MGCCT 3Q DPU up 11.6% at 1.854 cents

Mapletree Greater China Commercial Trust posted their 3Q FY 15/16 earning report in summary below.

•  Available Distribution per Unit (DPU) for 3Q FY 15/16 of 1.854 cents, 11.6% higher than the corresponding quarter a year ago
• Gross revenue grew 19.8% to $88.2 million
• Net Profit Income (NPI) rose 22.3% to $72.5 million

The growth in revenue and NPI was mainly due to the acquisition of Sandhill Plaza and steady contribution from Festival Walk and Gateway Plaza. There is rental uplifts of 42% from Festival Walk and 29% from Gateway Plaza. They have achieved a high portfolio occupancy of 98.7% and have renewed or replaced 92% of the portfolio leases due for expiry in FY 15/16.

MGCCT has also been consistent growth in Distributable Income and DPU since IPO in 7th March 2013. Today closing price at 84 cents give you an annualised distribution yield of 8.2107% which is very attractive to invest for income.

In general, MGCCT has been doing very well in managing their portfolio. From their initial portfolio of Festival Walk and Gateway Plaza, they had acquired their 3rd properties, Sandhill Plaza in 15th Jun 2015. Net Profit Income will increase due to their high occupancy rate. I will be looking to add MGCCT into my portfolio once my bonus come in March. 

Are you prepared if you are being ask to leave?

The recent market outlook had shown indication that we are heading towards technical recession due to the oil price slump crisis and the slowdown of the China's economy. Some companies that I had heard of, is starting to retrench their staffs to cut down on labour costs to keep their business expenses down. If that happens to you, are you prepared to go without a job for at least 3 to 6 months? Do you have enough savings or emergency fund to tide over this dark period?

Some of my colleagues and friends are not prepared for it. They always could not meet the month's end due to their family commitment and also they are not prudent to save when they received their bonus or increment. They will usually spend it on holidays or splurge on themselves or with their girlfriend/wife on a nice dining to relieve their stress on work and also to reward themselves for the hard work they had done.

It is always good to save and have an emergency fund. You will never know when you need it. You could be retrench or meet an accident and lose the ability to work. Once you have an emergency fund, then I would say, you are prepared. In the event, you are retrenched from your company, you can still have some savings to tide over the period and meanwhile trying to look for another job.

Create another fund for retirement or investment, make use of the fund to earn passive income from investment. By investing for income, at least the savings you have for this fund can beat the inflation rather than keeping it in the bank.

January 2016 Portfolio Update

Stock Name	No of Shares	Current Price	Current Value
Keppel Corp	1000	$4.710	$4,710
Accordia Golf Trust	9000	$0.48	$4,320
NeraTel	5000	$0.595	$2,975
Total Value			$12,005

This month I initiate a long position for Keppel Corporation in the first week for January. Their share price has been dropping tremendously since the oil price crisis triggered somewhere in the middle of last year. I had been looking out on Keppel Corp since last year and decided to go in at the price of $6.40 and $5.85 respectively. Initial thought that it won't be going any further down at the price of $6, but it keep on hitting all-time low at $4.64. Although, the price that I went in does not appear to be rosy at the moment as currently it is at a loss of 23.4%. I did not lose my sleep over the losses as I believe the price I went in is definitely not on the high side. There are people who vested around $9, $8 or even $7. You simply are unable to catch the bottom. You have to go in to test the water in order to find out. So the correct technique is to break your purchases into different tranches so that you won't miss the opportunity, should the price bounce back.

The market is in downtrend and most of the stocks that you are holding since 2011 is in the red zone. No one is being spared from the market. Unless, the stock that you are holding now is during the Global Financial Crisis in 2009. My overall portfolio is currently sitting at a loss of 20.88%. I am treating the current market sentiment as an opportunity for me to buy when the price is low, rather than being upset over why the price keep on dropping and tested new all-time low. How about you? How many percent paper loss is in your portfolio now? I believe most of the retail investors are sitting at a loss rather than a gain, unless you are a damn guru that bought in 2009 and kept it until now.

Keppel Corp to consolidate asset management businesses

After the Full Year 2015 financial result is out since last week saying there is a layoff of 6,000 Offshore & Marine (O&M) workers in a bid to slash costs and optimise its current operations. Today, they reported to propose consolidating of their asset management businesses (Keppel Infrastructure Trust, Keppel DC Reit, Keppel Reit and Alpha Investment Partners) under one subsidiary called Keppel Capital Holdings Pte Ltd, a wholly-owned subsidiary of Keppel Corporation.

The proposed consolidation will benefit the Keppel Group by strengthening the Group’s capital recycling platform and ability to make prudent and timely investments with an expanded capital base and without relying solely on its balance sheet. It will also improve the performance of the Subsidiaries and the funds, REITs and business trusts that they manage through centralising certain non-regulated support functions and creating a larger platform which will enhance recruitment and retention of talent and sharing of best practices.

This proposed consolidation is also implying they are restructuring their workforce to tide over the oil price dip crisis and to centralise their workflow and productivity to improve on unitholder and investor returns. Shared services allowed greater management focus on core business and to retention of top talent. This move come in at the right time to bring back the trust of the investors on their Infrastructure and Investment sectors. As O&M sector will not be doing well in the next few years, their move to strengthen on other sectors to balance out their business strategy and portfolio.

Waterway Point

Yesterday, we pay a visit to our long-awaited shopping mall that is near our house to make our weekly NTUC grocery shopping and also our weekend dining there. The mall had a soft launch on 18 Jan 2016 and will be officially open in 2Q 2016. The mall was built as part of Punggol's first integrated waterfront residential and retail development, Watertown. The mall was jointly developed by Far East Organization and Sekisui House and is part of the new Watertown development. We did not go for the soft launch as we anticipate there will be a huge crowd going to Waterway Point. Indeed, our guess is correct. There is huge crowd queuing up to enter into the mall early in the morning to be the first 500 shoppers to win a pair of free SHAW Theatres movie ticket.

Punggol used to be a deserted town many years ago due to the geographical location as it is located at the northeast corner of Singapore which is not fancy by others. From the turnout yesterday, the mall is packed with many shoppers and car park is full with long queue queuing for car park lots. This was definitely one of the great success from Frasers Centrepoint to open a mall in Punggol and with the new integrated waterfront residential. Have you been to Waterway Point already? Let me know your first experience when you visit the mall.

Keppel Corporation Full Year 2015 Report Card

Keppel Corporation posted their full year earning report in summary below. 4Q earnings decline 44% to $405 million from $726 million a year ago, as more than half of project deliveries it had planned for 2015 were pushed back to this year.

• Net Profit fall of 44% for 4Q 2015 to $405 million
• Net Profit fall of 19% for Full Year 2015 to $1.525 billion
• Earnings per Share fall 19% to 84 cents
• Annualised Return on Equity of 14.2%
• Economic Value Added decreased to $648 million
• Cash outflow of $694 million
• Net gearing was 0.53x
• Total cash dividends of 34 cents per share for FY 2015

Keppel Corporation faces a challenging environment in the coming FY 2016 on

• Falling oil prices
• Uneven recovery in major economies
• Chinese property market improving despite slowing economy
• Political and economic crises in Brazil

Keppel Corporation responding on how to handle the challenges:

Rightsizing and optimising operations

• Redeployed manpower across Keppel Offshore & Marine (O&M)
• Direct workforce lowered by about 6000 persons or 17%
• Singapore subcontract workforce lowered by about 7900 persons or 24%

Prudently investing in R&D, productivity and core competencies 

• Acquiring LETOURNEAU rig designs and aftermarket business 
• Developing and offering LNG solutions

In conclusion, Keppel Corporation is facing a tough period with the massive fall in oil price down below USD $27 per barrel. Profits had dropped to 19% thankful to their diversified business on Property sector, Infrastructure sector and Investments to balance the poor earnings on O&M sector. They are re-structuring their work force to bring down on labour cost and improve on productivity in hopping to tide over this period of crisis. They had to direct their focus on other sectors to balance their portfolio while waiting for the oil crisis to be resolved. The recovery will not be so soon but you can be sure that the oil price will not be all times low for that long. It will probably take about 2-3 years for them to recover to their peak. Meanwhile if they are constantly paying good dividend, I don't see why we should give them a miss since they are traded at all times low right now. Of course if you were to invest on them, you won't be seeing good returns from them in the next few years. If your investment time horizon is longer, you definitely can reap the rewards once they start to recover.

Keep your options open

Last week I have been hearing from my peers that, our ex-colleagues are submitting their resume to our management to request for job interview or to find a job that can match to our requirement. We are in the same organisation but in different business units. Initially my thoughts is I do not want them to join us. The working culture that we had built for a long time should not be destroyed by them if they do joined us. We had known them for a long time and we do not really enjoy working with them again. The link-up was through a senior manager from our management to our Vice President to consider them since we are doing the same line of business.

The reason why they had to resort on joining us is because they do not have anymore projects for them to work on and now the management has given them 2 months grace period to find another job outside or to look for other alternatives in the sister company that they can render their services to them. Upon hearing this piece of news, I began to ponder. Our company usual practice is not to retrench people. Most of the staffs leave on their own will as they could not stand the poor remuneration although it is a very stable and established company. Now that, things are different now. The company starts to retrench when it is unable to win contracts or projects to bring in revenue for the company and the shareholders.

I began to pity on them as now their bread and butter is on the chopping board now. I do hope now they can protect their rice bowl and continue working. Some of them has family commitment and some are already not young anymore to look for another job. They definitely will suffer a pay cut to gain employment again. The morale of this story is we should always constantly upgrade ourself and keep our options open if there is opportunity arises.

 

Same goes to stock investment, if any particular stock that you are holding that keep on dropping the share value. Sometimes it is better to cut losses and move on. By holding back, you are giving up your options to look out for other better stocks that could bring you to financial freedom. So in conclusion, be more mindful on situation awareness that surrounded you. Get informed on what is happening around you to make correct decision when necessary.

Things to do while waiting for market to recover

The global market is in extremely gloomy mood since the first day of trading 2016. STI has been dropping 2% to 3% almost every trading day. Investor's sentiment is very low now and everyone is panic selling or staying on the sidelined to wait for market to rebound and take action. So meanwhile what should we do while staying on the sidelined?

1) Read more on investment related books to keep on learning on personal finance.

2) Focus more on your work and since the new year has started, Key Performance Indicator (KPI) on your work has to measure again to determine your bonuses and promotion.

3) Start your exercise regime again. Studies had shown exercise can bring down the stress level and give you a clear mind to make your decision.

4) Meet up with close friends and interact (Topics can be lifestyles, work-related, family-related or personal finance).

There are many things you can do while waiting for the market to show sign of improvements or recovery. So don't be too upset on the paper losses that you had in your portfolio. Have faith in them and they will recover. Just remember what goes down will goes up again.

STI down 6% since the start of trading 2016

Since the start of trading 2016, the Straits Times Index (STI) has dropped to 6%. Before the recent high of 3,525.19 points in Apr 2015, the STI had tumbled 15% in 2015. This add up to a total of 21% dropped from the recent high. The gloomy outlook was triggered due to the fall of crude oil price to around USD $30 per barrel and also the devaluation of the Chinese currency Yuan, triggering a series of weakness in the Chinese market. So are we into the recession now?

My gut feel is, we are not into recession yet. The market will bounce back probably after testing the support of STI 2,500 points. The series of panic selling was the lost of confidence in the market outlook. There is a saying, price goes up must come down and vice versa. In this current turmoil, the market cannot be dropping every 3% to 5% on each trading day. Yes, we are in a prolong weakness period and everybody is panic selling. Look at the market in a different perspective, with the weakness of the current price, we should be scooping up stock that had strong balance sheet and give handsome dividend and growth in this period. If not, when is a good time for a good entry price?

When most people are panic selling, we should be vigilant in scooping up from them. I am not saying the decision to buy now is correct. We do not know the market behaviour and we are unable to know when the market will bottom. But however, we should nibble abit in this current turmoil rather than missing the opportunity to accumulate good fundamentals stock.

I had purchased 1000 shares of Keppel Corp last week when their prices dropped to a ridiculous low. When people are losing confidence in Offshore & Marine (O&M) industries, I am interested in coming into this industry. Analyst saying the price will drive down below $5 or even $4. I would be more than happy if the price keep on dropping. I will even accumulate more and hold for long term investment. Beside O&M, Keppel Corp also do multiple business like property, infrastructure and investments. They are diversified in their business, although O&M weighs 70% of their business. I have confident that this investment will reward me handsomely when the market bounce back. Meanwhile just sit back and enjoy the dividend given to us. Are you having the same sentiments as me or you think I am crazy to go into O&M now where everybody is selling? Please share with me your thoughts.   

First run of 2016 in Park Connector

Yesterday morning, my wife and I went to the Punggol Park Connector to explore the running route near our home. To my surprise, we need to walk or jog to a nearby entry point of the Park Connector in order to run inside the connector. This is about 1-2 km away from our home and by the time we reach there, there is no proper walkway for us to go down to the connector. We need to walk down from a slope. I suppose this is not the correct entry point to the connector.

 

Then I was thinking, those who live nearby the connector, there is no alternative route for them to run or cycle in the connector if their home is not close to the proper entry point. They have to go through one big round in order to get in, which I feel is not being organised at all. First of all, if there is an emergency, the runner or cyclist had to evacuate to the nearest entry point in order to get out of the connector. I'm not sure is there a guide for those who want to be exercise in the connector, to tell them where are the proper entry or exit point. In this way, he or she will be more informed and planned their running or cycling route. If you happened to know, please send me a message and let me know so that I won't be so lost next time. Nevertheless I still enjoy the scenery during our run.

COE for small cars drop $9,000 in latest bidding exercise

Today, the first open bidding exercise for January 2016 Certificate of Entitlement (COE) result released and had an astonishing result for small car dropping of $9,000 from the previous bidding. Now it cost $45,002 if you are intending to buy a Category A COE car.

Such an astonishing result for the start of the year would definitely attract alot of car buyers going to the showroom this weekend to check out the latest pricing for their dream car. The COE has been at all times high ever since 2013 hitting $100,000 benchmark which had broken the dream of majority ex-car owners to give up on buying a new car when their existing COE expired. It is simply too ridiculous for an ordinary person to buy a new car that costs so much. The price of the COE does not even include the price of the car. Only the rich and those who are in need of a car for their job's requirement would consider buying at this price.

I had bought a new car in Sept 2014 when my old car COE going to run up in 6 months. That time, the COE price I am paying is $62,890. After 1 year and 3 months, the price had been going down as the government releases more COEs. For those who are waiting for the price to come down, it is a happy moment for them as now the price look abit decent although it is still quite expensive. If you compared those who had bought it earlier like $100,000, $90,000, $70,000 and $60,000, you definitely get a better pricing now. Those who bought earlier like myself can only envy those who have not buy yet.

This is similar to stock investment. When the price is going up, it has to come down one day. What goes up will come down and vice versa. It's only a matter of time when you can catch a good price and went in to enjoy the fruits. As long as the price fit your criteria or requirement, go ahead with it. How about you? Are you going to the showroom this weekend to check out the latest pricing and book your dream car?

First trading day of 2016

First trading day of 2016 started with a blood pool sea of red. Chinese stock trading was halted after the CSI300 index plunged more than 7% at around 1.28pm Singapore local time, triggering China's circuit breaker mechanism. This was triggered due to poor sets of result from the manufacturing sectors for the 10th consecutive month of contraction with the world's second-largest economy set to post its weakest growth in the last 25 years. THE STI was also affected by the news and ended -47 points to close at 2,835 points on Monday.

If the markets continue to release poor sets of result in the coming quarter, we would be seeing the economy goes into the bear. It is always good to have a warchest ready when we see the opportunity to buy if the economy is in southward trending. The impact for not having a warchest, we could miss the chance to buy the counters at a lower price which are on the watch-lists and had to blame ourself if we couldn't make full use of the chance. 

In the journey of investment for income, there must be proper allocation of your assets on equities, bonds, ETF, fixed deposit and cash to wait for the right opportunity to invest in order to generate maximum returns for our portfolio. So please bear in mind not to be 100% vested all the times. Set aside 20% to 30% of your assets as warchest to ride on to opportunity when it comes.

Investing your first $20,000

This morning, I downloaded a copy of the e-book written by Singapore top finance bloggers on how they would invest on their first $20k. I was impressed by the idea of Alvin Chow from BigFatPurse to request from top finance bloggers in Singapore to advise beginners like me on how they would invest their first $20k.

My takeaways after reading the e-book. Most of the bloggers advise on Index Investing, ie the Exchange Traded Fund (ETF). It’s a proven, time-efficient and effective way of investing. Even Warren Buffett once said that the majority of investors should invest in indexes because that’s the easiest way to beat even professional money managers. However, it is a boring approach in investing. You do not need to research as you are investing in a diversified portfolio which give you a peace of mind and a handsome return if you will to invest in long term.

Now, I shall also share on how I would invest on my first $20k. As you can see, my portfolio is not yet $20k, I certainly would hit $20k by the end of 2016. First of all, this $20k should be a sum that you can afford to lose or you do not need this money to pay for your children fee, house renovation or wedding packages before we can safely say you can use the money to invest.

For me, I do not really like Index Investing. I prefer to invest on my own to create my mini STI constituent components. So my approach is to invest on 3 stocks using $5k each and left $5k as warchest should the economy turn southwards, you can still catch the falling knives. Beside this $20k, there must also be a saving plan to keep on saving from your primary income and to reinvest on the market to generate more passive income. A rule of thumb is to diversify your portfolio into not more than 20 stocks and also keep a warchest ready to deploy when the economy turn southwards.

Review of target setting for 2015

Last year I made a resolution to save at least $10k from my primary income and to invest on equities in hoping to make 7% dividend from the stock market. Now 1 year has passed, it is the moment for me to update this table to reflect on my achievement.

In 2015, I only managed to save $8,800 which is below my expectation. I shall not elaborate the reason for not being able to hit my target. If you have been reading on my blog, you should have know more about me and my commitment. My compound saving for 2015 stands at $12,918.46 which comprises of a one-off saving of $2,987.48 from 2014 and $1,051.10 of dividend I made from the stock market in 2015. This translated to 8.86% yield which had surpassed my initial plan of 7%.

Moving forward in 2016, I will still try my best to save $10k. This will depend on the bonus I will be getting and hopefully there is a promotion in July which can boost my saving plan. Beside saving and invest for income, I will also explore on other stream of passive income to boost my saving such as earning income from advertisement by writing blog ("If my blog can clock higher traffic from readers") or be an Uber driver.

In 2014, I had participated 3 charity events in helping to deliver dry foods and basic necessities stuff to the needy and old folks home. In 2015, I only managed to participate 1 charity event due to my tight schedule. So for 2016, I hope to at least participate 2 charity events to contribute back to the society in helping the needy.

Year	Age	Proposed Yearly  10k Saving	7% Dividend Based on  Compound Saving	Actual Saving	Compound Saving
2015	37	$10,000	$10,700.00	$8,800	$12,918.46
2016	38	$20,000	$22,149.00	-	-
2017	39	$30,000	$34,399.43	-	-
2018	40	$40,000	$47,507.39	-	-
2019	41	$50,000	$61,532.91	-	-
2020	42	$60,000	$76,540.21	-	-
2021	43	$70,000	$92,598.03	-	-
2022	44	$80,000	$109,779.89	-	-
2023	45	$90,000	$128,164.48	-	-
2024	46	$100,000	$147,835.99	-	-
2025	47	$110,000	$168,884.51	-	-
2026	48	$120,000	$191,406.43	-	-
2027	49	$130,000	$215,504.88	-	-
2028	50	$140,000	$241,290.22	-	-
2029	51	$150,000	$268,880.54	-	-
2030	52	$160,000	$298,402.17	-	-
2031	53	$170,000	$329,990.33	-	-
2032	54	$180,000	$363,789.65	-	-
2033	55	$190,000	$399,954.92	-	-