Berkshire Hathaway (BRK.B) becomes even more affordable

With the stock now approved for a 50-for-1 split, it looks like I can finally accommodate some BRK.B in my portfolio. Great!

Tiger Airways IPO

Tiger Airways IPO

Public Offer: 12,386,000 offering shares
Maximum offering price: S$1.65 per share (proceeds of S$246.8m)
Underwritten by: Citigroup, Morgan Stanley and DBS

Important Dates:

18 Jan 2010 - Closing date and time for Singapore Public Offer
22 Jan 2010 - Commence trading on a 'ready' basis

Financial performance
- Operating revenues grew with a strong CAGR of 71.6% from FY06, reaching S$378.0m (US$268.3m) in FY09. Total revenue for the six months ended 30 September 2009 was S$206.1m (US$146.3m), representing an increase of 12.4% YoY.
- Net loss, on the other hand, stood at S$8.3m, better than S$25.2m in previous corresponding year.
- This compares to S$5,953.5m in 1HFY10 revenue and S$465.9m in net loss for SIA (3.5% of SIA's half-year revenue and 1.8% of its net loss)

iTODAY: All that glitters is not gold

Article from ITODAY

All that glitters is not gold

Probably the only real surprise about the surge in gold prices is that it took so long to arrive.

Last week, gold touched an all-time high of US$1,227.50 ($1,705). In September it was still less than US$1,000. The price has dropped below US$1,200. It isn't hard to figure out why investors are interested in gold again. Central banks are pumping fresh money into the system. Economic history says that eventually this will lead to inflation. In reality, gold has a mixed record. A few industrial uses and jewellery aside, gold is valuable only insofar as other investors think it is valuable.

There isn't much chance of central banks making their currencies convertible into gold again. It may secure itself a greater role as a reserve asset.

Gold may have a role in protecting against inflation, but there are alternatives.

Real-estate rebound

The price of real estate will not always move in line with inflation. And you might want to steer clear of the markets where there has yet to be a retreat from the exuberant prices of 2006 and 2007. Even so, if there is more money chasing a static amount of land and buildings, prices will rise.

Crude oil

Oil has stopped being just stuff that we put in our cars, and become an investment in itself, effectively making it an alternative to gold.

Stock picking

Moderate, persistent inflation in the 3-per-cent range is good for big, blue-chip companies. They can edge up prices along with everyone else, and usually get away with increasing wages just a bit less than inflation, cutting labour costs. In those circumstances, shareholders should do fine - and their equities will more than keep up with rising prices.

Luxury goods

Once inflation takes off, only real assets that will hold their value - everything else is just paper. They should start to soar in price as the mega-rich realise they are among the few ways to protect wealth.

Private-equity funds

A leveraged buyout firm buys well-established companies in basic industries then loads them up with debt, while hanging on to a bit of equity. Inflation will effectively wipe out all that debt. The result? The equity that is left over will be worth far more.

None of these will necessarily work in the long term. The only real way to control inflation is to raise interest rates high enough to create a deep recession, and choke off rising prices. That's what central bankers did in the late '70s and early '80s, and may do again sometime around 2015 or 2020. Once that happens, you might not want to be in property or equities.

That, is some way off. As we move into the early stages of an inflationary era, those five assets should do at least as well as gold, if not better.

Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.

********************************************************

CapitaMalls IPO

CapitaMalls hits early peak of S$2.30 versus S$2.12 issue
CapitaLand raises $2 bln after over-allotment
IPO was 1.7 times oversubscribed.

More from: Reuters

HK Pre-IPO

1. Fantasia Holdings Group Co (HKD 2.18)

Pre-IPO: 24 Nov, Tue 4.30pm-6.00pm

IPO: 25 Nov, Wed

A property company focusing on four the fastest growing economic regions in China. The IPO was very well received with the retail tranche was 155 times covered and the institutional tranche was 40 times covered. Stock code is 1777 HK, lot size is 1,500shs.

2. China Minsheng Bank (HKD 9.08)

Pre-IPO: 25 Nov, Wed 4.30pm-6.00pm

IPO: 26 Nov, Thu

First National joint-stock commercial banks and 9^th largest bank in China. Corner stone investors include Asset Investment arm of Ping An Insurance and Chinese Estate Holdings. Retail tranche was 159 times covered. Stock code is 1988 HK, lot size is 500shs.

3. China Sands (HKD 10.38)

Pre-IPO: 27 Nov, Fri 4.30pm-6.00pm

IPO: 30 Nov, Mon

Leading casino operators, with casino including the Venetian Macau, the Sands Macau and the Plaza. Stock code is 1928 HK, lot size is 400shs.

Fantasia Holdings Group CO., Limited (The Company) is one of the leading property developer and property related service provider in China. The company first commenced their property development business in Shenzhen in 1996. The company has been involved and currently focuses their real estate activities in four of the fastest growing economic regions in China, such as Chengdu-Chongqing Economic Zone, the Pearl River Delta region, the Yangtze River Delta region and Beijing-Tianjin metropolitan region, after leveraging their broad experience and capabilities. The company and its members have received numerous accolades for their property development, service capabilities, design and quality.

China Mingsheng Bank (CMBC or the Group) Established in 1996, which is the first national joint-stock commercial banks held by non-public-owned enterprises, and the 9th largest bank in China. As at the end of 2009Q3, total assets and operating income of CMBC amounted to RMB1.4 trillion and RMB31.3 billion respectively. According to CMBC's estimation, the Group's net profits would increase by 53.2% yoy to RMB12.076 billion, and rose 11.7% and 31% yoy in 2010 and 2011 respectively.

China Sands is one of the leading operators of integrated resorts in Macau, which contain gaming areas, meeting space, convention and exhibition halls, retail and dining areas and entertainment venues. The casinos owned are the Venetian Macao, the Sands Macau and the Plaza. Also it operates 3 major high-speed ferry companies traveling between Hong Kong and Macau. As of Sept 09, revenue from casino contributed the largest portion of total net revenue, followed by those of rooms and malls.

Relook at infrastructure

With the recent news of Warren Buffett's purchase of Burlington (See http://www.bloomberg.com/apps/news?pid=20601087&sid=aonNZzzcmEOY ), or as he calls it "“all-in wager on the economic future of the United States", I thought of something I wrote 1-2 years ago and it is time for a relook into infrastructure.

http://www.waynekoh.com/2008/06/infrastructure-new-gold.html

WIIN Index-BSE-11Sep2009

Current level ==> 16,264.30

0.48% Chance of hitting this level==> 17,897

3.24% Chance of hitting this level==> 16,704

10.56% Chance of hitting this level==> 15,511

16.96% Chance of hitting this level==> 14,318

20.84% Chance of hitting this level==> 13,125

19.52% Chance of hitting this level==> 11,932 (m.r.t level)

18.80% Chance of hitting this level==> 10,738

5.28% Chance of hitting this level==> 9,545

3.32% Chance of hitting this level==> 8,352

1.00% Chance of hitting this level==> 7,159

WIIN Index-Nikkei225-11Sep2009

Current level ==> 10,444.33

1.20% Chance of hitting this level==> 11,671

8.24% Chance of hitting this level==> 10,773

24.64% Chance of hitting this level==> 9,875

25.52% Chance of hitting this level==> 8,977 (m.r.t level)

26.36% Chance of hitting this level==> 8,080

9.80% Chance of hitting this level==> 7,182

3.80% Chance of hitting this level==> 6,284

0.44% Chance of hitting this level==> 5,386

WIIN Index-S&P500-11Sep2009

Current level ==> 1042.73
0.72% Chance of hitting this level==> 1,064
25.00% Chance of hitting this level==> 976
45.76% Chance of hitting this level==> 887 (m.r.t level)
19.92% Chance of hitting this level==> 798
4.96% Chance of hitting this level==> 710
3.36% Chance of hitting this level==> 621
0.28% Chance of hitting this level==> 532

WIIN Index-STI-11Sep2009

Current level ==> 2681.03
0.24% Chance of hitting this level==> 2,865
1.48% Chance of hitting this level==> 2,660
11.80% Chance of hitting this level==> 2,456
31.36% Chance of hitting this level==> 2,251
23.72% Chance of hitting this level==> 2,046 (m.r.t level)
21.60% Chance of hitting this level==> 1,842
5.08% Chance of hitting this level==> 1,637
3.44% Chance of hitting this level==> 1,432
1.28% Chance of hitting this level==> 1,228

Overbought markets-12Aug2009

This is a new set of numbers I have put together to compare market indices against its individual 200-day moving average as well as across each other. Period of data: from Jan2002 til 12Aug2009.

What the coloured boxes mean:

1) Red: Overbought zone;

2) Green: Oversold zone;

3) Light blue with yellow outline: current level

All 5 markets exhibit clear signs of being in overbought zone. For example, STI at current level is only visible 2.1% of the time during the past 7+ years. All (except BSE) markets typically bottomed at -20% of 200-day moving average.

It's time to take profits.

Temasek Sells Barclays Stake At $850M Loss

SINGAPORE (Dow Jones)--Singapore's Temasek Holdings Pte. has sold its entire stake in Barclays PLC (BCS), booking a loss of around $850 million from the investment, people familiar with the situation said Wednesday.

Read more: http://online.wsj.com/article/BT-CO-20090603-705085.html

Q: Was it really for the reason: to be "in line with its plan to concentrate more on Asia"? Why sell after holding on to the stake for barley two years? What has happened to diversification and long term strategy? Why sell during the supposedly market bottom?

Shape of the stock market

What do you think will be the shape of the stock market in 2009?
Take the poll now! (Right hand side of this blog)

Obtain your latest shareholdings via email within minutes

As a registered user, you simply:

1. Select the transaction type:

• CDP account statement, including market value
• Current month's transaction record
• Previous month's transaction record

2. Key in your CDP securities account number and registered e-mail address

And you will receive the requested information via your e-mail box.

source www.cdp.com.sg

Dividend Report 17Nov2008

Stock Name		XD Date		Dividend
DBS GROUP HOLDINGS LTD		19-Nov-08		SGD 0.2
SINGAPORE AIRLINES LTD		19-Nov-08		SGD 0.2
SINGAPORE PRESS HLDGS LTD		09-Dec-08		SGD 0.19
SIA ENGINEERING CO LTD		14-Nov-08		SGD 0.05
STARHUB LTD		17-Nov-08		SGD 0.045
SINGAPORE AIRPORT TRML SVCSLTD		14-Nov-08		SGD 0.04
ASCENDAS INDIA TRUST		12-Nov-08		SGD 0.0347
HUPSTEEL LTD		04-Dec-08		SGD 0.025
MACARTHURCOOK INDUSTRIAL REIT		13-Nov-08		SGD 0.0235
DATAPULSE TECHNOLOGY LIMITED		02-Dec-08		SGD 0.02
SMRT CORPORATION LTD		12-Nov-08		SGD 0.0175
PARKWAYLIFE REIT		10-Nov-08		SGD 0.0171
LIPPO-MAPLETREEINDORETAILTRUST		17-Nov-08		SGD 0.016
SIM LIAN GROUP LIMITED		25-Nov-08		SGD 0.016
PCI LTD		10-Nov-08		SGD 0.015
THOMSON MEDICAL CENTRE LIMITED		16-Dec-08		SGD 0.015
SINGAPORE POST LIMITED		12-Nov-08		SGD 0.0125
BEYONICSTECHNOLOGY LIMITED		27-Nov-08		SGD 0.012
F J BENJAMIN HOLDINGS LTD		13-Nov-08		SGD 0.011
MTQ CORPORATION LIMITED		14-Nov-08		SGD 0.01
TRANSIT-MIXED CONCRETE LTD		09-Dec-08		SGD 0.01
CHOSEN HOLDINGS LIMITED		10-Nov-08		SGD 0.00875
HAI LECK HOLDINGS LIMITED		13-Nov-08		SGD 0.008
FIBRECHEM TECHNOLOGIES NCPS		17-Dec-08		SGD 0.0075
KODA LTD		12-Nov-08		SGD 0.005
MIDAS HLDGS LIMITED		26-Nov-08		SGD 0.005
MIYOSHI PRECISION LIMITED		08-Jan-09		SGD 0.003
CSC HOLDINGS LTD		04-Dec-08		SGD 0.0023
AUSSINO GROUP LTD		11-Nov-08		SGD 0.0017
FRAGRANCE GROUP LIMITED		04-Dec-08		SGD 0.0015
OMEGA NAVIGATION ENT,INC.		13-Nov-08		USD 0.5
RICKMERS MARITIME		13-Nov-08		USD 0.0225
LUXKING GROUP HOLDINGS LIMITED		11-Nov-08		CNY 0.02

Dividend Report 9Oct2008

Stock Name	XD Date	Dividend
Guocoland	24/10/2008	SGD 0.08
Singapura Finance	31/10/2008	SGD 0.08
Jaya Holdings Ltd	31/10/2008	SGD 0.075
K1 Ventures Limited	5/11/2008	SGD 0.05
ASL Marine	28/10/2008	SGD 0.04
British & Malayan Trustees Ltd	30/10/2008	SGD 0.035
Micro-Mechanics	6/11/2008	SGD 0.03
Union Steel Holding Ltd	30/10/2008	SGD 0.03
Guocoleisure Limited	23/10/2008	SGD 0.025
Olam	4/11/2008	SGD 0.025
Datapulse Technology	2/12/2008	SGD 0.02
Eu Yan Sang Int	7/11/2008	SGD 0.02
Boardroom	31/10/2008	SGD 0.019
Sin Ghee Huat	22/10/2008	SGD 0.0185
LongCheer Holding	6/11/2008	SGD 0.018
CH Offshore Ltd	29/10/2008	SGD 0.015
KTL Global	28/10/2008	SGD 0.015
Lum Chang Holdings Ltd	31/10/2008	SGD 0.015
PCI Ltd	10/11/2008	SGD 0.015
Noels Gifts International Ltd	28/10/2008	SGD 0.015
F J Benjamin	13/11/2008	SGD 0.011
Lion Asiapac Ltd	28/10/2008	SGD 0.01
Raffles Education	31/10/2008	SGD 0.01
Spinex Industries Limited	4/11/2008	SGD 0.01
Tai Sin Electric	6/11/2008	SGD 0.01
Tee International	31/10/2008	SGD 0.0095
Chosen Holding Limited	10/11/2008	SGD 0.00875
Portek International Ltd	5/11/2008	SGD 0.00807
Hai Leck Holdings Ltd	13/11/2008	SGD 0.008
C & O Pharm Tech	31/10/2008	SGD 0.007
Ausgroup Limited	31/10/2008	SGD 0.0061
Avi-Tech Electronics Limited	4/11/2008	SGD 0.005
Chuan Huo Holding	10/11/2008	SGD 0.005
Elite KSB Holdings	29/10/2008	SGD 0.005
Lion Teck Chiang Ltd	3/11/2008	SGD 0.005
L.C Development Ltd	3/11/2008	SGD 0.005
Kian Ann Engineering Ltd	7/11/2008	SGD 0.0045
TT International Limited	28/10/2008	SGD 0.002
Aussino Group	11/11/2008	SGD 0.0017
Memstar Technology Ltd	28/10/2008	SGD 0.0002
TPV Technology Limited	10/10/2008	USD 0.0088
Karin Technology	24/10/2008	HKD 0.081
Guangzhou Investment Co Ltd	29/10/2008	HKD 0.026
China Precision Technology Ltd	14/10/2008	CNY 0.08
China Hong Cheng	3/11/2008	CNY 0.03

Time to buy?

A Straits Times article on 25Sept2008 reported that some 32 companies (or perhaps more) have bought back S$86 million worth of their own shares in the past 2 weeks. This could be a signal of "insiders" indicating their company shares are under-valued.

Companies that were mentioned in the share buyback news:-
- Yangzijiang
- DBS
- Sembcorp Industries
- Hersing
- CSE Global
- Ezion Holdings
- Valuetronics
- Advanced holdings

First review of the Straits Times Index (STI)

GOLDEN AGRI-RESOURCES AND JARDINE MATHESON HOLDINGS TO JOIN STI IN FIRST INDEX REVIEW

Singapore, 11 September 2008 – Singapore Press Holdings (SPH), Singapore Exchange (SGX) and FTSE Group (FTSE) announced today the results of the first review of the Straits Times Index (STI) and FTSE ST Index Series.

What's In: Golden Agri and Jardine Matheson Holdings.

What's Out: Thai Beverage PCL and Yangzijiang Shipbuilding Holdings.

Read more here

Chart of Golden Agri












Chart of Jardine Matheson Holdings

Portfolio Rebalancing

Besides using "Drip In Money" as the key strategy to investment discipline, the other important aspect of investing is to control the emotions that comes bundled with it, like it or not.

Rebalancing your portfolio is as simple as managing your "emotions" in the up and down cycles of the market. In fact, investing needs to be boring. And by boring, I mean a rationalized range of value that is not too high, yet not too low. Rationalization also means certain rules are in place.

Below is an example of portfolio rebalancing with the following vital stats:
a) portfolio starting point is a 50% : 50% (Equity:Bonds) allocation
b) trigger point of rebalancing: whenever deviation of the two funds is 5% or more.

In contrast, another "Buy aNd Hold" portfolio of the same 50% : 50% (Equity:Bonds) allocation at the starting point chooses not to rebalance.
You will find that the "Buy aNd Hold" portfolio experiences a higher "high" as well as lower "low" than the "Rebalance" portfolio. All switching costs incurred during the rebalancing are accounted for.
At the end of the period, the "Rebalance" portfolio still wins by 0.8%.

In conclusion, rebalancing not only helps to smoothen out the too-high-too-low to just-nice, it actually helps the portfolio to be more rationalized, and yes, boring. And boring means getting less emotional.

Good read==> Reuters: Rebalance your portfolio

Edu Endownment vs BTITR

Recently, someone asked me whether an Education Endownment policy is worth taking up, as the returns look pretty decent.

Annual premium: S$5,700 payable for 10 years
Sum Assured: S$100,000
Maturity period: 20 years
Maturity sum: S$100,000
(payable of S$40,000, S$30,000, S$30,000 over three consecutive years beginning from 20th year);
I believe there should be some extra bonus (non-guaranteed) although it was not mentioned.
Riders attached: payer waiver of premium benefit.

Using the above figures, I calculated the internal rate of return (IRR) to be 3.46%. This is a decent figure, provided inflation stays around or below 3% for the next 20 years. Note that this is achievable because the premiums are squeezed into a 10-year period, therefore giving the money its time long enough to compound.

As always, there is a better way to achieve the above results through BTITR (Buy Term Invest The Rest), reasons being:-

1) there is a maturity sum to work on;
2) there is a maturity date to work towards.

Using the parameters as above, I used a term insurance to cover all contingencies needed (sum assured of S$100,000 on child's life, payer benefit on parent's life and critical illness etc). After setting aside the money needed for the term insurance, the bulk balance is channeled into a "Drip in Money" investment plan.

This is what could be achieved at different annualized returns:-
a) @ 5% p.a ==> S$108,653
b) @ 6% p.a ==> S$125,732
c) @ 7% p.a ==> S$145,402
d) @ 8% p.a ==> S$168,041

Two things that are better comparing BTITR vs the Education Endownment policy :-
a) Using BTITR: assuming the returns is 7% p.a, the destination amount is S$145,402, 45% more than what is given in the insurance policy.

b) Using BTITR: assuming the returns is 7% p.a, the annual premium payable could have been S$4,042 instead of S$5,700 to achieve S$100,000 at the 20th year. A savings of S$1,658 (29% less) annually, totaling S$16,580.

However, for most people who are not investment savvy enough, the tendency to take the "prescribed" route (i.e products packaged by insurance companies, except pure term insurance without cash values) is fairly high, mainly due to the lack of knowledge and self-confidence, and some are just "bo-chap", i.e do not bother to do a little more homework.