Genting Singapore 2013

I have a small amount invested in Genting. Currently wondering if it will be good to hold onto or sell and run. Looking at the graph below, I can only conclude one important thing. It has been very fiercely speculated in the past especially since the opening or Resort World Sentosa. One thing is for sure, they have been overbought in the past, they still remain overbought. Technical analysis proves nothing significant as there are no good supporting lines. Performing a Fibo retracement over the longest period available will show that the chart has bounced from the 50% retracement level. It would seem that $1.25 is a strong support price. However, the bottom has not been established for this great bull run. My exit price shall be $1.65 for two main reasons. Dont want to be too greedy and I believe it is in a short term down trend in search for a bottom. 

 

One more bullet for Hyflux

It seems like ages ago when i initially bought Hyflux. It was a rookie mistake; I was trying to catch a falling knife, cut myself and still not recovered fully. Having bought equal amounts at three intervals back in 2011, I have been sitting on my hands  throughout 2012. Still hoping that it will turnaround one day. 

After firing 3 shots, I am running out of bullets to spare for this counter. I only have 1 last shot left. This is a perfect example of how to break up your investments into 4 equal portions. Buy equal amounts at every 25% drop in value. However I could not do this blindly without technical analysis and/or without believing that the company have potential for future growth. Tech analysis will show me how to spend  my last bullet, see below:

From the chart, you can see a beautiful supporting uptrend line since 2001 to now. The question is whether the price now ($1.17) is going to respect this trendline. Since it has bounced twice from hitting this trendline, I can conclude for myself that there is higher chance of bouncing from this trendline once again. My risk of exposure is greatly reduced. My last bullet will lower my buy price to $1.50 region. It has taken me 2.5 years to come to this point. One of my worst performing shares in my portfolio (always been in the red).
It does not take a rocket scientist to see that current price levels seems to be well supported.

ON the positive side: Dividends collected from this counter comes to 4.38% over the last 2 years.(2.1% annually) 
Also things are looking good as they have finished the largest desalination plant in Singapore this year. Perhaps they will get more projects in the Middle East and China. There is one thing i know for sure, water is vital for life, we will face more shortages in water supply in the future. Therefor any company that is in this sector has potential for growth as long as they are well managed and reputable. To me, Hyflux fits the bill.

Far East Hospitality REIT

Are you surprised that the debt ceiling has been raised further? I am certainly not. 
The last quarter of the year has begun, everything is in full swing, an exciting time for people who are just coming back to the markets. 

I could have held on to my capital a little longer as the ongoing US government shutdown continued to bring the broader market down and with it many high quality stocks. However i chose to ignore the noise and buy on fundamental strength. Having a vision for the long-term is very important in investing in equities. Build on your portfolio when things are looking down, sit back and relax as people rush into the markets because you have already taken positions. 

For example, I have been buying more of Far East Hospitality REITs and CACHE REIT when they were down. My average buy price has come down quite a bit. Fundamentally FarEast is strong but still quite RISKY, technically speaking.

 
As it is with all recent IPOs, we cannot really judge the fair market value. However we know that there is support at IPO price of $0.93 and more recenly $0.84 (recent bottom). The problem is we do not know how low it can go. What i do know is that Far East is a great organisation and proper management and their property portfolio is strong. If its share price is a true reflection of how hotels and service residences perform during end of year tourism spikes, I am confident that its share price will definitely test resistance levels of $0.96. That is a critical resistance level to cross if the trend is going to reverse. Otherwise, we may be looking at a downward trend without a significant bottom.

OCBC Bank online features

Did you ever wonder why OCBC claims to be the worlds strongest bank? I know from the ratings that all 3 local banks are actually top 5 in the world. I have been most impressed by their customer service, their leniency to give me large credit limit as well as their online platform.
Only today i found myself on the eve of Hari Raya, feeling lazy to do any actual work, checking out OCBCs online platform features. I must admit that it is most impressive. If you have an savings/current/creditcard account with them, you must check out their feature which allows you to see how you are dealing with your finances compared to others. Some may say its invasion of privacy and probably be surprised they are being tracked so closely. For me I didnt really mind, it helped to see how I am doing, anyway it is all anonymous.
 

Quite interesting to see where most peope keep their assets, as for me I use OCBC mostly for the purpose of investments, so that would explain the chart below which shows most of my money being channelled into my investment account in iOCBC.

I was surprised to see relatively young unmarried people having 45% of their money in fixed deposits and 50% in investments. Personally I never bought any investment products (unit trusts) directly from banks and probably do not intend to in the future. Its just personal preference that i believe in picking my own stock portfolio. However this has got me thinking a little, I probably should allocate more money in fixed deposits, but at interest rates touching the floor, i do not see much incentive.

Next is debt. This chart is accurate, i never accumulate debt, always pay your bills in full every month. Quite surprisingly average debt for "people like me" is $3129 (credit card + Easycredit). If you are reading this and fall into this category, Please heed my advice, do not use Easy Credit if you dont intend to pay it off in a weeks time. Its just going to suck you dry. 

Lastly spending habits. This is accurate for me, I never go shopping. haha! Only spend on groceries and travel to get the points, most of my money will go towards investments. Wondering what "other financial services & charges" refer to?? Me too, i am guess these are the late payment fees which people get slammed by borrowing with EasyCredit.

All in all, I now understand why OCBC bank is one of the worlds leading bank. Their online features rival the best and it is very user friendly. Alot of lessons to be learned from this very interesting online feature. 

Disclaimer: I am in no way advertising for OCBC, or saying they are wrong in any way. I just found their features quite useful and decided to share with fellow readers.
   
As I am writing this, OCBC Bk is trading at 10.44 today. almost reaching its 52 week high of $11.40, overvalued and of course not really the time to get into banks. Wait for the next big crash, I will be keeping an eye on OCBC. Since 2002, a lot has changed of course, OCBC is not the same as it used to be back in 2002 - 2005. Next upcoming crash, we can definitely see up to 50% retracement. Just be patient.

.

Time for Action

If you are thinking in the same line as me for past month, you should be appalled by the greatest drama or stage play that is unfolding in the US. Its amazing how fear and uncertainty can be spread through our media. I have purposely stayed away from the markets for a month because there has been nothing as tempting or worth taking the risk.

We watch the news, read the papers everyday for our amusement but you should know deep down what really is going to happen. For the benefit of those who are still confused, let me just anticipate the possible outcome or rather the most likely scenario; US is not going to default, everyone is going to make a fuss about it but they will make the US pay for their debt. Debt ceiling may or may not be raised further, it does not make a difference. Once the fiscal "drama" is over, everything will be back to normal and we will see the next seasonal bull run for the rest of the year. Be prepared to take profits by the end of it.

Meanwhile in Singapore, MAS forecasts core inflation to be hovering in the 2-3% region for 2014. This is highly likely for 1st quarter of 2014 but it might be 4-5% for the rest of 2014. (that is just my opinion) So stocks with good dividends are still a safe bet. UNTIL interest rates go up late 2014.

 

Fed decides to postpone their tapering

I cannot say: "I knew this would happen" but my gut feeling was that all the news about Fed tapering their bond-buying was OVER-sensationalised by the News media. And I am glad this happened because i get to buy into some stocks at a discount. Good for investors and speculators alike.
 
Feeling lazy to type today but this is quite big news and should share with everyone so just copied and pasted the report from my broker. Its below for your reading pleasure:

-------------------------------------------------------------------------------------------------------------------------------
Fed Refrains From Taper as It Seeks Signs of Sustained Growth
2013-09-18 21:38:44.617 GMT
By Joshua Zumbrun and Jeff Kearns
     
Sept. 18 (Bloomberg) -- The Federal Reserve unexpectedly refrained from reducing the $85 billion pace of monthly bond buying, saying it needs more evidence of lasting improvement in the economy and warning that an increase in interest rates threatened to curb the expansion.
     
“Conditions in the job market today are still far from what all of us would like to see,” Chairman Ben S. Bernanke said at a press conference today in Washington after a two-day meeting of the Federal Open Market Committee. “The committee has concern that rapid tightening of financial conditions in recent months would have the effect of slowing growth.”
     
U.S. stocks rose, sending the Standard & Poor’s 500 Index to a record, while Treasuries and gold rallied as Bernanke stressed that the pace of bond buying would be dependent on economic data, and the Fed has no predetermined schedule for tapering the purchases that have pushed its balance sheet to $3.66 trillion.
     
“There is no fixed calendar schedule, I really have to emphasize that,”Bernanke said. “If the data confirm our basic outlook” for growth and the labor market, “then we could begin later this year.”
     
The S&P 500 climbed 1.2 percent to 1,725.48 at 4:02 p.m. in New York. The yield on the 10-Year Treasury note dropped 15 basis points to 2.70 percent. Gold for immediate delivery jumped $55.61 to $1,366.25 an ounce. Oil rose more than 2.5 percent.
     
“It looks like the Fed has done a major reset in terms of expectations on what they need to see before they start to taper,” said Chris Rupkey, the chief financial economist for Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
 
Rate Outlook
The central bank, in a statement, left unchanged its outlook that its target interest rate will remain near zero “at least as long as” unemployment exceeds 6.5 percent, so long as the outlook for inflation is no higher than 2.5 percent.
     
Bernanke added in his press conference that the first interest-rate increase may not come until the jobless rate is “considerably below” 6.5 percent.
     
“Even after asset purchases are wound down,” Bernanke said, the “Fed’s rate guidance and its ongoing holdings of securities will ensure that monetary policy remains highly accommodative, consistent with an aggressive pursuit of our mandated objectives of maximum employment and price stability.”
     
Bernanke said the Fed could also specify that it would not tighten if inflation was too low. “An inflation floor is certainly something that could be a sensible modification or addition to the guidance,” he said.
 
Forecasts Reduced
Fed officials today reduced their forecasts for economic growth this year and next. They forecast U.S. gross domestic product to increase 2 percent to 2.3 percent this year, down from a June projection of 2.3 percent to 2.6 percent growth.
     
“They feel the risks are too great to taper now, and the economy is not growing as fast as they had hoped,” said John Silvia, chief economist at Wells Fargo Securities in Charlotte, North Carolina. “They are going to take a few more months and maybe start in December.”
     
Economists had forecast the FOMC would dial down monthly Treasury purchases by $5 billion, to $40 billion, while maintaining its buying of mortgage-backed securities at $40 billion, according to a Bloomberg News survey.
     
Fed officials were spooked by an increase in bond yields that followed Bernanke’s comments in May that the Fed may step down the pace of purchases in the “next few meetings,” said Scott Brown, chief economist for Raymond James & Associates Inc.
in St. Petersburg, Florida.
 
Treasury Yields
The yield on the 10-year Treasury note climbed almost 1 percentage point through yesterday since Bernanke’s May 22 comments, with yields on Sept. 6 exceeding 3 percent on an intraday basis for the first time since July 2011. That compares with 1.61 percent on May 1, and a record-low 1.38 percent in July 2012.
     
“They were really surprised back in May and June by the market’s response to the initial talk of tapering,” Brown said.

“The Fed’s view was that it’s the amount of asset purchases, not the monthly pace that matters. In that case, it doesn’t matter whether they start tapering in September or December, but the markets decided it does, so it does matter.”
     
“We’re seeing the reaction that bond yields are coming down, and that’s got to be helpful for their outlook.”
     
Kansas City Fed President Esther George dissented for the sixth meeting in a row, repeating that the policy risks creating financial imbalances.
     
Higher interest rates have started to take a toll on housing, one of the drivers of the expansion. A Commerce Department report today showed that builders began work on fewer U.S. homes in August than projected by economists.

Housing Starts
Housing starts rose 0.9 percent to a 891,000 annual rate, following the prior month’s 883,000 pace that was weaker than previously estimated. The median estimate of 83 economists surveyed by Bloomberg called for 917,000. Permits, a proxy for future projects, dropped more than forecast.
     
The average interest rate on a 30-year fixed home loan was 4.57 percent last week, compared with a record-low 3.31 percent in November 2012, according to Freddie Mac. The rate soared 35 percent in 10 weeks ended July 11, the most ever for a comparable period, the data show.
     
Bernanke, who is nearing the end of his second term as chairman, has orchestrated the most aggressive easing in the Fed’s 100-year history, pumping up the balance sheet from $869 billion in August 2007 and holding the main interest rate close to zero since December 2008.
 
Leading Candidate
Vice Chairman Janet Yellen, a supporter of Bernanke’s policies, is the top candidate to succeed him after former Treasury Secretary Lawrence Summers withdrew from contention, according to people familiar with the process.
     
The Fed’s asset purchases have fueled gains in asset prices. Counting today’s increase, the S&P 500 Index has climbed 23 percent since Aug. 31, 2012, when Bernanke made the case for further monetary easing at the central bank’s annual forum in Jackson Hole, Wyoming.
     
Officials have also credited the program, which began last September, with reducing the unemployment rate, which is the lowest since December 2008. Officials have said that they would maintain bond purchases until the labor market has “improved substantially.”
     
At the same time, recent data on payrolls, housing and retail sales have lagged behind economists’ forecasts.
 
Jobless Rate
U.S. companies created 169,000 jobs last month, fewer than economists projected, and increases in the prior two months were revised down. The unemployment rate fell as workers left the labor force. August and July were the weakest back-to-back months for payroll gains in a year.
     
Employment growth has nevertheless improved since the bond purchases began. The U.S. has added an average of 160,000 jobs over the past six months, compared with 97,000 originally reported for the half-year before the Fed decided to start the third round of purchases a year ago.
     
Faster employment gains may be needed to spur the consumer spending that accounts for 70 percent of the economy. Retail sales last month rose less than forecast, with purchases climbing 0.2 percent, the smallest gain in four months, the Commerce Department reported last week.
 
Bright Spots
Homebuilding and manufacturing remain bright spots for the economy. Companies such as Hovnanian Enterprises Inc. have said the recent rise in mortgage rates will temporarily restrain the housing recovery rather than end it.
     
Homebuilder confidence held this month at the highest level in almost eight years, even as mortgage rates rose. The National Association of Home Builders/Wells Fargo confidence index registered 58 this month, matching August’s revised reading as the strongest since November 2005.
     
Such optimism has found fuel from a recovery in home prices that pushed up the S&P/Case-Shiller index of values in 20 cities by 12.1 percent in June from a year earlier.
     
Factories turned out more cars, appliances and home furnishings in August, propelling the biggest increase in U.S. industrial production in six months. Output at factories, mines and utilities rose 0.4 percent after no change the prior month, the Fed reported this week.
 
Auto Sales
Cars and light trucks sold last month at the fastest annualized rate since 2007, according to researcher Autodata Corp. Sales at General Motors Co., Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. all exceeded analysts’ estimates.
     
Texas Instruments Inc., the largest maker of analog chips, is among companies with a brighter outlook as global markets stabilize.
     
“Orders continue to be quite solid” this quarter, Chief Financial Officer Kevin March said at a Sept. 11 conference.

“We continue to see strength in three of the four regions of the world,” with Asia, Japan, and the Americas expanding, he said.

For Related News and Information:
Fed Seen Paring QE to $75 Billion Pace This Month, Survey Shows NSN MSPWYG0D9L35 <GO> Fed Officials Rebuff Coordination Calls as QE Taper Looms NSN MS4UHC6TTDS0 <GO> Less Tapering Becomes Tightening Credit No Matter What Fed Says NSN MT8N176K50YJ <GO> Fed balance sheet graph: FARBAST INDEX GP W <GO> U.S. economic forecasts: ECFC US <GO> Treasury curves: GC I25 TODAY 1Y 2Y 5Y 7Y <GO> Global economy watch: GEW <GO> World economic statistics: ECST <GO>

--With assistance from Steve Matthews in Atlanta and Caroline Salas Gage, Aki Ito and Craig Torres in Washington. Editors:
James Tyson, Christopher Wellisz, Kevin Costelloe

To contact the reporters on this story:
Joshua Zumbrun in Washington at +1-202-624-1984 or jzumbrun@bloomberg.net; Jeff Kearns in Washington at +1-202-624-1806 or jkearns3@bloomberg.net

To contact the editor responsible for this story:
Chris Wellisz at +1-202-624-1862 or
cwellisz@bloomberg.net

Building a Dividend Portfolio

I came across a really good article on SeekingAlpha.com and i want to share it. It is called "DIY Dividend Investors Club: Building a Sustainable long term dividend portfolio". Although it is based in the US, many principles can be reused in Singapore. We can even invest in those stocks they have highlighted. They are great dividend plays, some of the most well established companies in the world. They sell things that we need everyday of our lives to make our day a little easier. [eg. Coca cola - soft drinks, Kimberly Clark - tissue/toilet paper, Colgate - toothpaste, Unilever - various consumer goods, Procter & Gamble - Various consumer goods, Mcdonalds, Wal-Mart etc.]  This is only Part I, they are going to publish more parts in the future. Do look out for them.

However my key issue with investing in the US for dividends has always been the 30% tax they charge on all dividends!! There is a way to get around this if you are a long term investor, engage in Dividend Reinvestment Scheme if the company allows it. 

Tried to do this, a year ago but I have fallen flat in my search to establish something, my broker at OCBC said "we don't have such scheme". I gave up for the time being. If anybody knows how to escape the 30% tax, do let me know. 

I think i read somewhere that if you open an account with an US trading platform, they hold your investments in their custodian account and reinvest the dividends to buy in more units each time. I am still quite a noob when it comes to investments.

Meanwhile FEELING INSPIRED; I am thinking of adapting this strategy to Singapore stocks with the following aims:

• Portfolio Size: $100,000
• Target # of Stocks: 5-10
• Maximum Stock Concentration: 10.0% of portfolio
• Maximum Sector Concentration: 20.0% of portfolio
• Maximum High Yield Concentration: 20.0% of portfolio
• Minimum Dividend Yield: 5.0%

      
Its entirely possible to build a dividend portfolio in Singapore with the expectations to earn a minimum of 5% per year. Lets see how it goes, It will be a 20 year plan starting from 2014.