Portfolio Summary for December 2022

As of 31 December 2022

CDP

Security	# shares	Price S$	%
DBS	300	33.92	2.72
UOB	300	30.70	2.46
OCBC Bank	700	12.18	2.28
SGX	2,700	8.95	6.45
iFast	5,700	5.84	8.89
SATS	3,900	2.84	2.96
ST Engineering	6,900	3.35	6.17
CapitaLand Investment	7,400	3.70	7.31
Micro-Mechanics	8,400	2.64	5.92
Powermatic Data	8,500	2.59	5.88
Nanofilm	15,400	1.39	5.72
TheHourGlass	5,000	2.04	2.72
Vicom	11,800	1.92	6.05
Sheng Siong	13,000	1.65	5.73
ComfortDelGro	11,200	1.23	3.68
Credit Bureau Asia	14,300	0.925	3.53
Genting Singapore	11,700	0.955	2.98
HRnetGroup	21,900	0.785	4.59
HC Surgical	35,500	0.39	3.70
China Sunsine	41,800	0.425	4.74
TalkMed Group	14,500	0.40	1.55
Kimly	27,000	0.35	2.52
Silverlake Axis	15,000	0.36	1.44

Portfolio Market Value = $374,468

Trades
- None

SRS

Security	# shares	Price S$	%
OCBC Bank	900	12.18	7.76
SGX	1,300	8.95	8.24
iFast	2,100	5.84	8.68
SATS	2,200	2.84	4.42
ST Engineering	3,000	3.35	7.11
CapitaLand Investment	2,600	3.70	6.81
Micro-Mechanics	3,100	2.64	5.79
Powermatic Data	3,400	2.59	6.23
Nanofilm	5,500	1.39	5.41
Vicom	4,700	1.92	6.39
Sheng Siong	8,700	1.65	10.16
ComfortDelGro	6,900	1.23	6.01
Credit Bureau Asia	5,700	0.925	3.73
HC Surgical	19,500	0.39	5.38
China Sunsine	10,800	0.425	3.25
TalkMed Group	5,800	0.40	1.64
Kimly	5,800	0.35	1.44
Silverlake Axis	6,000	0.36	1.53

Portfolio Market Value = $141,258

Trades
- None

Singapore Savings Bonds

Security	Amount ($)
GX18070N	12,500
GX22120S	14,000
GX23010Z	15,000

Portfolio Market Value = $41,500

Commentary

I did not execute any trade in December.  Markets are trending sideways, but the year has been brutal for equity holders.  The S&P 500 Index is down 19.4% YTD while the Straits Times Index surprisingly eked out a 4.1% gain YTD.  I'm not too concerned with the loss in my portfolios as I'm investing for the income, not P&L.  I'm not a professional fund manager, so there is no pressure to beat any benchmark.  Hee.

I received dividend of $276 this month from ST Engineering.  I subscribed $15,000 of January 2023 Singapore Savings Bond and received my full allotment.  In fact, most people should have gotten their full allotment since this issuance isn't popular compared to the previous one which had a higher yield.

As we wind down 2022, COVID-19 is striking fear among countries again.  The Chinese government has gone the other extreme and dismantled the movement restrictions.  China is experiencing a tidal wave of new infections.  Fever medicine is flying off the shelves, so much so that retailers in various countries had to implement purchase limit per customer.

Central banks continue to ramp up interest rates to curb inflation.  This means more pain ahead for both bond and stock markets.  Nonetheless, this shall come to pass, and the situation ought to improve in a year or two.  My advice is to stay disciplined to your investment strategy.  Look forward to brighter days ahead!

Christmas has just passed, and Lunar New Year is less than a month away.  Hope the festive mood will bring cheer to every corner of Singapore.  Here's wishing you a Peaceful, Safe and Prosperous 2023/Year of the Rabbit!  GXFC!

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Portfolio Summary for November 2022

As of 30 November 2022

CDP

Security	# shares	Price S$	%
DBS	300	35.19	2.85
UOB	300	31.20	2.53
OCBC Bank	700	12.44	2.35
SGX	2,700	9.05	6.60
iFast	5,700	5.30	8.16
SATS	3,900	2.67	2.81
ST Engineering	6,900	3.43	6.39
CapitaLand Investment	7,400	3.67	7.33
Micro-Mechanics	8,400	2.76	6.26
Powermatic Data	8,500	2.65	6.08
Nanofilm	15,400	1.33	5.53
TheHourGlass	5,000	2.14	2.89
Vicom	11,800	1.92	6.12
Sheng Siong	13,000	1.65	5.79
ComfortDelGro	11,200	1.23	3.72
Credit Bureau Asia	14,300	0.95	3.67
Genting Singapore	11,700	0.88	2.78
HRnetGroup	21,900	0.795	4.70
HC Surgical	35,500	0.34	3.26
China Sunsine	41,800	0.405	4.57
TalkMed Group	14,500	0.38	1.49
Kimly	27,000	0.355	2.59
Silverlake Axis	15,000	0.375	1.52

Portfolio Market Value = $370,292

Trades
- Bought 2,200 shares of Nanofilm Technologies.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	12.44	8.03
SGX	1,300	9.05	8.44
iFast	2,100	5.30	7.98
SATS	2,200	2.67	4.21
ST Engineering	3,000	3.43	7.38
CapitaLand Investment	2,600	3.67	6.84
Micro-Mechanics	3,100	2.76	6.13
Powermatic Data	3,400	2.65	6.46
Nanofilm	5,500	1.33	5.24
Vicom	4,700	1.92	6.47
Sheng Siong	8,700	1.65	10.29
ComfortDelGro	6,900	1.23	6.08
Credit Bureau Asia	5,700	0.95	3.88
HC Surgical	19,500	0.34	4.75
China Sunsine	10,800	0.405	3.14
TalkMed Group	5,800	0.38	1.58
Kimly	5,800	0.355	1.48
Silverlake Axis	6,000	0.375	1.61

Portfolio Market Value = $139,476

Trades
- Bought 1,400 shares of Nanofilm Technologies.

Singapore Savings Bonds

Security	Amount ($)
GX18070N	12,500
GX22120S	14,000

Portfolio Market Value = $26,500

Commentary

The equity markets had no lack of action in the month of November.  Whenever there was any sign that the U.S. Fed may hike interest rate less than expected, the markets shot up.  Whenever there was any sign that China may go into lockdown mode (again), the markets tanked.

It has been a long time ago that we have seen interest rates in the region of 3 to 4 percent.  A recent poll of experts put the terminal Fed Funds Rate at around 4.75 to 5 percent [news].  If that is the case, the lending rate on mortgages is likely to peak between 5 and 6 percent.  The MAS warned that with rising interest rates and growing cost pressures due to elevated inflation, some households are likely to face increasing financial stress and may encounter difficulties in servicing their mortgages [news].

Price of Nanofilm Technologies plunged to an all-time low, as investors grew despondent about China's Zero-COVID policy, despite the fact that Nanofilm reported a 10% YoY revenue growth [here] for 9M2022.  I loaded on the shares, as I believe the company's long-term prospect is still good.  Again, I emphasize Nanofilm is one of my three strategic bets, and is unlikey to generate positive cashflows in the near term.

I had some major expenses this month which drained my savings till it nearly hit the minimum account limit.  I was tempted to transfer money out of my portfolio cash account, but that would totally destroy my 'pay oneself first' habit.  One transgression will soon lead to another.  Thankfully, the dividends were credited in the nick of time.

I received dividends from SGX, HC Surgical Specialists, Silverlake Axis, Micro-Mechanics, iFast, DBS and The Hour Glass, which literally saved me.  The amount totaled $1,701.10.  While it was not much, it is after all, the fruit of my investment strategy, and I cherished every cent.

I am looking forward to the day when my portfolio can provide sufficient passive income to cover my expenses so that I can call it a day from my job.  That said, it is not prudent to rely solely on dividends alone.  As the recent COVID-19 pandemic demonstrated, companies can cut dividends in a jiffy to conserve cash.  One will need to have multiple streams of income to tide over any crisis.

At an average yield above 3 percent, the Singapore Savings Bond (SSB) is looking increasingly attractive compared to equities on a risk-reward basis.  I will begin to subscribe for them again.  The demand is red-hot, according to what I have read [news].

Financial matters aside, I just came back from a cruise trip onboard Royal Caribbean's Spectrum of the Seas.  It was a wonderful break for me, even though the ship was packed to the brim with people.  I heard from the service staff that the ship is fully booked (5,000-plus guests) till the end of December.  Luckily, I chose the Grand Suite, so we had a separate dining area which is what I enjoyed the most.  No need to chope seats during mealtimes.  However, we still had to queue one and a half hours to play the Bumper Cars.  We also had to queue early to get good seats for the shows.

At the Royal Theatre, waiting for the show to start.

Nonetheless, it was a better experience compared to our previous three cruises, as my sons are older now and they can navigate their own way around the ship, choosing their activities while my wife and I simply laze around.  I also tried Ripcord by iFly, my first air tunnel skydiving experience.  It was truly memorable.  (I wish I can try skydiving for real, but my wife will surely object!)

For those who have never been on a cruise before, I strongly recommend to try it, but during an off-peak season if you don't like crowds.

We have finally reached the last month of the year.  2022 has been marred by the Russian-Ukraine war, as well as runaway inflation.  While the COVID-19 pandemic is still ongoing, it is less of a concern now, judging by the large number of Singaporeans who choose not to wear a mask in public unless mandated.  I sincerely hope things will get better next year.  My grand wish is for the war to end, the pandemic to cease, inflation to be contained, and the recession to be averted.

Here's wishing you and your family Happy Holidays!

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Portfolio Summary for October 2022

As of 31 October 2022

CDP

Security	# shares	Price S$	%
DBS	300	34.20	2.90
UOB	300	27.76	2.36
OCBC Bank	700	12.13	2.40
SGX	2,700	8.42	6.44
iFast	5,700	4.05	6.54
SATS	3,900	2.73	3.01
ST Engineering	6,900	3.30	6.45
CapitaLand Investment	7,400	3.01	6.31
Micro-Mechanics	8,400	2.75	6.54
Powermatic Data	8,500	2.60	6.26
Nanofilm	13,200	1.74	6.50
TheHourGlass	5,000	1.95	2.76
Vicom	11,800	1.88	6.28
Sheng Siong	13,000	1.56	5.74
ComfortDelGro	11,200	1.27	4.03
Credit Bureau Asia	14,300	0.96	3.89
Genting Singapore	11,700	0.805	2.67
HRnetGroup	21,900	0.73	4.53
HC Surgical	35,500	0.38	3.82
China Sunsine	41,800	0.42	4.97
TalkMed Group	14,500	0.40	1.64
Kimly	27,000	0.34	2.60
Silverlake Axis	15,000	0.325	1.38

Portfolio Market Value = $353,230

Trade Actions
- Bought 1,500 shares of SGX.
- Bought 3,900 shares of CapitaLand Investment.
- Bought 2,800 shares of Nanofilm.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	12.13	8.18
SGX	1,300	8.42	8.20
iFast	2,100	4.05	6.37
SATS	2,200	2.73	4.50
ST Engineering	3,000	3.30	7.42
CapitaLand Investment	2,600	3.01	5.87
Micro-Mechanics	3,100	2.75	6.39
Powermatic Data	3,400	2.60	6.63
Nanofilm	4,100	1.74	5.35
Vicom	4,700	1.88	6.62
Sheng Siong	8,700	1.56	10.17
ComfortDelGro	6,900	1.27	6.57
Credit Bureau Asia	5,700	0.96	4.10
HC Surgical	19,500	0.38	5.55
China Sunsine	10,800	0.42	3.40
TalkMed Group	5,800	0.40	1.74
Kimly	5,800	0.34	1.48
Silverlake Axis	6,000	0.325	1.46

Portfolio Market Value = $133,430

Trade Actions
- None

Commentary:

Another month flew past, but not without my stock alerts triggering almost daily as the general stock market sank lower by the day.  I took opportunity of the sour mood and loaded up on shares of SGX, CapitaLand Investment and Nanofilm Technologies.  I was tempted to add other stocks too, but I refrained.  (Have to keep my portfolio balanced.)

UOB reported a sterling set of 3QFY2022 result [here].  Net profit rose to S$1.4 billion, up 34% YoY.  Net interest margin expanded 40 basis points.  The positive result had been widely expected by investors.  Nonetheless, UOB's stock price skyrocketed 6.7% in the two days post-earning release.  Local banking stocks DBS and OCBC also gained from the sentiment.  DBS is set to report its results on 3 Nov; OCBC is set to report on 4 Nov.

My cash stash has reduced to approx. 16%.  I need to be selective on which stocks to add hereon.  Banks are currently bathed in this favourable light amid the rising interest rate environment, so it will be hard to pile on them at an attractive price.  I am also keeping an eye on The Hour Glass.  I sold the stock back in March this year.  Hope to build my position again as the market retreats due to recessionary fears.

Family-wise, my wife and I are looking forward to our Royal Caribbean cruise trip in November.  It will be a welcome break after a hectic year at work.

Until next time!

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You may lose if you do, but I guarantee 100% you will not win if you don't

We can draw many valuable lessons from the world of sportsmanship.

Athletes spend years going through sheer rigour to hone their skill, in order to make it to the top of their league. Some of these epitomes of success offer precious pearls of wisdom that we can apply in life.

My favourite quote comes from Hockey Hall of Famer, Wayne Gretzky. It states,

"You miss 100 percent of the shots you don't take."

This statement describes neatly the menace that stops investors from acting decisively - fear.

Often, when the price of a share has retraced to our target level, we refuse to pull the trigger because we fear that once we bought the stock, it will get cheaper and we look like a fool who paid more than the next person.

The market has an ominous name for this phenomenon. It is called, "catching a falling knife".

And it can get worse - When we miss the chance to buy and the share price bounces back up, the fear evolves into an uglier monster - regret.

While fear nibbles at our heart, regret takes a big bite.

At the moment of decision, it can feel like we are caught between a rock and a hard place. To buy, or not to buy? To click on the button, or wait?

Hesitation leads to paralysis, and before we know it, the chance slips us by.

Through years of investing, I have found two methods to deal with the malaise.

The first method is simple - take action. Shut out that inner voice. Feel the fear and do it anyway.

Frame it in another perspective:

You may lose ($$$) if you do (buy the stock), but I guarantee 100% you will not win ($$$) if you don't (buy the stock).

Pain is inevitable in life. Suffering is optional. There is a risk in everything. Even eating involves the risk of choking.

The best we can do as investors is to minimize the calculated risk taken, and maximise the probability of a win.

Which brings me to my second method of dealing with fear and regret - preparation.

I cannot emphasize enough - a good investor does his/her homework. He/She knows the right companies that fit his/her investment criteria. Any purchase is planned and not made on a whim.

A good investor should also have a clear idea of the limit price at which he/she is UNWILLING TO PAY for a stock.

When you are aware of the price boundary marking the forbidden zone, the rest of the region is opportunity land.

Both methods work in conjunction with each other. Unless we have good knowledge of the companies we want to invest in, and take action when the opportunity strikes, we will never be able to achieve our intended goal. Financial freedom will always remain an elusive dream.

Given a choice, I will take reality, warts and all anytime.

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Portfolio Summary for September 2022

As of 30 September 2022

CDP

Security	# shares	Price S$	%
DBS	300	33.39	2.95
UOB	300	26.16	2.31
OCBC Bank	700	11.83	2.44
SGX	1,200	9.46	3.34
iFast	5,700	3.95	6.63
SATS	3,900	3.01	3.46
ST Engineering	6,900	3.58	7.28
CapitaLand Investment	3,500	3.47	3.58
Micro-Mechanics	8,400	3.00	7.42
Powermatic Data	8,500	2.61	6.53
Nanofilm	10,400	2.10	6.43
TheHourGlass	5,000	2.10	3.09
Vicom	11,800	2.00	6.95
Sheng Siong	13,000	1.58	6.05
ComfortDelGro	11,200	1.32	4.35
Credit Bureau Asia	14,300	0.985	4.15
Genting Singapore	11,700	0.785	2.71
HRnetGroup	21,900	0.74	4.77
HC Surgical	35,500	0.41	4.29
China Sunsine	41,800	0.45	5.54
TalkMed Group	14,500	0.385	1.64
Kimly	27,000	0.335	2.66
Silverlake Axis	15,000	0.32	1.41

Portfolio Market Value = $339,517

Trade Actions
- Bought 3,500 shares of CapitaLand Investment.
- Bought 2,800 shares of ST Engineering.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.83	7.54
SGX	1,300	9.46	8.71
iFast	2,100	3.95	5.87
SATS	2,200	3.01	4.69
ST Engineering	3,000	3.58	7.60
CapitaLand Investment	2,600	3.47	6.41
Micro-Mechanics	3,100	3.00	6.59
Powermatic Data	3,400	2.61	6.28
Nanofilm	4,100	2.10	6.10
Vicom	4,700	2.00	6.66
Sheng Siong	8,700	1.58	9.73
ComfortDelGro	6,900	1.32	6.45
Credit Bureau Asia	5,700	0.985	3.98
HC Surgical	19,500	0.41	5.66
China Sunsine	10,800	0.45	3.44
TalkMed Group	5,800	0.385	1.58
Kimly	5,800	0.335	1.38
Silverlake Axis	6,000	0.32	1.36

Portfolio Market Value = $141,228

Trade Actions
- Bought 2,600 shares of CapitaLand Investment.
- Bought 5,800 shares of Kimly.

Commentary:

Time flies.  We have come to the end of the third calendar quarter.  Earnings reporting season will soon be upon us.  I'm expecting a grim verdict, with stubbornly high inflation eroding companies' profit margins.  (There is only so much cost you can pass on to customers before you lose their business.)

Central bank governors around the world are all marching to the same drumbeat - higher is better.  (Interest rates, that is.)  Even the BOJ had to intervene in the market to shore up the weak Japanese yen, the first time since 1998 [news].

As markets retreated, I nibbled on CapitaLand Investment (CLI) again.  Gone is the exuberance that shot CLI share past $4 in April this year.  Pragmatism and patience trump FOMO everytime.

I accumulated shares of ST Engineering in my CDP portfolio as it hit my target price level.  I also added Kimly shares to my SRS portfolio for the first time.

All of these companies have resilient business models which I'm totally fine to hold over the long term.  I'm particularly pleased that Kimly's management decided to diversify its Rive Gauche patisserie business [announcement].  I cannot see how the coffeeshop chain operator can derive much synergy from owning this confectionery brand.

SATS has officially announced the acquisition of Paris-based air cargo handler Worldwide Flight Services for a cash consideration of EUR 1.187B (SGD 1.639B). [announcement].  The enterprise value is assessed to be EUR 2.25B, smaller than the rumoured EUR 3B.  In terms of how SATS will cough up the cash, per the announcement, SATS has "committed funding in place through an acquisition bridge facility and will continue to evaluate its options with regards to the final funding structure.  The base funding plan entails use of internal cash and an equity fundraising from existing shareholders and new strategic investors (which could include a placement of new shares or other hybrid securities or convertible instruments)".

SATS' indicative financing plan (Source: SGX filing)

The SGD 1.7B equity fundraising is hardly a surprise, given SATS has only SGD 786M cash as of Q1 2022.  But raising money will be expensive in this environment, when central banks are committed to hiking interest rates in order to combat inflation.  SATS will probably need to offer a significant discount to the last traded price in order to entice investors.

The announcement did not sit well with the market.  SATS' stock price tanked more than 20% after the trading halt was lifted.  It must be highlighted that SATS' existing shareholders have yet to enjoy the fruit of the post-COVID19 travel boom, as the company ramped up costs significantly in the last two quarters.  I'm not sure how many existing shareholders are willing to pump more money into the company, even though Temasek has given its blessing for the acquisition.  I myself would like to see the funding proposal first before deciding whether to vote for/against the acquisition.

Well, not that my vote as a minority shareholder will make any difference. (LOL)  Any form of right offering will likely be subscribed by Temasek, inching the company more firmly into government hands.  If I am against the deal, I will sell off my holding in the market.  Broker analysts do not seem bullish on the deal either.  Credit Suisse had cut their recommendation from Outperform to Neutral.  UOB Kay Hian had cut their recommendation from Buy to Hold.

Heading into the final three months of 2022, my cash has dwindled to 21% of total portfolio value.  My household expenditure is rising because of the inflation.  I will minimize any non-essential spending like restaurant meals, and opt for alternatives like hawker food instead.  I don't drive and I hardly take cabs, so my transportaton expense is already at a minimum.  On weekends, I'm busy with my kids' tuition classes and swimming lesson, so we don't go out and socialise a lot.  Short of the cruise trip in November, I have only planned a hopover to Johor Bahru for shopping and massage.  Not going to fly overseas this year.  (I heard airfares now are sky high.)

On a different note, the recent market selloff has presented opportunities to load on quality stocks at favourable prices.  I know it is gut-wrenching to see your portfolio value goes down day by day.  If you have a sound investment plan in place, my advice is to be disciplined and stick to it.  Be aware of how much financial risk you can bear.  Set aside an emergency fund and allocate your remaining money into growing your portfolio wisely.

Until next time!

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Portfolio Summary for August 2022

As of 31 August 2022

CDP

Security	# shares	Price S$	%
DBS	300	32.60	2.90
UOB	300	27.33	2.43
OCBC Bank	700	12.09	2.51
SGX	1,200	9.49	3.37
iFast	5,700	4.48	7.56
SATS	3,900	4.04	4.67
ST Engineering	4,100	3.73	4.53
Micro-Mechanics	8,400	3.14	7.81
Powermatic Data	8,500	2.76	6.95
Nanofilm	10,400	2.37	7.30
TheHourGlass	5,000	2.32	3.44
Vicom	11,800	2.03	7.09
Sheng Siong	13,000	1.62	6.24
ComfortDelGro	11,200	1.41	4.68
Credit Bureau Asia	14,300	0.99	4.19
Genting Singapore	11,700	0.775	2.69
HRnetGroup	21,900	0.765	4.96
HC Surgical	35,500	0.435	4.57
China Sunsine	41,800	0.48	5.94
TalkMed Group	14,500	0.39	1.67
Kimly	27,000	0.365	2.92
Silverlake Axis	15,000	0.36	1.60

Portfolio Market Value = $337,700

Trade Actions
- None

SRS

Security	# shares	Price S$	%
OCBC Bank	900	12.09	7.85
SGX	1,300	9.49	8.90
iFast	2,100	4.48	6.79
SATS	2,200	4.04	6.41
ST Engineering	3,000	3.73	8.07
Micro-Mechanics	3,100	3.14	7.02
Powermatic Data	3,400	2.76	6.77
Nanofilm	4,100	2.37	7.01
Vicom	4,700	2.03	6.88
Sheng Siong	8,700	1.62	10.17
ComfortDelGro	6,900	1.41	7.02
Credit Bureau Asia	5,700	0.99	4.07
HC Surgical	19,500	0.435	6.12
China Sunsine	10,800	0.48	3.74
TalkMed Group	5,800	0.39	1.63
Silverlake Axis	6,000	0.36	1.56

Portfolio Market Value = $138,635

Trade Actions
- None

Commentary:

For the month of August, I did not execute a single trade. While work has been hectic, the other reason is because none of the stocks on my watchlist hit my target entry price. So I will just roll my cash stash over to next month. Equity markets are trading sideways. Investors are alternating between optimism that the economy is growing strongly, and pessimism that the hawkish stance by central bank governors in combating inflation will push the world into a recession.

I did spurge a bit in August however, as my family celebrated three birthdays within the same month. I also arranged an annual health screening at Raffles Hospital. Age is catching up and I want to ensure no negative surprise.

In August, I received dividends for iFast, TalkMed, UOB, The Hour Glass, OCBC Bank, Vicom, Powermatic Data, DBS, ComfortDelGro and Sheng Siong. It is always nice to receive the fruit of my investment strategy.

Looking forward to September, I think the seesaw-ing of stock prices is likely to persist. I do not see any clear reason that will send the markets into a buying frenzy or a freefall. Nonetheless, I will keep a lookout for buying opportunities as they appear.

Stay safe!

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Portfolio Summary for July 2022

As of 31 July 2022

CDP

Security	# shares	Price S$	%
DBS	300	31.47	2.84
UOB	300	27.55	2.49
OCBC Bank	700	11.67	2.46
SGX	1,200	9.90	3.57
iFast	5,700	4.21	7.22
SATS	3,900	3.97	4.66
ST Engineering	4,100	4.02	4.96
Micro-Mechanics	8,400	2.98	7.53
Powermatic Data	8,500	2.75	7.03
Nanofilm	10,400	2.01	6.29
TheHourGlass	5,000	2.22	3.34
Vicom	11,800	2.06	7.31
Sheng Siong	13,000	1.60	6.26
ComfortDelGro	11,200	1.42	4.79
Credit Bureau Asia	14,300	0.99	4.26
Genting Singapore	11,700	0.805	2.83
HRnetGroup	21,900	0.78	5.14
HC Surgical	35,500	0.475	5.07
China Sunsine	41,800	0.435	5.47
TalkMed Group	14,500	0.39	1.70
Kimly	27,000	0.365	2.97
Silverlake Axis	15,000	0.40	1.81

Portfolio Market Value = $332,353

Trade Actions
- Bought 10,400 shares of Nanofilm Technologies.
- Bought 14,300 shares of Credit Bureau Asia.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.67	7.64
SGX	1,300	9.90	9.36
iFast	2,100	4.21	6.43
SATS	2,200	3.97	6.35
ST Engineering	3,000	4.02	8.77
Micro-Mechanics	3,100	2.98	6.72
Powermatic Data	3,400	2.75	6.80
Nanofilm	4,100	2.01	5.99
Vicom	4,700	2.06	7.04
Sheng Siong	8,700	1.60	10.12
ComfortDelGro	6,900	1.42	7.13
Credit Bureau Asia	5,700	0.99	4.10
HC Surgical	19,500	0.475	6.74
China Sunsine	10,800	0.435	3.42
TalkMed Group	5,800	0.39	1.65
Silverlake Axis	6,000	0.40	1.75

Portfolio Market Value = $137,503

Trade Actions
- Bought 4,100 shares of Nanofilm Technologies.
- Bought 5,700 shares of Credit Bureau Asia.

Commentary:

July has been a hectic month at work, so I hadn't paid much attention to the market. July also heralded the start of Q2 earnings reporting season, with UOB reporting 11% YoY increase in Q2 net income yesterday, but its share price dropped due to downbeat sentiment.

The U.S. Fed hiked interest rate by 75 basis points this month, which was largely within investors' expectations. In Singapore, the MAS reported Core Inflation rose to 4.4% YoY in June from 3.6% in May [report]. It is going to be a while more before we will see any tapering.

I added another watchlist target to my portfolios - Nanofilm Technologies. This company, together with iFast and Credit Bureau Asia are my strategic bets. Even when these companies hardly pay a decent dividend now, I like their ROE, profit margins and growth potential in their respective areas. I must confess though - I don't fully understand Nanofilm's proprietary technology, and I cannot ascertain whether a newer discovery may render the technology obsolete. This contravenes Buffett's advice of staying within one's circle of competence. Caveat emptor. 

Heading into August, my cash hoard stands around 23% of total portfolio value. I have set market alerts around preferred price levels for the stocks on my watchlist, so that I do not miss out while burying myself in tons of work.

Take care!

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Portfolio Summary for June 2022

As of 30 June 2022

CDP

Security	# shares	Price S$	%
DBS	300	29.68	3.04
UOB	300	26.25	2.69
OCBC Bank	700	11.39	2.72
SGX	1,200	9.46	3.88
iFast	5,700	4.14	8.06
SATS	3,900	3.90	5.19
ST Engineering	4,100	4.08	5.71
Micro-Mechanics	8,400	2.90	8.32
Powermatic Data	8,500	2.68	7.78
TheHourGlass	5,000	2.32	3.96
Vicom	11,800	2.02	8.14
Sheng Siong	13,000	1.52	6.75
ComfortDelGro	11,200	1.40	5.36
Genting Singapore	11,700	0.72	2.88
HRnetGroup	21,900	0.775	5.80
HC Surgical	35,500	0.495	6.00
China Sunsine	41,800	0.44	6.28
TalkMed Group	14,500	0.385	1.91
Kimly	27,000	0.38	3.50
Silverlake Axis	15,000	0.395	2.02

Portfolio Market Value = $292,785

Trade Actions
- Bought 300 shares of UOB.
- Bought 500 shares of iFast Corp.
- Bought 500 shares of Micro-Mechanics Holdings.
- Bought 11,800 shares of Vicom.
- Bought 3,500 shares of Powermatic Data Systems.
- Bought 14,500 shares of TalkMed Group.
- Sold 10,600 shares of Silverlake Axis.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.39	8.43
SGX	1,300	9.46	10.12
iFast	2,100	4.14	7.15
SATS	2,200	3.90	7.06
ST Engineering	3,000	4.08	10.07
Micro-Mechanics	3,100	2.90	7.40
Powermatic Data	3,400	2.68	7.50
Vicom	4,700	2.02	7.81
Sheng Siong	8,700	1.52	10.88
ComfortDelGro	6,900	1.40	7.95
HC Surgical	19,500	0.495	7.94
China Sunsine	10,800	0.44	3.91
TalkMed Group	5,800	0.385	1.84
Silverlake Axis	6,000	0.395	1.95

Portfolio Market Value = $121,551

Trade Actions
- Bought 3,400 shares of Powermatic Data Systems.
- Bought 4,700 shares of Vicom.
- Bought 2,100 shares of TalkMed Group.
- Sold 9,100 shares of Silverlake Axis.

Commentary:

The Straits Times Index (STI) has completely eliminated its year-to-date gain. Although the local market is still far from bear territory, stock prices have started to slide, similar to other markets.

Worry of inflation has finally crept into Singaporeans' mind, according to separate surveys by DBS [here] and YouGov [here]. The government has taken preemptive action by announcing a surprise S$1.5b budget to help families and businesses tide through this challenging period [news].

I went on a spending spree in June. Fine-tuned my positions in iFast Corp, Micro-Mechanics Holdings and Powermatic Data Systems as their prices retreated.

I also built a stake in two new counters - UOB and Vicom. Banks are big beneficiaries of interest rate hikes, although there is the concern that a recession may bump up nonperforming loans. UOB's acquisition of Citibank's consumer assets in Malaysia, Thailand, Indonesia and Vietnam provides hope that the bank now has a meaningful avenue to expand its business in ASEAN [news]. Vicom is a relatively well-known vehicle inspection company in Singapore. I like the consistency in Vicom's double-digit ROE and margins.

I have managed to add TalkMed Group to my CDP portfolio too. I further reduced my position in Silverlake Axis as its price rallied near month end.

I am gradually tilting my portfolios towards more liquid holdings. Current cash stands at 30% of total portfolio value. I hope to scoop up more shares as they approach my preferred entry level.

July marks the beginning of Q3, which also heralds the start of the earnings reporting season. As investors buy and sell based on actual results versus estimates, volatility is going to be high. A U.S. Fed interest rate hike of 75 bps in July is almost a given. Any economic data that paints a better picture is likely to spark a relief rally. Overall, a wild ride is expected.

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Mortgage takes a bigger bite of my income

CNA published an explainer last evening about how the U.S. Fed interest rate hike impacts mortgage rates in Singapore [here].

This brings to mind a letter I received from DBS a few days ago. The bank wrote that in view of the increase in their FHR6 (6 months Singapore Dollar fixed deposit interest rate), they will be raising my mortgage rate from 1.00% to 1.55% p.a. accordingly.

My first reaction was, "Yikes."

I know the Fed had hiked Fed Funds Rate (FFR) by 50 basis points in May, but DBS is raising their FHR6 by 55 basis points???

I can imagine getting more letters from DBS in the remainder of the year, as the Fed had just hiked FFR by 75 basis points in June, and is committed to do the same in their July meeting if required.

This spurred me to reach deep into my email inbox and retrieve the details of the repriced mortgage package which my wife and I signed with DBS in September 2021. Back then, our mortgage lock-up period was expiring, and DBS strategically sent us an email with an attractive repricing offer.

The offer was a fixed rate package tied to FHR6 in stepwise increment for first three years. FHR6 + 0.80% p.a. for first year, FHR6 + 0.85% p.a. for second year, FHR6 + 0.90% p.a. for third year and FHR6 + 1.00% thereafter.

But what got me to sign on the dotted line was a feature that DBS offered:

The bank promised to cap the maximum interest rate at 1.60% p.a. throughout the first three years.

Looking at the inflationary enviroment today and the central banks' aggressive posturing, I am glad I have gotten the deal.

Mortgage servicing is due to take a bigger bite out of Singaporean households' expenditure. A 1.00% increase on a $500,000 mortgage means an extra $417 per month to the bank.

That is $417 which could have been spent on a nice staycation, a new kitchen appliance or an investment course.

Or if you are a glutton like me, that is $417 which could have been spent on restaurant meals.

$417. Each. Month.

My wife and I are dead set to repay the full mortgage at the end of the three-year lock-up period. That will be one heck of a milestone for us.

In the interim, time to 'take revenge' by investing in bank stocks. DBS itself is starting to look attractive. Yummy.

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Cosmetic Giant Revlon Files for Bankruptcy

I am sad to read that U.S. cosmetic giant Revlon has filed for Chapter 11 bankruptcy protection [news]. The company had buckled under a combined debt of US$3.7 billion, with an asset total of only US$2.3 billion.

I remember Revlon because I had often seen their commercials on the television during my younger days.



This is another sombre lesson why investors need to watch the right side of companies' balance sheet carefully. It is even more critical now as central banks around the world are starting to hike interest rates, meaning the financing expense for companies will only grow larger.

Personally, I have been burnt by my investment in Hyflux's perpetual bonds because I did not pay attention to the company's financial health when I first subscribed for the security. Had I bothered to scrutinise the numbers, I should have caught a few red flags. Oh well.

This also drove my preference now for companies with little or no debt. At the least, the company should have sufficient cash and marketable securities to cover their total liabilities.

Do pay attention to the fundamentals of the companies you are investing. A bit of homework can potentially save you money, and some heartache.

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Jerome Powell got to wear the black suit and dark tie

I was tickled as I read an article on Bloomberg titled, "Fed Mulls ‘Game Changer’ to Jolt Inflation: Decision Day Guide" [news].

The quote in the title came from Chief Economist Vincent Reinhart at Dreyfus and Mellon. He was describing how the U.S. Fed Chairman Jerome Powell will have to present himself at his upcoming June 22 and 23 semi-annual testimony before the U.S. Congress.

Spiking inflation in the U.S. has bristled many U.S. lawmakers. Since the mandate for the U.S. Fed is to control inflation, it is fair to say Powell has perhaps the most stressful job in the world right now.

For sure, the U.S. Fed is going to hike the Federal Fund Target Rate in tonight's FOMC meeting. The question is by how much?

Some professionals think an increase of 50 basis points is still on the table; CME Fed Fund future traders believe a 75-basis point increase is more likely [data]; yet, there are a few extremists who believe a 100-point hike cannot be ruled out either. [news]

None of the above three choices will satisfy investors completely. So a massive reaction in the equity market is not unexpected.

Hang on tight for a long roller coaster ride.

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CME FedWatch Tool

I was watching the Asia First programme on CNA this morning when the presenter talked about CME's FedWatch Tool [here].

As explained on the website, the FedWatch Tool calculates unconditional probabilities of Federal Open Market Committee (FOMC) meeting outcomes to generate a binary probability tree.

The probabilities of possible Fed Funds target rates are based on Fed Fund futures contract prices assuming that the rate hike is 0.25% (25 basis points) and that the Fed Funds Effective Rate (FFER) will react by a like amount. (For more information on the methodology, click here.)

CME FedWatch Tool.

What interested me was that based on the data at time of writing, the market is pricing in a 96.8% probability that the U.S. Fed will hike 75 bps - yes, 75 basis points, not 50 anymore - during tomorrow's FOMC meeting.

Figuratively, it is no longer about the U.S. Fed slamming the brakes on the economy. It is about the U.S. Fed throwing everything, including the kitchen sink in an attempt to tame the runaway inflation.

I'm not sure if the prophesied recession will materialize or not, but the simple fact that the U.S. Fed is hiking interest rate faster than previously expected means that perception will change within the population.

When a person thinks the near-term future is going to be financially challenging, that person will likely adopt a series of actions to mitigate the effect. For business owners, this means manpower hiring freeze or holding back on business expansion. For consumers, this means cutback on unnecessary expenses or simply saving more.

All of these actions will have a follow-on impact on the economy and companies' top line. When profits are squeezed, further mitigative actions are taken and the tightening cycle goes on.

Hopefully, the fear does not spread maniacally, and we can avert a recession, even by a slim margin.

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The True Investor Welcomes Volatility

Sharing a quote taken from the book, "My Warren Buffett Bible" compiled by Robert L. Bloch [emphasis mine]:

"In fact, the true investor welcomes volatility ... because a wildly fluctuating market means that irrationally low prices will periodically be better attached to solid businesses. It is impossible to see how the availability of such prices can be thought of as increasing the hazards for an investor who is totally free to either ignore the market or exploit its folly."

- Warren Buffett

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Recession or not, solid businesses will survive and even thrive in difficult times. It is a boon that valuations have finally come down to attractive levels.

Hope you are ready to take advantage of buying opportunities. Feel the (market) fear and do it anyway.

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In investing, learn to lean into the wind

If you read market commentaries, you will know there are many trade suggestions that contradict each other.

For example, when there is a selloff, some investment advisors will encourage us to "buy the dip"; others will warn us not to "catch a falling knife".

When there is a rally, some fund managers will enthuse "the bull run still has legs" (whatever it means); others will caution this is a "dead cat bounce".

So who is right? Who is wrong? The answer is anybody's guess.

And honestly, you shouldn't care.

It is this potpourri of conflicting perspectives in the market that billions of dollars worth of shares change hands daily. [data] If everybody believes a stock is going to go one direction, nobody will be willing to take the other side of the trade.

Professional portfolio managers have learnt to take a stand - bullish or bearish, risk on or stay defensive at any point in time. Their PnL and their future career prospects depend on it.

As retail investors, we should have our own view too, be it right or wrong. When you are indecisive and always looking out to others for a lead, your mind will be like a reed in the wind - shaken by changing opinions, none of which is yours.

Are you like a reed shaken in the everchanging wind?
(Photo credit: Unsplash)

We ought to ignore the chatter and formulate our investment thesis based on logic and data. Here is what a savvy bottom up stock picker would do:

1. Retrieve the figures from company financial statements.
2. Derive the valuation ratios.
3. Compare result against history and peers in the same sector.
4. Decide on companies to invest.
5. Decide on price to buy and sell.

It may sound tedious, but it does not have to be manual. There are ready stock screeners out there that can perform the number crunching.

If even a screener sounds too scary for you, and you prefer to get stock recommendations directly, the least you can do is a fact check on other people's findings. Trust, but verify.

It is only through our own effort that we build up sufficient conviction on a company. It is only through our own analysis that we know for sure whether a stock is cheap or expensive at the current price.

When you have gone the mile to complete the homework, I'm sure you will feel more at ease when you put in the order. This is especially critical when everybody else seems to be heading for the exit.

Even when you invested and the stock price moves the other way, you will feel personally responsible, and not point the finger at others. Since the onus lies within you, you can take action and not be hapless.

You can review the information and see if you had missed out an important point. Is it an idiosyncratic company risk? Or is it broad market sentiment in general? If there was a mistake, you can learn from it. If there was none, you can stand firm in your belief. Either way, you are on track to becoming a better investor.

The money is yours. The financial freedom is yours. No one is obliged to realize your dream. Not your broker analyst; not your blogger next door.

Learn to invest with a view. Learn to lean into the wind. Face head-on towards volatility with confidence from your own research. It is a more comfortable position to be than being tossed around like a reed.

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An Economic Hurricane on the Horizon

I was reading on CNBC when I came across an article titled, "Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by the Fed and Ukraine war" [article]

The head honcho of JPMorgan Chase was speaking at a financial conference in New York on Wednesday when he uttered,

"You know, I said there’s storm clouds but I’m going to change it ... it’s a hurricane ... You’d better brace yourself ... JPMorgan is bracing ourselves and we’re going to be very conservative with our balance sheet."

An economic hurricane on the horizon? (Photo credit: Unsplash)

These are very strong words indeed. It seems the global investment bank is preparing its clients for not just a downturn, but a huge slump in the economy and the markets.

Sadly, I don't have excellent foresight as Dimon, so I cannot say for sure whether this economic disaster is going to strike or not. But if history is any guide, I would say our local stock market hasn't baked in any of that possibility.

During the 2007-2009 Global Financial Crisis, the Straits Times Index (STI) declined 62% from peak to trough (11 Oct 2007 to 9 Mar 2009).

During the 1997 Asian Financial Crisis, the STI also retreated 61% (17 Feb 1997 to 4 Sep 1998).

Right now, the STI has only fallen 6% from its peak on 5 Apr 2022. We still have a long way to go when the shit hits the fan.

Naturally, such a recessionary event does not manifest quickly, not like when the COVID-19 pandemic struck and STI crashed 30% within the span of one month. It would be akin to a tango between the bulls and the bears - one step forward, two steps back.

In any case, it is always good to be mentally prepared for a precipitous drop in your portfolio market value, and have emergency funds set aside for unexpected expenses.

Personally, I maintain some liquidity in my DBS Multiplier account to tide over any unforeseen circumstance. I also have a separate cash stash for investing in the companies on my watchlist if and when the prices hit my target entry level.

As the cliché goes, be greedy when everybody is fearful. Our mettle as savvy investors may well be tested soon.

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Portfolio Summary for May 2022

As of 31 May 2022

CDP

Security	# shares	Price S$	%
DBS	300	30.94	3.52
OCBC Bank	700	11.83	3.14
SGX	1,200	9.53	4.33
iFast	5,200	4.88	9.61
SATS	3,900	4.38	6.47
ST Engineering	4,100	4.11	6.38
Micro-Mechanics	7,900	3.05	9.13
Powermatic Data	5,000	2.81	5.32
TheHourGlass	5,000	2.34	4.46
Sheng Siong	13,000	1.53	7.54
ComfortDelGro	11,200	1.44	6.11
Genting Singapore	11,700	0.78	3.48
HRnetGroup	21,900	0.725	6.02
HC Surgical	35,500	0.47	6.32
China Sunsine	41,800	0.45	7.13
Kimly	27,000	0.38	3.89
Silverlake Axis	60,800	0.31	7.14

Portfolio Market Value = $263,928

Trade Actions
- Bought 5,200 shares of iFast Corp.
- Bought 6,600 shares of Micro-Mechanics Holdings.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.83	9.67
SGX	1,300	9.53	11.26
iFast	2,100	4.88	9.31
SATS	2,200	4.38	8.76
ST Engineering	3,000	4.11	11.20
Micro-Mechanics	3,100	3.05	8.59
Sheng Siong	8,700	1.53	12.09
ComfortDelGro	6,900	1.44	9.03
HC Surgical	19,500	0.47	8.33
China Sunsine	10,800	0.45	4.42
TalkMed Group	3,700	0.40	1.34
Silverlake Axis	21,300	0.31	6.00

Portfolio Market Value = $110,060

Trade Actions
- Bought 2,100 shares of iFast Corp.
- Bought 3,100 shares of Micro-Mechanics Holdings.

Commentary:

It has been a brutal month for tech stocks and markets in general. The selloff amplifies whenever a megacap reports worse-than-expected result. Any relief rally dissipates quickly the following day. The S&P 500 Index is hovering just above bear market territory. Interestingly, the STI is holding up well with a positive 3.5% YTD return amid a sea of red. Post-pandemic reopening optimism trumps recession fear at the moment.

Slowly but surely, Singapore is facing the onslaught of global inflationary headwinds. The MAS reported a 3.3% YoY increase in Core Inflation for April 2022, up from 2.9% in March. [data] India, Indonesia and Malaysia have implemented export bans to cater to their own domestic demand. I wouldn't be surprised if more food exporting countries follow suit. So far, I haven't read of any local listed company being affected, but SMEs like chicken rice sellers are feeling despair. [article] We will likely see the adverse impact materialise in 2Q2022 earning results.

I built a stake in iFast Corp, the fintech company that suffered a massive selloff recently. I understand market jitters may cause the stock to decline further, but I feel $4+ is a fair price to pay for the earnings potential of the company.

I have also added Micro-Mechanics Holdings during the recent share price weakness. I like the company's net cash position, compared to other local semicon plays like AEM Holdings and UMS Holdings.

Silverlake Axis extended the dateline for their Equal Access Offer, which gave me sufficient time to inform my custodial bank. I will tender the full allotment of 6,200 shares from my SRS account.

Wifey said I have been paying too much attention to the stock markets lately. I would wake up around 4 plus and check how the U.S. market closes for the day, and which company is the latest victim of The Big Sale. This has become a habit. 

Latest Fed minutes suggest the Fed is prepared to hike interest rate further than expected. [news] At this juncture, it is hard to say whether the Fed will succeed in containing the runaway inflation without causing a recession. The current situation is exacerbated by issues beyond the Fed's control, namely supply chain bottlenecks, the Russo-Ukrainian war and China's draconian COVID-19 lockdowns. The economy and company earnings remain under pressure.

So far, the market downturn has been pretty orderly. I do not see any sharp spike above 40 in the VIX, which is a pseudo indicator of widespread panic. Nonetheless, pockets of opportunity have started to appear in the local stock market. I will deploy my cash accordingly.

Chart of CBOE Volatility Index (VIX). (Source: Yahoo)

Speaking of waking up early, I was amused by my boss' surprised look when I told her I wake up at 5am to exercise, bathe and head to office. I start work at 7am when the sun has just risen. The quiet ambience is perfect for clearing my urgent priorities, although I sometimes get instant messages from my San Francisco colleagues for help, which add tasks to my To Do List. (Oh well.) This routine fits rather well to my Lion chronotype. [link] I am most productive in the morning. (Coincidentally, my Zodiac is Leo.)

How fast time flies. We are now approaching mid 2022. I read that many families are planning to travel abroad during the June holiday. Given the pandemic is still ongoing, my wife and I have opted to stay in Singapore. That said, we have booked another cruise in November. (Yes, I like the sea very much.) Looking forward to that.

Until next time, stay vigilant for buying opportunities, my friends!

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DBS and SGX

Somebody just dumped 11.1m shares of DBS at MOC:

Same for dumping 7.9m shares of SGX:

Not a phenomenon that you get to see everyday. Given it is EOM, it must be some fund doing portfolio rebalance.

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Surprised by SATS FY22 Result

I must admit - I am surprised by SATS FY2022 result:

- Revenue grew 21.3% to S$1,176.8m
- OpEx grew even more (24.4%) to S$1,219.4m
- Core PATMI is a loss of S$8.5m

Thanks to govt relief and its associates' profits, the company was able to eke out a 1.8 cents EPS.

Figure is way below Street concensus. Given that SATS stock price has been soaring recently, I will be watching to see if there is a selldown tomorrow.

Going to eat my dinner first before I start digesting the company's earnings report.

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Addendum:
Okay, having gone through the earnings report, it seems SATS is ramping up operations to prep for the anticipated increase in flights. Staff costs alone went up 44% YoY while raw material costs went up 15.3% YoY.

Granted, the post-pandemic reopening has encouraged more visitor arrivals in Singapore. April saw a spike to 294.3k visitors. [data] The forgoing of FY22 dividend is a bummer. Hopefully, all these front-loading of costs will translate to better earnings for SATS in the next quarter.

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A Question to Myself

Pondering a question out loud to myself:

The underlying resilience in the Straits Times Index (STI) is mind-boggling. Are local investors truly oblivious to the worsening global outlook, or do they believe Singapore can emerged unscathed when other countries are suffering?

We shall see.

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Skipping Meals Because of Inflation

I read with sadness how one quarter of Britons have resorted to skipping meals amid crippling inflation in the U.K. [article]

One caterer even commented how schools are facing difficult decisions on whether to shrink food portions for students or use lower quality ingredients.

Spiking food inflation is one of the worst outcomes to befall on a nation, especially for importing countries. British grocery inflation hit 5.9% in April. In Singapore, the MAS reported a YoY increase of 3.3% in food inflation in March. [data] Looking at the current world situation, no country will be spared.

Wheat prices have risen sharply because of the Russo-Ukrainian War. Russia and Ukraine are both major wheat producers, and the war has caused their output to drop significantly. India has also banned wheat exports to meet their own domestic demand. Wheat is a staple used to make various foodstuffs like bread and noodles. A supply constraint means prices for these items will rise correspondingly.

Price of wheat futures at CBOT. (Source: Yahoo)

Indonesia has also banned the export of palm oil, another important ingredient used in processed foods.

Similarly, global energy prices have shot up. Persistently high crude oil prices mean electricity and even plastic packaging will incur higher base costs. The business of manufacturing, transporting and serving food has gotten more expensive.

Price of Brent crude oil futures at NYMEX. (Source: Yahoo)

Then there is the wage-price spiral. As workers demand higher salaries to handle the rising expenses, companies have no choice but raise their product prices. Workers have to spend more of their paycheck per item, thus they demand higher salaries...and the death spiral goes on.

Consumers are forced to choose cheaper alternatives and dial back on non-essential spending. Companies, already facing margin pressure, suffer from lower revenue. Cost cutting takes place, layoffs happen and before you know it, a recession comes knocking.

Granted, such an apocalyptic scenario does not occur overnight, and there is a possibility we can avert this crisis if higher interest rates can curb demand to cater to the reduced supply.

However, it is a fact that interim higher prices on basic necessities will cause more hardship for families living just above the poverty line. Woe to the household who has to decide between buying groceries or footing the utility bill.

I hope the children will not have to go to bed hungry at night.

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