Upcoming Workshop: Market Insights and Profiting From Corporate Actions

Upcoming Workshop: Market Insights and Profiting From Corporate Actions

2018 has been an eventful year so far, as the Singapore stock market has shown an increase in volatility. Higher oil prices, rising US interest rates, trade tarrifs disputes between US and many other countries and the recently announcement of cooling measures that increased the Additional Buyers Stamp Duty and tightened loan-to-value limits on residential property purchases are just some of the things to recognise that changes are coming.

As we transit into the 2H 2018, we will address the following questions that every investor should be concerned about right now:

  • How would all these developments play out?
  • Where should one invest?
  • Why is it important to understand how corporate actions affect stock prices
  • What each corporate action means and how to react in the right way
  • Which stocks you should never touch
  • Which stocks are in play now

This is a crucial time for many investors.

We are privileged to invite our All Time Most Followed Person – Li Guang Sheng on InvestingNote to share his thoughts and views of the markets.

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FREE Workshop: Trend Trading Made Simple – The RSI Way

FREE Workshop: Trend Trading Made Simple – The RSI Way

An Alternative Approach to Using RSI (Relative Strength Index).

Whether you’re new to trading or a market veteran, spotting trading opportunities can be a daunting task.

Most have discovered that profitable strategies are often simple without the unnecessary frills. But the key to profitable trading is understanding the market behaviours and devising strategies to capitalize on them.

In this seminar, CK will showcase a proven trend and momentum strategy based on Relative Strength Index (RSI). He’ll demonstrate how this unique strategy helps traders to successfully navigate the market.

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How To Avoid Traps Laid By Big Boys Everytime

How To Avoid Traps Laid By Big Boys Everytime

Have you ever felt that the market is purposely going against you, like someone is always monitoring what you do?

Have you learnt tons of fundamental/technical knowledge and skills but still encounter difficulties to be consistently profitable in market (or even suffer huge losses)?

Do you like these feelings and scenarios to happen again and again?

Or would you like to change, become more confident and profitable in trading?

If you are a new trader, do you want to avoid gaining experience from huge losses like how many others do?

If your answer is no, then how do you test-drive new strategies and yet still beat the market without paying all your profits back while you learn?

The Game Theory Strategy might be the answer.

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Trade Tariffs Hit Asian and US Stock Markets Badly

Trade Tariffs Hit Asian and US Stock Markets Badly

But first, what are trade tariffs?

A tariff is basically a tax paid on imports and exports of goods and services.

An imposing tax on an imported product would cause its price to increase, which results in a decrease in demand for imported goods. In relation, the price of local products becomes lower to the consumer.

The US Total Imports vs Dutiable Imports from 1821 to 2016 can be seen below:

The current US deficit as of 2017 is $500 billion. The US imports from China about four times as much as it sells to that country in goods as services, leaving Washington more room than Beijing to tax a greater share of bilateral trade. The U.S. trade deficit with China was $375 billion in 2017. The trade deficit exists because U.S. exports to China were only $130 billion while imports from China were $506 billion. The United States imports consumer electronics, clothing, and machinery from China. A lot of the imports are from U.S. manufacturers that send raw materials to China for low-cost assembly. Once shipped back to the United States, they are considered imports.

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How Corporate Actions Affect Stock Prices More Than Anything Else

How Corporate Actions Affect Stock Prices More Than Anything Else

But first, what exactly is a corporate action? And why does it matter?

According to Investopedia,

A corporate action is any activity that brings material change to an organization and impacts its stakeholders, including shareholders, both common and preferred, as well as bondholders.

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Corporate actions includes:

  • Stock Split and reverse split (consolidation)
  • Spin-Offs
  • Dividend Payouts
  • Mergers and Acquisitions
  • Bonus Issue
  • Rights Issue
  • Share buybacks
  • IPO

Corporate actions are important source of indicators for the retail investors to monitor the company’s direction and effectively, the share price. There are some rules that investors and traders have to take note of, according to Li Guang Sheng (a top tier remisier and veteran community member):

  • Officers and employees of the Company two weeks before the announcement of the Company’s financial results for the first three quarters and one month prior to the announcement of the full year results (“Black-out Period”). Usually there will be internal memo to notify and remind all Directors, officers and employees of the Company on compliance with the best practices on dealing in securities pursuant to Listing Rule 1207(19)(c), in not dealing with the Company’s securities during the Black-out Period. The Company, its Directors and officers should be aware that the Company should not deal in its own securities (including undertaking any share repurchases) during the Black-out Period. Therefore, the Company would wish to complied with the Listing Rule 1207(19)(c) and not run foul with SGX.
  • If the players of the company shares belong to insiders, then during this period there may be less buyers and harder for you to run or sell your shares. Also if the company is undergoing share buyback and supporting the share prices through daily share buy back, the price may tank during the 2 weeks of no buying from the company or 4 weeks if it is the full year listing result period. So for those who trade heavy, be prepared to reduce your position 2 weeks prior to quarter result announcement due to less liquidity.
  • Also take note on listed company share buy back rules,
    • a) on-market purchases should not exceed 5% above the average closing market prices of the share over the last five market days;
    • b) details of purchases to be released to the SGX-ST, if it is non-market purchases, by 9am on the next market day, or, if an off-market acquisition, by 9am on the second market day after the close of acceptance.

Watch this quick video of Guang Sheng where he explains why corporate actions are so important:

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Workshop: Build your DIY investing portfolio with 10 Simple Steps

Workshop: Build your DIY investing portfolio with 10 Simple Steps

This latest workshop in our series, is all about helping retail investors focus on key criteria in the stock selection and portfolio allocation process by using a solid checklist.

Serious investing requires the investor to do his homework.

Every piece of homework done needs to follow a structure. Like the great Benjamin Graham and Warren Buffet, great investors always have a plan.

Like the saying goes…”Failing to plan, is planning to fail.”

This is the workshop that teaches you how to plan your portfolio, by first creating the most crucial part of the plan: the checklist.

Whether you’re a totally newbie or an experienced investor, having a solid investing checklist is necessary because it will set the criteria, tone and structure to pick the best stocks and also manage the worse threat faced by investors when it happens – Fear.

In this session, we will share with you how you should build your own portfolio using this 10-step checklist.

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Impact Of Higher Interest Rates on Property and REITs

Impact Of Higher Interest Rates on Property and REITs

The US Federal Reserve just announced the second Interest Rate Hike in 2018. And it hints at least another 2 more hikes for the later part of the year.

 

Jerome Powell us fed chairman

With the increase of interest rates by 25 basis points from the FOMC meeting yesterday, the current federal funds rate is now at 2%.

The Federal Reserve signaled it will raise rates to 2.5 percent in 2018, 3.0 percent in 2019, and 3.5 percent in 2020.

Singapore manages an exchange rate based monetary policy, pegging the Singapore Dollar to a basket of currencies, which the US Dollar is a primary component. This explains why US interest rates have a strong positive correlation with Singapore’s interest rates as seen in the chart below:

correlation us fed interest rate and singapore SIBOR   Source:  www.mortgagewise.sg

What does this mean for Real Estate Investment Trusts? (REITs)

As REITs require borrowing to develop properties, a rise in interest rates would essentially mean a rise in the cost of borrowing. A higher cost of borrowing would mean that REITs are taking a higher risk of default.

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The FTSE S-REIT Index has also began to show a sell down since the beginning of the year, when there was the first Fed rate hike of 2018. The FTSE S-REIT consists of 31 SGX-listed REITs.

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All you need to know about Temasek’s Astrea IV bonds

All you need to know about Temasek’s Astrea IV bonds

 If you don’t already know, Astrea IV is a wholly-owned subsidiary of Azalea Asset Management Pte. Ltd, which is indirectly wholly owned by Temasek Holdings.

Bonds have traditionally been viewed as less volatile investments, paying out regular income over a fixed period of time. This characteristic also makes them a useful investment for retirees to continue receiving visible cash flows for their daily living requirements. Of course, investors who prefer less uncertainty in price fluctuation will also be drawn to bond investments.

In fact, earlier this month, Temasek Holdings CEO Ho Ching described the upcoming Astrea IV PE Bonds as a good “way to grow (our) retirement nest egg”. Unlike most bonds, the Astrea IV PE Bonds will be the first-of-its-kind allowing retail investors to access the private equity investment class that is usually exclusive to high net worth individuals, large financial institutions and funds. Here is a short run down of the description of the Astrea IV PE Bond.

Temasek's Astrea IV bonds
From Temasek’s Astrea IV bond’s prospectus

THE Azalea Group, a Temasek unit specialising in investments in private equity, has launched its first PE-backed bond for retail investors, with a smaller-than-expected retail tranche of S$121 million according to Straits Times.

The retail tranche of Class A-1 bonds carries an interest rate of 4.35 per cent. Retail investors may subscribe via ATM with a minimum investment of S$2,000.

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Trump-Kim summit will cost Singapore about $20mil to host 🇸🇬️

Trump-Kim summit will cost Singapore about $20mil to host 🇸🇬️

It’s official: Trump-Kim summit will cost Singapore about $20mil to host 🇸🇬

North Korean leader Kim Jong Un and United States President Donald Trump both touched down in Singapore on yesterday, June 10th.

kim3For a summit that was planned months before.

This summit is significant because this is the very first time both Trump and Kim are meeting each other. This summit also lays out the possibilities that could impact the security of not only the Korean peninsula, but also the rest of the region and world. At this summit, the two leaders are expected to address the complete denuclearisation of the peninsula and possibly declare an end to the Korean War, which has been going on for nearly seventy years.

The summit is the first of its kind, for it is setting in motion a series of events that could have lasting global ramifications.

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Prime Minister Lee Hsien Loong also said that the bill for hosting the historic Trump-Kim summit will come up to about $20 million. He added that this is Singapore’s contribution to an international endeavour that is “in our profound interest”, as cited by The Straits Times.

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What Type Of Investor Are You?

What Type Of Investor Are You?

Really, have you ever wanted to find out what type of investor are you?

Take This Personality Quiz To Find Out & Stand A Chance To Win This eBook! (Total 5 Lucky Winners)

This is a quick, 5-question quiz to reveal what type of investor you are.

No right or wrong answers!

Complete the quiz by 18th June, 12pm and 5 lucky winners will be selected randomly to receive the eBook: Create A Secondary Income Stream Through Long Term Shares Investing by veteran SGX academy trainer and investor, @chuaimin.

Winners will be contacted privately via FB messenger.

Start the quiz ↴

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Investors level up!


InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Check out our upcoming Mid-Year Market Outlook Free Seminar here.

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