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Showing posts from January, 2019

#MOGA (Make Orchard Great Again)

https://www.businesstimes.com.sg/government-economy/shopping-to-lifestyle-destination-new-plans-unveiled-for-orchard-rd "The plans were unveiled on Wednesday by the Singapore Tourism Board (STB), Urban Redevelopment Authority (URA) and National Parks Board (NParks). Together with the Land Transport Authority, these bodies have completed a six-month review of the plans for the belt." You know Ah Kong means business when not 1, not 2, not 3 but 4 G agencies come together to devise a plan for rejuvenating the orchard belt. #MOGA - it's a thing now. Apparently, it will be a "lifestyle" destination - not sure what that means but presumably the inclusion of NParks would suggest that "concrete mall jungle" is not on the cards.  After all, can a place really be called "orchard", if there was nary any flora and fauna. The image concepts  provided by NParks look straight out of a cheesy china developer property brochure: Wavy wood?

Frasers Logistics Trust - Optimistic despite slight DPU drop

DPU rises (but not really) No thanks Australia The TLDR version is that DPU went up by 6.5% (which is respectable) but the actual DPU received in SGD went down by 1.1% due to unfavorable AUD/SGD exchange rates. The impact was slightly mitigated by currency hedging. Spot rate (28 Jan): AUD/SGD: 0.97102 (source* OANDA ) Hedged rate (1Q19) AUD/SGD: 0.982 The hedged rate is still slightly better than the live rate. AUD is at historical low Over the last 15 years, the AUD only went below parity with the SGD for a short period of time during the 2008/09 GFC and recorded its lowest at 0.93 SGD. The AUD has steadily lost value since Jan 2018 (1.057).  I do not believe that the AU economy is in such bad shape that the value of its currency would drop to GFC levels. One must also remember Australia is an export economy, and is highly dependent on tourism. A lower AUD is in fact a boon for these industries and acts as a hedge against further currency

Frasers Commercial Trust - On its way up

There is talk  on the street that Google is interested to lease the vacant space at Alexandra Technopark. One may recall that the occupancy rates of Alexandra Technopark was left in tatters after HP terminated its lease and moved out. The space has since undergone AEI and should Google decide to lease space, the occupancy of the asset will become close to 100% (from its current 68.6%). I bought a bit FCOT a few months back , hoping for something like this to happen. While this is all speculative at this stage, one can be forgiven for being cautiously optimistic that the occupancy of the Technopark won't stay low for an extended period. Coupled with an comparatively low gearing of 28.3%, which is way below the regulatory ceiling of 45%, there is also more than fair chance that some form of acquisition (in UK?) may happen in 2019. All in all, FCOT seems to be poised for recovery.  DBS has a TP of $1.70, which seems a tad unrealistic. Nevertheless, even at current prices, FCOT

Meritocracy is both essential and justified

Today, i received a rather funny (but sad funny) email from a clerk in my firm. Her email attached an invoice bearing the date 11/12/2018. A client from the US had requested that we re-issue the "November invoice with a December date". Now, it is immediately clear to me that the US client is confused by the date format. Unlike the rest of the world, the US appears to revel in its odd ways of not using metric, and adopting counterintuitive date conventions i.e., month/date/year. But this is not my point. That clerk knows full well that both the service and the invoice were rendered in December, being the same person who processed the work and issued the invoice. There should be zero doubt in her mind that the invoice was correctly issued in December. But what does Ms Clerk do?  She simply forwards the invoice to the accounts department, asking that the invoice be re-issued with a December date, with a note, "Client's request". Stupidity? Nonchalance?

How much do you need to have for FAT FIRE

To answer this question, we first have to define what is "FAT FIRE".   No. Not that kind of FAT FIRE. There is no simple numerical benchmark for determining whether one has reached FAT FIRE (FF). Presumably, FF in New York is likely to demand a lot more than FF in Thailand. Even in the same country, what is FF for one person may be lean FIRE for another. A lot depends on what you consider "intractable luxuries". However, with some broad assumptions of costs, we may be able to determine (imagine?) what a FF lifestyle might entail: (Conservative) Fixed monthly costs: Mortgage/Rent: 2,500 (2BR condo not in Core Central Region) Car plus use costs:  2,000 (sorry not Z4 or GTR, more like Mercedes A180) Medical Insurance: 150 Parent Maintenance: 1,000 (I know not all folks are required to support their parents) Utilities/Internet/Phone: 400 Food/Shopping/Entertainment: 4,000 Travel and Holiday: 1,333 (assume 2 holidays per year, each costing 8k)

Dead cat bounce or Rebound - Singtel

Singtel is up 1.36% to 2.98 with around 12 million shares traded at 2 PM today. There appears to be strong resistance at the 3 dollar mark. Is this a sign that the worst is over? Or merely a dead cat bounce? At 2.98, ST has a guaranteed yield of 5.87% over the next 2 years. ST has said that after 2020, it will stick to a payout of between 60-75% of earnings. Singtel's EPS in 2018 was 21.71 cents per share.  This translates to a PE ratio of 13.7x at a share price of $2.98.  Assuming there is no improvement to EPS by 2021, the expected dividend pay out would be between 13 cents to 16.3 cents.  Even at the revised dividend rate, this translates to a yield of between 4.36% - 5.47% at a share price of $2.98, which is still a steal for a blue chip like ST, no matter how one looks at it. Between 2012 - 2015 Singtel traded within a band of $3.09 - 4.41 per share. During these years the dividend pay out ranged from 15.8 cents to 16.8 cents - translating to yields of around 3.5