Genting Singapore – What really matters in a Bond

very safe

Perpetual Securities – Get paid first before the shareholders | 5.12% | Hotel, Restaurant & Leisure

1)  IDENTIFICATION OF BOND BELOW PAR VALUE

  • Current market value : 1.030 ( $30 dollars above par value)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity: 14.09% ( Low reliance on debt)
  • Growth Performance : -35% (Negative growth rate, worst than the previous company)
  • Current Ratio : 8.93 (Very good)
  • Suspicious management ability ( Steady dividend payout – Might be a smokescreen for poor growth/ Net income has reduced drastically)screen-shot-2016-09-28-at-7-13-59-pmscreen-shot-2016-09-28-at-7-13-49-pmScreen Shot 2016-09-28 at 7.15.19 pm.jpg

I would’t buy into the bond (even thou with such a high current ratio – I doubt it will last with such poor performance) or stock as financial statements are really contradicting…. what are you thoughts??

+1 knowledge point

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Capital Mall – What really matters in a Bond

Big brand doesn’t mean good brand

Semi-Annual (twice a year) | 3.8% per annum

1)  IDENTIFICATION OF Bond Below Par Value

  • Current market value : 1.016 ($16 dollars above par value)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity: 92.68% ( High reliance on debt for growth, so if payment is missed… you know what will happen)
  • Growth Performance : -6.14% (Negative growth rate, worst than the previous company)
  • Current Ratio : 1.61 (Average)
  • Average management ability ( Steady dividend payout | High reliance on financing-poor cashflow management)screen-shot-2016-09-26-at-1-17-50-pmscreen-shot-2016-09-26-at-1-17-44-pm

Under all circumstances, it is still not under my “worthy” criteria to be investing into this bond. Management has an average score rating as compare to the others.

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Hutchison Port Holding – What really matters in a stock?

Quantity is not better than Quality

Container Port Business Trust | Owns interest in two container port (HK & Shenzhen) | Provides logistic & Supply chain solutions | Feb 2016 : Had Job cuts and Disruption calls for sensitive leadership

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 0.734 (26.6% discount of actual)
  • Price to earning ratio : 15.537

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity: 54.526 % ( Average reliance on debt for growth)
  • Growth Performance : -3.92% (Negative growth rate)
  • Current Ratio : 0.872 (Inability to cover short debt % long term obligation with assets)
  • Poor management ability ( decrease in dividend payout | High reliance on financing-poor cashflow management)screen-shot-2016-09-25-at-1-07-09-pmscreen-shot-2016-09-25-at-1-07-26-pmscreen-shot-2016-09-25-at-1-07-15-pm

Once again, it is a NO-NO for me. I would rather spend more money over a quality stock like KSH or Ellipsiz.

+1 knowledge point

Keppel Corporation Limited – What really matters in a Stock

Cheap stuff doesn’t mean good stuff 

It’s a holding company of 5 subsidiaries | Land/Transport/Communication/Offshore Marine/ Capital | Started in 1968 | Temasek Holding holds 20.43% of its shares

1)  Identification of Companies that are undervalued.

  • Price to book ratio : 0.861 (Discount of 13.9%)
  • Price to earning ratio : 8.12

2)  Learn about Their numbers

  • Debt To Equity: 77.178 (High reliance on financing for growth)
  • Growth Performance : -0.4139 % (Average through 5 years – Negative growth is a bad sign)
  • Current Ratio : 1.836 (Average)
  • Poor management ability ( Decreasing revenue | With super high payout ratio?! – It means for every $1 they earn they pay 52cents to their shareholders | Decreasing amount in payout dividend)Screen Shot 2016-09-21 at 2.34.23 pm.jpg
  • Inability in cashflow mangementScreen Shot 2016-09-21 at 2.37.26 pm.jpg

This is a straight forward example for me, that cheap doesn’t mean good all the time. Numbers are my determining factors, what are yours???

+1 knowledge point

Should you buy a second home as an investment?? (Part 2 – Revenue)

Everything so expensive

Now after knowing all the Cost/Other factors in Part 1, let’s move on to the only way to get a Second Home.

Utilising CPF – If only you never wipe out your CPF after your 1st house

  • You can only utilise it if your CPF(OA/SA/CPIS-SA) have more than Half of the prevailing CPF minimum Sum currently at $80,500 [$161,00/2].
  • If your CPF surpass the $80,500 mark ( You can only use the excess – the amount above $80,500)
    • How much can you use?
      • Valuation LimitPurchase Price or The Value of the property (Which ever is lower)
      • Withdrawal Limit (Maximum amount use on private property) – 120% of Valuation Limit
    • Which can you use?
      • You are first entitled to use the valuation limit which is 100%
      • In order to use the Withdrawal Limit your CPF have to set aside the Basic Retirement Sum (BRS) in your Special account (SA) of  $80,500 – if you’re below the age of 55
      • If you’re aged above 55, You have to meet the BRS in your Retirement Account (RA).

So should you get a second home as an investment??

Slide1.jpg

Housing price are taken from PropertyGuru.com

Some points to note if you’re lazy to follow the chart:

  • Basically you need ALOT of Excess Cash/  CPF to purchase
    • And if you do, is it even wise for you to invest???
      • You might be better off investing that money into Reits ( 7 times better)

In an investment nut shell, I have left capital gain out for a reason due to the inability to predict housing prices and how much a REIT can grow in terms of price. I would only suggest you to buy a second home, if you have a  strong understanding of the vicinity’s market competition (Value) as it has to be stronger than your purchase price and also only if it (Price paid) beats your other opportunity cost ( I.E Reits/Index Investment)

P.s Click here if you have not read part 1, do let me know if there are missing information 🙂

” Ultimately, its knowing your options well and of course, choosing the best”

“+1 Knowledge point”

 

 

Should you buy a second home as an investment?? (Part 1 – Cost)

Is it impo@ssible to buy two house in singapore???

As there will be too many numbers, this topic will be a two part series with the final one connecting all of them together.

Before buying it is always important to know ALL costs/factors behind them.

Cost Factors – Upfront fees before getting your keys

  • Buyer Stamp Duty Tax (BSD) – On property price
    • 1% for the first 1$80k
    • 2% for the next $180k
    • 3% for the remaining amount
  • Additional Buyer Stamp Duty Tax (ABSD) – On property price [On top of your BSD]
    • 7% (Second Property) – Singaporean Rate
    • 10% (Third & Subsequent properties onward) – Singaporean Rate
    • 5% (First Property) – Singapore PR
    • 10% (Second Property & Subsequent properties onward) – Singapore PR
    • 15% (First Property & Subsequent properties onward) – Foreigners
  • Legal/Valuation/Fire insurance FeesUSED TO be absorbed by the banks (Now you have to pay)
    • Market Rate for legal fees are 0.4% of property price
    • Valuation fees are done by the bank before providing loans – $200 to $500
    • Fire Insurance range from – $100 to $300 per anum
  • Condo Payment
    • Option Fee – 1%
    • Option Exercise Fee – 4%
    • Downpayment – 15%

Other Factors – How many people you can rent it to/Loan

  • Total Debt Servicing Ratio (Everyone living in Singapore are tagged with it to prevent over borrowing/ debt repayment failure)
    • Capped at 60%
    • Meaning, money use to service the loan cannot exceed 60% of your total income.
      • Example : You are paying $1,000/monthly for your HDB Loan, $1,000/Monthly for your Car Loan and $400 Credit Card Loan/Monthly with a monthly Salary of $7,000.  Which means you can only loan $1,800  [$7,000 x 0.6 =$4,200 – $2,400 (current loan) = $1,800] – Computation is based on a FIXED monthly income.
        • TSDR considers your gross monthly take home income (EXCLUDE CPF Contribution by employer) | Plus it also considers your Annual Variable Income ( Bonuses, Commissions and Rental income) at 5.8%  & if your bonus and commissions are fixed they would be calculated at 1%. [Situation where you have both fixed monthly income and variable income] – Thanks CORY 🙂 
        • If all these are too confusing for you, you can just type all your numbers down and it will crunch it out for you HERE
        • If your salary is a variable one, you have to first minus 30% of it which leaves you 70% of your variable monthly income. Then computate 60% of it(70%)!
  • Loan-to-Value (LTV) limit (How much percent can you loan from your property price)
    • First House – 80%
    • Second House – 50%
    • Third House – 40%
  • Renting 
    • HDB  – Minimum Occupation Period of 5 years ( You have to stay for 5 years before subletting out your flat, Including RESALE FLAT – Thanks Foolish Chameleon!)
      • 1/2 Room – 4
      • 3 Room – 6
      • 4/+ room – 9 (you can click to check the HDB board)
    • Condo/Landed
      • Maximum 8 people (No matter how big the unit is) – Each occupants should have at least 10 Sqm of space .
    • All have to be rented out for at least 6 months and max at 3 years

 

As daunting and intimidating as the cost can be, is there a way around it??? hmm?

p.s Do let me know if there are missing information!

+1 knowledge point

 

Chemical Industries (Far East) – What really matters in a Stock

Must always listen to professional advise on tv

Sole manufacturer of chlorine/caustic soda/other chlor-alkaline products in Singapore | Since 1963 | 3 Facilities

1)  Identification of Companies that are undervalued.

  • Price to book ratio : 0.487 (52 % Discount?!)
  • Price to earning ratio : 4.123 (Undervalued)

2)  Learn about Their numbers

  • Debt To Equity: 19.239 (Super low reliance on debt for growth)
  • Growth Performance : 15.37
  • Current Ratio : 2.212 ( 2 times the ability to pay off debt)
  • Management Ability (Steady Constant/Increasing dividend payout | Reduce Cogs while Total revenue is low – Good Characteristic/Strategy)Screen Shot 2016-09-17 at 12.44.36 pm.jpgScreen Shot 2016-09-17 at 12.46.37 pm.jpg

This is definitely a buy buy for me, but as of now I would like to utilize the knowledge I have on maximising my investment dollars. Hopefully when the times comes, the price of this company will drop 😦

+1 Knowledge Point

+ PI