Sunday, November 19, 2017

Some Corporate Bonds and their Yield to Maturity

To me, investing in corporate bonds is easier than investing in equities, because all one needs to care about is not whether the company makes more and more money in the future, but whether the company can make enough money to survive the holding period of the bond. 
However, needing to fork out generally $250k a unit ( except retail ones) adds to the risk. Given that there is little capital appreciation, the greediness to leverage looms large. I really need to give myself a slap in the face if i ever think about it and thank God, i have not levered ...yet.
The fall of Swiber, Marco Polo, krisenergy is a lesson for bondholders. Other than just simply looking at pure numbers, it is imperative to know what kind of assets a company holds. A company holding computers as assets does not give one peace of mind. 
Perpertual securities and preference shares are a very tricky lot and they must be adjusted for as in the end, it is still a liability to the company.
From the table, generally, the higher the liabilities/equity, the greater the yield to maturity (ytm). The further the maturity of the bond, the greater the yield to maturity.
Heeton seems very "value" from the perspective of it having a lower liabilities/equity than Tuan Sing, Oxley and Aspial but commanding a higher ytm.
(ytm taken from bondsupermart. liabilities/equity taken from financial statements.)

Wednesday, October 25, 2017

Committing Financial Harakiri and the ICBC Travel Mastercard

I will be going overseas to splurge on luxury watches (looking for Pateks and Audemars Piguet) hence committing financial harakiri. Sweat.... Actually, its a gift to people special so damn it, better make it bang for the buck. Save on the taxes. I can't possibly be carrying more than ten thousands of cash overseas. Fortunately, a special shoutout to a forumner called BBCwatcher who alerted the public on the ICBC Travel Mastercard. No link nor picture, as i am not advertising for them nor paid by them.

My motive of this post is for constructive feedback in case i did my calculations improperly or for any alerts if there is a better card out there for overseas foreign transaction because every cent counts.

The ICBC Travel Mastercard has a bank fee of 2.5% and an unlimited cashback of 3% on foreign transactions.

I used the following 2 websites.
1) The official Mastercard website that lists the indicative forex rates. We can input the bank fee which i inputted as 2.5%.
2) A money exchange website that lists the exchange rates that one can find in Singapore ( i am not being paid so no link).
Official Mastercard Website
Money exchange website
Nett cashbacks for transactions in stated currencies after bank fees 
(done on 25/10/2018 11.10am)
YEN = 0.41%
USD = 0.53%
AUD = 0.22%
MYR = 0.43%
NZD = 0.74%
EUR = 0.46%
KRW = 1.4%

The KRW and NZD are aberrations. I will need to observe them again as what Mastercard does is to convert foreign currencies to USD before converting to SGD. Since all foreign currencies have to be converted to USD first before being converted to SGD, it is unlikely that the nett cashback on any foreign currency to be higher than the nett cashback on USD. Perhaps the money exchange website isn't showing correctly for these rates. 

Wednesday, October 11, 2017

Unsatisfactory reply from SGX Regarding SIAEC - Part 2

Oh boy, i sound like the mad dog who refuses to let go.

Actually, if they have read my blog, they would have realised i already checked the annual reports and also checked the funds JP Morgan holds.


The annual report reflects many nominee accounts who hold shares for people and one of these nominee accounts could be holding shares for JP Morgan. Most likely DBS Nominees or Citbank Nominees since they are the only ones who hold more than 38.8 million shares. 

I understand the rule that a shareholder, holding less than 5%, do not need to issue notifications as they are not substantial shareholders. 

This reply email from SGX doesn't tell me anything i don't already know. Perhaps, it adds to my curiousity only.

What i am curious is:
1) How come SGX through their stockfacts service is aware that Matthews own 22 million and Seafarer owns 10 million but not aware that JP Morgan owns 38.8 million shares?
2) Is there some form of market manipulation going on where major news are allowed to broadcast news but no one knows what's happening and no one questions? I mean if im a big  boy and just releasing such unverified facts to move a share price without any cost, wow, easy money.
3) Can SGX stockfacts be relied upon and trusted? 

Which points me to another question. Why does SIA not want to privatise SIA engineering since it already owns 77% and save on listing fees?

Lots to learn..lots to learn

Tuesday, October 10, 2017

Unsatisfactory reply from SGX regarding SIAEC

Alamak. What kind of reply is this? Why is SGX asking me to clarify with the source of the information when it is already published publicly in Reuters and SPH Business Times .Unless they are implying the above news is unverified. 


Reply by SGX

Anyway,  for the sake of continous learning and curiousity, i have emailed back.

Saturday, October 7, 2017

SIA Engineering and JP Morgan Asset Management

I understand that SIA Engineering was dropped as a STI Component on 1 Sep 2017 and this remains the most possible explanation for now, though lingering doubts remain.

The Curious Case of SIA Engineering
SIA Engineering and try to make sense of JP Morgan's sale

Based on SGX website, the Edge Singapore mentioned JP Morgan Asset Management Real Assets (Singapore) Pte Ltd, so i went to google and it brought me to a list of funds managed by JP Morgan Asset Management.


The most likely place a stake such as SIA Engineering would be hiding in would be in the following 3 funds.

JP Morgan Funds - Singapore Fund (Total fund size of USD63 Million)
JP Morgan Funds - Singapore Fund


JP Morgan Funds - Asean Equity ( Total fund size of USD433.9 Million)
JP Morgan Funds - ASEAN Equity

JP Morgan Funds - Asia Pacific Equity (Total fund size of USD 919 Million)
JP Morgan Funds - Asia Pacific
Based on the total fund size and top ten holdings, it is impossible for SIA Engineering to be among the list of funds above, unless they bought it after July 2017. The traded volume, however, does not correspond to this hypothesis.
Maybe, it is in the other entities of JP Morgan. Anyhow, let's see what SGX emails back with.


Thursday, October 5, 2017

Sia Engineering - trying to make sense JP Morgan's sale

SIA Engineering's response to SGX queries still sheds no light on why JP Morgan offered to sell 28 million shares. Looking at the volume traded on 4 october, about 5.5 million shares changed hands through SGX. The past 2-3 months total volume also don't add up to 28 million which mean they haven't sold it yet. Could they have done it through a married deal and who is the counterparty? According to SGX rulebook, married deal needs to be reported.

8.7.4

Direct Business must be reported through the married trade reporting system of the Trading System under Rule 8.7.5.
I need to be educated on this.

How did Reuters or Bloomberg know about this? And why would JP Morgan make it a public news? Very curious.

Actually, people tend to focus on the bad news but every sale has a buyer and what if the buyer who is not known is warren buffet? Anyway, just some due diligence  before i decide to plonk in more money if it goes down further.



Comparing the 767 (old model ) vs 787(new model), indeed, SIA engineering, like Comfortdelgro, Singpost, SPH is facing the disruption due to new technologies. Using the above comparision, if every old plane is replaced with a new one and assuming the total number of planes serviced does not increase, SIA engineering will be facing with a 65% reduction in total man-hours.
We are indeed entering a new era of technology disrupting our lifes!

Wednesday, October 4, 2017

Curious case of SIA Engineering

Straits Times reported a massive selling of 38.8 million shares in SIA engineering by JP Morgan. This likely being the reason why it plunged 6% to $3.15.


BUT................A look at the Twenty Shareholders breakdown in their latest Annual Report shows Singapore Airlines Limited holding on to 77.72%

JP Morgan is not in the list. So where did JP Morgan get 38.8 million shares to sell?A look at SGX website Stockfacts on 04/10/2017 also shows JP Morgan not in the list.

The next biggest shareholder is Matthews , holding 22,873,500 shares which is much lesser than JP Morgan's short sale volume of 38.8 million. How do i make sense of this? Are the facts of the reporting wrong? Did JP Morgan borrow shares to short this counter? How did JP Morgan get 38.8 million shares unless Matthews ,Seafarer and some others combined to lend them the shares? Matthews and Seafarers don't seem to be subsidiaries of JP Morgan, based on my brief check on the internet .Will see the short sale report tmr. 

I just stopped eating my prawn mee soup and added some shares to my existing collection. Given its recurring free cashflow, no debt, 4 plus% dividend yield, again, its a sin not to buy since stocks are like rubber band.

Haven't been following this counter for years but a brief search on the internet word says about new aircrafts needing less maintenance, hurting SIA engineering. DBS research in July 2017 noted in their report about a potential catalyst regarding a merger with ST Aerospace or privatization with SIA. ( huh where did this thinking come from?? I can't find any supporting evidence.) . Anyhow, let's hope for the best!

Analysts: Suvro Sarker and Glenn Ng
Source:dbsvickers.com

Wednesday, September 20, 2017

Bought Comfortdelgro and hoping for the best




The dividends being 5%+ and a currently, consistently free cash flow positive company with little or no debts. With the PE being in the low teens, it is a sin for me not to take part.

Judging by the huge gap down coinciding with the huge short-sell volume on 15 Sept and 18 Sept, this indicates that the huge down is due to short-sellers, not genuine sellers. A short-seller has to buy back the shares eventually.

Short-sell value
19 Sept - SGD 7,335,227
18 Sept - SGD 13,958,536
15 Sept - SGD 19,597,813
14 Sept - SGD 1,642,692
13 Sept - SGD 2,714,317
12 Sept - SGD 1,320,798
11 Sept - SGD 1,342,370

There is no denying that Grab and Uber is affecting them greatly. There is very little catalyst that i can imagine coming from the alliance between Uber and Comfort. The short sellers must also be taking the opportunity to short it when comfort didn't clinch the contract for the MRT line.

I am hoping for the best and will average down as it goes further. The short-sell value seems to decrease on 19 Sept. Let's see if it decreases further.