial competency, Financial planning on 22/08/2020 at 11:01 am

UBS researchers looked at how ESG investments fared under the Trump presidency: he comes across as a Woke.

Ang moh spends S$9,800 monthly on daughter’s therapy

In Financial competency, Financial planning on 20/08/2020 at 5:29 am

In Ang moh family of three spends S$1,170.44 on food in one week, I reported on an ang moh couple with one kid who spent S$1,170.44 on food and booze in one week. They ate out or had food delivered. This is a lot more than my mum, her maid and I spend on food (including hawkers’ food and fast food) in an average month.

They sure got a lot of money because they also spend S$9,800 monthly on their daughter’s therapy

Alex has been confirmed by the doctor to need some occupational therapy for a couple of conditions so that’s starting to sound expensive! We can put that off till next week to start looking around for a good one.

Occupational therapy will now add to the ABA therapy and speech therapy we already pay for Alex. Raising a child in Singapore is very expensive, especially when they have special needs and you’re a foreigner. We haven’t had to pay the ABA therapy bill during the week of this blog but that sets us back around Singapore $9,800 (£5,490) each month. We saved some during the circuit breaker because all sessions were remote.

It’s the dilemma of any parent whose child has suspected autism; do you hope it’s a phase and they’ll develop late or do you make a choice and invest in early intervention? Fortunately, we chose the latter and it turned out to be the right call. We are lucky that we are both employed in good jobs and salaries. We can afford it for now, but it’s massively impacting our ability to save for retirement. Luckily when she starts school that will actually be cheaper; we are looking forward to that.

Whatever life is really sweet, financially at least, for this expat family. Sorry that their daughter is autistic but then what the gods (or fate) give(s) away, they also take away.

Attitudes to $

In Financial competency on 12/08/2020 at 10:53 am

For many S’poreans, and generally for people round the world, money represents freedom, security or choice.

But it’s worth going deeper. Do we adopt a “money worship”, “money status” or “money vigilance” script in living our lives? Or in rare cases where money does not represent freedom, security or choice, is the “money avoidance script” being followed?

Checjk out to find out what’s yr real attitude towards money.

US ETF has more gold than Japan, S’pore or India

In ETFs, Financial competency, Gold on 09/08/2020 at 6:20 am

US of A gold ETF is tua kee.

Goh Meng Seng will be relieved to learn that China has more gold than this State Street ETF. Still Meng Seng and Grandpa Xi are reminded that America is the hegemon.

Plebs: ETF is Exchange Traded Fund.

Can local bank stocks fall by 37%? And other investment tales

In Banks, Financial competency on 03/08/2020 at 6:29 am

Last Thurday, DBS fell by 3.09%, UOB by 3.15% and OCBC 3.82% because following the Monetary Authority of S’pore’s July 29 announcement on capping Singapore banks’ FY20 dividends at 60% of their FY19 levels.

Analysts from DBS Group Research, OCBC Investment Research, and CGS-CIMB Research have maintained their “hold” or “neutral” recommendations for the shares of DBS Bank, UOB and OCBC.

But in the past, these analysts (and many others, to be fair) said that the banks’ share prices are underpinned (among other things, to be fair) by their dividend yields of around 6%.

So shouldn’t the dividend yields now adjust to reflect this?

Well if they do, share prices can fall a lot: up to 36-37% from their last traded prices.

Remember you heard this first here. LOL.

Btw, I have an economic interest in UOB via Haw Par:

Btw2, I missed a bullet. I was thinking of buying OCBC shares. Glad I didn’t but btw3 I’m into two dogs that I had tot had bottomed out: SingTel and SPH.

Btw4, I think I’ll stick to my industrial reits, sub-$1 stocks, and penny stocks. Less risky.

Btw5, hopefully if the bank stocks collapse, they bring the market down and I can get some penny stocks at decent prices. Juz grin and bear on SPH and SingTel: no averaging down. Juz collect dividend lor.

Hard Truth about equity markets

In Financial competency on 02/08/2020 at 10:34 am

Apple, Microsoft, Amazon, Alphabet and Facebook now represent more than a fifth of the S&P 500. More impt S&P 500 would be down 5% without them

Looking for dividend yields?

In Financial competency on 01/08/2020 at 5:21 am

Now that local bank yields have collapsed following the central bank’s restrictions that dividends are now limited to 60% of 2019 dividends.

Why not try Russia? MSCI’s Russia index offers the highest dividend yield of any major country in the world at 7.4% (prospective) , according to Morgan Stanley.

Ang moh tua kee attitude loses $

In China, Financial competency on 25/07/2020 at 11:05 am

Once upon a time, the Americans took the Japs to the cleaners, selling stuff to the Japs at over the top prices and then buying them back for a song: think the Rockfeller Centre.

Now its the Chinks that get screwed, not only by the Americans but by ang mohs in general.

Virginia-based WorldStrides, a student-focused travel outfit backed by Primavera Capital, filed for bankruptcy this week after the pandemic hit bookings and forced it to issue refunds. The Beijing-based fund, invested in WorldStrides three years ago. The hope was to roll out its services across the People’s Republic and beyond.

The idea of expanding Western companies in China has sucked Chinese buyers abroad, adding to a frenzy of outbound deals. The track record doesn’t look promising: state-owned conglomerate Bright Food sold off British cereal maker Weetabix in 2017 after failing to grow the business in China. Hony Capital’s acquisition of PizzaExpress is turning out to be a disaster. Even Fosun International is struggling with its investment in Canadian acrobatics troupe Cirque du Soleil. With Covid-19 affecting Western and Chinese consumers, expect more casualties.

Ang moh tua kee has its consequences.

Covid-19 and the S&P

In Financial competency on 21/07/2020 at 7:32 am

Those who waited for S&P (and other global equity indices) to dip again after late March collapse can go bang their balls.

But I wouldn’t go on a buying spree to compensate. Buy the dips.

Dogs with fleas that could make you money

In Financial competency, Financial planning on 18/07/2020 at 5:10 am

Just realise that most of the time, there’s a good reason why investors avoid

listed companies which have their net cash exceeding their market capitalisation. This is essentially the same as net cash per share compared to the share price. The excess cash should also inform investors that these companies could be potentially strong takeover or privatisation targets, as acquiring these companies would improve the financial position of the acquirer. Therefore, to investors, they could expect to receive a significant premium on their investments if they purchased the company before any takeover offers.

Xia suay! Technical recession? What technical recession?

In Economy, Financial competency, Media on 15/07/2020 at 4:23 am

Singapore in technical recession after GDP shrinks 41.2% in Q2 from preceding quarter due to COVID-19

Constructive, nation-building CNA

Singapore enters technical recession as GDP plunges 12.6% in Q2: Flash data

Constructive, nation-building ST

Singapore has entered a technical recession after its economy contracted 41.2 per cent in the second quarter from the previous three months, dragged down by weak external demand and Covid-19 “circuit breaker” measures.

MediaCorp’s Constructive, nation-building freesheet

Kee Chiu if you believe it’s a “technical recession”.

The term “technical recession is used when there are 2 consecutive quarters of slightly negative numbers. There is nothing “technical” about the 41% collapse after “only” a 3% fall in the previous quarter.

Kee chiu if you still believe it’s a “technical recession”.

In America, the usually post-fact society, when the GDP was likely to fall because of Covid-19, a recession was “called” even by the Fed, the world’s central bank, even before the monthly data came out.

Kee chiu if you believe we juz had a “technical recession”.

The ang moh media got it right when they reported:

Singapore enters recession after economy shrinks more than 40% quarter on quarter


Singapore Slumps Into Recession With Record 41.2% GDP Plunge


But then they are not constructive, nor nation-building. Ask Trump.

The use of the term “technical recession” by our constructive, nation-building media must have resulted from a media briefing by some xia suay Ah Beng from MTI. Kee chui chiu if you know his identity?

For the avoidance of doubt, the technocrats at MTI did not use the term:

GE2020: Could have been 23 Oppo MPs

In Financial competency, Political governance on 14/07/2020 at 5:19 am

Emphasis mine.

12,367 votes (0.5% of the PAP’s popular vote) in all the marginal constituencies where the PAP scored around 55% or less (West Coast GRC, East Coast GRC, Bukit Panjang, Bukit Batok, Marymount) – and we might have woken up to headlines that Singaporeans elected 23 MPs from parties other than the PAP.

Or nearly a quarter of Parliament.

That’s how close this election was – in a way that even 2011 and arguably even 1991 wasn’t. To understand this, pay very close attention to the marginal seats (>45%, rounded to 1 decimal place) and count what would happen if all marginal seats flipped.

Carissa Cheow

For a more detailed analysis, click Carissa Cheow


In Financial competency on 27/06/2020 at 1:32 pm

Using ESG (Environmental, Social and Governance) criteria to invest is hot in fund mgt and a survey by Nuveen (an American fund mgr) found that most investors believe ESG helps them make more money.

The problem is that under ESG criteria energy stocks are haram. And in the last 10 yrs energy has underperformed, from 11% of S&P now 4%.

So will this good performance of ESG continue now that energy’s weightings have gone down. I doubt it.

How TLCs perform before/ after GEs and latest TLC consensus forecasts

In Financial competency, S'pore Inc, Temasek on 22/06/2020 at 5:31 am

OCBC report dated 12 June 2020

Four in five fund managers believe stocks ‘overvalued’

In Financial competency, Financial planning on 18/06/2020 at 1:42 pm

Xia suay. So why market keeps flying?

But as market keeps going up, it means that a lot of these “bears” are actually buying. Fear of missing out and “greater fool out there”.

Covid-19: The huge risk India, Pakistan and Bangladesh are taking and the reason why

In Financial competency, India on 11/06/2020 at 4:35 am

The risk: they are relaxing lockdowns even as new cases continue to increase.

The lockdowns may have made these countries’ curves of new infections less steep so far. But lockdowns did not flattened them. Millions are emerging from lockdown into an environment where Covid-19 infection is more widespread than when they went in.

At the current pace, the numbers are doubling every two weeks, suggesting that by the end of July, when some models predict the outbreak will peak, the official number infected may reach 5m and the death toll could approach 150,000.

But these countries had no choice. Because even at the best of times many people live hand-to-mouth. With lockdown, many were starving. and hence reopening the economy became more important than flattening the curve. Sad.

When a crown prince goes on a shopping spree

In Financial competency on 09/06/2020 at 5:14 am

Crown Prince Mohammed bin Salman is the de facto ruler of Saudi Arabia. The Public Investment Fund a US$325bn sovereign wealth fund has used the recent market collapse to buy and buy.

Sia suay! 24% of S’poreans are more PAP than the PAP on our reseves

In Financial competency, Public Administration on 08/06/2020 at 9:44 am

Must be hardcore PAP MPs and other die die must support PAP’s Hard Truths like Liang Eng Hwa, Kate Spade Tin and Arthur Fong: PM aiming left, to hit the centre/ Axed? PAP MPs who don’t get it.

Think PAP govt really spending our reserves? Think again

The government has so far drawn down S$52 billion from our reserves to fund the packages.


“Peanuts”: our reserves estimated to be worth over US$710 billion or S$1 trillion by ang mohs. Only 5% of our reserves drawn down and do remember that S$13 million is for “contingencies”. Exclude that S$13 million and only 4% of reserves will be spent.

Bah humbug, a reasonable man may say.

Fortitude Budget is Peanuts

Related posts:

Why Pay And Pay govt wants elections earlier than later

S’poreans see Fortitude Budget no ak

The bull market is dead! Long live the bull market!

In Financial competency on 06/06/2020 at 1:59 pm

On Friday, the S&P index was up 2.9%, trimming its 2020 decline to less than one-tenth of 1 percentage point It now is juz 5.4% below its peak close on February 19.

We probably had the shortest bear market in history, after the longest bull market in history. Maybe we’ll have the shortest bull market in history?

Who knows?

We live in interesting times.

America is Great Again

In Financial competency on 30/05/2020 at 6:21 am

Japs are on Americans’ tail.

Typography of our (and global) economic recovery

In Economy, Financial competency on 26/05/2020 at 5:22 pm

So the economy is expected to shrink between 4 and 7% this year as MTI again downgraded official growth projections for 2020. If the projections are correct (remember that astrologers and other fortune tellers have better track records) we are headed for the worst-ever recession since 1965.

The estimates for non-oil domestic exports (NODX) and total merchandise trade for the year have been cut drastically.

But factory output surged by 13 per cent in April, the second straight month of a year-on-year rise, largely down to gains made by the pharma manufacturing cluster. But excluding biomedical manufacturing, overall output in April fell 3.5% due to COVID-19 related measures both locally and overseas.

So how will the recovery pan out?

Related posts:

Investing in the time of Covid-19: Watch this index

What goes down quickly, must go up quickly

Covid-19 investing: Beware of a double bottom

Markets: Easy collapse, easy rebound

Antidote to Covid-19 and market stress

CPF: Imitate Oz?

In CPF, Financial competency, Financial planning on 03/05/2020 at 9:12 am

The Australian govt recently decided to allow people in financial distress to withdraw up to A$20,000 from their superannuation (pension) accounts. Australia has the world’s 4th largest pension fund system: A$3tn in assets.

The govt expects a withdrawal of A$30bn. Some industry experts think the final figure could be almost double that,

Difficult see the PAP govt imitating the Oz govt. Not so much on ideological grounds (Hard Truths), but because CPF funds are also used to make public housing “affordable”, and private housing more than just a dream. CPF is not juz saving for pensions.

Is US equity market deluded?

In Financial competency on 01/05/2020 at 4:01 pm

Around half the S&P 500 Index constituents have reported first-quarter earnings, including the start of the sharp downturn triggered by the coronavirus. Profit for the group in the period is set to drop nearly 15%, according to Refinitiv data. A month ago, analysts thought the decline would be under 5%, and at the start of the year they were targeting a 6% increase.

For the second quarter of 2020, the picture is starting to look more realistic. Earnings are forecast to slump nearly 40% from last year. But with revenue projected to be down only 10% in the three months to June, Wall Street may still, unfortunately, be behind the Covid-19 curve. For every company with top-line growth, like Facebook, there are others like American Airlines, which sees industry revenue down perhaps 95% in April compared to last year. It will get worse before it gets better. (By Richard Beales)

PAP govt prudent? This prudence?

In Economy, Financial competency, Political economy, Political governance, Public Administration on 30/04/2020 at 9:07 am

Our debt already so high. Still want to spend so much money?

How come PAP running dogs (Apologies to the real dogs) in parliament not KPKBing that PAP must be prudent and not pass on the sins of overspending onto future generations.

The PAP govt is throwing US$41.6, more than 10% of GDP to fight the economic and financial consequences of the pandemic in an election year.

Whatever happened to MPs like Liang Eng Hwa, Kate Spade (who else?), Hri Kumat and Arthur Fong: PM aiming left, to hit the centre/ Axed? PAP MPs who don’t get it.

When they so quiet?

Govt change policy, so they sit down and shut up?

Related posts:

Can the hard-hit spend their way out of a recession?

“Prudent banker” is an oxymoron

Investing in the time of Covid-19: Watch this index

In Commodities, Energy, Financial competency, Gold on 23/04/2020 at 1:58 pm

BCA Research says cheong when gains in the CRB index outpace those of gold as Chinese “stimulus seeps through to the real economy”.

Toilet paper maker cleans out

In Financial competency, Uncategorized on 16/04/2020 at 4:47 am

Vinda International Holdings is one of the world’s biggest toilet roll makers and is listed in HK.

Shareholders must be shitting themselves in joy.

It just said operating profit for the three months ended March 31, 2020 is expected to increase by about 55% compared with the year before.

Profit for the first quarter is expected to increase by about  65% from the year before. Operating profit and net profit forthe first quarter are expected to be about HK$527 million and HK$377 million, respectively.

Revenue is expected to be about HK$3.41 billion, down by 16% and organic growth of  -12%.

Funnily, the stock tanked during the recent sell off, only to reverse.

Those who panicked must be shitting bricks.

What goes down quickly, must go up quickly

In ETFs, Financial competency, Financial planning on 12/04/2020 at 1:39 pm

Bulls are hoping.

US stocks have just recorded their biggest weekly gain since 1974 despite the bleak economic outlook.

Wall Street’s S&P 500 shares index rose 12% this week, as the US central bank announced more stimulus measures to support the economy.

Related posts

Covid-19 investing: Beware of a double bottom

Markets: Easy collapse, easy rebound

Antidote to Covid-19 and market stress

Covid-19 investing: Beware of a double bottom

In Financial competency, Financial planning on 10/04/2020 at 10:30 am

As Mobius points out, historical bear markets on a global scale have averaged a larger 30% to 50% drawdown spread out over the span of roughly two years. Some have been quick to optimistically predict, however, that if the market cratered at record speed, perhaps it could recover just as fast because this time it is different. To refute the notion that lightning could strike just as quick to fuel an equal move to the upside, Mobius quoted the late John Templeton.

“The most expensive words in the world are ‘This time is different.’ I don’t think this time it’s different,” he said. “I think we’re probably maybe going to do a double bottom, jumping down again and pushing up again.”

I bot on the way down. Out of three stocks, one is ahead, two under water. Still got ammo.

Antidote to Covid-19 and market stress

In Financial competency, Financial planning, Media on 09/04/2020 at 4:44 am

The BBC (among others) recommend that to lessen the stress of Covid-19

— Limit the amount of time you spend reading or watching things which aren’t making you feel better.
— Be careful what you read


Until very recently, markets were tanking as if there were tomorrow. Maybe in such a situation, stop following the market.

Btw, markets are on a roll. Most say it’s a bear market rally. But hope springs eternal.

Covid-19: The truth about the death projections

In Financial competency, India, Media on 25/03/2020 at 11:50 am

No they are not fake news, but the projections are very nuanced and come with caveats, something that social media, new media and the mainstream media don’t communicate properly.

But before going into that something that most reports don’t highlight, did you know that the Spanish flu that killed an estimated 50 million people worldwide should have been named the Indian flu given that some 12-17 million people died in India, about 5% of the population? Only 5-7 million people died in China. And a lot less in Spain.

Sorry for the aside, Coming back to the death projections, I’m sure that you know by know that a key piece of modelling which has informed the British government’s decision to try to suppress the virus was done by Imperial College London.

It suggested 500,000 could die if we do nothing, while the government’s previous strategy to slow the spread was likely to lead to 250,000 deaths.

Instead, it is hoped the steps which have been taken, which are essentially about suppressing the virus, will limit deaths to 20,000.

BBC report

It also came up with projections for countries like the US.

But these projections do not exclude the number of people that who would have died in the normal course of events if there had been no pandemic. The modellers did not exclude the normal death numbers because they can’t. They have no data to work from.

As the BBC explains in the context of the UK:

Every year more than 500,000 people die in England and Wales – factor in Scotland and Northern Ireland, and the figure is around 600,000.

The coronavirus deaths will not be in addition to these, as statistician David Spiegelhalter, an expert in public understanding of risk at the University of Cambridge, explains.

“There will be substantial overlap in these two groups — many people who die of Covid [the disease caused by coronavirus] would have died anyway within a short period.”

It was a point acknowledged by Sir Patrick at a press conference on Thursday when he said there would be “some overlap” between coronavirus deaths and expected deaths – he just did not know how much of an overlap.

What I trying to say is that the very nature and limitations of modelling means that we have to be very careful in trying to understand the numbers thrown at us. They are actually very nuanced, and come with caveats.

Some householders laughing all the way to the bank

In Energy, Financial competency on 25/03/2020 at 4:32 am

Those (like me) who signed up for floating rates pegged to the regulator’s price are smiling.

Looking forward to really low bills so long as oil is below US$30. So long as oil price is below US$55, those who signed up for floating rates can sneer at those with fixed tariffs. Most tariffs were fixed when oil was in US$55 – US$65.

Actually, I signed up for the floating rate scheme because it’s possible to break contract without penalties, unlike the fixed tariff contracts.

Related post: Wuhan virus: Why electricity prices sure to collapse

Whatever, the smaller bills will help make up for the mark-to-market losses in the stock market: Markets: Easy collapse, easy rebound.

Vote wisely.

Tourism: Look on the bright side

In Economy, Financial competency, Tourism on 23/03/2020 at 7:35 am

In Tourism: Where Covid-19 really hurts us, I pointed out that the drop in tourism will hurt the economy. But, looking on the bright side, things no longer that expensive for us locals.:

Cities that get a large part of their income from tourism could become cheaper as their economies shrink and prices are driven down.

The impact of the coronavirus has shaken the world economy, with the travel and tourism industries among the hardest hit. Hong Kong and Singapore are two of the cities that could see a big drop in revenue as demand for leisure activities, restaurants and accommodation plummets. This weaker demand could drive down prices, making these cities cheaper for their inhabitants.

True, things no longer that expensive for us locals. But got money to spend or not?

Markets: Easy collapse, easy rebound

In Financial competency, Financial planning on 22/03/2020 at 11:39 am

If wondering why markets tanked so fast juz look at

Could rebound pretty fast: I hope. Core portfolio stocks down 30%. New positions 20% underwater. And I was buying 25% from highs at end February.


Xia suay! If we triple AAA why pay so much more than ang moh sick man?

In CPF, Economy, Financial competency on 07/03/2020 at 4:20 am

With the carnage in markets, we’ll soon hear in the constructive, nation-building media that have AAA status.

The PAP govt and its running dogs in parly, in the constructive, nation-building media, and on the internet will be trumpeting our triple A status, reminding of our budget surpluses and prudent budgets

So what? The S’pore 10 year government bond has a 1.335% yield. 

But UK’s 10 year government bond has a yield of now around 0.24% despite the UK not being triple A, and the UK being a sick man:

Since the financial crisis of 2007-2009 Britain has lost its AAA credit rating, seen its debt-to-GDP ratio rise from 40% to more than 80% and voted for Brexit. And yet over the same period the yield on gilts, the benchmark ten-year government bond, has fallen from around 4.5% to under 0.5%. 


We AAA paying 556.25% more than the UK? CCB. KNN.

Maybe because, our debt-to-GDP ratio is 108%. For that 108%, think and thank CPF.

[O]ur CPF monies are invested in special government bonds. The $ from the bonds flow into the government’s Consolidated Fund together with revenues from taxes etc. All government expenses are paid out from this fund. If there is a surplus (as there usually  because the government is thrifty or mean depending on who is doing the talking) part of that surplus can go to GIC and Temasek. The government argues that because all the monies in the fund  is fungible (cannot be separated), one is wrong to argue that CPF monies are invested abroad.

How we fund our SWFs: ”If Singaporeans are not “hard-driving and hard-striving”, where did GIC and Temasek get so much money to lose?”

PAP govt’s explanation

Special Singapore Government Securities (SSGS) are non-tradable bonds issued specifically to meet the investment needs of the Central Provident Fund (CPF). Singaporeans’ CPF monies are invested in these special securities which are fully guaranteed by the Government. The securities earn for the CPF Board a coupon rate that is pegged to CPF interest rates that members receive.


Investors who gave finger to Wuhan virus doom mongers now crying

In Financial competency on 25/02/2020 at 4:39 am

The S&P 500 was down by 3.6% by lunchtime today, its worst day since February 2018, and the tech-heavy Nasdaq lost 4%.

Earlier other global stocks slide after Italy’s coronavirus lockdown. Iinvestors shift from equities and oil to bonds and gold

Just last week,  Wall Street bullish on corporate earnings despite virus. The case for stock market bull run bolstered, despite risk warnings like the one below.

(Chart from last week. LOL)

“There’s a big chance for disappointment if the impact is greater in China and the spillover effects on to the global economy last longer than expected,” said Liz Young, director of market strategy for BNY Mellon Investment Management.

Related posts:

Wuhan virus: Goldman Sachs has second tots?

Wuhan virus: Why investors are not panicking

Interesting ideas from Germany and US to protecting borrowing home owners and their lenders

In Banks, Financial competency, Financial planning, Property on 22/02/2020 at 2:38 pm

Recently I wrote in TRE cybernuts and central bank singing from the same song sheet that our central bank is worried that

Singapore property market faces risks from unsold units, uncertain economy: MAS

Here’s what the Germans do to protect banks and borrowers

German mortgage-lenders embrace an unusual appraisal technique. When assessing the value of a house, they rarely refer to market price; instead they consider “mortgage-lending value”, an assessment of the probable price of a house over the economic cycle. A report from the Bank for International Settlements, a club of central banks, suggests that by discounting short-term price fluctuations, this valuation technique can stop bubbles from forming. Lenders in America once embraced the technique, points out Ed Pinto of the American Enterprise Institute, a think-tank, yet after the second world war it fell out of fashion.

Meanwhile in America

Safe Rate, based in Chicago, offers a new type of mortgage. When local house prices decline, so do borrowers’ monthly mortgage repayments. The benefit for the borrowers is that they save money and are less likely to default. The advantage for investors is that, by preventing foreclosures, more mortgages will be kept going and it is less likely that house prices across a region will spiral downwards.

Wuhan virus: Goldman Sachs has second tots?

In China, Financial competency on 22/02/2020 at 4:14 am

Just as well as Wall ST is down two days in a row on fears that that the Wuhan Virus is an economic killer. Apple’s profits warning early this week spooked the market. When Apple sneezes, investors worry.

Before Apple’s warning, in Wuhan virus: Why investors are not panicking, I had quoted Goldman Sachs

We estimate that even in a scenario where the rate of new infections did not peak until the second quarter, the negative hit to global economic growth would be about 0.3 percentage points. That means the expansion would still be 3.1 per cent — in line with last year’s pace.

Goldman Sachs Japan vice chair talking about the global economy

This week, “The impact of the coronavirus on earnings may well be underestimated in current stock prices,” Peter Oppenheimer, analyst at Goldman Sachs, warned in a client note this week.

He said that investors are misjudging the full impact of the Covid-19 outbreak on companies’ earnings, pointing to China’s economic rise and greater integration in the world economy. Note (The Chinese economy is six times larger now than it was during the Sars outbreak of 2003, and Chinese tourism alone accounts for about 0.4%) of global GDP.

He said forecasts for profit growth this year are already “relatively modest” and so far earnings revisions have been in line with the historical trends, including in “more cyclical markets like Europe, where direct exposure to China is much higher”.

Equity markets are looking increasingly exposed to near-term downward surprises to earnings growth and while a sustained bear market does not look likely, a near-term correction is looking much more probable.

Remember: A correction is defined as a drop of 10% or more from a recent peak.


No, markets are not in a bubble

In Financial competency on 16/02/2020 at 4:53 am

Rather as a perceptive FT reader puts it after yet another article denouncing that markets are not behaving the way the FT thinks they should (ie collapse)

The other way of looking at things is it is not that asset prices have gone up, but the value of cash has gone down. Equity prices may have risen, but so have the prices of property, luxury items, art, etc., i.e. all the things that matter to most owners of stocks – so the purchasing power of stocks is unchanged for them. This comes at the expense of the the middle class (who pay capital gains tax on their nominal gains) and the working class (whose labour has become less valued).

Wuhan virus: Why investors are not panicking

In Financial competency on 12/02/2020 at 11:22 am

Unlike the anti-PAP cybernuts who rushed to hoard rice and instant noodles investors are not panicking Because

We estimate that even in a scenario where the rate of new infections did not peak until the second quarter, the negative hit to global economic growth would be about 0.3 percentage points. That means the expansion would still be 3.1 per cent — in line with last year’s pace.

Goldman Sachs Japan vice chair talking about the global economy

Current investor sentiment seem to suggest an economic recovery from 2018 lows remains on track, albeit with a delay.

JPMorgan’s Asia equity strategy team notes the prevalence of three types of investors at the moment:

“The largest group of investors have chosen to ride out the whole episode with an assumption that market reactions to the developments would be transitory and difficult to time. Much of this camp has recently been adding to existing holdings as they have corrected.”

It says, one gauge of this, which also dovetails with the Nasdaq 100 up 9.4% this year to a record high, is how the China A-shares tech sector is the best performing sector, says JPM.

A more KS group of investors believes “the situation is about to significantly deteriorate, calling cycle views into question”, notes JPM.

The bank’s strategists say “there are risks from unexpected supply disruptions (through bottleneck inputs or processes) or a resurgence of new cases as factories reopen or the virus mutates”. That scenario entails a drop of 6% in the MSCI Asia Share index excluding Japan, and further pain should the cycle falter from here.

The final group includes the buyers of the dip or what JPM term “a similar minority of investors are tactically raising risk exposure” and anticipating a lot more easing from China that offsets any damage to consumer sentiment.

JPM points out:

“In a somewhat cyclical argument, it is important for the market to hold up as, contrary to popular belief, we find price action shaping narratives and sentiment as much as (if not more than) the other way around.”

In simple English it’s saying “This view requires a degree of optimism”.

Based on joint salaries, what properties available

In Financial competency, Financial planning, Property on 22/01/2020 at 12:00 pm

Here’s a great table from “Here’s the salary you need to earn to afford these homes in Singapore”

Btw, nothing great about our property mkt in 2020

The prime sales market in Singapore had an active 2019 despite the cooling measures in place. The city benefited from rising affluence among residents and interest from international buyers. Small price rises are expected in 2020 triggered by pent-up demand.

Sophie Chick, head of Savills world research

Not like M’sia or Manila.

Related posts:

Why S’pore is so shiok for private property investors

Ang moh’s great insight on property mkt

Buying homes the billionaire way: two luxury homes are better than one

Why S$73.8m flat is a steal

But don’t get overgeared: TRE cybernuts and central bank singing from the same song sheet

Benefit of saving regularly illustrated

In Financial competency on 10/01/2020 at 5:37 am

FT has a graphic that shows that saving £43.60 a week has


Vote wisely

All Blacks are not the only the Kiwis’ world class champions

In Commodities, Currencies, Financial competency, Uncategorized on 09/01/2020 at 4:45 am




Why investors can afford to be complacent about climate change

In Financial competency on 08/01/2020 at 4:30 am

Even if it’s not fake news.



Another year of sticking to S-Reits

In Financial competency, Financial planning, Property, Reits on 30/12/2019 at 8:39 am

In summary, the models expect recovering GDP growth, extremely low inflation, exceptionally low bond returns, and low but positive equity returns in 2020-22.

Gavyn Davies* talking about the global macro scene for 2020

I tot I would be selling out of my S-Reits in 1Q 2020. Guess I’ll hang around for a bit longer.

*He’s an FT columnist

Gavyn Davies is now chairman of Fulcrum Asset Management and co-founder of Prisma Capital Partners. He was the head of the global economics department at Goldman Sachs from 1987-2001, and was chairman of the BBC from 2001-2004. He has also served as an economic policy adviser in No 10 Downing Street, an external adviser to the British Treasury, and as a visiting professor at the London School of Economics.


Which greener? Online shopping or visiting store?

In Environment, Financial competency on 26/12/2019 at 10:25 am

“The problem isn’t buying online — it’s how the delivery is implemented and how packages come to our door,” BBC article.

Fake news: CPF Life not enough to live on

In CPF, Financial competency, Financial planning on 26/12/2019 at 5:28 am

This reminded me of u/m chart. Look at it and realise that it’s fake news that S’poreans (young and old) are worried about their retirement needs. Way down at number 24.


Time to POFMA TOC’s M’sian Indian goons (Terry and his “bunch of Indians”), the cartoonist and other TOC , and TRE cybernuts?

And Straits Times and StanChart Bank for this BS?

Making yr money work harder for u

In Banks, Financial competency on 18/12/2019 at 5:16 am

What with GST going up another 2 points soon, us coupon clippers got to find the difference so that we can continue eating Stilton, French butter, suckling pig etc.

The dividend yields on DBS, OCBC and UOB are 4%+. And so are the forecasted yields. Now for those of us who have second tier S-Reits up to our eyeballs, this is “peanuts”.

But instead of putting money into fixed deposits, maybe KS S’poreans should think of buying the shares of one of the local banks: remembering that you may not get back the amount invested if things go wrong. Equity premium risk leh.

And do remember: Using yr CPF OA as a savings account.

Why buy bank shares? Because PAP govt is friend of banks or so it seems: Why I hold Hongkong Bank and UOB shares

Latest BS in asset mgt to steal yr money: ESG

In Corporate governance, Environment, Financial competency on 09/12/2019 at 4:37 am

ESG (Environmental, Social and Governance) scores are becoming ever more important in the marketing of financial products that are sold to the masses. At least US$3trn of institutional assets now track ESG scores, and the share is rising quickly.

Pure BS to charge higher fees

Why did the ESG investor cross the road?

If you’ve spent any time around the sustainable investing world, you might have heard the old joke: “What’s the easiest way to improve your company’s ESG score? Change your rating agency.”

Is it funny? That’s debatable. Is it cynical? Possibly. But is it rooted in truth? Absolutely.


Don’t believe?

esg scores are poorly correlated with each other. esg-rating firms disagree about which companies are good or bad. The Economist has compared the scores of two big esg-rating systems, updating an analysis done by the imf earlier this year (see chart). It shows at best a loose link between the two measurement systems. The same lack of correlation holds even when the es and g scores are considered separately, according to the imf. Small wonder, then, that it found no consistent difference between the performance of esg funds and that of conventional ones.


The result

Tobacco and alcohol companies feature near the top of many esg rankings. And many funds marketed on their green credentials invest in Big Oil.




TRE cybernuts and central bank singing from the same song sheet

In Economy, Financial competency, Property on 30/11/2019 at 11:32 am

A recurring tune that TRE’s cybernut-in-chief “Oxygen” and his pals (like “Jihadist Joe” aka “Bapak”) shout is that the property market sure to crash and that when that day comes, they shout that they’ll be having orgasms of joy seeing their fellow S’poreans (even anti-PAP voters) suffer. Problem is that they’ve been predicting this since when TRE started (circa 2007, I think).

So my conclusion in reading the u/m headline from the usual constructive, nation-building CNA is that MAS must have been infiltrated by said cybernuts. Time for the ISD to investigate senior central bank officials for being anti-PAP?

Singapore property market faces risks from unsold units, uncertain economy: MAS

Singapore’s property market faces “potential downside risks” from a large supply of unsold units in the medium term and an uncertain economy, said the Monetary Authority of Singapore (MAS) on Thursday (Nov 28).

In its annual Financial Stability Review, the central bank urged prospective buyers, especially households that are highly-leveraged, to be mindful of risks and remain prudent.

Property firms that have built up high levels of leverage and hold large unsold inventory should also exercise prudence …

These concerns come against the backdrop of a moderation in the private residential property market following the cooling measures introduced in July last year.

Don’t they know there’s a GE (My prediction in 2018 Akan datang: GE in late 2019) and GST rise (How PAP can win 65% plus of the vote) round the corner?

Seriously, just remove Additional Buyer’s Stamp Duty (ABSD) and prices will cheong.

Related posts:

Forgot (ignored?) asset inflation?

Look at our private housing, it’s expensive:

Buying homes the billionaire way: two luxury homes are better than one

Why S$73.8m flat is a steal

Why S’pore is so shiok for private property investors

And even in private property there are govt controls

Ang moh’s great insight on property mkt

PAP whacks greedy pigs





Angry, little people fight back

In Corporate governance, Financial competency on 24/11/2019 at 6:38 am

otter saluting flagGreat to see minority shareholders do something other than go to and whine to that toothless, flea ridden watchdog that is the Securities Investors Association of S’pore asking for help, or to failed presidential candidate who lost his deposit (and PAP enabler) Tan Kin Lian for help.

A group of minority shareholders of Magnus Energy shot down all the resolutions put forward at the recent annual general meeting on Oct 30. They ousted three of the directors and blocked the reappointment of the external auditor as well as the mandate to issue shares to raise funds or pay director’s fees.


On Nov 7, these shareholders, who hold a total stake of about 10%, sent Magnus Energy’s board an extraordinary general meeting requisition notice.

And that’s not all, they are suing past and present directors for breaches of general and fiduciary duty.

Wow. These are really very angry shareholders. Can’t blame them. before the shares were suspended from trading in Aug this year, the share price was 0.1 cent. They were at a high of $3.75 in February 2013.

Bit harsh on SIAS? Go read

Why SIAS should sit down and shut up

FBI in US, SIAS, SGX here

SIAS: Close it down

Hyflux: Can believe or not?

Buying STI ETF is buying into HK

In Financial competency, Hong Kong, Indonesia on 18/11/2019 at 4:17 am

I’ve always told young people who want to invest in local shares to buy into one of the two STI ETFs if they believe that the PAP govt is doing a decent job and will continue doing a decent job, and if they believe that it will continue ruling S’pore. A coalition of the Spastics (Mad Dog, Lim Tean and Goh Meng Seng) will ruin S’pore.

But with the troubles in HK, I’ve had to modify that advice by telling them that because the STI Index has a heavy HK component, they have to think about HK’s problems and its long term future.

I tell them that around 13% of the STI Index (by mkt cap) is made up cos in the Jardines Group. Jardine and Matheson (and Sassoon) were the original narco drug barons. Jardines Group is still very HK-based: Dairy Farm, Jardine Matheson, and HK Land. All these cos are in STI, as is Jardine C&C*. See table for the HK exposures of the Jardines Group: SGX-listed stocks that have serious HK exposure. Note that Mandarin Htls is part of Jardines Group.

I’ll end with a link to the constructive, nation-building BT, defending the heavy presence of Jardines in STI Index: Note a far cry from its snide remarks in 2010. See STI ETFs — Are there values there?.

*Jardine C&C is big in Indonesia: Impt of Indonesia to Jardine’s and other local listcos


Power of compounding

In Financial competency, Financial planning on 16/11/2019 at 5:13 am

Actually in this case the power of reverse compounding.

Pocahontas (aka Ms Warren, a descendant of Marx, who has a bit of Cherokee blood and who got into trouble claiming to be an Injun) has proposed what her campaign calls an “ultra-millionaire” tax of 2% on assets above $50m, plus a 1% “billionaire surtax” on assets above $1bn.

Doesn’t sound much does it? FT has done some calculations. If US billionaires paid her weath tax since 1982, they’d be a lot poorer.

SGX-listed stocks that have serious HK exposure

In Financial competency, Hong Kong on 14/11/2019 at 4:04 am

DBS got almost 20% exposure (no surprise), while OCBC has only 9% exposure (surprise, tot more). UOB doesn’t even make the list (surprise, surprise). Surprise that that Wing Tai and iFast got that much HK exposure.

Economics of buying cheap and cheerful stuff

In Financial competency, Financial planning on 08/11/2019 at 4:33 am

The late (and much missed) Sir Terry Pratchett , in his Discworld series, had a character by the name of Captain Samuel Vimes of the Ankh Morpork City Watch. He was penny wise, pound foolish.

He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

Of course one has to take care of the good quality boots.

M’sian stocks: eagles and dogs

In Financial competency, Malaysia on 20/10/2019 at 10:20 am

Interesting tables from

From the late 80s until the late 90s, I used to specialise in M’sian equities. These stocks are Mandarin to me. LOL.


Where PAP is most vulnerable

In Economy, Financial competency, Political governance, Public Administration on 26/09/2019 at 4:50 pm

In PAP is like one armed swordsman,I said I’d talk more about the election goodies.

“Ownself fund ownself”

We know the PAP has been doling out the goodies. But remember it’s all from yr own money.

In 2018, I wrote

[O]ver the last 10 years, Singapore’s net investment returns (NIR) contribution (NIRC) to the Budget has more than doubled from S$7 billion in FY2009 to an estimated S$15.9 billion in FY2018.

Waz this NIRC and NIR BS?

NIRC consists of 50 per cent of the Net Investment Returns (NIR) on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek Holdings and 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets.

In other words, we spend 50 per cent of the estimated gains from investment, and put the remaining 50 per cent back into the reserves to preserve its growth for future use.

Associate Professor Randolph Tan is Director of the Centre for Applied Research at the Singapore University of Social Services, and a Nominated Member of Parliament.

Under PAP rule will S’pore become like UK or Venezuela?

In 2011 I wrote the following explaining how the money for our SWFs really came from us (When most probably Roy Ngerng was still wearing shorts and still coming to terms with his sexuality):

https ://

At the most, the PAP govt should be given credit for allowing S’poreans to spend more of our own money on ourselves. And even that was because in 2011, the voters gave the Pap an underwhelming ruling mandate to govern. And if not for Goh Meng Seng, his useful idiot Tan Kin Lian and Tan Jee Say (opportunists three), the PAP’s preferred presidential candidate would have lost to Dr Tan Cheng Bock.

So spread the word to those who think that they should be grateful to the PAP for the goodies that its our money the PAP is spending, but claiming credit for. Sadly, I doubt this will happen because cybernuts rather spread anti-PAP BS than the nuanced truth, even if the latter can persuade the PAP voters who think (about 35% of the voters: those who voted for Dr Tan Cheng Bock).


In How PAP can win 65% plus of the vote, I pointed out that postponing the GST rise is the best to ensure a 65%+ share of the popular vote for the 4G leaders. But the 4G leaders think that the goodies doled out are sufficient for a 62% victory, if not more. (Btw, article lists most of the goodies)

Well this gives the Oppo a good chance to KPKB about the folly of increasing GST when the global and S’pore economy are weak, if not in recession (“Only cold spell coming, but not Winter,” says Heng). But will they do it? I have my doubts.

I’ll end with:

Countering PAP’s BS that taxes must go up

Welfarism the PAP way/ The last word on GST

which show that really the PAP govt doesn’t need the GST to fund future welfare spending.



Hedgies con trick unravels

In Financial competency on 07/09/2019 at 1:37 pm

Investors pull money from hedge funds at fastest pace since 2016

Rebound in returns this year has not stopped clients punishing managers for weak 2018

FT headline

“It is the best returns the industry has broadly seen in almost 10 years, but it is still below an equal-weighted equity and bond benchmark”, said Peter Laurelli, the head of research at eVestment.


Btw, HK Monetary Authority beat the crap of George Soros in 1998 after he screwed Tun: Attempt to bring down HK’s financial system fails: yet again


Sovereign bond with penny stock characteristics

In Financial competency, Financial planning on 01/09/2019 at 4:51 am

From juz below par (100) to 38 in two years.

Two years ago, investors were rushing to buy Argie’s 100-year bond with a coupon of 7.125% and initial yield of yield of 7.9%:

Rational long-term investors “reasoned that a bond with a 7.9 per cent yield would cover the initial investment and then some over a decade or so,” said the FT

Yesterday it fell to 38 cents on the dollar, a fall of 6% on the day after Argentina started selective defaulting of its bonds: Line between living beyond one’s means and being mean is very thin.

Reminds me of this S’pore fiasco:

Line between living beyond one’s means and being mean is very thin

In Financial competency, Financial planning, Political economy, Political governance, Public Administration on 30/08/2019 at 11:27 am

Argie president Mauricio Macri’s plan to delay payments on more than U$101bn of debt, is a de facto default.

Todd Martinez, director of sovereign ratings at Fitch debt agency, had earlier told the BBC’s Today programme that Argentina had three options to repay what it owes – most of which is in US dollars – and none of them “looks very viable”.

“It comes down to a simple equation,” he said. “Argentina can either (sic) dip into its savings, borrow new money or achieve a budget surplus.

True of a country, true of an individual. Over-borrowing and over-spending have consequences. Btw, a Hard Truth of the PAP is be prudent. Problem is this leads to the vice of being over-prudent and leads to meanness. Think PAP: Will PM, tonite, give peace of mind on CPF Life Standard?

But to be fair to the PAP: Reason why CPF Life so mean?

Vote wisely.

Why Oppo cock to think that HDB issues will affect the vote

In Financial competency, Financial planning, Property, Public Administration on 28/08/2019 at 10:01 am

In Christmas, CNY coming early thanks to PAP, I pointed out that the loss of value for resale flats and the older flats has yet to be addressed by the PAP govt. And that there are S’poreans that are unhappy.

But all the KPKBing by cybernuts like Goh Meng Seng (If he still thinks HK better place to bring up his family, how come he so quiet nowadays and btw, I hear his daughter is studying here despite him saying that HK’s education system is better), and Lim Tean (He rents a S$15,000 black and white bungalow from the PAP govt) to stir more unhappiness and discontent, S’poreans are not fooled by their BS.

Our public housing policies mean that public housing is cheap, compared to other major cities, not juz “affordable”.

This table puts into context the issues of

— Falling resale prices causing a problem for the PAP with those who bot resale flats: Double confirm, ground not sweet for PAP and Will this resale flat buyer vote for PAP in next GE?

— 99-year leases: Why 30-year old HDB flats difficult to sell/ Why PAP rule will end in 2029 and 

Christmas, CNY coming early thanks to PAP

Things could be better, a lot better. But 60-70% of voters think (thanks   that housing would be be like in HK, if not for the PAP govt. And while taz not the real pix, they are not that wrong.

Look at our private housing, it’s expensive:

Buying homes the billionaire way: two luxury homes are better than one

Why S$73.8m flat is a steal

Why S’pore is so shiok for private property investors

And even in private property there are govt controls

Ang moh’s great insight on property mkt

PAP whacks greedy pigs

So when will the PAP start worrying about the problem of older flats? Read Why PAP rule will end in 2029.

Fed chair: Not much Fed can do right now to help world economy

In Economy, Financial competency on 25/08/2019 at 10:55 am

In addition to the Fed’s focus on balancing inflation against employment, Federal Reserve chair Jerome Powell is dealing with two other sources of stress. Investors have been critical of how he communicates policy and The Donald has been demanding, more aggressive by the day, for more monetary accommodation via interest rate cuts and quantitative easing.

Powell has juz given Trump the finger.

Powell has now called the current era of Fed history the “emerging new normal”, and said it offered three challenges: low inflation, financial risks, and how the Fed can support economic growth when interest rates are already so low. The Fed, he added, “faces heightened risks of lengthy, difficult-to-escape periods in which our policy interest rate is pinned near zero.”

How to support economic growth when interest rates are already so low is an important question for central bankers all over the world. They had gathered in Jackson Hole, Wyoming, to among other things, discuss whether policy rates have any effect on the real economy.

With his historical timeline, Mr Powell offered an answer to both. The current era of slower growth, downward pressure on inflation, and lower interest rates is the consequence of long-term trends. And there is not much the Fed can do right now to help.

It’s a very pessimistic (and hawkish: nothing much can be done) speech.

Here’s how the Economist put it

He spoke of the difficulty the Fed faced in assessing and responding to Mr Trump’s trade war. And he mentioned that if interest rates globally remain near zero, then central banks may need new policies. But on the subject of the moment—what the Fed will do next—he gave little away. “We will act as appropriate to sustain the expansion, with a strong labour market and inflation near its symmetric 2% objective,” he said.

Mr Powell may have felt he could say little more, given the disagreement within the Fed. But both the recent minutes and the speech today devoted more words to the possibility that low rates might contribute to financial instability than has recently been the norm in the Fed’s discussions. That may be a sign of more determined opposition to additional easing than recognised hitherto.

And btw, Trump’s not that dumb

At least one observer felt the hawkish overtones of the speech to be crystal clear. “As usual, the Fed did NOTHING!” Mr Trump tweeted after Mr Powell’s remarks. “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” The president thus cast a longer shadow than the Tetons over the day’s events.

How all this impacts us:

S’pore: the canary in the coalmine/ Is the ground sweet for the PAP?

Latest “bad” economic data is really “gd” news for PAP

“Only cold spell coming, but not Winter,” says Heng

Ground is not sweet economically/ Authorities may have to do something but no gd options

-ve deposit rates

In Financial competency, Financial planning on 22/08/2019 at 9:07 am

Further to Bank pays u to borrow/ Govts borrow for free, Jyske Bank who pays money to borrowers to borrow has become the first Danish lender to impose negative interest rates on customer deposits and has warned that sub-zero rates were looking “rather permanent”.

Customers with balances over DKr7.5m (US$1.1m) would be charged a default rate of 0.6% a year.

Fyi, UBS and other major Swiss banks have been charging negative interest rates on customer deposits for some time. But there we are are talking of deposits of tens of millions, not US$1m

Bank pays u to borrow/ Govts borrow for free

In Financial competency, Financial planning on 21/08/2019 at 5:35 am

World turned upside down.

A Danish bank last week week launched the world’s first negative-rate mortgage, allowing housebuyers to take a home loan and pay back less than they borrowed.

Sounds good.

But do realise that should negative interest rates leads prove to be a precursor of deflation, property values fall in a deflation. But then that doesn’t matter to HDB flat owners.

Germany has a new test of investors’ voracious appetite for bonds with very low or even negative yields: a 30-year bond that offers no interest payments at all.


It has already issued similar 10-yr bonds

Bonds worth U$15tn, about a quarter of the global market, are offering negative returns, the FT reported last week: U$100 of bonds, including interest payments, will return less than that amount throughout their lives. That’s useful context in understanding why central bankers keep being asked about negative rates.

The central banks of the Eurozone, Switzerland, Japan, Sweden and Denmark all have rates set below zero to try and tackle very low inflation. It isn’t working, but that’s another story.

The Bank of England’s governor was asked by website Central Banking whether the UK will try the policy.

“At this stage we do not see negative rates as an option here. I am not criticising others that have used them, but we don’t see it as an option,” he replied.

Whatever one says about the Brits, despite a no deal Brexit being the likely result, the economy doesn’t yet need to resort to -ve interest rates. Sounds like Brexiters are right to accuse the Remoaners (those who want to stay) of doom-mongering i.e. Project Fear.

Hyflux revisited: Got profits but cash flows out

In Accounting, Corporate governance, Financial competency on 13/08/2019 at 11:51 am

Muddy Waters (Temasek helped Olam see off an attack from them yrs ago: see this*): has written a really nasty report about a UK company Burford Capital,a litigation funder. The shares collapsed. because muddy waters has a more than decent track record despite having its balls crushed by Temasek over Olam.

Carson Block, the boss of Muddy Waters, had been speaking to BBC Radio 4’s Today Programme about his concerns.

One of his concerns is that the profits did not result in positive cashflow, rather negative cashflow.

He makes a great analogy about an accounting trick (OK OK OK, a legitimate accounting practice that ‘s perfectly legal): realised gains not reflected in the income statement (and hence cashflow). Think Hyflux: the profits were there, but there was no positive cash flow, rather cashflow was negative.

“Hyflux Group has generated negative operating cashflow in every year since 2009. Was this highlighted to bondholders and shareholders? If so, in what form? Why did the Board continue to pay dividends, when the operating cashflow was negative and accumulate more debt during this time?”

The investor watchdog also highlighted that Hyflux, despite the negative operating cashflow, reported profits in each year before 2017 and asked how this was possible.


A really curious incident

Legitimate accounting tricks practices allowed this. See box for detailed explanations.

Hyflux’s Worrying Cash Flow Situation


As Carson Block put it, “The analogy I like is if I say ‘I’m going to take you on vacation, meet me at the airport oh Hawaii is amazing, it’s got great beaches, my favourite hotel is this one’ and then you meet me at the airport and I say ‘we’re going to Ireland’. Hawaii has nothing do with Ireland and all that discussion about Hawaii has nothing to do with where we were going.

“And that’s basically what all this discussion about realised gains in the investment materials is. It has nothing to do with – or very little to do with – what flows into the income statement.”

Want to know more about what went wrong at Hyflux?

Hyflux on investor losses: “Not our fault, banksters at work”

Did Hyflux’s auditors mislead?

Hyflux fiasco shows why “book value” is BS


Olam: Hang on, buy for the ride?

Hyflux is Big Flush

In Corporate governance, Financial competency on 12/07/2019 at 6:20 am

The latest news that Huflux is talking to the camel drivers (Hyflux: Can believe or not?) after telling them to go f**k their camels reminded me of a comment I once saw on TRE:

Hyflux will be known as Big Flush?

GIC outperformed by tell-all Norwegian SWF

In Financial competency, GIC, Private Equity, S'pore Inc on 03/07/2019 at 6:38 am

By 15%.

GIC’s annualised 20-year real rate of return, its main performance metric, was 3.4 per cent up to the year-end in March. That compares with a real rate of return of 3.9 per cent since 1998 at Norges, the Norwegian sovereign wealth fund.


Please remember that GIC (like Temasek) says it needs to be non-transparent to make money for us. Well tell that to the Norwegians who even tell the world the colour of the underwear of the fund managers.

Btw, GIC is investing less in stock markets, more in private equity. Who isn’t?

Why I hold Hongkong Bank and UOB shares

In Banks, Financial competency on 27/06/2019 at 4:38 am

OK, OK, I only have an economic interest in UOB via shares in Haw Par. The underlying reasons for investing in Haw Par haven’t changed since 2011: Haw Par: Rediscovered yet again. More recent analysis:

As a result of the high cash balance and also to celebrate Haw Par’s 50th anniversary, the group has declared a bumper special dividend of S$0.85 per share in addition to its final dividend of S$0.15 per share. The sum of its final and special dividend amounts to S$1 per share, and if we include its interim dividend of S$0.15 per share, the full-year dividend would be S$1.15 per share. At Haw Par’s last done share price of S$12.39 on 27 February 2019, that represents a trailing dividend yield of 9.3%.

(Bear in mind that the huge dividend yield is due to “special” dividend. It’s normal dividend yield is between 3-4%. FYI, UOB has a 4%+ yield.)

Btw, OCBC and DBS recommending UOB. So do ang moh brokers.

Back to why I own HSBC and Haw Par shares: S’pore and HK are very kind to banks:

CPF interest rates: PAP govt cares for u, they really do

In CPF, Economy, Financial competency, Financial planning, Public Administration on 18/06/2019 at 11:02 am

The US 10-year real yield — a barometer of future growth expectations for the economy — has dropped below 0.4 per cent, eyeing its September 2017 nadir of 0.25 per cent.

FT a few days ago

CPFers get a better deal from the PAP govt.

Our inflation rate is about 1.37%.


Savings in the Special Account earn a guaranteed 4% while savings in the Ordinary Account only earn a guaranteed 2.5%. The lower interest rate offered by OA is due to its wider usage. For instance, funds in OA are allowed to be utilised to fund child’s tertiary education as well as CPF member’s property purchase. Such uses of the CPF funds are not applicable to the Special Account and a higher interest rate is therefore provided to compensate for its restricted use.

How to Optimise Singapore CPF: Ordinary Account into Special Account

2.5 – 1.37 = 1.13. 1.13 is the real return assuming that the CPF interest rate is only 2.5%. and we know it’s higher, don’t we?

And taz not all. Read, the bits I bolded

The interest rate on Ordinary Account (OA) monies is reviewed quarterly. OA monies earn either the legislated minimum interest of 2.5% per annum, or the 3-month average of major local banks’ interest rates, whichever is higher.

The OA interest rate will be maintained at 2.5% per annum from 1 July 2019 to 30 September 2019, as the computed rate of 0.60% is lower than the legislated minimum interest rate.


The interest rate on Special and MediSave Account (SMA) monies is reviewed quarterly. SMA monies earn either the current floor interest rate of 4% per annum or the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, whichever is higher. In view of the continuing low interest rate environment, the Government has decided to further extend the 4% floor rate for interest earned on all SMA monies for another year until 31 December 2019.

Consequently, the SMA interest rate will be maintained at 4% per annum from 1 July 2019 to 30 September 2019, as the computed rate of 3.37% is lower than the current floor interest rate of 4% per annum.


The interest rate on Retirement Account (RA) monies is reviewed annually. RA monies credited each year will be invested in newly-issued Special Singapore Government Securities (SSGS) which will earn a fixed coupon rate equal to either the 12-month average yield of the 10YSGS plus 1% computed for the year, or the current floor rate of 4% per annum, whichever is higher. The interest rate earned by RA monies is the weighted average interest rate of the entire portfolio of these SSGS, which is adjusted in January each year to take into account the coupon rates payable by the new SSGS issuance. In view of the continuing low interest rate environment, the Government has decided to further extend the 4% floor rate for interest earned on the RA for another year until 31 December 2019.

The average yield of the 10YSGS plus 1% from November 2017 to October 2018 is 3.38% per annum. As this is below the current floor rate of 4% per annum, new SSGS issued in the year of 2019 will pay a fixed coupon of 4%.

Consequently, the RA interest rate from 1 January 2019 to 31 December 2019 will be maintained at 4% per annum.

Above from CPF website

Vote wisely.

Related posts (Even an anti-PAP TOC writer appreciates that the PAP govt cares):

CPFLife: PAP govt cares for u, really they do

TOC’s “Correspondent” shows that PAP govt really cares for S’poreans

Vaping: PAP govt cares for u, really they do

Merdeka Generation: PAP cares for u, really they do

Groceries: PAP cares for u, really they do

Techs are humongous

In Banks, Energy, Financial competency on 08/06/2019 at 2:34 pm


Winners, losers this week

In Commodities, Currencies, Energy, Financial competency, Gold on 08/06/2019 at 4:37 am

Winter is round the corner

In Financial competency on 05/06/2019 at 4:48 am

Morgan Stanley warns on growing risk of US market “downturn”. It says its market cycle gauge moved from “expansion” to “downturn” for the first time since 2007.

Hyflux: Can believe or not?

In Corporate governance, Financial competency on 28/05/2019 at 7:31 am

Earlier this month, Utico, a UAE water utility offered to invest S$400 million in Hyflux, offering a binding agreement. But Oliver Lum and her board kaki are playing hard to get, telling the Arabs to go f*** a camel.

So Utico has gone on a massive PR exercise to put pressure on the Hyflux board via the retail holders of perpetual securities and preference shares.

In a media statement, after a meeting with SIAS, chief executive of Utico, Richard Menezes, made an offer to the retail investors in Hyflux perpetual securities and preference shares, if Hyflux accepted his offer, of a

“part cash redemption and also a hope for full redemption with a plan and exit option” …

“Full details can only be revealed later but as part of the overall deal, small investors of up to S$2,000 to S$3,000 could get 50 per cent cash redemption along with full redemption opportunity, while the rest of the investors could get a similar but staggered and cascade deal.”

“All investors will have an opportunity to get their money back … if they support the deal,” he added.


He’s also scoring a lot of PR points for explaining why the company is making this offer to Hyflux’s junior creditors with perpetual securities and preference shares, instead of senior creditors.

“(Senior creditors) took an active business risk with ringside view, whereas (perpetual securities and preference shares) investors took a passive blind faith risk,” he said in the statement.

He said neither coupon nor principal was guaranteed in the offer prospectus and while trading at SGX, and morally there remains some responsibility from Hyflux for the predicament of the perpetual securities and preference shareholders.

To score even more points, he says:

Meanwhile, Utico said it could consider a listing in Singapore and “put some skin into the game” if it gets investors’ support for the deal.

As to the reality of the offer to retail perpetual securities and preference shares , it sounds like an extend and pretend game: both sides agree that the debt will be repayable sometime in the distant future, if at all. Tan ko ko.

Related posts

Hyflux: Sue those with money

Hyflux: “going concern” BS/ KPMG again and again

Hyflux on investor losses: “Not our fault, banksters at work”

Why most S’poreans keep voting for PAP

In Financial competency, Political governance on 17/05/2019 at 1:32 pm

It’s like shopping leh:

self-reinforcing cycle, where they became more and more attached to a product.

We are attached to the PAP because we keep voting for it.

Analysing the decisions we make in the supermarket can help us understand the choices we make in other areas of our lives.

Analysing the buying decisions of 280,000 customers revealed that they fell into a self-reinforcing cycle, where they became more and more attached to a product.

These cycles tend to last for several consecutive store visits before the pattern is broken and the process starts again with a different brand.

Interestingly, when consumers break out of these self-reinforcing loops, they tend to do so across multiple products at a time.

For example, when switching their brand of coffee, they are more likely to change their brands of yoghurt and washing detergent as well.

Blind loyalty

Why does this loyalty build up?

Further analysis of the data ruled out simpler explanations, such as price or force of habit being responsible for these patterns.

One explanation is that people come to like what they purchase, out of a need to “make sense” and explain their choices to themselves and others.

For example, after buying the ingredients for a salad, a consumer might start to value healthy foods more to justify the purchase.

This pattern of behaviour could be exploited to try to create a relationship with a selected product.

In the loyalty card study, we sent the supermarket’s instant coffee drinking customers coupons to try a different brand.

Those in the switching phase were twice as likely to use the coupon as those still locked in to their existing coffee product.

Beyond shopping

This self-justified decision making is not limited to the weekly shop, but probably spills over to many areas of our lives.

For example, studies suggest people defend their selection of everything from the jam they buy to the politicians they decide to vote for in an election.

After we vote for a leader we may mimic their positions on many issues, including those we were undecided about or even to which we were opposed.

Fake news: Use electric cars to reduce carbon usage

In Environment, Financial competency on 10/05/2019 at 10:55 am

The German Institute for Economic Research (Ifo) claims that an electric vehicle produces more carbon emissions than a diesel car. They are right because major carbon emitters like China, USA and Germany use lots of coal to produce electricity.