SINGAPORE SAVINGS BOND...THE NET EFFECTS

The Monetary Authority of Singapore (MAS) has released more information on the Singapore Savings Bond (SSB). I will leave you to click on the link to find out more about the SSB.

But what's the effects of issuing such bonds?

1.  Another debt instrument is launched to borrow from the public. This time, aimed specifically at individuals, made easier to procure and with 'safeguards' to assure the retail investor.

2.  As suggested by the Business Times article, the SSB would give fixed depos a run for their money. I think it will also grab some share from the ordinary savings accounts, dividend yielding counters on SGX and perhaps even some ETFs. The example cited in the SSB link mentioned a range of 0.9 to 3.3% returns...averaging 2.4%. It should be close.

3.  Banks will likely react. Stocks may drop further to increase their yields and attractiveness.

4.  Will MAS raise rates sans the Feds? Maybe?

BORROWERS UPSET OVER HIKE IN MARGIN FOR SIBOR LOANS

The Straits Times' Money section had the following headline boldly emblazoned on page C5 this morning: 'Borrowers upset over hike in margin for Sibor loans'. 

The article goes on to explain that the anger was directed to the larger spreads and subsequent increase in payments to be borne by the borrower.

CASE felt that the increase in spreads should be clearly explained and justified by the banks in question.

Citibank seemed to have caved in slightly at the end of the article by making some concessions. I wonder if they were under any duress then.

But in any case, that's how banks make money from the retail borrower. Scalping you via the spreads. 

Perhaps it is time to refinance or reprice for some of those who took up loans in 2010 and 2011. 

The swinging good times of cheap credit is ending. Yellen reiterated that it would be sometime in 2015. 

JUNK STOCKS, VICE STOCKS

I should have been clearer. The title of this post should be 'Junk Food Stocks...'.

With Buffett's backing for the merger of Heinz and Kraft, nutritionists are up in arms against the creation of a bigger entity selling unhealthy food to already unhealthy persons making them even more unhealthy.

Junk food, is addictive no doubt. Just like gambling, tobacco and other vices. Macau-related stocks are taking a beating now with the reining in of Chinese spending and corruption. This would likely continue till a much longer time. 

I like beaten down gambling stocks like Genting Singapore and Wynn Resorts. But are they that cheap yet? I do not think so. 

I got a nasty feeling that Genting Singapore will make another cash call in due course.

SINGAPORE SAVINGS BOND

Something slutted from AK.

ANAL-YST

Flipping the papers and trawling the Internet daily is always a joy. Sometimes, the act would bring laughter. Just like this BT article on Nomura's re-rating of a business trust and a REIT.

I was not too sure if Sai Min Chow knew what he/she was talking about. But I was terribly amused.

Are you a Nomura client?

THE GROUND IS...SWEET

The last few weeks saw an exceptional flurry of rumours and news on the worsening condition of founding Prime Minister of Singapore Mr Lee Kuan Yew. The last straw was the hoax screencap of PMO's site announcing the passing of Mr Lee. Netizens were up in arms, protesting the idiocy of the person responsible. Foreign news outlets were also lambasted for latching onto the hoax.

What struck me was the heightened outpouring of concern and attention onto a man who was likely off the radars of the silent majority for many years.

I further underestimated the silent majority's might as news of Mr Lee's death broke on early Monday morning. The picture depicting a black lapel bearing the late founder's side profile took over many Facebooks and Instagrams locally. The sharing of news, photos, videos escalated exponentially. 

Methinks the ground is sweet.

News of the reshuffle should come after that. I hope the momentum would not be lost.

Credit to National Archives of Singapore.

YELLEN YELLEN YELLEN

Just when I was writing about how some CEO/Chairman had balls in my last post, Janet Yellen decided to do the opposite last night.

Cautious optimism is how the financial Twitterverse is terming it.

Here's how I am seeing it, rate hikes would be gradual. Very gradual. Stocks will still push upwards ala 2003 - 2007. Countries are taking turns to ease. Kick the can further down the road. 

How would you trade this tape?

WARREN'S GOT BALLS!

Owning up to your mistakes is not something that every CEO or Chairman could do. In most annual reports and media releases, you would witness glowing statements from the men on the top. During bad quarters or years, you would see notes of caution.

But that is about it. Nothing on saying things like 'I made a colossal mistake'. Nothing.

That is why I say Warren, in this case Warren Buffett has got some guts and gumption in admitting to his past investment mistakes. 

I hope more top management would be able to do this. But most of them are transitory in nature and move on in a matter of years. Perhaps the family-owned businesses, listed or not, would have better luck at dishing out such words of steel.

Bill Gates termed this the most important letter by Buffet, thus far.

SIDEWAYS

The past 12 months have seen an upswing in local and foreign equity markets. By foreign I mean USA, European and Asian ones.

I suspect markets have been pumped in the last one year for institutions to offload at their convenience. It does not help that ECB has started on their bazooka move of QE. But it is still early days as to whether it is any effective.

I see next week's 18 March FOMC meeting as crucial as market watches look to the FEDs for signals to raise rates. However, I am of view that most people are looking to the wrong thing. Interest rates will rise, it is only a matter of 'when'. To me, it does not matter if it is June or Sep 2015. I am not going to trade the markets in those three months of respite if rates rises only in Sep. 

I will just sit pretty and watch the slide. 

SOME THOUGHTS ABOUT THE iWATCH

The smartwatch industry has been receiving interests and hype these few days with the introduction of Apple's iWatch. 

But let us take a step back. Recall a few months ago, a flurry of smartwatches were launched by various mobile phone makers. The launches did not gather much traction amongst techies. The moves by the competing phone makers could also have been made in anticipation of Apple's big launch. 

So how will the iWatch perform in terms of sales? I will attempt to make the call here. Dismal.

Why so? With the advent of mobile phones since the late-90s and early 2000s, watch wearing has been slowing losing favour. Even among regular watch wearers. One could tell the time simply by fishing out the mobile, and along with it, texting friends and surfing the net. The flicking of the wrist and pulling back of a shirt's sleeve was a habit reserved for the die-hards, me inclusive.

Of course, there are people who wear watches for various purpose such as participating in outdoor activities, high-fashion tastes, admiration of certain watch brands, horological pursuits etc. However, these people will not find their requirements fulfilled fully by the iWatch. It is not rugged enough, not long lasting in terms of battery life, and has minimal brand recognition/affinity and most importantly, perceived value with horological fans. 

I remembered reading somewhere some time ago that if you launch a product that is so so so good, there will be enormous demand for it. I think Apple wants to head down that route. But I am not sure if the iWatch is good enough.