Portfolio Summary for August 2026

As of 31 August 2026

CDP

Security	# shares	Price S$	%
DBS	440	77.40	3.97
UOB	400	41.56	1.94
OCBC Bank	700	31.52	2.58
SGX	3,200	25.50	9.52
ST Engineering	6,900	10.79	8.69
Azeus	5,600	9.63	6.29
Powermatic Data	13,800	3.07	4.94
Sheng Siong	19,100	3.22	7.18
Micro-Mechanics	18,400	2.75	5.91
TheHourGlass	19,600	2.80	6.41
UMS	39,000	2.66	12.11
VICOM Ltd	21,500	1.85	4.64
Nanofilm	36,100	0.94	3.96
Credit Bureau Asia	39,200	1.09	4.99
Info-Tech	41,400	0.87	4.20
Riverstone	40,500	0.795	3.76
HRnetGroup	21,900	0.725	1.85
China Sunsine	41,800	0.66	3.22
Kimly	27,000	0.41	1.29
HC Surgical	35,500	0.345	1.43
Audience Analytics	38,900	0.245	1.11

Portfolio Value = S$856,777
YTD Dividends Received = S$18,735
YTD SBL Fees Received = S$2,220

Trades
None

SRS

Security	# shares	Price S$	%
Micro-Mechanics	5,400	2.75	9.39
TheHourGlass	5,000	2.80	8.86
Nanofilm	12,500	0.94	7.43
NetLink NBN Trust	108,000	0.975	66.62
HRnetGroup	7,500	0.725	3.44
HC Surgical	19,500	0.345	4.26

Portfolio Value = S$158,065

Trades
None

Singapore Savings Bonds

Security	Amount	Coupon Now
GX22120S	S$14,000	3.58%
GX23010Z	S$15,000	3.25%
GX23110V	S$20,000	3.21%
GX23120Z	S$20,000	3.30%
GX24060A	S$20,000	3.26%
GX24070S	S$20,000	3.26%
GX24080W	S$20,000	3.19%

Portfolio Value = S$129,000
YTD Coupons Received = S$2,983

Speculative Play

Security	# shares	Price US$
KORE US REIT	70,000	0.171

Portfolio Value = US$11,970
YTD Dividends Received = S$223

Trades
None


Commentary:

August was a happy month for me. We celebrated three birthdays in the family. Not so much for investors.

Taking a look at the benachmarks, the U.S. S&P 500 Index closed up 2.6 percent MoM. The tech-heavy NASADAQ 100 Index finished higher 4.2 percent MoM. The Singapore Straits Times Index climbed 2.3 percent MoM, while the iEdge Singapore Next 50 Index ended down 0.9 percent MoM.

All three local banks DBS, UOB and OCBC reported stellar 2026 Q2 results. DBS net profit rose 9 percent YoY to S$3.08 billion. An one-off 15 Singapore cents special dividend was paid out, on top of a 66 Singapore cents interim dividend. UOB net profit rose 10 percent YoY to S$1.48 billion. A 88 Singapore cents interim dividend was paid out. Lastly, OCBC net profit rose 22 percent YoY to S$2.22 billion. A 47 Singapore cents interim dividend was paid out. All three banks were helped by booming demand for wealth management products, even though net interest margin was compressed.

As stocks continued to scale new peaks, I did not execute any trade in the month. When prices vastly exceed prudent valuations, it is NOT the right time to plow in hard-earned savings. Institutional investors are getting wary about the giantic sums poured into building the AI infrastructure. Yet, no one wants to be seen as the fool that pulled out of the market too early.

Mixed economic signals and the ongoing Hormuz spat did not help. The U.S. Federal Reserve chose to stay put on interest rate in July. Probability of a hike in September is around 65 percent, according to CME FedWatch. There is no clear impetus for the market to head in either direction.

Signing off for now. Take care, my friends!

---

Enjoyed this post? Never miss out new posts by subscribing here.

Portfolio Summary for February 2026

As of 28 February 2026

CDP

Security	# shares	Price S$	%
DBS	440	57.12	3.70
UOB	400	36.97	2.18
OCBC Bank	700	21.43	2.21
SGX	3,200	18.20	8.58
ST Engineering	6,900	9.97	10.14
Powermatic Data	13,800	3.33	6.77
Sheng Siong	19,100	2.63	7.40
TheHourGlass	19,600	2.46	7.11
Micro-Mechanics	18,400	1.98	5.37
VICOM Ltd	21,500	1.77	5.61
UMS	39,000	1.45	8.33
Credit Bureau Asia	30,100	1.27	5.63
Info-Tech	41,400	1.12	6.83
Riverstone	40,500	0.77	4.60
China Sunsine	41,800	0.76	4.68
HRnetGroup	21,900	0.75	2.42
Nanofilm	36,100	0.65	3.46
Kimly	27,000	0.40	1.59
HC Surgical	35,500	0.355	1.86
Audience Analytics	38,900	0.265	1.52

Portfolio Value = S$678,544
YTD Dividends Received = S$1,174
YTD SBL Fees Received = S$73

Trades
None

SRS

Security	# shares	Price S$	%
TheHourGlass	5,000	2.46	8.17
Micro-Mechanics	5,400	1.98	7.10
NetLink NBN Trust	108,000	0.99	71.00
HRnetGroup	7,500	0.75	3.74
Nanofilm	12,500	0.65	5.40
HC Surgical	19,500	0.355	4.60

Portfolio Value = S$150,585

Trades
None

Singapore Savings Bonds

Security	Amount	Coupon Now
GX22120S	S$14,000	3.58%
GX23010Z	S$15,000	3.25%
GX23110V	S$20,000	3.21%
GX23120Z	S$20,000	3.30%
GX24060A	S$20,000	3.26%
GX24070S	S$20,000	3.26%
GX24080W	S$20,000	3.19%

Portfolio Value = S$129,000
YTD Coupons Received = S$866

Speculative Play

Security	# shares	Price US$
KORE US REIT	70,000	0.215

Portfolio Value = US$15,050

Trades
None


Commentary:

With the passing of Lunar New Year, the festive spirit is gone and life has kicked into full gear.

A surprising twist occurred in February as the U.S. Supreme Court ruled against President Donald Trump's use of tariffs, rendering it illegal [news].  But Trump's team immediately jumped at another legislation and raised the global duty on imports into the United States to 15 percent the next day [news].  It is clear that Trump is not giving up without a fight.

After the stellar climb last year, the markets are taking a breather and heading lower.  The S&P 500 Index closed 0.87 percent lower MoM.  The tech-heavy NASDAQ 100 Index faced heavy selloff due to AI fears and slumped 2.32 percent MoM.  Meanwhile, the local Straits Times Index bucked the trend and closed 1.83 percent higher MoM.

The local banks handed in a mixed report card for Q4 2025.

DBS Group total income dropped 3.2 percent YoY to S$5.33 billion; net income, excluding one-time items, dropped 10 percent YoY to S$2.36 billion.  A final dividend of S$0.81 per share was declared, bringing the total dividend for the full year to S$3.06 per share.

UOB total income dropped 5.0 percent YoY to S$3.29 billion; net income dropped 7.4 percent YoY to S$1.41 billion.  A final dividend of S$0.71 per share was declared, bringing the total dividend for the full year to S$1.56 per share.

OCBC Bank total income rose 5.9 percent YoY to S$3.62 billion; net income rose 3.4 percent to S$1.75 billion. A final dividend of S$0.42 per share was declared, as well as a special dividend of S$0.16 per share.  This brings the total dividend for the full year to S$0.99 per share.

A new counter in my CDP portfolio, Info-Tech turned in a pretty good set of FY2025 result.  Total revenue rose 29 percent YoY to S$56.5 million.  Adjusted profit after tax rose 46 percent YoY to S$18.0 million.  A final dividend of S$0.0195 per share was declared, bringing the total dividend for the full year to S$0.035 per share.

The sole counter in my Speculative Playbook, KORE US REIT has finally declared a distribution of 0.25 US Cents per unit after a hiatus of two years.  The market reaction has been muted, much to my dismay.  I guess Trump's tariffs have thrown a spanner in the works, clouding the future of the U.S. economy, which in turn makes the prospect of U.S. real estate murky.  I am contemplating whether to sell off my holding at the current prevailing price, or hold on for better return when the storm clears.  No quick decision on this one.

As usual, I did not trade in February.  Markets are neither expensive nor cheap.  Saving up my capital for better opportunities down the road.

At work, I adjusted into my new role which involves collaborating with colleagues from other departments to solve clients' complex Production issues as well as to reply prospective clients' Request for Proposal.  Since it is a new job posting with no precedence, Management has only provided very general guidelines of the KPIs.  Annual performance evaluation will likely remain subjective among the ten of us in this role globally, depending on how much value we contribute to the firm.

At home, my two boys are tackling their Term Paper 1.  I have reminded them to stay on top of their studies and fortify their knowledge through assessment book practices.  I hope they have taken my nagging to heart.

Signing off for now.  Take care, my friends!

---

Enjoyed this post? Never miss out new posts by subscribing here.

Portfolio Summary for February 2024

As of 29 February 2024

CDP

Security	# shares	Price S$	%
DBS	400	33.33	3.91
UOB	400	27.95	3.28
OCBC Bank	700	12.98	2.66
SGX	3,200	9.45	8.86
ST Engineering	6,900	3.98	8.04
Powermatic Data	8,500	2.95	7.35
Micro-Mechanics	18,400	1.68	9.06
Sheng Siong	19,100	1.55	8.67
TheHourGlass	19,600	1.55	8.90
VICOM Ltd	21,500	1.43	9.01
Credit Bureau Asia	14,300	0.915	3.83
HRnetGroup	21,900	0.725	4.65
Nanofilm	36,100	0.705	7.46
China Sunsine	41,800	0.39	4.78
TalkMed Group	14,500	0.375	1.59
Kimly	27,000	0.31	2.45
HC Surgical	35,500	0.29	3.02
Silverlake Axis	37,100	0.23	2.50

Portfolio Value = S$341,367
YTD Dividends Received = S$1,000
YTD SBL Fees Received = S$20

Trades
- Bought 500 shares of SGX.
- Bought 4,200 shares of Micro-Mechanics.
- Bought 22,100 shares of Silverlake Axis Limited.

SRS

Security	# shares	Price S$	%
DBS	100	33.33	2.64
UOB	200	27.95	4.43
SGX	1,300	9.45	9.74
ST Engineering	3,000	3.98	9.46
Micro-Mechanics	5,400	1.68	7.19
Sheng Siong	8,700	1.55	10.69
TheHourGlass	5,000	1.55	6.14
VICOM Ltd	5,500	1.43	6.23
Credit Bureau Asia	5,700	0.915	4.13
HRnetGroup	7,500	0.725	4.31
Nanofilm	12,500	0.705	6.98
China Sunsine	10,800	0.39	3.34
TalkMed Group	5,800	0.375	1.72
Kimly	5,800	0.31	1.43
HC Surgical	19,500	0.29	4.48
Silverlake Axis	6,000	0.23	1.09
NetLink NBN Trust	24,000	0.84	15.98

Portfolio Value = S$126,166

Trades
- Sold 900 shares of OCBC Bank.
- Bought 24,000 units of NetLink NBN Trust.

Singapore Savings Bonds

Security	Amount (S$)	Avg Yld %
GX22120S	14,000	3.47
GX23010Z	15,000	3.26
GX23110V	20,000	3.32
GX23120Z	20,000	3.40

Portfolio Value = S$69,000

Speculative Play

Security	# shares	Price US$
Kep Pacific Oak REIT	70,000	0.125

Portfolio Value = US$8,750

Trades
- Bought 70,000 units of Keppel Pacific Oak REIT.

Commentary:

The Lunar New Year came and went in a flash.  My family did not do many visits, as my older son fell sick on the second day.  It pains my heart to see him coughing away through the night and had to miss school for one whole week.  While staying home, I had spare time to spring clean (yes, on CNY Day 1-3) and do some reading.

The Singapore bank stocks found a second wind at the start of the month.  DBS, UOB and OCBC soared in price before retreating in mid-February.  All three banks announced record earnings and a higher final dividend.  DBS also announced a 1-for-10 bonus stock issue, Ex Date: 22 Apr 2024.  I did not manage to buy any bank share at my intended price.  Will continue to monitor for suitable opportunities.

Meanwhile, I accumulated shares in SGX, Micro-Mechanics Holdings ("MMH") and Silverlake Axis Limited ("SAL").  SGX fell out of favour with institutional investors, which caused its price to decline significantly.  MMH and SAL had reported less than stellar results, which saw their prices retrace accordingly.  Nonetheless, these companies remain profitable and I believe they will be able to grow their business over the long run.

I also executed an unscheduled trade in February.

---

Keppel Pacific Oak REIT ("KORE") suffered a massive 40% price plunge when the Manager announced that it will suspend distribution to unitholders till 2H2025 (see company filiing [here]).  The aim is to retain the income for recapitalization of KORE's balance sheet.  As of 31 Dec 2023, KORE has aggregate leverage of 43.2%, primarily due to lower portfolio valuation.  This is a whisker away from the 45% limit, which may make lenders unwilling to provide further financing.  The Manager has evaluated various options, including equity fund raising, divestment of properties and reduced distribution to unitholders.  All were found to be unfeasible.  Continued capex is also required to keep the properties attractive to current and prospective tenants.

I have reviewed KORE's FY2023 earning result.  Gross revenue was US$150.8M (FY22: US$148.0M), +1.9% y/y.  NPI was US$86.1M (FY22: US$84.3M), +2.2% y/y.  As of 31 Dec 2023, net assets was US$723.2M (31 Dec 2022: US$846.1M), -14.5% y/y.  NAV was US$0.69 (31 Dec 2022: US$0.81), -14.8% y/y.  KORE's current liabilities exceeded its current assets by US$67.0M, compared to US$24.3M a year before.  KORE has an uncommitted unutilised facility of US$50.0M and a committed unutilised facility of US$18.1M.  KORE should have no problem rolling over the debt with its retained income and unused facilities.

I believe the pendulum has swung too far to the downside.  KORE is still in a healthy operating mode, albeit it needs liquidity to tide over the present challenging situation facing U.S. commercial real estate.  S-Reits are not my forte, but KORE's dramatic fall in price caught my eye.

Securities Investors Association Singapore (SIAS) organized a Zoom session with KORE management.  (You can access the Powerpoint deck [here].)  The deck showed KORE has US$25M debt due 4Q2024 and US$50M due 2025.

If KORE survives through these two years and its refinancing goes through successfully, its price should recover to close the 80% gap to its NAV.  This is a rare mispricing event.  Thus, I bought 70,000 units of KORE for my account.

My analysis may well be wrong.  Just how bad is the U.S. commercial real estate situation?  The short answer is: real bad.  Bloomberg did a short video documentary about it.  You can watch it [here].  In the worst-case scenario, KORE finds itself unable to refinance its debt, and declares bankruptcy.  Should this happen, I will lose my entire investment.  However, this is only a small sum relative to my net worth.  The loss will not have any material impact to my wellbeing.  I am comfortable taking this speculative bet, in which the potential reward outweighs the risk.  (Please DYODD.)

---

As mentioned in my previous month's summary [here], I am revamping my SRS portfolio.  I have started selling down my existing holdings.  At the same time, I have started to accumulate NetLink NBN Trust ("NetLink").  For someone who previously avoided S-Reits, why the sudden interest now in NetLink?  Well, I find NetLink has many attractive points: a stable unitholder base; recurring earnings visibility; consistent and healthy margins; as well as a low gearing ratio of 24.3%.  With the development of new HDB residential towns like Tengah, and the government's plan to upgrade the National Broadband Network (NBN) infrastructure so as to provide faster connection speeds for families, the revenue outlook is bright for NetLink, as it is the sole entity providing the connection service and maintenance of the NBN.  It is like owning a utility company, albeit one with a 6% yield.  The vision for my SRS portfolio is to be a money stash that compounds at a moderate clip.  Investing in NetLink can help in this aspect.

April issuance of Singapore Savings Bond (SSB) is estimated to have an average yield of 3.04%.  The coupon rate is trending up again, but this is still below my requirement, hence I will not subscribe for the SSB.

At the workplace, I have just completed my annual performance evaluation with my team leader and manager.  My coworkers had told me their 2024 increment ranged between 1 and 3+ percent.  Hence, I wasn't expecting any better.  So I was pleasantly surprised when I was given a 5 percent increment in total compensation.  My actual bonus was also 15 percent higher than the target amount.  I'm glad that my contribution was given due recognition by my boss, and I'm grateful for the above average adjustment.  But it also means they have higher expectations for me this year.  I hope not to disappoint them.

My kids have just completed their Term One weighted assessments.  We can finally take a breather from the intensive revision (imagine: the parents are more worried than the kids!)  My older boy is taking his PSLE this year, hence we are concerned about his progress.  That said, as I grow older, I have realized the importance of taking care of our own mental health.  Being under constant stress can be harmful.  I try not to pack my kids' schedule, though I want my kids to take personal responsibility for their own success in life.  On various occasions, I have emphasized to my kids that I am not asking for perfect scores in their exams.  All I want them to do is to learn from their mistakes, pick themselves up when they fall, keep moving forward and "be better than yesterday".  Tenacity coupled with a growth mindset and incremental improvement can go a long way.

Until next time.  Cheers!

---

Enjoyed this post? Never miss out new posts by subscribing here.

OCBC Group FY2023 Earning Result

OCBC Group ("OCBC") reported their FY2023 earning result yesterday [here].  Here is a quick dive into the numbers:

Numbers in S$ million unless stated otherwise.

Full Year Ending	31 Dec 2023	31 Dec 2022	% Change
Total Income	13,507	11,286	19.7
Profit Before Tax	8,401	6,670	26.0
Net Profit	7,165	5,639	27.1
EPS (S$)	1.55	1.22	27.0
DPS (S$)	0.82	0.68	20.6

OCBC's FY2023 NII was S$9.65B (FY22: S$7.69B), up 25.5% y/y, attributed to asset growth and a higher NIM of 2.28% (FY22: 1.91%).  Non-interest income was S$3.86B (FY22: S$3.60B), up 7.3% y/y, attributed to higher trading income of S$1.00B (FY22: S$929M) and higher investment gains.  Insurance income from Great Eastern Holdings was comparable at S$808M (FY22: S$803M).  Wealth management income improved to S$4332B (FY22: S$3.42B).  FY2023 net profit hit record S$7.02B (FY22: S$5.53B), up 27.1% y/y,

FY2023 operating expenses was S$5.22B (FY22: S$4.83B), up 8.0% y/y due to higher staff cost, IT-related costs and other operational expenses.  Non-performing assets stood at S$2.90B as at 31 Dec 2023, down 16.8% y/y.  NPL ratio is 1.0% as at 31 Dec 2023 (31 Dec 2022: 1.2%).  FY2023 allowances increased to S$733M (FY22: S$584M).  FY2023 ROE improved to 13.7% (FY22: 11.1%).

OCBC CEO Helen Wong highlighted the strategic acquisitions of AmMetLife Insurance and AmMetLife Takaful in Malaysia and PT Bank Commonwealth in Indonesia to accelerate OCBC's growth in ASEAN, pending regulatory approvals.  FY2024 loan growth is expected to be low single digit (similar to UOB).

The Board declared a final dividend of 42 cents per share, going Ex Date: 8 May 2024.

My Thoughts
Welcome to the wacky world of equity investing.  OCBC achieved record revenue and net profit, but the stock got sold down because of missed analysts' 4Q2023 EPS expectations (actual: S$0.357, street: S$0.386).  Even a higher final dividend failed to whet the appetite of investors.  Nonetheless, OCBC still managed to clock in a respectful performance.  OCBC forecasts FY2024 NIM to be in the range of 2.00% to 2.25%, just slightly lower compared to FY2023.   Will continue to monitor the stock price and accumulate on opportunity.

---

Enjoyed this post? Never miss out new posts by subscribing here.

You have S-Reits. What about S-Banks?

Perhaps the worst kept secret in the financial world today is that the U.S. Federal Reserve wants to bring the benchmark overnight borrowing rate lower this year.

A lower rate means that banks will have to lower their loan rates, resulting in a compression of the Net Interest Margin (NIM) - the lifeblood of their profit.

For the uninitiated, NIM is the difference between the rate banks charge their borrowers versus the rate banks pay to depositors.  Banks cannot afford to lower their deposit interest rate too much.  Otherwise, depositors will flock to another bank.  This leads to the dilemma above.

Accordingly, broker analysts have started to downgrade their view of the local banking sector, as reported [here] and [here].

However, it is my belief that the Singapore banks remain an attractive investment proposition.

DBS 9M23 total income was S$15.2B (up 27% y/y); UOB was S$10.5B (up 28% y/y) over the same period; and OCBC was S$10.2B (up 24% y/y).  9M23 net profit was S$7.89B (up 35% y/y), S$4.3B (up 26% y/y) and S$5.4B (up 32% y/y) respectively.  Even if the NIM is compressed come 2H24 and loan growth stalls, the banks will still be highly profitable.

Unlike other global banks which suffered significant losses due to investment and trading, our local banks are cautious risk-takers and big brother MAS is always watching over their shoulder.  I wouldn't expect any rouge trader to bring the house down.

I read [here] that the three banks had the highest S$2.6B of net institutional selling in 2023.  When the professionals decide to park their funds elsewhere, they sell by the buckets and price retracement occurs.  This presents an opportunity for us retail investors to buy the bank stocks cheaper.

If you are big on S-Reits, I recommend to get some S-Banks (Singapore banks) exposure too, never mind that the quantum is large for the lot size.  The banks are in a strong position to grow and increase their payout over the long run.

If you worry about over-paying, you can use the Price-to-Book Value (P/B) Ratio as a yardstick to determine whether the bank stock is cheap or expensive.  The P/B ratio measures the market's valuation of a company relative to its book value.  For banks, it is considered a less volatile measure compared to the Price-to-Earnings Ratio.

The table below shows the P/B ratio for UOB, and is taken from Morningstar, which you can access for free [here]:

Source: Morningstar

UOB is currently trading at a P/B ratio of 1.04, close to its 5-year average of 1.05.  In layman terms, it is not exactly expensive *relative* to its history.  (Remember: valuation needs to be evaluated in a relative manner, either against its peers or compared to historical data.)

Circling back to my opening paragraph, all these institutional selling is banked on - pardon the pun - the U.S. Fed cutting interest rate.  What happens if U.S. inflation reverse its trend and head back up?  In all likelihood, the Fed will maintain the current rate, which is a boon for the banks.

Hope the above information is useful.

As usual, here is a disclaimer: I hold shares in DBS, UOB and OCBC Bank.  This post is NOT a recommendation to buy any stock.  Please do your homework and review your financial circumstances before making any investment decision.

---

Enjoyed this post? Never miss out new posts by subscribing here.

Portfolio Summary for February 2022

As of 28 February 2022

CDP

Security	# shares	Price S$	%
DBS	300	33.82	3.63
OCBC Bank	700	11.67	2.93
SGX	1,200	9.34	4.01
SATS	3,900	3.97	5.55
ST Engineering	6,800	3.82	9.31
CapitaLand Invest	2,700	3.69	3.57
Micro-Mechanics	1,300	3.20	1.49
Powermatic Data	5,000	2.80	5.02
Singtel	6,100	2.52	5.51
TheHourGlass	15,400	2.00	11.03
Sheng Siong	13,000	1.52	7.08
ComfortDelGro	11,200	1.41	5.66
Genting Singapore	11,700	0.77	3.23
HRnetGroup	21,900	0.775	6.08
HC Surgical	35,500	0.48	6.10
China Sunsine	41,800	0.485	7.26
Kimly	27,000	0.39	3.77
Silverlake Axis	60,800	0.285	6.21
CL Int Com Trust	3,400	2.11	2.57

Portfolio Market Value = $279,156

Trade Actions
- Bought 10,800 shares of China Sunsine Chemical Holdings.
- Sold 400 shares of DBS.
- Sold 800 shares of OCBC Bank.
- Sold 2,700 shares of CapitaLand Investment.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.67	11.48
SGX	1,300	9.34	13.27
SATS	2,200	3.97	9.55
ST Engineering	3,000	3.82	12.52
Singtel	2,000	2.52	5.51
Sheng Siong	8,700	1.52	14.45
ComfortDelGro	6,900	1.41	10.63
HC Surgical	19,500	0.48	10.23
China Sunsine	10,800	0.485	5.72
Silverlake Axis	21,300	0.285	6.63

Portfolio Market Value = $91,501

Trade Actions
- Bought 10,800 shares of China Sunsine Chemical Holdings.

Commentary:

It's earnings galore in February. The bulk of companies on my watchlist reported an improved set of results. China Sunsine in particular, reported a significant increase in revenue and profit. HRnetGroup also reported a hefty gain in revenue due to a much better job placement market.

As stock prices climbed in early February, I took some profit on my stake in DBS, OCBC Bank and CapitaLand Investment. It was a timely move as the Russia-Ukraine war broke out thereafter.

Even though the war is thousands of miles away, it grabbed my attention as a similar situation could have happened to Singapore, if our bigger neighbours are aggressive and militarily potent. Peace can never be taken for granted.

Closer to home, we have the inflation war and the COVID-19 war to fight. During my weekly grocery trip, I observed how the cost of food items has increased. Some prices jumped nearly 10%. And it wasn't just food, but other necessities too, like energy. My friends are complaining about the continual jack-up in fuel pump prices. There was an article describing how bigger electricity bills are causing a headache for F&B owners [news].

Then there is the virus. Singapore is seeing daily case load in the tens of thousands. On my Facebook wall, several friends posted about being tested COVID-19 positive. Seems like it is a matter of when - not if - one would get infected. I do hope the pandemic ends with the Omicron variant. The world cannot afford to deal with another more lethal and transmissible strain.

Sheesh. For my own sanity and emotional health, I ought to stop reading all these depressing stuff in the news and social media.

On a more positive note, I had just completed my yearly evaluation with my boss. Thankfully, my performance had met his expectation in 2021, and I received a performance bonus and a pay bump.

I read in Straits Times how a man of my age had been out of employment for a year and is struggling to land a job [news]. I am grateful I still have a position and can provide for my family. I am mindful of how people tend to increase their expenditure with a higher salary. I see no need for a change in my current lifestyle. I am comfortable staying in a HDB estate and not in a condominium. I am comfortable taking public transportation and not owning a car. I am comfortable packing food from hawker centres and not dining in fancy restaurants. Sure, these status perks are wonderful, but I don't think they will give me any more fulfillment than the simple pleasures I am enjoying in my life right now.

To know that I have the CHOICE (to spend more money freely when I want to) is already a satisfying feeling in itself.

In the recent Budget 2022 announcement, Finance Minister Lawrence Wong confirmed the GST will be increased to 8% and 9% in 2023 and 2024 respectively. Some folks gripe about the double whammy of tax and inflation. Then again, there is never a good time to raise taxes. Better the bitter medicine now than a bigger pill to swallow later down the road. And I just watched CNA's Talking Point documentary, in which a tax expert said that 9% may not be the end. Singapore may need the GST to be around 12% to 15% in ten to fifteen years' time in order to sustain the budget [video]. Given my low propensity to consume (i.e. thriftiness), the impact on me and my family should be limited. (In fact, I often joke to my wife that if everybody were like me, Singapore would have an ailing service economy!)

In the blink of an eye, we are nearly through the first calendar quarter. My boss promised more responsibilities for me this year. Ugh. Sounds like more challenges coming my way. But really, having been in this competitive IT industry for a decade now, I should get comfortable being uncomfortable. What I earn commensurates with the value I bring to the table for my clients. Ideally, if I can accomplish more (result) with less (effort), then it will be a win-win outcome. To derive full benefit of the Pareto Principle, this is my short term goal. My long term goal remains the same - to build a sizeable asset portfolio that generates a meaningful passive income. And I am confident I am taking concrete steps in the right direction.

Until next time, stay safe my friends!

---

Enjoyed this post? Never miss out new posts by subscribing here.

Portfolio Summary for May 2020

As of 29 May 2020

CDP

Security	# shares	Price S$	%
DBS	400	19.47	6.74
OCBC Bank	1,500	8.55	11.10
SATS	3,900	2.66	8.98
ST Engineering	4,100	3.19	11.32
CapitaLand	1,700	2.89	4.25
Singtel	4,000	2.49	8.62
Powermatic Data	2,800	2.40	5.82
ComfortDelGro	7,900	1.44	9.85
Genting Singapore	11,700	0.785	7.95
Old Chang Kee	5,000	0.695	3.01
HRnetGroup	11,600	0.495	4.97
HC Surgical	19,100	0.305	5.04
Nam Lee Metal	28,200	0.305	7.44
Kimly	27,000	0.21	4.91

Portfolio Value = $115,533

Trade Actions
- Added 600 shares of OCBC Bank.
- Added 1,600 shares of ST Engineering.
- Added 1,900 shares of SATS.
- Added 2,000 shares of Singtel.
- Added 3,300 shares of ComfortDelGro.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	8.55	12.20
SGX	1,300	8.28	17.07
SATS	2,200	2.66	9.28
ST Engineering	1,700	3.19	8.60
Singtel	2,000	2.49	7.90
CapitaCommercial Trust	5,000	1.75	13.87
Sheng Siong	8,700	1.57	21.66
HC Surgical	19,500	0.305	9.43

Portfolio Value = $63,071

Trade Actions
- None

Commentary:

SGX - Company was dealt a critical blow when MSCI decided to shift its equity index business to Hong Kong, to the benefit of HKSE. I can understand MSCI's rationale for wanting to tap a larger potential customer base in Hong Kong (due to its proximity to mainland China). It remains to be seen whether SGX management has been humbled by this episode, and how hungry and determined they are in securing SGX's lead in APAC derivative trading over the next year.

Singtel - Full year net profit declined 65% y/y to S$1.08b. Excluding Airtel, net profit declined 21% y/y to S$2.42b. Winning the 5G spectrum means high capex ahead. Board cut final dividend by half to conserve cash. Management is also looking to sell off Optus' tower assets to raise cash. At current price, we're looking at 4.8% yield - still attractive in my opinion, unless there is unexpected COVID-19 pain ahead.

SATS - Poor company got bumped out of MSCI Singapore Index. Tracking funds will likely have to sell off their holdings. Took a chance to load. Still, I'm prepping for extremely lousy Q2 results.

ComfortDelGro - Another company that got dropped from MSCI Singapore Index. Taxi division is bleeding cash, but I'm heartened management is making an effort to secure side income for the cab drivers. Downside should be limited from this price point.

ST Engineering - Company with a comfortable order backlog. Customers may opt to delay contract delivery, but so far no news of clients backing out. MRO business will take a big hit, but that is water under the bridge.

OCBC Bank - Stock got sold down, probably due to its Wing Hang bank/HK protest exposure. Dividend may shrink a bit, but I don't foresee it being skipped like Stan Chart and HSBC.

---

Enjoyed this post? Never miss out new posts by subscribing here.

Happy News from OCBC

Came to office today, only to find positive news released from OCBC.

Not only has the company defied The Street's expectations of a drop in profit, it also INCREASED its interim dividend to 25 cents per share - the highest amount ever!

My Friday morning is starting to look brighter already.

---

Enjoyed this post? Never miss out new posts by subscribing here.

Portfolio Summary for May 2019

As of 31 May 2019

Cash Equity

Security	# Shares
DBS Group	400
OCBC	900
LHT Holdings	15,500
AIMS APAC REIT	2,189
Old Chang Kee	100

Portfolio Market Value = $31,185

SRS Equity

Security	# Shares
SGX	1,300
OCBC	900
Sheng Siong Group	8,700
Frasers Centrepoint Trust	3,000
SingTel	2,000
CapitaCommercial Trust	3,000
Frasers Commercial Trust	2,408

Portfolio Market Value = $51,652

It is no wonder the clique goes, "Sell in May and go away". The Straits Times Index suffered a 8.3% drop for the month. While the benchmark is still up 1.6% year-to-date, there is scant comfort in the global economy. The US and China have yet to iron out a trade deal, so tariffs will continue to eat into corporate profits. US President Donald Trump's latest tweet threatened to raise tariff on Mexico, if the country fails to stem illegal immigrants from crossing the border (news). Looks like "tariffs" has become the new weapon of mass (economic) destruction.

In my previous summary, I mentioned that I was keen to take on some new positions. A few micro caps on my watchlist had released favourable annual results. Unfortunately, those stocks were also monitored by others in the market. On the day after the result announcement, those stocks jumped in price significantly. Oh well, such is life. I'd be patient and wait for another buying opportunity.

I did load up on two bank stocks though, taking advantage of the selloff in the last week of May.

Trade Actions

DBS Group
Finally, I had succumbed to temptation and bought 400 shares of DBS Group at $24.25 apiece. The price is still high in my opinion. Would have preferred to load up at the 52-week low. Nonetheless, I believe the business is still intact. An annual dividend of $1.20 is a good aspirin for the volatility in its share price.

OCBC
I added 900 shares of OCBC at $10.84 apiece. The Business Times recently quoted a Citibank report stating, "OCBC appeared interested to raise its 20 per cent stake in Bank of Ningbo over time as and when regulations allow." (news) This could potentially explain the rationale behind the lower-than-peers dividend payout. The article echoes the same sentiment shared in my earlier blog post (here), that something - positive or negative - may be brewing for OCBC that requires significant capital outlay. Taking a longer term perspective, I am confident the local banks will continue to be profitable, and the dividend will be increased or sustained.

Savings

Next month's Singapore Savings Bond (SSB) has an average yield of 2.13% p.a. which is on the low side compared to historical precedents. I have decided to stay out, in favour of the stock market.

Looking Ahead

June will be a 'dry' month for me, as I need to pay income tax and my insurance policies. Most probably I will only be a spectator in the stock market.

---

Enjoyed this post? Never miss out new posts by subscribing here.

Portfolio Summary for March 2019

As of 31 March 2019

Cash Equity

Security	# Shares
OCBC	900
Old Chang Kee	100
AIMS AMP Capital Industrial REIT	2,150

Portfolio Market Value = $13,132

SRS Equity

Security	# Shares
Sheng Siong Group	8,700
Frasers Centrepoint Trust	3,000
Keppel Corp	1,000
SingTel	2,000
CapitaCommercial Trust	3,000
SembCorp Industries	2,000
Frasers Commercial Trust	2,408

Portfolio Market Value = $42,932

March is another happy month for me. My company's long term incentive plan finally came to fruition, and I received a small sum as reward. Just in time to bolster my war chest for investment.

The market is rolling along nicely, even when US and China haven't agreed on a trade deal. Recent talk of the town was about the US Treasury yield curve inversion, though it didn't last very long. An inversion is said to be the harbinger of a recession. Looking at the mood in the market, a recession seems to be the last thing on people's mind. As we head into another earnings season, Wall Street is betting the US Fed will cut interest rates this year. Hard to see any justification for the Fed to do so in the near horizon.

Trade Actions

OCBC
I bought 900 shares of local bank OCBC for my cash equity portfolio at $11.06 per share . I have written out my reasoning in a previous blog post here.

Sheng Siong Group
I bought 8,700 shares of supermarket retailer Sheng Siong Group for my SRS equity portfolio at $1.05 per share. I've yet to pen down my thoughts for this investment. Will try to do so soon.

Dividends

There is no dividend event for my holdings this month.

Savings

The April 2019 Singapore Savings Bond (SSB) offered an average yield of 2.16% p.a., which is unappetizing to me. Granted, it is still better than most fixed deposit promotions out there. But I'm not going for it.

Looking Ahead

This week marks the start of the Qing Ming Festival, where Chinese folks will make their way to pay their respects to the deceased. It has been three months since my dad passed away, and I still think of him from time to time. Sombre mood aside, I'll be ready to pounce on any buying opportunity when earnings season (hunting season?) starts.

---

Enjoyed this post? Never miss out new posts by subscribing here.

Trade Action - OCBC

This company needs no introduction.  Recently, I had initiated a position of 900 shares at a price of $11.06 apiece.  This post summarizes my thoughts about investing in this company.

Pros for investing:

Diversified earnings across industry group and geography
Besides Singapore, OCBC operates in Malaysia (OCBC Bank Malaysia) and Indonesia (Bank OCBC NISP).  OCBC also has two brokerage businesses (OCBC Securities and OCBC Sekuritas), though the result of this division is nothing to shout about.  Another affiliate OCBC Wing Hang operates in Hong Kong and Greater China.  OCBC also owns wealth management unit Bank of Singapore, which has seen healthy AUM growth in FY2018.  Lastly, OCBC owns asset manager Lion Global Investors and an 87% stake in local insurer Great Eastern Holdings.  The diversity of earning streams across industry group and geography minimizes the probability of significant loss caused by a single event.

Recent earnings miss is temporary
OCBC reported lower than expected FY2018 earnings ($1.06 against street estimate of $1.11).  This was mainly attributed to unrealized valuation losses and absence of realized gains in the securities portfolio held by Great Eastern Holdings.  It is pretty normal when investments are marked to market, volatility will swing the valuations and thus impact reported earnings.  Warren Buffett had warned about this phenomenon in his 2017 Berkshire Hathaway Chairman's Letter (source).  Judging from the YTD gain in global equity markets, assuming the trend is sustainable through 2019, the securities portfolio should experience a positive rebound in valuation this year.

Share buyback
OCBC has been consistently buying back shares from the open market.  Some investors see this as a positive move, since it reduces the float and increases earnings per share.  However, it can be a double-edged sword when management does it without regard to the intrinsic value per share.  If we use OCBC’s reported NAV of $9.56 (before unrealized valuation surplus)(source) as a yardstick, then management is not purchasing the stock because it is cheap.  It is more likely an exercise to balance out shares issued under its employee share scheme.

Cons against investing:

Lower dividend than peers
Compared to DBS and UOB, OCBC distributes a lower percentage of earnings (payout ratio of 40.6% versus DBS 59.7% and UOB 51.5%).  This is nothing new, and the bank had explained its rationale previously (source).  According to the Business Times (BT), OCBC CEO Samuel Tsien defended the conservative approach against risks on the horizon.  Mr Tsien “feels that the market is going to be a rougher market” (source).  The CEO also denied looking for potential acquisition at the moment.  For a head honcho to go against institutional imperative – of distributing similar payout as its peers and risk a share price decline – either Mr Tsien is not afraid of shareholder activism, or something is brewing for the company that requires significant capital allocation.  I believe we will know in due time.

Dividend scrip option
Contrary to most investors, I do NOT like companies to offer dividend scrip option.  Firstly, it dilutes the shareholding of existing owners who do not wish to participate (either because of odd lot allocation, which makes it harder to dispose the position in the market, or because of cashflow needs).  Secondly, a dividend reinvestment plan is typically offered because the company wants to retain more cash in their coffers.  The question is WHY?  Why is there a need to set more cash aside?  Again, this circles back to my point highlighted earlier.  There may be something – positive or negative – stirring in the undercurrent.

Oil & Gas industry exposure still a drag
OCBC increased its bad debt provision for the oil & gas industry last quarter.  News finally broke in January when crude oil products supplier Coastal Oil Singapore went belly up with US$354 million debt (source).  OCBC Hong Kong unit was owed the lion’s share at US$122.7m.  In a separate BT article, CEO Samuel Tsien highlighted oil exploration had not increased as expected when oil is trading at US$60-70/bbl range.  Vessel charter still remained below breakeven rates by the bank’s repayment requirement (source).  In short, more pain before the bank is out of the woods.

Final Thoughts

Despite my apprehension from the reasons above, I had decided to go ahead with the investment in OCBC.  Of the three banks, DBS is my first preference, but at 12x earnings (OCBC 10x UOB 10x) and 1.3x book (OCBC 1.1x UOB 1.1x), it is still a tad too expensive for me.  Between OCBC and UOB, I see more growth potential in the former.  That said, I won't be adding to my OCBC position anytime soon.  Hopefully, the reason for OCBC management's conservative stance will come to light as time passes.

---

Enjoyed this post? Never miss out new posts by subscribing here.