Saturday, December 25, 2010

Investing in Singapore listed ETFs

ETFs is the acronym for exchange traded funds, which are basket of stocks traded over the exchange. Having invested nearly 0.5M in stocks I must agree that ETFs are not exciting products for people looking at supernormal returns. However, holding ETFs means sleeping better at night since I will probably not be losing my entire capital even during market crash.

Take the STI ETF for example. If I lose my entire capital invested, this would literally translate to DBS, UOB, OCBC, SIA, Singtel trading at zero dollars. For that to happen, I think putting money anywhere will mean total loss anyway.

Besides, STI ETF pays regular dividends as well. Historically, the dividends are about 4-6 cents per unit, which translates to miserable yield of 2%. Well, don’t expect Singpost or SPH dividends payout if you are buying STI ETFs. People mainly buy it for capital appreciation.

The sales charge is equal to brokerage charges (0.2%), management fee of about 1% and that’s it. No need to rebalance portfolio as fund manager does that for you, daily.

I have been through the Lehman crisis and it’s terrible to see my stock holdings bleed day after day. Fortunately, I was holding on to pure blue chips and that gave me conviction to hold. Dividends came in timely as I repurchase other even badly battered mid cap stocks that gave me more than 100% returns on hindsight.

Today as I looked back, I might not have fare much better if I invested in STI ETF. However, I definitely would have slept better during the crash in 2008. This is what portfolio theory explains: Invest according to risk tolerance and you will get an optimal portfolio that gives you the highest return based on your risk profile.

I want to blog more about ETFs as this is the next direction I am getting into. No more single large stock purchase, mainly diversified portfolio in different regions.

In Singapore, we can access to the worlds markets just by buying ETFs and paying the minimum brokerage of 0.2%. However for a start, I would like to constrain myself to buy plain vanilla ETFs instead of exotic new generation ETFs.

From SGX website:

Plain vanilla ETFs (as I termed it) are cash based ETFs that adopt either full replication methodology or representing sampling methodology

Full replication methodology
The ETF holds the same stocks in the same proportion as the weights of the constituent stocks in the benchmark index.

Representative sample methodology
The ETF holds a selected number of constituents stocks of the underlying index according to their degree of historical correlation with such index. In other words, the ETF holds a sample of constituent securities that statistically represents the index.

In other words, my invested captial is backed by shares of companies as underlying assets.

List of cash based ETFs

Cash-based ETFs

SGX Stock Code

ABF Singapore Bond Index ETF




Daiwa FTSE Shariah Japan 100 ETF


DBS Singapore STI ETF


iShares Dow Jones US Technology Sector Index ETF


iShares MSCI Singapore Index ETF


iShares S&P 500 Index ETF


SPDR Dow Jones Industrial Average ETF


SPDR® Gold Shares


SPDRs® S&P 500® ETF


streetTRACKS® Straits Times Index ETF


As I am only interested in investing in cash based ETFs, options to me are still quite limited. I have invested in STI ETF and will probably look into gold etf (O87, S27), American markets (I17, I21), ASEAN markets (M62).

Asean 40 ETFs invests mainly in Singapore stocks (40%) and the rest in Malaysia (31%), Indonesia (17%) and Thailand (11%). Quite an interesting combination.

As for exotic ETFs which I termed that myself because I don’t quite like the fact that I am not holding on to actual securities but rather options/notes of the underlying assets. If you want more info on this, check this link out:

Though counterparty risk may be low, but I still traditionally believe that investment should be simple and direct. I don’t mean to put new generation ETFs down, but it is just a personal preference to keep my investments simple. Even though that means I am losing out on buying Brazil, Russia, China index funds. Well, I may invest in an emerging market unit trust instead to ride the new commodities and BRIC wave.

Sunday, November 28, 2010

Hong Kong Small Size Properties

I have always like Hong Kong and have stayed there several times during my course of work and leisure. I remembered staying in one of the islands know as Pak Lai Wan for a couple of weeks and I was extremely impressed by the smallish apartment.

The apartment featured here is about 750 sq ft and costs SGD$660k. It is extremely decent, with 2 bedrooms and a seaview of the QingMa bridge.

Cars are not allowed in the island and residents can either take a shutter bus or ferry to reach their homes. It is 20 minutes ferry ride to Central (10 mins interval on average) or 10 minutes shuttle service to and fro Tsuen Wan. This is really pollution free place!

I am really amazed by just how they can pack good quality furnishings into a compact apartment without you feeling suffocated. Full condo facilities and a heated pool. Perfect!

If you are staying at this kind of apartment anywhere in Singapore, it will definitely cost you at least 2x the quantum, not forgetting you will not get the views below...
Getting up early in the morning with such views, no matter how small your living space is, you feel that you are having the whole world! This is first hand experience, honest!

Conclusion: Singapore property is too expensive, even by HK standards!

Saturday, November 27, 2010

MRT stations of the future

Currently properties with MRT stations command a high premium. With the upcoming Eastern, Bukit Timah, North Coast, Downtown lines, more and more houses will be near MRT. In fact, any house will be near MRT stations!
Link to map

Perhaps by then houses away from MRT stations will command a higher premium instead!

Wednesday, November 24, 2010

M1 Good Service

I am really impressed by M1. I made a call to them today and wanted to change my subscription plan. Initially, there was a $20 charge and I casually mention to them to waive it, they acceded to my request without any objection.

Thereafter, they informed my that as I am on corporate plan, my new plan costs only $20.54. I replied that I was not aware I should be enjoying corporate rates and the phone officer volunteered to give me a $5 rebate on my phone bill for the next 6 months as goodwill compensation.

I decided that my data plan was going to waste as I seldom use the internet other than checking emails. Besides my company provides a state of the art smartphone that has everything to keep me working 24 hours. I can't be surfing internet on both phones together right? Hence I decide to withdraw my personal data plan from M1.

More savings for me ahead, though I still prefer the days when apple and blackberry are just fruits.

Tuesday, November 23, 2010


Just applied for this reit.

Friday, November 19, 2010

Liu Wei: Armless Pianist

While you are digging your nose and reading my blog, listen to this:

Out of difficulties create miracles.

Now stop complaining about life. Not when Liu Wei isn't.

Tuesday, November 16, 2010

Everyone should know everyone's pay!

According to columnist Matthew Lynn, everyone should be open about their pay.

1) Everyone will benefit because we aren't sure if we are fairly paid unless we know what our colleagues and bosses are getting. Our bosses can easily hookwink us because we don't have enough information. Knowing everyone's pay will allow us to seal a better salary package.

2) We tend to feel insecure of our earnings if we do not know how much others are making. We are likely to assume that they earn more than us and feel lousy about it. Truth is, you are probably above average and your self esteem will improve upon knowing your commercial value.

3) It will make us financially responsible. How many times have people bought LV, BMW, Patek Philippe, condominiums on credit without being able to afford it? This is because people don't really know how much you earn and thus some people buy more than they can afford to create an illusion of being highly paid and successful. If everyone knows how much you earn, you don't need to buy anything to create any illusions. Everyone will be humbled and purchase goods that match their income (since it is no secret).

Thus disclosing one's income may be embarrassing in the short run but beneficial for all in the long run. How much do I have and earn? It's all in my blog! Now tell me yours....

Number 1 search result!

Every time you search "Singapore Blue Chips", you will definitely have my website as one of the top search results.




My google page rank has a decent value of 3. For a non profit personal blog, I think that's a little achievement! Yeah!

Monday, November 15, 2010

A Visit To Esparina Residences

I was driving near Sengkang and decide to pop by the new EC, Esparina Residences. The prices were extremely competitive!

As more than 90% were sold, only 2 bedroom units were left. This is a peculiar phenomenon as usually 2 bedroom units were the 1st the be snapped up in any new launches. As this development is an EC, the main barrier is $10,000 household income. I was interested in a 3rd floor 2 bedroom unit.

The prices were really reasonable. A 2 bedroom 829 sq ft unit, morning sun with blocked afternoon sun and facing a garden, it costs $617k before CPF grant of $30k.

TOP is expected to be in 1st quarter 2014. PSF price works out to be $744.

I believe this is a good buy, stay invest unit for a couple of reasons.

1) 5 mins to Buangkok MRT

2) Low financing rates

Based on 20% downpayment (5% cash 15% CPF), loan amount required is $493,600

Monthly installment before TOP is in the range of $157-$659.

Interest rates are assumed to be 1.05%, 80% financing and 40 years loan tenure.

Upon TOP, monthly installment of $1023; after one year certified statutory completion (CSC), $1259

3) Good Investment potential

If one would want to take the chance to rent out the unit upon TOP (illegally), the expected rental is $2k (minimum) after taking into account the $180 monthly maintenance.

That works out to be a 4% yield based on purchase price. The leverage of 5x will mean yield to be 20% based on 20% downpayment.

Even if one stays for 5 years and sell in 2019, the expected price based on The Quartz selling price now is projected roughly to fetch about $750k-$800k, conservatively.

One can earn at least $130k in 10 years time, or an annually compounded return of more than 10% based on my downpayment!

4) Walking distance to 24 hours fair price and Kopitiam. All amenities has been set up, critical mass attained. More amenities will be available.

5) Land parcel near Esparina Residences is up for tender to private development. This would further support its price in the medium term.

Alas! If only I am eligible....

Sunday, November 7, 2010

Property Bubble?

It's quite worrying when almost everyone I know starts buying property for investments. Table 1 shows the pipeline of project due, extracted from URA.

Table 1

We are expecting 2,000 odd units to be completed by end of 2010. Supply will still be low in the region of 6,000 completed units in 2011. However, in 2012 there will almost be a 50% increase to 9,000 odd units, followed by a YOY 100% increase of completed units in 2013.

This is almost a 300% increase as compared to 2011!

In 2014, 15,000 units are expected to complete, which adds to the glut of supply. Should interest rate rise to 3.5% then, the influx of supply will lead to further rental depression due to high cost of funding. Investors will be selling cheap when their rental yield cannot cover the interest rate they are paying to banks.

The average net rental yield is about 3% now. I believe we will be seeing a downtrend of rental yield from 2011 onwards together with a apike in local interest rates.

Perhaps one should buy a HDB now and wait for fire sale in 2015.

I might be wrong though.

Friday, November 5, 2010

Highest Fixed Deposit Rates in Singapore

Just realised that local banks fixed deposit rates are really crazily low. Effective interest rates after all those interest on interest, free vouchers and loyalty bonus gimmicks never breach 1% PA.

But wait, check this out..

Not some Ponzi scheme but fresh rates given by ICIC bank. BUT, they only have one pathetic branch at Raffles Quay. Still not a bad deal for most people!

Their Aussie rates, my favourite currency is as follows:

No link to their websites as this is not an advert.

Monday, October 18, 2010

Stretch you dollars series: Preferred Banking Standard Chartered Bank

Just receive the preferred banking package. The package sent was quite delightful, considering that I only applied for a credit card and current account.

The card comes with 25,000 points upon first transaction.

There is an overdraft facility that is interest free (without processing fees) for the first $3,000 drawn upon. The current account comes with a debit card that comes with 2% cashback on mastercard spending.

Spending gives 1.5x reward points for $1,500 of spending and below; 2.5x reward points for purchases above that.

Different account categories earn points monthly. For example, a current account, time deposit and investment account earn 250 points monthly or 750 points in total. Online payment of credit card also yield 250 points.
The package comes with some 1-1 vouchers.

I have enquired that there is no termination fees AFTER 6 months for preferred banking account. Before that there is a $30 early account closure fee.

Not a bad deal.

Qualifying criteria: Earn more than $6000 monthly or have $50,000 with SCB. If you have a mortgage with more than $600,000 in value, you also qualify.

Mapletree Industrial Reit (MIT)

I was rather pissed off when I was only allocated 3 lots for GLP. MIT seems the next best alternative as the market is still flushed with liquidity. The balloting results of GLP suggest that many retail investors applied up to $2M for GLP. A few others applied with $1M. I salute them, though they earned about $1.2k profit immediately in 3 days. Given the response for GLP, I expect MIT to rise at least 6% on day 1. That said, I playfully applied for a few lots. I think it was about 60 lots. Not expecting to keep it for long, perhaps to earn just a bit of kopi money for Oct.

I got 0 lots allocated this time. Wow, my guess is MIT will rise 10% on debut.

Wednesday, October 13, 2010


Just applied IPO for GLP. Applied for 79 lots. Yes, it is overpriced, but at current market I am sure I can strike a winfall even if I am just allocated 4 lots. It will be part of STI index in time to come, similar to Capmalls Asia. Index funds will be mandated to purchase it, from us. :)

Eventually I was only allocated 3 lots, a paltry $600 paper gain on the first day. Oh well, its free money anyway.

Saturday, October 9, 2010

SPH 2010 Final Dividends Prediction

Given that Sky Eleven has ceased contribution for 4Q10, I believe management will be cautious in dishing out dividends. Management is unlikely to cut dividends and have a higher tendency to increase dividends to signal growth and support share price. Hence I expect final dividends to be raised from 18 cents in 2009 to 19 cents in 2010.

Print expenses are expected to decrease due to cheaper US$ and lower circulation demand.

Total profits are expected to be much higher than 2009 due to SPH portfolio and advertising revenue recovery.

Final contribution from Sky Eleven will definitely help to propel SPH profits to near record high.

I predict FY 2010 profit to be in the region of $580M, EPS of 32.5 cents.

Of course I am striking a balance to be optimistic and objective, since a large part of my networth is determined by SPH. I do hope that SPH can deliver 21 cents of final dividends. This would likely propel it to breach the $4.60 mark by Dec 10.

Results will be out after 6pm on Oct 12. Let's see how far my prediction is away from actual results.
Post script: SPH delivered 20 cents of final year dividends, EPS 31 cents. Operating profit of $539M, circulation down by 2.4%, printing cost lowered by 29%. Final contribution from Sky@Eleven of $154.2M. Investment income recorded $39M, a turnaround from last year's loss of $6.2M.
Surprisingly, my projection was the closest than all the reports available in the market.

Thursday, September 30, 2010

The new American Express Rewards Card

One of my colleagues is deciding to buy a 5 year savings plan that costs $20,000 upfront. At the end of the 5th year, he will receive $1,000 and at the 10th year, he will get $25,000. In total, his yield is a miserly 3% (average).

This return is better than our 0.15% banks’ interest rate though.

The good thing about his savings plan is that one can pay using any credit card.

Since the new American express rewards card (ARC) advertisements can be seen anywhere, let me do a simple calculation to see if paying $20,000 using this card actually increases his yield.

ARC gives 100% points on spending for the 1st 90 days. Thus my friend will get 40,000 points upon paying his premium.

He spends $20,000 on a calendar year, thus entitled to 50% bonus points. This is another 10,000 points.

In total, he gets 50,000 points, which allows him to exchange for $250 of cash.

If he adds that up to his total endowment return, his average return is 3.125%.

My friend has a visa infinite card from StandChart. It gives him 2.5x reward points on spending. Thus spending $20,000 gives him 50,000 points. This again works out to a payout of $250 spending credit, similar to ARC.

Hypothetically, if he gets a card that gives him 10% cash back ($2,000) on his spending, he will get 4% return on his endowment plan. Unfortunately, there is no such plan at the moment.

If he uses the Manhattan Card, he will get a $300 rebate. If he pays the bill through NETS using his X tra saver card spread over 2 months, he gets a $100 rebate, a total of $400. This brings his endowment yield to 3.2%.

I am extremely impressed by ARC marketing. I seem to see if everywhere, on papers, buses and even MRT floors! However, there is really nothing much to shout about, considering the points are merely 1.25% cash back on spending (at most).

I almost applied for the card when I was at Ion Orchard, but a mental calculation made me realize that I am better off holding the current cards I have now.

I firmly believe that cashback credit cards are more superior products than points/miles accruing ones. Thus readers should note that points are merely gimmicks to entice spending.

Thursday, September 16, 2010

Best Credit Card in Singapore

This issue of stretch your dollars series is definitely worth a read for all who qualify for credit card applications.

My colleague and I went shopping for a car last week. He liked the car and decided to pay for the booking fee. As he didn’t have a credit card, I offered to pay for him. The booking fee costs $16,000 thus I have to split payment between 2 cards. The first card I used was the Manhattan Card. It gives me a cash rebate of 5% on spending, with a cap of $300 every quarter. Good choice, I just earned $300.

The 2nd card I used was an Xtra Saver Debit card by Standard Chartered Bank (SCB). As I have more than $6,000 in the account, I am eligible for a 2% cash rebate on my MasterCard transactions. Not bad, I will be getting $160 cash rebate.

As I rarely use my cards, SCB sent a mailer saying that I qualify for a 5% retail rebate, up to a cap of $50 for my purchases. Coincidentally, I earned another $50.

The Xtra Saver card gave me another 0.5% on NETS payment (cap at $50). Hence I will be using the Xtra Saver card to pay my Manhattan Card bill ($8,000). This gives me $40 cash back.

My total gain was $550, for helping my colleague out. He transferred the money back to me this morning.

I did not do my “homework” on which card to use before going shopping but when I came back and search the web on the “best credit card” to use for the $16,000 purchase, it turned out that no matter how many points you chalk up, the returns can hardly be as good as the above combination.

The best combination, perhaps is to use 3 different (holders of) Manhattan cards to clock a $800 rebate ($16,000x5%) plus paying 3 cards using Xtra Saver NETS ($80 rebate) which gives a grand total of $880.

However, it will be too much of a hassle to do that. Currently, even with American Express 100% bonus points or SCB Visa Infinite 2.5x points system, the total vouchers value will not be close to $300. Don't even bother about airmiles or POSB everyday card's 0.3% cash rebate.

Typically, credit card gives 0.5% rebates in voucher values on spending. For example if I spend $10,000 on the card, I can redeem around $50 of vouchers. Even with 3x points on spending, I can only get $150 of vouchers. This is a far cry from pure 5% cash rebates from Manhattan Card.

The only drawback for Manhattan Card is that it only gives 5% rebates when spending exceeds $3,000. But readers can consider using this card to pay your annual insurance premiums, wedding banquet or any other purchases that exceeds $3,000. Do not be fool by marketing gimmicks of 2x or 5x points. They are at most 1% to 2.5% rebates of your spending.

Monday, August 30, 2010

Measures to curb property speculation finally revealed

Today’s papers reported that measures are rolled out with immediate effect to curb property speculation. In layman terms, they are:

(1) Sellers to pay stamp duty again if they resell the property within 3 years of purchase. (A $1m property attracts $24,600 of stamp duty.)

(2) For buyers who have outstanding loans with banks or HDB they

(a) need to pay at least 10% in cash for downpayment, instead of 5%.

(b) can only loan up to 70% of property valuation limits.

Looks like the government is intervening as the property market astronomical rise is going out of hand and they can only continue to roll out measures in a such manners to react accordingly.

I feel that more can be done to curb the property craze. It is a good thing that government is trying to balance speculative interest from real home seekers. However from my observation, most speculators are already sitting on high paper/real profits; the people who are trying to buy now are real home seekers.

That’s truly an irony.

Then again, what is the definition of speculator? If I am investing in property because I want to leverage on cheap interest rates and earn rental income for 10 years before selling off, am I a speculator?

Actually, I am only trying hard to save for retirement. With the stock market increasingly unpredictable, savings interest rates at 0.2%, buying a property seems to be the next best alternative for anyone who can cough up 20% downpayment.

Yet again, I am always priced out.

I applaud the government for proactively solving problems. But may I suggest that they stay on top of our problems by reacting before they even surface?

Prevention is better than cure, am I right, Mr. Govt?

Tuesday, August 17, 2010

Public transport

I tried taking the MRT and bus to work recently. It was a horrible experience to take the train. As I need to alight in Orchard area, I had to smell the arm pits of commuters. Then I tried the bus, service 65. Below was the snap shot.

I was pleasantly surprised! I could even read papers there! The ride was a short 30 minute ride from my home. I could check the bus arrival times rather accurately using my iphone from the SBS website. Meanwhile, I could even have a cup of coffee and noodles for breakfast while waiting for the bus.

The dedicated bus lanes also narrowed the time savings between public and private transport. I felt sorry for the cars beside me having to pay hefty $4 ERPs (accumulated), $150 season parking while being stuck in jams daily.

My daily transport cost? $2.20. Of course I hate to leave my car at home, but it just doesn't make sense to pay 100 times more and spend more time travelling.

As LTA races to tender out railway network in Singapore, I seriously doubt the marginal increase in ridership will increase the profits of SMRT. The circle line is already operating at a loss, major lines running at full capacity, what kind of growth are we looking at? A PE ratio of above 20 doesn't justify its growth rate ahead.

Though the bus business seems to be a dying trade, I would prefer to take the bus anytime now, considering the current situation of MRT rides. Due to training purposes, public transport for me will only be a temporary measure, but I am quite sure I will research the bus routes instead of MRT whenever I take public transport.

Well done SBS!

Wednesday, August 4, 2010

Make money blogging

I have been meaning to write on blog monetization so here it is!

I started Singapore Blue Chips in May 2008, it has been slightly more than 2 years from now. I would say that my blog did generate decent income to cover my internet bills over the past 2 years. The majority of my income did not come from direct advertising but rather from indirect sources.

I earn referral fees from US advertisers to put up their advertising on Singapore blogs. I receive $6-$10 for each referral. So during my free time I comb the local blogging fraternity for possible referrals.

Another part of my income comes from online requests. Prudential once approached me to moderate their forum, (forum closed down as campaign ended) and I was paid $100 weekly. The forum was part of their advertising campaign and I am honoured to have the opportunity meet their advertising team to discuss on the online advertising aspects of insurance products.

Occasionally, I do get tertiary students asking me to complete their finance assignments. I do charge high prices for that, at $40-$60 per page. Most of them get good grades anyway, so ethics aside, this blog does generate indirect income similar to online tutoring service. I do discourage prospective students from approaching me though as you are eventually short changing yourself.

Lastly, online advertisements account for the least income. My readership isn’t high, slightly over a thousand unique views weekly, hence payouts from advertisers have been slow. And I know you guys reading my blog never click on my advertisements too!

Fortunately my “Singapore Blue Chips” is always the 1st search result on google and yahoo. Hence readership can always be maintained at a decent rate even if I stop blogging for 3 months. Mr. Tan Kin Lian has kindly linked his blog to mine, which generate the highest number of web referrals too.

This blog was never intended to make money anyway. But it is really satisfying to be able to generate income from a hobby, however little it may be.

I do get several emails a day from readers asking advice on stocks and wealth accumulation. I rarely reply them due to time constrains and the information provided is simply inadequate. Besides, I have no license to advise on financial matters! All I can say that it is never simple to make money through equities investing. Making money through equities does not mean you are correct in your financial concepts. The acumen needs to be honed and there is no short cut in hard work to build one’s fundamental knowledge in finance.

Lately I have been blogging lesser on equities mainly because my portfolio is generating decent income and passivity is my best way to monitor the market. I have no desire to generate super normal returns and my farmer philosophy has served me well.

Hence, everything will continue as so.

Thursday, July 22, 2010

Of Cars and Cars

I have a rather luxurious family car below where I rarely drive. Most of the time, I drive my trusty 5 year old Japanese car (1.6 litre) for work or take the train when I go for trainings in town. Occasionally, I do drive my family car for errands when it is available. Often people who just got to know me will associate the car with me living in a bungalow or working in prestigious MNC. It seems that the car is an epitome of success, which is quite inconsistent with my current image. In the end, I have to clarify that I have a humble job, that car isn’t mine and I only stay in a HDB flat.

Honestly, sometimes driving this car leads to more embarrassment than awe as people who just knew me would probably be thinking why the hell you are driving this car when you are “supposed” to be taking a bus.

There are many cons in driving that car other than the above scenarios. I would be afraid while in my possession that it might be scratched, knocked or stolen. I have to be careful while going over the humps and struggle to remember the different functions that are supposed to “aid” in driving.

When should I be using cruise control these days when the expressways are as crowded as the car parks, 24/7?

I forgot to mention that I need to see a doctor to check for my hearing soon. There seems no difference between a Mark Levinson and a pioneer locally assembled car stereo system.

On the contrary, I feel a lot at ease driving my own LKK car. The leather seats seem seasoned to my butt, fitting them comfortably. The single CD player (not even MP3 player) never jams. The $50 full tank can last me for a good 10 days. Not to mention the $750 insurance premium and $769 road tax is easy on my pocket. The servicing cost me $100 every 9 months, nobody ever bothers to scratch my car since day 1 I bought it. I can floor the accelerator without feeling heartpain. Only God washes my car for me (quite often recently!).

Driving is a luxury only when you comfortably afford it. I guess I still can’t get used to spending things I rarely use and impressing people I don’t know.

Monday, April 19, 2010

Is Singapore really that bad?

Today a colleague told me she wants to migrate to Australia. Initially, I thought it was just a passing remark. However, as I probed further, she has actually obtained PR status through an agent here, after spending about $8,000. She has also taken an English test to demonstrate her proficiency in English and will be moving over to Western Australia by December as a skilled worker.

My first question was, why leave? She is in her late thirties and has worked in the same line as me since graduation. Her grouses are the same as mine: No work life balance, working over weekends, no time for herself to consolidate and “talk to herself”. She feels the sheer volume of work is making her out of breath, only by leaving Singapore can she regain her sanity. She has a lot of health problems, possibly attributed by her career.

I applaud her courage. She is single, have aged parents and living alone. She will only look for accommodation and job when she reaches there. I would probably sink into depression if I go to a foreign land with no friends and job.

Is Singapore really that bad?

Over the weekend, there are extensive reports on the Singapore Dream. It states that to attain 5Cs has become increasingly impossible over the years. This is extremely true even for me and everyone around me. I earned an average of $6,500 a month. However, I can only afford a Japanese car (5 year old now) and stay with my parents. Unless I get married, there is no way I can afford a roof over my head alone. Well I can, if I use up ALL my savings and investments. That would mean an opportunity cost of at least $1,800 a month as the dividends from my investments generate roughly that amount on average.

I would need to pay for utilities, property tax, maintenance, gas, groceries, electricity and many other costs associated with living alone. My living cost will shoot up and I will be stuck to my job, forever.

Lately, I feel the strained in my workplace. It has become increasingly competitive as every other colleague competes to outshine each other. Workplace has become a place where working hard is no longer enough; Competition breeds office politics and other hypocritical acts. Nobody is my friend now. I am an economic unit of my office which is a subsidiary of Singapore Inc.

Not many people seem happy in my workplace. Many are stuck and resigned to fate.

“This is Singapore”

“It is the same everywhere”

“Some places are worse!”

“I can only do this”

“I have a family and mortgage to service every month”

My Singaporean readers, are you entrapped in the vicious cycle as well? Do you pursue wealth to attain happiness only to lose happiness while pursuing wealth?

Why are you feeling like that?

I believe it is an issue of comparison. Below was an excerpt I posted 2 years ago on my blog:

Robert H. Frank, professor of economics at Cornell University, says that most people find the first option more attractive. When it comes to salaries, we care more about relative size than absolute size. What matters most is earning more than our neighbours.

The same holds true for all sorts of things. The actual size of our apartment matters less than its size compared to everyone else's. And most of us will settle for a modest car - provided our neighbour is driving something worse.

It is a sobering thought. We assume that getting a pay rise, or moving into a new apartment, or trading-up to a better car will bring us increased levels of happiness and satisfaction. In fact, many of us simply raise the bar on what counts as adequate.

We work longer hours, earn more, spend more and consume more. Meanwhile, everyone else does the same. So, by comparison, we are no better off, and therefore no happier.

How true?

(I actually enjoy re-reading my blog sometimes. It is like talking to someone about my past. It makes me philosophical and happy.)

Saturday, April 10, 2010

When you can hear

Today a new admin staff came to my office. When I wanted to speak to her, she passed me a black colour remote control like device and asked me frantically to speak into the device. I was quite taken aback as I didn’t know how to use it until she demonstrated it to me. That was when I realised that she was having a hearing aid on her ear. Every time we want to communicate to her, we have to speak to her listening device and it will amplify our conversation to her ear piece.

I was actually quite overwhelmed by her disability. Even though it was not as serious as not being able to see, smell, taste or feel, yet I feel so much for this young lady.

Over the past few years, I spent a large part of my time pursuing wealth, work and academic studies. Even on a Saturday night, I am clearing my work from home now, hopefully I can have my Sunday free. Yet as I listen to the wonderful music playing from my laptop, I taught of this (near) deaf girl.

What she wants in life is so simple. To hear us clearly. To answer the telephone. To use an ipod. To drive.

Sometimes when I look at the misfortune of others, I gloat at myself. Every day I struggle to juggle between societal expectations of a 30 year old graduate, yet within me, all I wanted was a simple, low paying, brainless job to get by the day happily.

So what if I manage to reach $500,000 assets by December 2010? So what if I get the Masters in Applied Finance? Will that warrant a passport to happiness?

I guess it is time to take life slowly now. As I listen to beautiful music, I feel blessed to be even able to hear them. Something that Beethoven couldn’t even enjoy.

I will tender my resignation by the end of this year and enjoy being unemployed. Perhaps I would just be the clerk next door.

Stay tuned. J

Saturday, March 13, 2010

Analysis of Macquarie International Infrastructure Fund (MIIF)

Macquarie International Infrastructure Fund Ltd (MIIF) is a mutual fund company that has been formed to own, operate and invest in a diversified group of infrastructure businesses around the world.

It offers investors an opportunity to invest in the Macquarie Bank Group’s first listed infrastructure fund in the Asian region and to participate in the public ownership of infrastructure assets.

MIIF's investments include direct investments in airport infrastructure in Belgium and communications infrastructure and renewable energy assets in the United Kingdom. In addition, it will own interests in one unlisted and four listed infrastructure investment funds that have ownership interests in, amongst other things, airports, communications infrastructure, utility and energy assets, water and gas distribution assets and transport infrastructure assets located across the globe.

MIIF was listed on May 2005 at $1 per share. Its first day IPO price was $1.14. It currently trades at $0.525 (14/03/10). No rights shares were issued from its IPO till date.

Below figure A is a screen shot from MIIF 2H 2009 interim report. It shows the portfolio of MIIF:

Figure B shows the corporate structure and investment of MIIF

Figure B

Regular dividend payouts were given since it was listed on SGX

Dividends are paid semi annually, at 3 cents per annum payout, representing a yield of 5.7%. There is a drop in dividend yield over the years due to a larger conservation of cash to lower its corporate level debt (Source: Business Times Singapore May 2009). Arqiva which is the largest revenue contributor of MIIF contributed 62% lesser investment income on 2H 09 (based on 2H 09 interim report). Also, patronages for its China and Europe assets weaken possibly due to financial crisis across the globe.

It’s gearing ratio from 2H 2009 report stands at 63%, considered normal for an infrastructure fund. (Source: Lecture readings: AMP capital Newsletter)

MIIF has a diversified base of infrastructure, which is profitable and commands a high profit margin (before tax) of about 90% based on 2H 09 revenue and net income report.

At current share price of $0.525, book value of $0.80 and yield of 5.7% (before brokerage charges) MIIF presents a good investment opportunity to investors. The global market is set to recover, ease of borrow to resume, thus MIIF is poised to ride the uptrend.

Moreover, management fees of MIIF is a mere 1.5%, compared to many infrastructure unit trusts charging 2% and above for its management fees. As investors can purchase the MIIF on SGX, there is liquidity and transparent pricing of its funds. The brokerage charge is a mere 0.275%, compared to 2%-5% for other non listed unit trust infrastructure funds. All these will add up to a higher return for investors’ portfolio in the long run.