WOTC - Tariffs to protect jobs

Wisdom of the Crowd: 85% of the respondents said that each country should decide on its tariffs to protect local production and jobs.

https://tklcloud.com/Crowd2/chart3.aspx?id=2799

TKL said.
I found that the World Trade Organization allows this measure, although WTO prefers that tariff barriers be reduce.

Wisdom of the Crowd - New Issues

1. Was Keppel guilty of bribery in the Brazilian offshore maritime contracts?
2. Was the US govt correct in charging Keppel for bribing the Brazilian officials?

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WOTC - Donald Trump's tax returns

 Wisdom of the Crowd: 54% of the respondents said that the tax returns of Donald Trump is a private and confidential matter and should not be discussed in the media.

https://tklcloud.com/Crowd2/chart3.aspx?id=2798

WOTC - Donald Trump's tax return

 Wisdom of the Crowd: 58% of the respondents said that the US House should keep the tax returns of Donald Trump private as it was released to the House to carry out its duty.

https://tklcloud.com/Crowd2/chart3.aspx?id=2797

Review of ministers' salaries

1. The government is carrying out a review of ministers' salaries in 2023. The last review was carried out in 2017. The actual review is for the top political office bearers, but the public generally refers to them as "ministers".

2. An earlier review in 2012 made a major adjustment. It reduced the salary of the prime minister and president. If I remembered correctly, the revised salaries were still pegged to the top salaries in the private sector. However, the revised salaries were still high by international standards.

3. At the salary review in 2023, it would be more acceptable to peg the salary of the prime minister to a certain multiple of the median income.

4. The median monthly income from work in Singapore was $4,680 in 2021, or $56,000 annually. These figures are inclusive of CPF contributions from employers.

5. I suggest that the salary of the prime minister be pegged at 15 times of the median income. This would work out of $840,000. The salary of the other ministers and of the president should be pegged at 80% or 90% of the prime minister's salary, depending on responsibility.

6. My suggested formula will produce a lower salary for the ministers compared to what they earn now. However, they will still be the highest in the world.

7. The use of a formula that is pegged to median income will be simpler (compared to the top salaries). It would also more acceptable to the people.

8. Some people suggested that the salary should be pegged to the lower quartile but a higher multiple could be used. They said that it would focus the minister's attention to raising the salaries of the lower income. I think that this would be somewhat complicated, as the lower quarter would include part time and casual workers. It is better to deal with the inequality separately.

9. Over the past 10 years, the median income has actually risen 44%, or 3.7% per annum, from $3,249 in 2011. This benchmark is likely to reflect the general increase in wages, and will be more stable compared to a benchmark that is based on top salaries.

Tan Kin Lian
http://tklcloud.com/Feedback/feedback2.aspx?id=5603

Review of China stocks

 I invested HK$12.8 million (S$2.1 million) in China stocks listed in Hong Kong.

The average PE ratio is 5.78 and the dividend yield is 10.87%.
The prices in Hong Kong are about 30% lower than the same stocks quoted in Shanghai.

At the current prices, these stocks should a loss of S$128,000. I expect to see the prices recover in the near future, with the re-opening of the economy of China.

https://fisca.sg/ArticleDisplay.aspx?ID=1294

Paxlovid vs VV116

 Pavlovid is a therapy approved for the treatment of covid. It is owned and manufactured by Pfizer.

The US government bought 10 million courses of the therapy for $5.3 billion. Each course is taken over 5 days.

The cost paid by the US government is $450 per course. This is for bulk purchase. For smaller quantities, it is probable that the price is higher.

A Chinese company has created another covid therapy called VV116. The clinical trial showed that VV116 is more effective and safer than Paxlovid. It has been submitted for approval.

More details can be found here.
https://fisca.sg/ArticleDisplay.aspx?ID=1293

Review of Shanghai Junshi (1877.HK)

 I bought 5,000 shares of Shanghai Junshi (1877.HK) at $41.65 HKD on 9 Jan. The price jumped by 7.7% to $45.00 within one day.

I bought this stock because it produced the VV116 theraphy for covid that is more effective than Paxlovid. They have applied for approval of this drug, and are waiting for the decision.

The company is still operating at a loss. The future profit depends on the approval of VV116 and its sales.

In November 2021, the US government paid $5.3 billion for 10 million courses of Paxlovid. This works out to US $530 for a 5 day course. It implies a large profit margin to the manufacturer Pfizer.

Shanghai Junshi should be able to sell VV116 at a lower price, gain a large market share and show a huge profit.

I read from other reports that Shanghai Junshi had also developed therapies for the treatment of cancer and have entered into marketing arrangements to sell the therapies.

I will study them in more detail.

Note - this is my finding on the stock. I am not giving investment advice.

Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1293

WOTC - Long term contract for energy

 Wisdom of the Crowd: 84% of respondents said that a country should enter into a long term contract for the supply of energy to create a steady source of supply at steady prices.

https://tklcloud.com/Crowd2/chart3.aspx?id=2796

Review of Hongkong Land (H78.SI)

 I have 15,000 shares of Hong Kong Land (HKL), bought at an average cost of $4.89. It is listed in USD in Singapore Exchange.

The current price is $4.82 giving me a small lost of 1.5%.

The PE ratio (TTM) is 13.39 and the forward PE ratio is 9.55. This implies that the earnings will increase by 40% for the next financial year which ended on 31 Dec 2022 (the results are not known yet).

The dividend yield is 4.78%.

The book value is $14.78 p share, which is 3.0 times of the current stock price.

The fundamentals are very attractive. I expect the stock price to increase strongly when the financial results later this year.

I just bought another 10,000 shares at $4.82.

Note - I am sharing my views. I am not giving investment advice.

Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1291

WOTC - Screen visitors from China

 Wisdom of the Crowd: 59% of the respondents said that countries should screen visitors from China before allowing them to enter the country.

https://tklcloud.com/Crowd2/chart3.aspx?id=2795

Wisdom of the Crowd - New Issues

1. Should the President call for a COI on the reliability of SMT subscription statistics?
2. How should our state media respond to the rivalry between America and China?
3. How should the SG government respond to the rivalry between America and China?

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Compulsory insurance for visitors

 It is reasonable for a country to require visitors to buy insurance to cover medical expenses that may be incurred during the visit to the country.

The country should arrange the insurance with a local insurance provider for the mandatory coverage.

This type of insurance is necessary as the visitor may need hospital treatment for covid infection, which is now quite common, and may affect more than 1% of visitors.

The visitor can pay for the insurance and treat it as part of the cost of travel to that country. After all, they have to pay visa fee (in some cases) and the airline and hotel bills.

Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1290

Is insurance good for the community?

Insurance is good for the community if it is run properly. It performs a useful role in protecting economic losses and generates employment.

It can also be bad for the community if it is run badly. It can imposes a high cost to the community and create unproductive jobs to resolve disputes that can be avoided.

Let me compare the role of insurance with the road of private cars in the economy.

Private cars are good for the community if it leads to the following outcome:

a) The drivers observe traffic rules to ensure road safety
b) There is effective control to avoid congestion on the roads

Private cars are bad for the community if it leads to the following outcome:

a) The roads are not safe, due to lack or disregard for traffic rules
b) The roads are overcrowded and travel time is long

To ensure that the private cars are useful, the authority needs to set and enforce the rules on traffic safety and prevent congestion.

The same principle applies to insurance. The authority needs to set and enforce the rules on the safe operation of insurance contracts. It cannot be unregulated and left to the free market.

Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1289

Wisdom of the Crowd - New Issues

1. Should MAS allow insurer to offer their own products freely?
2. Are customers generally satisfied with settlement of insurance claims?

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Economic role of insurance

1. Insurance is not gambling, as there is an economic loss that needs to be compensated.

For insurance to work properly and fairly, the following pre-requisites have to be observed:

a) the coverage has to be clearly defined

b) the past statistics of losses have to be available

c) the premium should be computed fairly with a margin to cover expenses and profit.

A well designed insurance scheme is beneficial to the community. It helps to protect economic losses and imposes a fair charge. It also creates employment.

2. Insurance can be badly designed under the following circumstances

a) The coverage is vague and leads to disputes over what is covered or not

b) There are no past statistics of losses, leading to speculation by the insurer

c) The premiums are excessive high to make big profit for the insurer.

d) The insurer employs agents who misrepresent the coverage in their eagerness to earn a commission on the sale.

A badly designed insurance scheme imposes a high cost to the community and creates jobs for people who carry out unproductive work, i.e. sell insurance that are not valuable or handles disputes that should have been avoided.

3. To ensure that the insurance schemes are useful, the government authority has to perform a important role:

a) They have to agree with the insurance companies on a few standard insurance policies that are offered to the public.

b) The coverage of these standard policies are clearly defined to avoid disputes due to ambiguity.

c) The insurers have to offer some or all of these standard policies to the public

d) The loss statistics have to be available to determine the expected losses.

e) The premium should not exceed 50% of the expected losses.

f) If the insurer wishes to customize their own policy, it has to go through a rigorous scrutiny by the authority and the policy has to be labeled as "non-standard"

Tan Kin Lian

https://fisca.sg/ArticleDisplay.aspx?ID=1288

WOTC - Covid outbreak in China

 Wisdom of the Crowd: 87% of respondents expect the covid outbreak to be overcome within a few weeks in China.

https://tklcloud.com/Crowd2/chart3.aspx?id=2794

Review of Cosco Shipping (1919.HK)

I hold 130,000 shares of Cosco Shipping Holdings at an average cost of $11.73 HKD.

This stock pay a dividend of $2.21 HKD in Dec 2022. My cost has reduced to $9.52. The current price is $7.84 giving me a loss of 18% ($37,000 SGD).

I cannot understand why the stock price is so low. At the current price, the PE ratio is 0.97 times and the dividend yield is 42%.

The quarterly financial figures showed that the earnings for 2022 is likely to be 20% higher than 2021.

I expect that this stock will give another bumper dividend after the close of the 2022 results. Maybe, the dividend will be another $2.21 per share.

The debt is 39% of equity, which is quite low.

The forward PE ratio for this stock is 4.2 times, based on the analysts estimate. This suggest that the profit is likely to drop by 4 times. This is probably likely to occur for 2023, assuming that the capacity oversupply brings down the earnings.

I have read forecasts that the earnings are likely to drop by 60% annually over the next few years. I find this forecast to be speculative. I did not see any report to substantiate it.

The stock trades in Hong Kong at a discount of 33% from the price in Shanghai. Overall, I find the fundamentals to be excellent. I will hold on to the stock until the release of the 2022 financial results and review my decision at that time.

Note - I am giving an observation. I am not giving financial advice.

Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1284

Integrated health plan does not cover congenital birth defect

 My friend have a strong trust in the integrated health plan. He likes to buy the top plan to cover private hospital and is willing to pay the high premium. He also read the coverage and policy conditions carefully and talk to the insurance agent to clarify any doubts.

Recently, he came across an unexpected problem.

He had some problems with irregular heartbeat recently. He carried out a thorough medical checkup. The doctor discovered that he had a congenital hole in the heart and a faulty valve.

He thought - how fortunate that he had a complete integrated plan coverage. That would take care of his financial problem.

He got a shock. Congenital defects are excluded from the coverage.

My friend has been insured under this plan more than ten years. He is now approaching 60 years. All along, he was not aware of this medical defect.

He recalled that the medishield plan (on which the integrated plan was built on) was extended to cover congenital defects many years ago.

The insurance company said that this coverage applied to integrated plans taken after the change of government policy. It does not apply to insurances taken earlier.

I find this reason to be ridiculous. My common sense indicates that the inclusion of congenital defects should be applied to all coverages, and not those taken after the change of government policy.

I was not sure if he had since resolved this issue with the insurance company.

Over the years, many people have consulted me on claims settlement matters. The problem arises with the interpretation of the policy conditions, and the obvious effort by the claims officers to reduce the claim payment as much as possible, to the detriment of the customers.

This is a big disadvantage of an insurance system that is run by private insurers to make the most profit.

Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1287

Travel insurance

 Someone asked me if he should buy travel insurance.

I told him that the premium is a few dollars. He can decide whether or not to spend this money. He does not need to ask me.

If he wants to spend $100 on a dinner, he can go ahead. He does not need to ask me also.

He can ask the insurance agent or marketing staff about the travel insurance coverage. I have no idea what is being covered and what is the premium charged.

Anyway, I never buy travel insurance over the past decades. I found it to be unnecessary.

But my family members, being typical Sinkies, want to buy travel insurance all the time. I do not argue with them It is their money.

I think that they never made any travel insurance claim. So, they are giving a lot of profit to the insurance company.

Tan Kin Lian
https://fisca.sg/ArticleDisplay.aspx?ID=1286