SPH is one of my anchoring stocks in my stock portfolio. The company just announced plan to list a real estate investment trust in July. The REIT will buy Paragon and the Clementi Mall located in a western suburb for $3.07 billion. Seletar Mall probably will get on the REIT in 2014 after completion.
SPH has been generous with dividend payouts over the years, and hopefully this will also be true for this SPH REIT. I think I will need to build up my war chest for July action.
Although I am a bit disappointed that existing shareholders of SPH are not given any free shares of the new REIT, a one-time dividend payment of 18 cents a share eases some disappointment.
An article about the coming REIT:
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I found some old documents in the back of the drawer and learnt that my father had ventured into the uncharted territory - stocks, in 1961.
He had invested into a gold mine preference shares scheme. Unfortunately, that was an expensive and painful lesson as he was scammed by a friend of the boss.
Sometime in 1961, the boss's friend visited his factory and sweet-talked the workers into investing into a gold mine in Mersing, Johore. The workers were told that the gold mine had huge deposit of gold and the owner of the gold mine was looking for investment money in order to start extracting gold from the mine.
After the gold mine started operation, the owner would list his gold mine on the stock exchange. The workers who invested into the preference shares would exchange into the shares cheaply. The company (gold mine) would also pay huge dividends every year.
My father's pay was $50 a month back in 1961. The investment amount of $250 was five month's pay. A lot of workers, including the boss, had invested into this gold mine preference shares scheme.
Unfortunately this was a scam, and the boss's friend, after collecting the money, disappeared into an unknown hell-hole.
1. If we need the money next year, it should be in Cash.
Well, we do not want our down payment for our house or other important commitment to evaporate or stuck in the stock market, in the event of a crash. We need to find a high interest fixed deposit for temporary storage for that money.
2. If we need the money in the next one to five years, or are approaching retirement; it should be in relatively safe investments.
Whether we need to pay for the kid's university fees or the retirement income that we need for the not so distant future, we need to reduce exposure to stocks and invest into safer investments, such as treasury bills, fixed deposits, government or corporate bonds. Here, T-bills have the lowest yield, while corporate bonds have the highest yield. However, the returns and risks also go hand in hand, and corporate bonds correspondingly have the highest risk.
If possible, it is better to invest into individual bonds rather than bond funds. The advantage of individual bond is that we know exactly what we will get back when the bond matured. While bond funds don't technically mature and we do not know how much our investments are worth when we need the money. In the event of a market crash, the bond fund could depreciate quite a bit too. It could greatly inconvenient us if it happens right when we need the money.
3. Any excess money that we do not need for more than 5 years, it can be invested in stocks
In the long run, returns from stocks will beat all other kinds of investment and when doing correctly, will beat the inflation rate and accumulate our wealth.
Whether investing in blue chips, dividend stocks, growth stocks or penny stocks; or mixture of the classes of the aforementioned stocks, diversification is a MUST. Nobody is perfect and inevitably, we will pick some "loser" stocks on our investment journey. Diversification is the "insurance" that these few losers will not affect the whole portfolio badly.
It is also important the you know your own risk appetite and risk tolerance level to prepare for the volatility of the stock market. We will definitely see bull runs and bear runs on our investment journey. It would be bad for your health if you lose sleep when your portfolio take a hit in bear run when even the bluest of the blue chips fall significantly. It may be alright if you lose a couple of night's sleep, but what if it is an extended bear run? On the other hand, it would be bad for your wealth if you sell your stocks cheaply and run away during such bear runs.
For a young investor who has decades of investing horizon, he can allocate all excess cash into stocks, which will generate the biggest returns for him in the long run. He could reduce the stocks exposure near his retirement, because he would has shorter time frame for stock recovery in event of a market crash. He also need more protection for his retirement fund.
Heard about this new promotion from Singapura Finance for children below age of 15:
Open a Singapura Blue Sky Junior Savers Account between 30 March 2013 and 30
June 2013 with a minimum amount of $500 and get a coin bank and instant cash
credit of $30.
However, the $30 cash credit is fixed, even if you deposit more than $500.
That's an instant return of 6% for your kid. But you must maintain the account for minimum 12 months.
Beside the instant interest, the account is paying 0.375% interest p.a., with interest crediting into the account every month. Assuming that your kid is keeping the $530 for one year, it will generate $1.99 interest for the year. This will give a net interest of 6.398% p.a. for your initial deposit of $500. Effectively this is the highest return that we can get from bank saving accounts nowadays.
This is a good starting bank account for children. Parents could deposit children's "angpow" (red packet) money into this account. Children also could be taught the good habit of savings when they are young and see their savings grow.
It is always good to have a head start on the road towards Financial Freedom.
I have some odd lots in my stock portfolio.
Some are created by my mistake.
I participated in the scrip dividend scheme for SP Ausnet. Scrip dividend scheme is
intended to give shareholders a choice to convert their entitled dividend payout
to more shares in the company. The subscription price of the scrip dividend
scheme is normally given at a slight discount from the market price, in order to
make it more attractive for shareholders to subscribe to the scheme. Moreover, shareholders do not need to pay any
brokerage/transaction fees to convert the dividends into shares. So, through my mistake in joining the scrip dividend scheme for SP Ausnet, I have some odd lots in this counter. I think it would be much better for me to take the cash dividend, rather then figuring out how to sell away the odd lots when I want to sell the counter.
Some odd lots are not created by choice.
1. When SingTel shares IPO in the market, in order to give all IPO subscribers a chance to own the shares, all IPO subscribers were given odd lots of about 200 shares.
2. Some were created by share splits or bonus shares issued. Example, Hyflux gave 1 Bonus Share credited as fully paid for every 2 existing ordinary shares held by the shareholders of the Company.
3. Some were given free. Example, Far East Orchard gave existing shareholders some odd lots of Yeo Hiap Seng. 220 shares of YHS for every lot (1000 shares) of Far East Orchard.
I discovered that Phillip POEMS has a platform to deal in odd lots, which is called the Unit Share Market.
Unit Share Market is a market which allows the trading of odd lots in quantity less than the board lot size. It is a totally different market from the common SGX ready market which is trading on Board Lot. Board Lot is the standard trading size in the local market which is 1,000 shares except for a few exceptions.
Trading size less than 1,000 shares is termed as 'Odd Lot'. 'Odd Lot' refers to non-standard numbers of shares that arise from stock splits or bonus or rights issues.
Of course, there are buy and sell options. You can top up your odd lots to standard board lot or simply sell away your odd lots.
There are 2 options for Unit Shares trading on POEMS.
1. "All or None" Order -- Meaning an order submitted must be immediately filled completely. If this is not possible, the order will not be queued in the system and will be cancelled immediately.
2. "Day" Order -- A buy or sell order will be placed in the queue after submission. It automatically expires if it is not executed during the day trading session. However, "Day" order might be partially done.
I tried this Unit Share platform with my 220 shares of Yeo Hiap Seng. I submitted an "All or None" order, and the order was completed immediately. I paid the minimum commission of $10 for this trade.
This is a good platform for dealing with odd lots. However, do take note of the following:
1. If the contract value X 28% > $10, then the minimum commission rate for board lot ($25) is chargeable.
2. Even if the sales proceed is less than the minimum commission rate ($10), the minimum commission will also be chargeable.
| No. |
STOCK NAME |
LOTS |
% PORTFOLIO |
AVG COST $ |
|
1
| Starhub |
5
|
21.61
|
3.22
|
|
2
| SPH |
4
|
16.30
|
3.98
|
|
3
| SGX |
2
|
13.67
|
2.68
|
|
4
| CapitaLand |
2
|
6.83
|
3.91
|
|
5
| CapitaMall Trust |
3
|
6.36
|
1.71
|
|
6
| CDL HTrust |
3
|
5.48
|
1.66
|
|
7
| Starhill Global |
6
|
5.29
|
0.71
|
|
|
8
| Sing Tel |
1.2
|
4.27
|
3.21
|
|
| 9 | Suntec Reit |
2 | 3.55 |
1.34 |
|
| 10 | Hyflux |
2.5 | 3.13 |
1.70 |
|
| 11 | HPH Trust |
3 | 2.82 |
0.90 |
|
| 12 | FE Orchard |
1 | 2.04 |
1.18 |
|
| 13 | CapitaMalls Asia |
1 | 1.92 |
2.12 |
|
| 14 | AIMS AMPI Reit |
1 | 1.66 |
1.70 |
|
| 15 | CitySpring |
3 | 1.36 |
0.65 |
|
| 16 | Sing Post |
1 | 1.18 |
0.875 |
|
| 17 | FE HTrust |
1 | 1.03 |
0.93 |
|
| 18 | SP Ausnet |
0.7 | 0.97 |
0 |
|
| 19 | Yeo Hiap Seng |
0.2 | 0.52 |
0 |
|
Movement in my portfolio in April:-
Sold:- Nil
Bought:- HPH Trust, Starhill Global, AIMS AMPI Reit.
Dividends collected in Apr: $0
2013 avg dividends/month: $161.44
Big "0" for April. May is the dividends harvesting month.
Last month I received a letter from the government with "ON GOVERNMENT SERVICE" on the envelop. That looked like letters in the past that summoned people back for in-camp training or for Individual Physical Proficiency Test (IPPT).
Upon opening the letter, I found that it really was from the Singapore Armed Forces. In celebration for 45th anniversary of National Service (NS), MINDEF is giving National Serviceman the opportunity to enjoy SAFRA benefits with the family. This is a small token of appreciation for my participation in NS and reservist duties for the nation in the past.
I was given $100 worth of vouchers (10 pieces of $10 vouchers) and free SAFRA membership for one year. The vouchers can be used at more than 5,000 outlets in Singapore, which include major shopping malls, petrol stations, supermarkets and F&B outlets!
I was still pondering how to spend the vouchers, when I happened to see that the rubber soles of my jogging shoes were disintegrating to pieces.
Come to think about it, I do not have regular exercise since after I was not required to take the annual IPPT. I have not worn that jogging shoes for a few years.
I remembered last time my lecturer told us that when we exercise in the "now", it is for good health in the "decade" later. For example, regular exercise in the 10's for good health in the 20's; 20's for 30's and so on.
I decide that I will pick up regular exercise again. This is investment for my good health.
I used all the vouchers and exchanged a pair of $99 jogging shoes from Royal Sporting House. This pair of jogging shoes is my commitment to regular exercise.
Last month I had a post on the highest Fixed Deposit interest rates on offer in the market. ICICI Bank offered the highest 1.2% p.a for 12 months tenure for placement sum $50,001. That promotion was over and ICICI's interest rate has dropped to 0.95% p.a. for the same tenure months and placement sum.
The highest interest rate in the market now is 1.10% p.a., offered by 3 banks.
1. CIMB Bank
The promotional interest rate now is 1.10% p.a. for 12 months tenure. Minimum placement sum $25,000.
2. RHB Bank
The bank has a FD promotion, which it called "Ground Shattering Interest Rate" - 1.10% p.a. for 12 months tenure. Minimum placement sum $50,000.
(I do not feel any ground shattering effect here......)
3. Maybank
Maybank's FD promotion is still on. However, the minimum placement sum has increased from $25,000 to $60,000.
| No. |
BANK |
PLACEMENT SUM $ |
TENURE months |
INTEREST % P.A. |
|
1
|
CIMB Bank
|
25,000
|
12
|
1.10
|
|
2
|
RHB Bank
|
50,000
|
12
|
1.10
|
|
3
|
Maybank
|
60,000
|
12
|
1.10
|
Related post:
Maybank Fixed Deposit
Please let me know if there is better offer in the market.
