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Possible Movements of 30 Blue Chip Companies in the Week Ahead(between 13 – 17 April 2020) (Guest Post)

Possible Movements of 30 Blue Chip Companies in the Week Ahead(between 13 – 17 April 2020) (Guest Post)

If you have been following my weekly posts, you probably would be aware that I’ve mentioned before that, should the STI for the week closed above 2,560 points, we could see a possible change in trend.  That said, is an uptrend in sight? In my post today, I’d be sharing with you my personal thoughts on how the STI, as well as all the 30 blue chip companies’ share price may move in the week ahead based on a weekly timeframe…

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 858 followers.

If you have been following my weekly posts on the possible movement of STI and all 30 blue chip companies’ share price movements, you probably would be aware that I’ve mentioned before that, should the STI for the week closed above 2,560 points, we could see a possible change in trend (from a downward moving one to an upward moving one.)

When trading for the week ended last Thursday (09 April 2020), STI was at 2,571 points (above the 2,560 points.) That said, is an uptrend in sight? In my post today, I’d be sharing with you my personal thoughts on how the STI, as well as all the 30 blue chip companies’ share price may move in the week ahead (between 13 – 17 April 2020) based on a weekly timeframe…

 

1. Straits Times Index
Straits Times Index’s Movements on a Weekly Timeframe

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Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio (Guest Post)

Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio (Guest Post)

Some insights about UOB ’s historical financial performance, along with its dividend payouts to shareholders over the years and many more.

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 797 followers.

 UOB launches high street branch model at Faber House targeting ...

Why Did I Add UOB (SGX:U11) to My Long-Term Investment Portfolio

With my investment in UOB (SGX:U11) on 06 March 2020 at my intended entry price of S$23.26 (based on this entry price, and a dividend payout of S$1.30/share in FY2019, my dividend yield is 5.6%), I now have all 3 Singapore banks, plus another financial institution in Hong Leong Finance (SGX:S41) in my long-term investment portfolio.

In my post today, I would like to share with you reasons why I’ve invested in the bank…

 

Brief Introduction to United Overseas Bank

Before I talk about the bank’s historical financial performance, along with its dividend payouts to shareholders over the years, let me first a quick introduction about the bank.

Besides Singapore, UOB has more than 500 branches and offices in 19 countries (Australia, Brunei, Canada, China, France, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, Philippines, Singapore, South Korea, Taiwan, Thailand, United Kingdom, United States of America, and Vietnam.)

 

Historical Financial Performance of UOB over the Past 10 Years

Before I put my hard-earned money into any company, I will need to make sure the company fulfils some criteria – one of which is an improving set of financial results reported by the company over the years.

In this section, I will be sharing some of the key financial statistics reported by UOB over a period of 10 years (between FY2010 and FY2019):

Net Interest Income, Net Fee & Commission Income, and Other Non-Interest Income:

UOB’s “Total Income” comprises of 3 business components – (i) Net Interest Income, (ii) Net Fee & Commission Income, and (iii) Other Non-Interest Income.

Let us now take a look at the performances of these 3 business components between FY2010 and FY2019:

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SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

Most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue. SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan and has 17 followers.

SIA reassures cabin crew on medical leave system, Singapore News ...

SIA RIGHTS ISSUE: DEBUNKING THE COMPLICATION BEHIND THE MATHS

By now, most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue.

SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

S$15bn looks like a HUGE amount of equity to be raised, particularly when one compares with SIA’s key competitor Qantas which, a few days prior to SIA’s announcement, highlighted that it has managed to secure ONLY A$1.05bn in collateralized (against its fleet of 7 Boeing 787 aircraft) debt funding at an interest rate of 2.75%. Qantas share price appreciated by 26%.

Unlike SIA which has been levering up on its balance sheet to make new aircraft purchases, Qantas, on the other hand, has maintained a steady net debt balance of A$3bn over the past 3 years. Comparatively, SIA’s net debt balance has ballooned to S$8bn (including lease liabilities) as at end-2019 as a result of their aggressive fleet renewal plan.

So, Qantas (with a market cap of A$5bn) requires an additional A$1bn to tide over this major aviation crisis (for now perhaps) while SIA (now with a market cap of S$7bn) requires a potential total of S$15bn (plus S$4bn in bridging loan) and one can see the huge disparity in terms of capital management.

With that notion in place, let’s evaluate the two Rights issuance, first the SIA Rights Share followed by the SIA Rights Mandatory Convertible Bonds.

I will then follow up with 4 scenario analysis for a potential SIA shareholder and calculate what might the market value of the SIA Rights Shares and SIA Rights MCBs be worth when they start trading.

They are;

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The Hammer Candlestick Trading Strategy Guide (Guest post)

The Hammer Candlestick Trading Strategy Guide (Guest post)

The Hammer candlestick pattern is a powerful entry trigger. If you were to trade it, your stop loss is at least the range of the Hammer (or more). But won’t it be great if you can reduce the size of your stop loss and improve your risk to reward?

This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 310 followers.

According to most textbooks:

Whenever you spot a Hammer candlestick pattern, you should go long because the market is about to reverse higher.

And that’s what you do.

But the next thing you know…

The price immediately reverses and you get stopped out for a loss.

And you wonder to yourself:

“Wait a minute, isn’t a Hammer candlestick a bullish signal?

“Why did the market reverse against me?”

“What’s going on?”

Well, let me tell you a secret…

A Hammer candlestick pattern doesn’t mean jackshit (and I’ll explain why later).

But first, let’s understand what a Hammer candlestick pattern is about…

What is a Hammer candlestick pattern?

A Hammer is a (1- candle) bullish reversal pattern that forms after a decline in price.

Here’s how to recognize it:

  • Little to no upper shadow
  • The price closes at the top ¼ of the range
  • The lower shadow is about 2 or 3 times the length of the body

And this is what a Hammer means…

  1. When the market opens, the sellers took control and pushed price lower
  2. At the selling climax, huge buying pressure stepped in and pushed price higher
  3. The buying pressure is so strong that it closed above the opening price

In short, a hammer is a bullish candlestick reversal candlestick pattern that shows rejection of lower prices.

Now, this is important.

Just because you see a Hammer candlestick doesn’t mean you go long immediately.

Here’s why…

The truth about Hammer candlestick (that most gurus don’t even know)

Are you ready?

Here you go…

  1. A Hammer is usually a retracement against the trend
  2. The Hammer doesn’t tell you the direction of the trend
  3. The context of the market is more important than the Hammer

Let me explain…

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A Look into the Possible Share Price Movements of Singapore’s Blue Chip Companies in the Week Ahead (30 Mar – 03 Apr 2020) [Guest Post]

A Look into the Possible Share Price Movements of Singapore’s Blue Chip Companies in the Week Ahead (30 Mar – 03 Apr 2020) [Guest Post]

During the course of last week, the STI fell to a low of 2,208 points, before rebounding up strongly to finish the week at 2,528 points. In my opinion, in order for the trend to be considered as reversed (i.e. from a downtrend to an uptrend), it must close above 2,560 points when trading for the week closes this Friday (i.e. 03 April.) Otherwise, in my opinion, the overall trend is still a downward one.

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 772 followers.

The share prices of quite a number of blue chip companies rebounded last week – but in my opinion, the trend is still a bearish one.

Before I proceed to analyse the share price movements of each of the 30 blue chip companies last week, and possible movements in the week ahead (for the trading week between 30 March and 03 April 2020) based on a weekly timeframe, here’s the share price movement of the STI on a weekly timeframe:
STI’s Movements on a Weekly Timeframe

During the course of last week, the STI fell to a low of 2,208 points, before rebounding up strongly to finish the week at 2,528 points. In my opinion, in order for the trend to be considered as reversed (i.e. from a downtrend to an uptrend), it must close above 2,560 points when trading for the week closes this Friday (i.e. 03 April.) Otherwise, in my opinion, the overall trend is still a downward one.

Now, let us take a look at how each of the 30 blue chip companies performed last week, and how they are likely to perform in the week ahead:

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Updates from Manulife US REIT & Prime US REIT (Guest Post)

Updates from Manulife US REIT & Prime US REIT (Guest Post)

Most of the REIT investors endure some extreme volatility in this March Madness. Their holdings have quite a good run in 2019.Coming into 2020, investors believe that the low rate environment is here to stay. Even when the threat of Covid-19 reaching the United States and Europe, investors rationalize that when the interest rate plunge, this must be a more conducive environment for the REITs. What comes next is that in a span of 2 weeks, many REITs saw their stock prices plunge 50%.

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 954  followers.

Most of the REIT investors endure some extreme volatility in this March Madness. Their holdings have quite a good run in 2019.

Coming into 2020, investors believe that the low rate environment is here to stay. Even when the threat of Covid-19 reaching the United States and Europe, investors rationalize that when the interest rate plunge, this must be a more conducive environment for the REITs.

What comes next is that in a span of 2 weeks, many REITs saw their stock prices plunge 50%.

Manulife US REIT and Prime US REIT both endure the same fate as their peers.

In the past 2 days, both REITs provided some updates to analysts, so as to address the potential uncertainties of investors.

Since then both REITs saw their share price go up 20-25%. Manulife’s share price held up better, probably because they are in the Index and are much more liquid.

Their transparency may have worked wonders for their share price. However, overall, a lot of the REITs managed to bounce off their lows.

Here are some updates that I have gathered.

 

Possible Reasons for the Sharp Price Falls

Management updated that possible reasons why the draw down was so swift was due to

  1. Manulife’s entry into the index. When index funds, exchange-traded funds systematically sell down, there isn’t many fundamentals per se
  2. There was a lot of margin calls from the Private Banks (my friend KK from RisknReturns mentioned a few days ago that the three US Office REITs may have been removed from the list of marginable stocks on private banks)
  3. Funds redeeming and switching around. They are switching from smaller stocks to more liquid stocks
  4. Ultra-rich Chinese are facing heavy margin calls (we can guess who they are). Manulife US REIT does not have them on their register

 

Are Manulife US REIT’s Properties Affected?

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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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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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Global Indexes In 2019: How did global indexes really perform?

Global Indexes In 2019: How did global indexes really perform?

The Straits Times Index (STI) performance (with dividends) is around 8%.

Now take a look at the comparison tables for major global indexes. Source: https://tradingeconomics.com/

Did You manage to beat any indexes?

Take the poll here: https://www.investingnote.com/posts/1771829

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Don’t make the same mistake that I made 2 decades ago (Guest Post)

Don’t make the same mistake that I made 2 decades ago (Guest Post)

For the calendar year 2018, the Straits Times Index (STI) retreated from 3400.91 at the close of Year 2017 to 3068.76 at the close of Year 2018. The absolute fall for the calendar year 2018 was more than 10%. It had defied the predictions of many analysts.

Many of them were generally bullish at the beginning of Year 2018. By today, on the 1st day of trading for Year 2019, it retreated another nearly 30 points, -29.87 (to be exact). Surely, many players have been slowly but surely cashed out of the market as the market retreated. Even those with cash to spare were not willing to get into the market. Just as we know in economics, there were more sellers than buyers for year 2018. That, precisely, was the reason for the market to fall.

This post was originally posted here. The writer is a veteran community member and blogger on InvestingNote, with username known as BrennenPak, with more than 3,000+ followers.

d

With each market fall, it flushes out some players. The unfortunate thing is market retreats and advances are never linear with time. They are never exactly predictable, especially over a longer of period of 6 months and longer. Market volatilities are due to the changing political, economic and social conditions that are thrown out into the market from time to time. Frankly who is able to predict what an influential political figure will say or act next week or next month or next year. Most of the rise and falls were due to some smart Alex out there trying to anticipate the moves of these people before things really happen. Unfortunately, time and again, it almost always sucks in new players and throw out some others as the market rise and falls in a falling trend. Many players, who were unable to take the market gyrations would have cashed out of the market, and stayed in cash in hope to fight for another day.

Let me say this. Market gyrations are not an easy thing to stomach, especially for those who are very watchful of the market movements. In fact, many are willing to take losses and leave the market instead of riding through the market ups and downs as sentiments get hazy. Along with the falling market, I am quite sure a number of us have this floating thought “I would rather take a small return of even 1-2% to protect my capital than to see my capital dwindling with time.” That precisely became the guiding principle that drives their action. So, instead of staying liquid after cashing out, they choose to put the money into more certain investments. They gladly put their money in longer term plans, such as fixed deposits and Singapore government bonds and even insurance plans that can only yield rewards (if there really are any), at least, 1, 2 years or even a few years down the road. I mention this because I happened to see some posts in social media lately. Some people seemed to have decided to take this course of action. Frankly, this was exactly the mistake that I made 20 years ago.

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