ECONOMICAL DOLDRUMS

A quick scan of business headlines in the last few weeks continue to show how badly local companies are faring.

The narrative is worse in Business Times.

One trend that I observe regularly to judge the health of Singapore's economy is that of COE prices.

It's been going nowhere for some time now with a dip in the latest bidding.

Good luck to all.

ALL CASH. AGAIN.

After riding the STI from 2591 to 2800, I am out. Almost all cash now.

Will I rush back in if STI breaks 3000? 

No.

Why?

Because I do not have a fear of missing out the action. 

Good luck. 

THE FATAL MISSING PIECE IN RETIREMENT PLANNING

I have been asked a few times, how much is enough for retirement on a monthly basis. I would usually reply, how much do you spend in a month.

It's not too difficult a sum to work out. But one should always assume all costs involved, including loans and leisure expenses. 

I find most retiree aspirants do not attempt to factor in costs of their entertainment and leisure activities. This results in a budget that crimps their current lifestyle. Thus, making for an almost painful retirement.

Go ahead and factor in the holidays, gifts, shopping, movies and gambling jaunts. 

You would then realise you need much more than you initially thought.

Good luck.

DELONGZZZ

Just when you thought things were looking up for the steel/iron industry in China and for local players like Delong, this fellow came and shingzed the whole party. 

Of particular note:
“The iron ore market remains massively oversupplied and steel consumption in China will extend declines this year,” Li said in an interview on Tuesday. On Wednesday, he told a conference in Perth that he sees iron ore prices trading between $40 and $60 a metric ton this year as China’s demand weakens.

God bless you.

CASH = BALLS

Nobody doubts the fact that money, can get you almost anything, anywhere.

But not everyone who invests knows that.

The common refrain: Start investing young, let your investments compound, you got a long runway.

But that's not the right track. It sets you up thinking that any time, is a good time to invest.

The right refrain: Work hard, save up your money, invest when your basics are take care of.

But nobody understands why. Why is it so important to have enough savings to tide you over when an emergency occurs. Or simply when an investment goes south overnight.

Because without cash, you got no balls to hold.

YANGZIJIANG AND HONG LEONG ASIA - A DISMAL LOOK AT CHINA

Both Yangzijiang (YZJ) and Hong Leong Asia (HLA) reported their 4Q results. And things don't look pretty.

HLA which produces consumer goods, appliances, diesel engines for the Chinese market alluded that the world economy would be affected by the largely bearish and underperforming equity markets. Well, I agree that happens, in some ways. But quoting an unnamed HR consultant on wage growth in China seemed a bit off and odd. HLA is still conducting a strategic review of Xinfei's business. I hope they get a buyout offer.

I used to like YZJ. But ever since their involvement in the micro credit and financing business, I decided to put them on the backburner. Their latest 4Q net profit is a -99% drop from 2014's. Enough said.

In any case, these two companies are excellent for monitoring certain segments of the Chinese economical health. But only for monitoring at this juncture.

BIDADARI FEB 2016 BTO - NOT SO PRIME SITE

The latest HDB BTO sales launch starts today on 24 Feb 2016. As mentioned previously, Bidadari forms part of this 'exciting' town which is parked under Toa Payoh. This means the usual restrictions pertaining to BTO launches in Mature Estate.

Let's get straight to the point. The new plot at Bidadari, called Alkaff Oasis, is not that prime of an offer. It's sited about 400-500m away from both MRT stations. There is a mosque and a school nearby. Two sides are road facing with no good views to offer. 

The good thing is, Alkaff Oasis is cheaper than the previous Bidadari offering in 2015. 

There are more 4-room units catering to earlier demands seen in 2015. That should be a consolation to folks who hanker after them...you should stand a higher chance. With the economic slowdown, you would probably expect less applicants too.

Good luck!



alkaff oasis, bidadari, bidadari estate bto, hdb bto, hdb bto feb 2016, Singapore

OBSERVED: INCREASED BAD NEWS FLOW IN SINGAPORE MEDIA

There are a number of ways in which one can assess the health of the economy and observing the flow of business-related news is one such method.

The Singapore media have been pretty factual in its reporting of local business news. Which is to say nothing much's been censored or overtly glossed over. At least that's my assessment. But of course, Business Times' coverage do differ from Straits Times', especially in its nuancing by going for the throats.

In any case, these few weeks have seen financial reporters getting bylines in prominent the first five pages of the Straits Times. And most of the accompanying articles are reports of bad news in the local business realm. Retrenchment, dismal property sales figures, plunging exports. 

And that's not a good thing.

THE 4-ROOM MATURED ESTATE SYNDROME

An ex-colleague recently lamented he failed to get a number in his 13th BTO attempt. I asked which estate he had applied for. Bidadari.

Having expressed my thoughts on Bidadari some posts earlier, I was familiar with the fervour in which potential applicants had favoured 4 and 5-rooms units there.

I asked why the decision to apply for a 4-room unit rather than a 3-room given there were no plans for children? The ex-colleague replied it was for the potential rental of the two additional bedrooms for income.

With the high number of applicants for the said 4 and 5-room units at Bidadari, I would say the chances of getting a queue number is small, but not impossible. 

For those who hankers after a 4 or 5-room unit in a matured estate, the wait can be long unless lady luck is smiling upon you. For those who need a flat for a small family of three or less, the 3-room units at Bidadari were expectedly less subscribed. 

Good luck in your future applications. Knowing where the betters odds lie will favour you.

THE MOST OVERLOOKED THREAT TO YOUR GRANDCHILD

What jolted me this morning was Straits Times' coverage of the LTA's raising of Nicoll Drive, a 1km long dual carriageway near the coast of Changi. 80cm was the height to be raised. 

This is meant to mitigate the impending rise of sea levels by the end of this century which is projected to be about 80cm. Tracts of lands would be lost, water catchments compromised by seawater...

You are not likely to face this phenomenon if you are in your 30s. Your children might even evade it. But definitely not your grandchildren. 

With this in mind, it would be prudent to make better choices in life. I wonder who's vested in properties near Changi, Sarimbun, Seletar or Sentosa?

In any case, do read the following for more info:
https://courses.nus.edu.sg/course/geowyc/course/ge3216/students/sea_level_rise/Findings.htm
http://www.econ.yale.edu/~nordhaus/homepage/documents/SLR_Ng_second.pdf
http://www.nytimes.com/2007/08/29/world/asia/29iht-Dikes.2.7301576.html?_r=0

The word 'stave' is kind of strong?

ARE YOU BUYING NOW?

STI touched 2,581 points earlier today. That's about 1,000 points from one year highs of 3,549.

But what's worrisome is the velocity at which these levels were breached. Bloomberg compared Singapore's market loss for 2015 to Greece's. 15% loss it touted.

With year to date performance for 2016 so much more pitiful than Bloomberg's time-stamped article, we all now know where the hot money flowed into all this while. 

Our shores.

Buy where you'd ask?

HOW CAN A YOUNG COUPLE GET A UNIT AT BIDADARI BTO...AT A HIGHER CHANCE?

Now that everyone is gunning for the Bidadri BTO, how can you, as one half of a young couple ensure that you have a higher chance at getting a unit?

This checklist comes in handy:

1. Are you a 2nd-timer as a HDB home buyer?
2. Do you intend to have a child at all?
3. Do you intend to have a child within the next 5-10 years?
4. Do you intend to live with your parents/siblings/grandparents at Bidadari?
5. Do you intend to sell your unit when the Minimum Occupation Period is up?

If you had answered 'No' to all four questions, then you should right-size now to a 3-room. This enables you to have a higher chance of getting a better shot at a unit at Bidadari.

95% of 3-room units at a Mature estate BTO are allocated to 1st timers. That's you. And that's the reason why there is currently 10 units for every 6 applicants in the current BTO exercise as of now.

Judging from history, the application numbers for 3-roomers may go up a bit at the end of the close of applications, but it sure beats the low chances of the 4 and 5-room applicants.

I half-suspect the higher pricing of the overall Bidadari exercise is turning off some people too.

So, there you have it. Right-size and stand a higher chance. You have less than 24 hours.

Good luck.

2015, august, august 2015 bto, bidadari, bidadari estate bto, BTO, HDB, hdb bto, hdb bto 2015, hdb bto aug 2015, hdb bto august 2015, potong pasir, Singapore, toa payoh, toa payoh town, woodleigh mrt, 

WRONG MOVE #2: BUYING A CAR IN SINGAPORE

Some time in mid-December 2015, I would have to make a decision to i) scrap my car, ii) renew the COE for 5-years, iii) buy a new car or iv) buy a PARF car.

It is not an easy decision to make. The main consideration is plonking good money into a depreciating asset.

Let's do the sums for a Honda Fit to be scrapped.

(Installment + usage/maintenance) per month = $1,083. This sum includes petrol, parking at home & work, ERP, insurance, road tax and regular servicing, changing of parts. 

PARF rebate at scrap = $9,500.

So, after scrapping the car in December I get an 'increment' of $1,083 per month and a $9,500 bonus? 

OK, take my car.

TURNING SHIT INTO GOLD

$200 may not mean much to a lot of people. But they do not stop to think of the possibilities of that amount when compounded.

Imagine you are 25 years old and put about $200 in your CPF-SA as part of your mandatory contribution. Then you get a $200 pay increment as part of your promotion. You up your expenses accordingly, splashing on food and what naught.

Instead of pumping that amount to food which turns into shit, how about putting it into your CPF-SA and earn some 4% interest?

Here's how it compares when things square up at age 55.

Not too shabby yea? However, not many people do it. 

Those who do, do it even better by pumping in that extra $2,400 at the beginning of the year to work that compounding effect.

NIBBLE YOUR LIFE AWAY

You will hear the common refrain from some gurus or bloggers who write about the stock market and financial issues locally, especially when markets are roiled:

The stock is undervalued, nibble some.

The stock is trading below NAV, buy some.

Dollar cost averaging/value investing is the way to go. 

Buy regularly, every month/quarter/half a year.

I do not disagree at buying. But at the rate that they are urging you, you will be eaten up. Soon enough.

The net effect is obvious. 

Keep buying. Keep churning brokerage. Keep fees coming. Keep the brokerage firms going. Keep your broker employed. 

By the time you are done nibbling at ST Engineering so many times from a recent 6-month high of $3.80 to a low of $2.80, you are all negative from the fees paid to your brokerage.

You know what to do the next time someone urge you to nibble, or tell you they have been nibbling some.

FO.

IS A MEMBER OF PARLIAMENT NECESSARY?

According to the Middle Ground FB post, general elections is upon us soon. 

I do not deny that is my gut feel as well.

But in the last few years since GE2011, I have been thinking: Is the MP in my ward a necessity?

As Singaporeans progress and become more net savvy and government agencies' feedback/comms channels improve, the two-way communications between government and citizens vastly increase over the years. 

QSMs and ministries' FB pages receive a constant deluge of feedback and complaints from the everyday man. So do the various politicians and office holders. This is not withstanding the usual email and letter writing forms. 

With the advent of the Social Service Offices, help for the needy is now much more accessible than earlier CDC variants. MPs also direct cases, especially more complex ones, to be looked at by the SSO. 

Municipal issues are now taken much more seriously, especially for those that cross multiple agencies and territories. The Municipal Service Office coordinates such multi-office efforts to service the public better.

This leaves me with community bonding, which is the mandate of the Community Development Councils and the Peoples' Association. 

So where does that leave my MP? It's anybody's guess.

SHUNFU VILLE EN BLOC SALE?

The Business Times' Kalpana Rashiwala nicely hyped up the impending en bloc sale launch of Shunfu Ville, a sleepy HUDC enclave that was recently privatised. 

So...what are the upsides? Firstly, it's near Bishan and Thomson. So the perceived value of the centrally located plot is high. Second? It's slightly elevated.

Not sure if the developer would make use of this elevation to its advantage. But that's all the goodness to the place.

The nearest makan place is the FC a short walk away. Amenities like NTUC etc are either at Bishan Junction 8 or Thomson Plaza.

So what's not so good about the place? The NSE.

Yes, the dreaded North South Expressway will cut right in front of the plot. The last I heard, the underground entry/exit point could possibly be sited right outside Boon View and Tresalveo. 

That's one helluva noise hole people.

The only consolation is that the demolition/construction of the Shunfu Ville plot might coincide with the construction of the NSE. This way, would be residents are spared the noise, dust and traffic congestions from the construction of the NSE.

I also heard the NSE has 'eaten' into some parts of Boon View and Tresalveo's plots. Not sure if Shunfu Ville would also suffer from this partial makan.

The 2014 URA Masterplan shows that the place is not going to very densely built up. A good mix of private low-rise and high-rise. Near good schools like Raffles Institution and the incoming RGS in 2018, this would be a nice area for those who can afford the projected $1,400 psf and can endure traffic noise. Especially if you are road-facing.

One last look at the vicinity. By the way, a 3-room HDB at Shunfu Gardens is going for about 400k plus on a 60-odd year lease. 

Cheerios.

CHANNEL NEWSASIA VS BLOOMBERG

So who's right? Weather versus currency. CNA vs BBG.

BYE BYE RINGGIT?

According to local news outlets, the Malaysian ringgit is in hot demand following fresh lows against the Sing$.

Well, SHTF again today. New lows.

But fret not, the ever kiasu Singaporeans will catch the falling knife over and over again.

Me? I will wait till month's end for Fitch's re-rating of Malaysian debt.

Cheerios.

BLACK SWAN - MERS

News of a suspected case of MERS in Tsing Yi MTR, Hong Kong is spreading this afternoon. 

This is not an unknown 'black swan'. The economic backlash to any countries stricken by such occurrences would be severe.

Can we not relive 2003 again?


Update 11 June 2015: PM Lee visited TTSH's CDC today. I took a gander over there some time ago. It's not a pretty place. Hope we do not have to use it.

The man with the prediction