How COVID-19 Had Impacted SMEs, Startups And Our Daily Lifestyle (Guest Posts)

How COVID-19 Had Impacted SMEs, Startups And Our Daily Lifestyle (Guest Posts)

The unique thing about this problem,the COVID-19 is that commerce came to a screeching halt. In other crises, the problem was a lack of liquidity. Banks could not lend and small and large firms have to tighten their belt. Those who cannot will default and this ends up as non-performing loans on the balance sheet of banks. Increasing unemployment rates.

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 953  followers.

Image result for bakeries closing ntice on doors

What we are going to talk about today is on SMEs, Lack of Financial Slack, Re-calibration of Risk, Priority in Life and Impact to Blogging

The Little Shops Are Going to Suffer

The unique thing about this problem is that commerce came to a screeching halt.

In other crises, the problem was a lack of liquidity. Banks could not lend and small and large firms have to tighten their belt. Those who cannot will default and this ends up as non-performing loans on the balance sheet of banks. There are more unemployed. Providing liquidity to the banks lubricates commerce.

The shit thing about what we are facing now is that you can provide all the liquidity to you to facilitate spending, but if you cannot go out and carry out some services, it is very tough to lubricate.

The world comes to a standstill for a while because the manufacturing base of the world, China, couldn’t function. Your company does not have spare parts, and therefore cannot ship.

Now that they can ship, the demand drops off because other countries are on locked down. Commerce comes to a halt.

What kind of crisis does this other than the great depression?

The toughest folks are the small and medium-sized companies. They usually depend on their peers or the big companies to give them business. A hit in demand on a wide scale hurts them the most.

My friend Caveman said the working capital for these firms is usually very challenging. The government’s main support package’s job is to ensure that these companies do not fire their workers but sometimes you wonder whether they have operated a small business before.

JD Roth over at Get Rich Slowly has a good piece asking how Coronavirus has affected your life. I like that he explores a lot of the impact on his recreational and financial life.

But what captures my attention was his description of his friend’s experience:

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Singapore Airlines Ltd (SGX: C6L) Is In Deep Trouble And Rights Issue Call Is Imminent (Guest Post)

Singapore Airlines Ltd (SGX: C6L) Is In Deep Trouble And Rights Issue Call Is Imminent (Guest Post)

The Covid-19 situation has hit the aviation industry really hard and in particular the airlines, SIA, since they are highly capitalized business which needs constant cashflow to fund their operating costs, capex and fixed costs. In the scenario where they have to cut capacity like where we are in this situation now, the company may be able to “save” on their operating costs since they do not have to incur charges like handling and ground charges that are related to the operating business.

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and 2068+ followers.

Image result for sg airline

Singapore Airlines Ltd (SGX: C6L) Is In Deep Shit And Rights Issue Call Is Imminent

The Covid-19 situation has hit the aviation industry really hard and in particular the airlines since they are highly capitalized business which needs constant cashflow to fund their operating costs, capex and fixed costs.

In the scenario where they have to cut capacity like where we are in this situation now, the company may be able to “save” on their operating costs since they do not have to incur charges like handling and ground charges that are related to the operating business.

But, they do have to continue paying for parking charges to the airport, levies as well as fixed costs such as salaries and rental that will continue to bleed the business.

Cashflow Simulation Run
I’ve run a simulation run where the left hand side shows their latest Q3 results for the year ending 31 Dec 2019, while the middle portion reflects what the situation is today. On the right side, I’ve accounted for movement that is related to cashflow, so things like depreciation is taken out of context because they are non-cashflow related items.

The middle portion reflects the current scenario we have today.

For example, the topline sees a 95% capacity cut which was announced just a few days ago since Singapore is on semi-lockdown situation. Consequently, I’ve adjusted the same for operating costs related such as fuel, inflight meals and handling charges.

For staff costs, I’ve used a 20% haircut across the payroll while for other fixed costs I’ve taken a 50% haircut.

The resulting loss coming in from this simulation is a negative $(1,998m) for the quarter. If we divide this by months, it means incurring a net loss of $(666m) / month.

What this means from a cashflow point of view is that should the situation prevails, the company is burning approximately $1,461m in cash every quarter, or $487m every month.

Now, this might look okay if you are in a good standing order in terms of your balance sheet but let’s see what they have today.

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LIVE Market Commentary with Terence Wong: Monday 30th March

LIVE Market Commentary with Terence Wong: Monday 30th March

On Monday 30th March, join us and Azure Capital’s CEO Terence Wong, as we tide through the tough market conditions in this live webinar.

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Terence will be sharing his updates & views on the current stock market conditions as an investment professional.

Watch his previous webinar with us here.

Ask him anything on the Singapore market, from the largest blue chips to the smallest caps.

Venue: Attend online anywhere

Register for this webinar now!

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A MUST-READ SPECIAL REPORT: BEAR MARKET 2020

A MUST-READ SPECIAL REPORT: BEAR MARKET 2020

A MUST-READ Special Report: Bear Market 2020 by @jaytun

The bull market is onto its 11th year and due to the knee-jerk reaction to the fear for the economic impact done by COVID-19, global equity markets tanked 30% at an unprecedented pace.

During this period, these are the questions you should be asking:
  • What Are The Macroeconomic Factors That Will Directly Impact Your Portfolio?
  • What Are The Key Levels On S&P 500 Where You Can Buy Safely?
  • Is It A W-Shaped Or V-Shaped Recovery?
  • Where Will Be The Bottom And How To Find It?
  • What’s A Better Alternative Compared To Catching The Falling Knife So You Can Profit Safely?
  • What’s The Top 10 “MUST HAVE” Companies That Can Potentially Return Multi-Fold On Your Portfolio?
  • What’s The Key Price Levels To Buy On These “Beaten Down” Stocks To Supercharge Your Returns?
If you’ve asked others or yourself any of these questions, you’re at the right place.

This 32 page special report is specially curated for you to help you navigate this treacherous bear market filled with uncertainty, with the aim of enriching you through the research based on Fundamentals, Technicals & Macros.

Get this report for only $9.90.

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Thoughts On CK Hutchison Holdings 2019 Results (Guest Post)

Thoughts On CK Hutchison Holdings 2019 Results (Guest Post)

2019 was a pretty challenging year by all standards. Being listed in Hong Kong, investors were concern about the impact of Hong Kong Riots on results. Since they have enough assets in Europe, a region which many believe is declining, they were concern about how Brexit impacts them. The declining in Euro and GBP, trade war between the United States vs China and Europe and also in recent times, it is Covid-19 and the plunge in oil prices will impact them.

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as Kyith and has 953 followers.

 

In terms of investments, CK Hutchison (0001.HK…) will probably go down as one of my poorer investments.

I got it at $85.90, $87.65, $81.25, $80.60, $82.90, $76.40, $67.90, $55.45. Based on cost, this is one of my largest position. It may go down as one of my biggest mistakes.

CK Hutchison or CKH for short is the listed flagship company of Li Kar Shing. In 2018, he step down from the company, handing the reins over to his eldest son Victor Li.

Victor Li manages CKH together with the best-paid employee in Hong Kong Canning Fok and Frank SIXT.

CKH this week together with their sister companies CKI, CKA, and Power Assets announced their full-year results.

In terms of key metrics this is how it lines up:

  1. Share price: HK$49.60
  2. Total outstanding shares: 3.8 billion
  3. Total market capitalisation: HK$188.5 billion
  4. Enterprise Value: HK$395.5 billion
  5. Net earnings attributable to shareholders: HK$39.9 billion (2018: HK$39 billion)
  6. Free cash flow: HK$35.7 billion (2018: HK$24.7 billion)
  7. Earnings Yield: 21%
  8. FCF Yield: 18.9%
  9. Dividend per Share: HK$3.17 (2018: HK$3.17)
  10. Prevailing dividend yield: 6.39%
  11. Dividend Payout Ratio: 30%
  12. Net Debt to Asset: 19.3%
  13. EV/EBITDA: 3.53 times
  14. Price / Equity (net of non-controlling interests): 0.40 times.

 

Why a Post on CKH Matters

On paper, you do not wish to hear me talk about one of possibly my big investment failures. But I thought the results are applicable in the context of what we are going through today.

CKH operations happens to be global:

  1. Ports in China, Hong Kong, Belgium, Germany, the Netherlands, UK, Spain, Poland, Sweden, Malaysia, Indonesia, South Korea, Thailand, Pakistan, Thailand, Australia, Egypt, Oman, UAE
  2. Retail Beauty & Health stores through AS Watson, ParknShop, Rossman, Drogas in Albania, Belgium, Czech, Germany, HK, Hungary, Indonesia, Ireland, Latvia, Macau, Malaysia, the Netherlands, Poland, Russia, Singapore, Taiwan, Thailand, UK, Vietnam
  3. Infrastructure through CKI in Australia, Canada, Germany, Hong Kong, Mainland China, The Netherlands, New Zealand, UK, Portugal.
  4. Energy in Canada through Husky Oil
  5. Telecommunications in the UK, Italy, Sweden, Denmark, Austria, Ireland, CKH Networks, Indonesia,

2019 is a pretty challenging year by all standards. Being listed in Hong Kong, investors were concern about the impact of Hong Kong Riots on results. Since they have enough assets in Europe, a region which many believe is declining, they were concern about how Brexit impacts them. The declining Euro and GBP is a concern as well. As they are tapped into so many areas of world trade, investors were concerned about how the trade war between the United States vs China and Europe will impact them.

In recent times, it is Covid-19 and the plunge in oil prices.

There is definitely no escape for CKH. They tried to pillage the world. Now the world will royally fxxk them.

In the results update, we can learn more about how well they navigate these challenging times and how Covid-19 and the oil crisis have been for them.

Here we go.

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3 Important Things You Should Do Before Investing (Guest Post)

3 Important Things You Should Do Before Investing (Guest Post)

You tend to hear horror stories about people going into debt. Others are buried under thousands of dollars of credit card bills. Some are picking up extra jobs and taking out loans left and right. Having a good system to manage your finances is a smart idea if you want to stay out of debt and possibly save for the future. Here is a beginner’s guide to managing your money before investing.

This post was originally posted here. The writer, James Yeo is a veteran community member and blogger on InvestingNote, with username known as Smallcapasia and has 821 followers.

 

Image result for working guy with 2 hands on the head

You tend to hear horror stories about people going into debt. Others are buried under thousands of dollars of credit card bills. Some are picking up extra jobs and taking out loans left and right.

Having a good system to manage your finances is a smart idea if you want to stay out of debt and possibly save for the future. Here is a beginner’s guide to managing your money.
1. Set up a Rainy Day Fund

Contrary to popular belief, setting aside is the most #1 important thing you should do as compared to learning how to save or cutting down your debt etc.

This is because a rainy day emergency fund is for unplanned essential expenses, such as a sudden car repair or if you lose your job. The rule of thumb is to have:

Rainy Day Fund: At least 3 to 6 months of your expenses

The easy way to go about it is to just spend an excruciating month tabulating your expenses for the entire month. After that, smoothen out any irregular spike in expenses based on the number of months/years – example spending for staycation or travelling worth $5k should be divided by how many times you do it in a year.

After you build your emergency fund, you may consider building up your savings.

 

Image result for saving budget

 
2. Automate your savings budget

When most people think of a budget, they think of a set of rules. Now, something is telling them what they can and cannot buy.

While this definition or practice is supposedly correct, i find that (from my friends) it rarely works. Its more of a theory thing.

Reason being that people will always spend whatever they have to the last dime and savings will only come by if there’s extra – but there wouldn’t be any!

So instead, we should all practise automation when it comes to our budget – Open a separate savings account and establish a automatic transfer of at least 10% of our take-home income.

Better still – Don’t apply any atm card for that account. Because…

You can’t use what you can’t see!

3. Protection before Earning

Last but not least, it is wise to have enough insurance coverage even before you start investing.

No matter how much you can earn, one illness can rob you of all these riches instantly. Health is always more important than Wealth.

Hence, you have to at least protect your downside (hedging) through insurance before you start to embark on the route to investing.

Conclusion

The first principle of managing your money is to live within your means. Always spend less than what you make and keep to your budget.

Once you have a strong foundation, you will not panic when your investments suddenly turn sour – just like the vicious spread of coronavirus which sent the markets into a tailspin.

Thanks for reading.

Once again, this article is a guest post and was originally posted on Smallcapasias profile on InvestingNote. 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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Top 4 Reasons You Should Not Panic As An Investor (Guest Post)

Top 4 Reasons You Should Not Panic As An Investor (Guest Post)

I know your portfolio is in a deep sea of red, but what I want to tell you is this – you’re not alone. Many investors are also suffering from a huge unrealised loss in their portfolio, myself included (as at time of writing, my long-term investment portfolio is down by 20.0%.) And in case you might be thinking I am a “veteran” in investing, I only have about 2+ years of experience as a full-time retail investor, and is my first time I’m experiencing a stock market decline like this.

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 736 followers.

 

On Monday evening (16 March 2020), Malaysia’s Prime Minister Muhyiddin Yassin announced the lockdown of Malaysia for a period of 14 days (from 18 March to 31 March) in a bid to stem the further spread of Covid-19 in the country.

Almost immediately, I read about news of fellow Singaporeans rushing to the supermarkets (even though its already late into the evening) to sweep them clean of fresh produces out of panic that supplies in Singapore may be cut as a result of the lockdown in Malaysia (as many of our fresh produces are imported from the country.)

I see some parallels happening in the stock market as well, especially over the past two weeks, where I see many investors emptying their portfolios and rushing for the exit doors out of fear.

I know your portfolio is in a deep sea of red, but what I want to tell you is this – you’re not alone. Many investors are also suffering from a huge unrealised loss in their portfolio, myself included (as at time of writing, my long-term investment portfolio is down by 20.0%.) And in case you might be thinking I am a “veteran” in investing, I only have about 2+ years of experience as a full-time retail investor, and this is the first time I’m experiencing a stock market decline like this (I hope that after hearing this, it makes you feel better.)

Before you make any rash decisions, I suggest you calm yourself down, and ask yourself the following 4 questions:

1. Why are You Investing in the First Place?

Image result for investing

I’d like you to recall the moment you make the commitment to invest – why did you make the decision?

Some may decide to invest because they want to build a high yielding portfolio (with yields higher than their CPF Special Account), some may be more focused on the eventual capital gain they could possibly get from their investments, while for some, it may be a mixture of both.

So, which group do you belong to?

 

2. Why did You Choose to Invest in those Companies in Your Current Portfolio?

I certainly hope your answer to this question is not, “because of hearsay.”

Prior to investing your hard-earned money in a company, I really hope that you have done a thorough research about it, and have a good knowledge of the company’s businesses, financials, debt profile, dividend payouts, etc. well enough before you make the eventual decision to invest in it.

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Trading Profitably In Extremely Volatile Market Conditions [LIVE WEBINAR]

Trading Profitably In Extremely Volatile Market Conditions [LIVE WEBINAR]

Stock markets around the globe are tumbling.

Here’s how much the S&P 500 dropped since 2 months ago:screen-shot-2020-03-16-at-5-08-09-pm

The STI is also not spared:

screen-shot-2020-03-16-at-5-06-14-pm

Did it look obvious enough that the markets would’ve plunged so much?

Or did the thought of catching the bottom crossed your mind more than once?

If either or both these thoughts have ever crossed your mind, you’re not alone.

What if there was a systematic way of approaching the markets?

To help you with that, we’ve veteran trader Collin Seow, an ex top-tier remisier in Phillip Securities for 12 years, a qualified Chartered Portfolio Manager (CPM) holding a Certified Financial Technician (CFTe) qualification and a member of MENSA Singapore, who will show you how he is Trading Profitably In Extremely Volatile Market Conditions.

collin

In this 2 hour LIVE webinar, Collin Seow will be covering on the 3 immensely powerful combination strategies that you can use immediately, especially during such volatile markets:
✔ Swing Trade Strategy
✔ GMMA Strategy
✔ The K-Wave Indicator

Also, engage in Q&A with Collin during this exclusive live webinar.

Attend anywhere from the comforts of your own home or office.

The full recording of this entire webinar will also be given to you.

Date & Time: Wednesday March 25th, 2020, 7:00 – 9.00PM
Venue: Watch Online

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Will STI recover from 2500 or if contagion happens, will the next floor for STI be 2200 or lower? (Guest Post)

Will STI recover from 2500 or if contagion happens, will the next floor for STI be 2200 or lower? (Guest Post)

Now, the STI reaching 2500 in the next 3 months is probable. The more pertinent question is: will STI recover from 2500 or if contagion happens, will the next floor for STI be 2200 or lower?

This post was originally posted here. The writer, Wen Hou Lam is a veteran community member and blogger on InvestingNote, with username known as padraig_lam and has 170 followers.

Image result for global debt crisis
Based on the current environment, contagion will happen in either or both of the 2 situations:
– global debt crisis (likelier of the 2)
– lack of USD outside the USA

Our abnormal and irrational optimism for all asset classes has been supported by Central Bank liquidity for the past decade, and not so much a fundamental improvement in microeconomics.

There is a cost to printing money to support liquidity: risk misallocation. We are now in the dying throes of this risk misallocation, with Central Banks warning for the past 2 years that they cannot continue to support this madness.

Those who have been shouting that “this time is different” are about to learn the timeless lesson of all market crashes, because if fools can make money, we all will soon be out of business.

Back to the topic of contagion, we then look for the likelihood of the above 2 events happening. For the past decade, all developed economies have been dragging along under a low-interest rate environment, accumulating rolled-over debt, year after year.

This inevitably encourages zombie corporations which survive on the margins of market share, fictitious product demand and low interest expense. Simply, the world has been converging towards a Japan-esque economy.

Now, the debt markets are feeling strain as future prospects dim, and existing cash is being locked up in safe havens further into the future. We can confirm that this contagion event will happen as the yield curve remains inverted at a steeper decline or a longer period. Today, the market is moving again towards such an inversion.

 

Image result for money fly

The next implication is that these zombie corporations cannot roll over their debt unless they are willing to pay a higher interest expense due to immediate debt illiquidity in markets. Add the demand shock from COVID, we may soon see the first Lehman moment in a decade.

How bad such a contagion event transpires depends on what Central Banks have left at their disposal, which I personally believe is none are sustainably effective (due to being so close to 0% rates). Of which fiscal intervention will happen as it did in 2008, which I personally believe will politically backfire as the common man has seen what “too big to fail” has cost for themselves. The chant of “taxpayers will not bailout” will be extremely loud this time round.

And as with all debt crises, the market will panic into a tailspin, like a dead bird flying mid-air and freefalling. This is the more likely event if contagion happens.

I will return soon with a second post about the second kind of contagion event: lack of USD outside the USA. This first post is sufficient for today’s mental consumption.”

Thanks for reading.

Once again, this article is a guest post and was originally posted on padraig_lams profile on InvestingNote. 

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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

Download our free app here:

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A Look into the Share Price Movements of DBS, UOB, and OCBC (Guest Post)

A Look into the Share Price Movements of DBS, UOB, and OCBC (Guest Post)

In this post today, I’d be sharing with you my personal technical analysis of the 3 Singapore banks, along with how their share prices may move in the near-term. I’d also be sharing with you a simple comparison (by taking their current valuations and compare against its 8-year average) to find out whether or not the banks are currently trading at a discount (or not), and finally, I’d also be sharing with you my investing plan for the 3 banks.

Image result for sg banks

This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 671 followers.

At the time of writing:

  • DBS’ share price have slumped from a high of S$31.28 in early-May 2018 to S$18.93 now – down by 39%
  • UOB’s share price have plunged from a high of S$30.37 in end-April 2018 to S$19.73 now – down by 35%
  • OCBC’s share price have plummeted from a high of S$13.90 in early-May 2018 to S$8.80 now – down by 37%

Looking at the above statistic, it seems that the 3 Singapore banks achieved their peak at around the same period, and are also suffering a similar magnitude of fall from its high (at the time of writing.)

Let’s begin.

My Personal Technical Analysis of the 3 Banks

DBS (SGX:D05):

The following is the share price movements of DBS since April 2010, along with the various support/resistance, and uptrend/downtrend lines I’ve identified. The black support/resistance line at S$24.07 is where I’ve invested in the bank:

DBS’ Share Price Movements since April 2010 till Time of Writing

The last time DBS’ share price was trading at around S$18.93 was back in April 2017. Now, zooming into the bank’s most recent share price movements, especially since the beginning of March, there was a huge selldown (I’ve highlighted it in a black rectangular box in the chart below). Also, if you look at the trading volume in the same time period (I’ve highlighted this in a red rectangular box below), the trading volume was much higher than usual during those few days, suggesting that the bears are very much in control of the share price movements:

Share Price of DBS has Plummeted since the Beginning of March 2020, and at a High Trading Volume, Suggesting that the Bears are in Complete Control Currently

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