Saturday, September 05, 2020

Overview of Industrial & Commercial Bank of China

 In a recent analysis of global banks, I indicated my personal preference to invest in the stock of Industrial & Commercial Bank of China.

It has a price earning ratio of 6.06 times, a dividend yield of 5.3% and an attractive discount when the stock is purchased in Hong Kong (compared to the price quoted in Shanghai).

Someone asked the question - are the financial information of this bank reliable?

Wisdom of the Crowd - New Issues


1. Should we continue the Safe Entry operations

Vote in

WOTC - Why are the ministers so quiet after the election?

 Why are the ministers so quiet after the general election? 53% said that they are planning to fix the opposition. 18% said that they are lost. 16% said they are waiting for the national day events to be over. 13% said that they are planning the strategies for their ministry.

WOTC - Financial figures on public transport

 Wisdom of the Crowd: 73% of the respondents said that the government should publish the financial figures on the operation of public transport. 27% think that the financial figures are likely to be unreliable and not trusted.

Tesla - going forward

 Tesla closed at $418 on 4 September 2020. It dropped to $402 after market. I just closed a short position in Tesla at a small loss.

What is the prospect for Tesla going forward?

Safe Entry - streamline the process

 The current process of handling Safe Entry is largely wasteful, as follows:

Thursday, September 03, 2020

Analysis of international banks

 My friend invested in Citibank and Bank of America. He asked me to give my views on these shares.

I decided to analyze several international banks.

Elderly people - stay with Medishield Life

 I suggest that elderly people should stay with Medishield Life.

Here are my reasons.

Trading using charts

 Many people trade using charts. They follow the charts to tell them when to buy and sell shares.

Some of them acquire the skills after practice and experience. Others may trade but they do not have acquired the skills yet.

I do not have this skill. I did not practice it long enough to learn the skill. I leave it to the experts to tell me about the signals to follow.

Taking a short position on Tesla

 I sold 80 shares short on CFD on 20 August 2020 at a price of $1,850 (USD). I felt that the price was too high. Tesla split its shares 5 to 1 on 31 August. My short position was converted to 400 shares at $370. The total value of my short position was $148,000 (SGD 201,000).

Tesla climbed to a high of $530 on 1 September before market opened. At that point, the total loss on my short position was a horrendous $64,000 (SGD 87.000).

Tuesday, September 01, 2020

Wisdom of the Crowd - New Issues

1. Should we open our borders for visitors from countries with low infections?

Vote in

WOTC - Minister with poorest performance

 Wisdom of the Crowd: Which minister has the poorest performance? 74% chose Josephine Teo. 15% chose Gan Kim Yong.

WOTC - Best performing minister

 Wisdom of the Crowd: Which minister has the best performance? 48% of the respondents chose Ong Ye Kung. 26% close Lawrence Wong.

Analysis of blue chip shares in Singapore

 The blue chip shares in Singapore appeared to be performing poorly in recent years. This is reflected in the performance of the SPDR STI ETF, which is invested in the top 30 blue chip shares in Singapore.

The banks in this ETF perform well. However, the industrial companies, e.g. Keppel Corp and Sembcorp, perform poorly.

This ETF was trading at $3.14 10 years ago. It is now at $2.54 a drop of 20% in 10 years. It has a high dividend yield of 4.71%. After allowing for the drop in the value of the ETF, the return is about 2% p.a.

Analysis of Singtel, Netlink and Starhub

 These are the three listed telecommunication companies in Singapore.

The public is familiar with Singtel and Starhub because they provide fixed line, mobile phone and data services.

Netlink Trust is not so well know. It owns a large majority of the Fibre network in Singapore, that the Internet Service Providers (Singtel, M1, Starhub, MyRepublic, Viewquest) leverage on to provide fibre broadband to you.

The financial figures for these companies are shown below.

Analysis of Tesla - after the 5 for 1 stock split

 Around 11 August 2020, Tesla announced a stock split of 5 for 1. Each 1 share of Tesla is broken down into 5 shares. The share price of Tesla was around $1,380 (or $276 for the split share).

The stock split occurred on 30 August. The share price closed at $515. It had increased by 86% over 19 days.

The fundamentals of the stock had not changed during this period. The main reason for the large increase is the change in sentiment and the momentum.

Monday, August 31, 2020

Allow visitors from countries with low infection rates

 Should we open the border and allow incoming visitors from countries with infection rates that are similar or lower than Singapore?

I give my view here:

Risk management - close the border

 In risk management, we have to consider the cost of risk of the various options.

For example, we can close the borders to stop infected people from coming into Singapore and spreading the virus.

However, this option will harm the tourism trade and the livelihoods of many people and businesses in the trade. It will also cause damage to the rest of the economy.

A risk management approach tries to quantify the cost of risk of the various options.

Placing incoming visitors on quarantine

 I consider it insane for the ministers to impose a 14 day quarantine on incoming visitors from countries with infection rates that are similar or lower than that of Singapore.

If Singaporeans can move around within our island, there is no reason to believe that the incoming visitors are more likely to be infected and should be placed on quarantine.

The quarantine strongly discourages visitors into Singapore (who wants to be quarantined for 14 days?) and surely kills the tourism trade - airlines, hotels, restaurants, conventions.

I am however surprised that over 80% of ordinary people support the quarantine. Maybe they still have jobs and are not affected by the economic downturn.

There is a higher risk of infection when visitors are allowed into Singapore, but this risk is manageable. It will not lead to a high rate of hospitalization or deaths.

By taking the extreme measures of quarantine, we will surely kill the livelihood of many people and more businesses will close down and never recover.

The insanity expends beyond the ministers and has infected 80% of the population.

WOTC - Place incoming visitors on quarantine

 Wisdom of the Crowd: 87% of the respondents support the measure to place incoming visitors on quarantine.

WOTC - Dr. Mahathir's new party

 Wisdom of the Crowd: 91% of the respondents said that Dr. Mahathir's new party will not succeed.

Wisdom of the Crowd - New Issues

1. From the employee's view, which Work From Home arrangement is best
2. From the employer's perspective, which Work From Home arrangement is best?

Vote in

Quora: Did the Chinese government just ask their banks to pull out of the Swift system? If true, what will be the underlying consequences?

Liu Lisong replied

The Bank of China and the Industrial and Commercial Bank of China did conduct an exercise to test the ability of China's financial system to withstand pressure after the sudden loss of US dollar circulation. But this is only a preventive measure. China will not do any reckless behavior that destroys the world value chain, and this is a patent of the US authorities today.

China does not intend to disrupt the existing world order. But considering that the US authorities have identified China as an enemy and are launching all-out attacks against China by all means, we need to respond a little bit.

The best response is to continue to increase costs for the US global governance system. Add some today and add others tomorrow. Interesting things will happen eventually.

Sunday, August 30, 2020

Wisdom of the Crowd - New Issues

 1. Do you expect the global stock market to crash?

2. If the stock market crash, what will happen to gold?

Vote in

Minimum salary for S Pass, E Pass

Ten years ago, I advertised for software developer. The locals were not interested. One foreigner, working in Singapore, applied. I interview him.

I told him that the salary for E Pass was higher than the salary that I was prepared to offer.

He said that I could declare a salary for the E Pass and he will return the difference back to me each month.

I was not prepared to carry out this arrangement. He assured me that many of his friends, who came from his country, are working in Singapore under this arrangement. It was a common practice.

I did not employ him. I was not able to verify if it was a common practice.

FISCA talk

 The talk "Choose the Right Insurance Policy" will be conducted on Wed 9 Sep at 8 pm.

It is available only to FISCA members and is free.
As this is an online talk, you can invite your children (if they are working) to join the talk as well, using your login.
As a member, you can also read the articles that are now "restricted".
If you are interested, please register now. Do not wait or the last minute and then contact me to help you with the registration. I have many things to do.

Difficult to pay with PayNow

 A new member sent me an email that he is not above to pay the subscription to FISCA using PayNow.

I told him that other members have no problem in making the payment. I think he might have used the letter O instead of the number 0.

I prefer that PayNow use only numbers, instead of numbers and letters.

The people in GovTech and MAS probably do not have the experience on these practical matters. If they listen to the older folks (like me), they will probably develop a more practical and useful platform.

An email will be sent to you to pay the talk fee or subscription. You have to pay by PayNow to FISCA (T09SS00081A) and update your payment using the link contained in the email.
Our staff will check the payment later against the money received - but you can access the website immedately after the payment is updated.

WOTC - Wearing a mask outdoors

 Wisdom of the Crowd: 51% of the respondents said that wearing a mask outdoor should be made compulsory. 49% prefer other approaches.

WOTC - Should PAP ministers donate half of their salary to charity

 Wisdom of the Crowd: Should PAP ministers donate half of their salary to charity? 69% of respondents prefer that their salary be cut by 50%. 17% said that it should be voluntary. 8% said that it should be compulsory.

Wisdom of the Crowd - New Issues

1. Do you expect the global stock market to crash?

Vote in

Quora: Do you expect China to eventually catch up to the United States in the global semiconductor market?

Ray Comeau replied

Until recently China was perfectly happy to continue to purchase semiconductors from US and other companies. However the Trump Administration has placed enough road blocks for China, that it forces China to be develop a new strategy to ensure it will be able to source what semiconductors it requires for its industry.

Trump’s actions have crystallized to China that its aspirational vision of China contained within Made in China 2025 ,is the right direction for China to take.

Just as China is neck and neck with the US in some other technology like AI, etc; China will now provide the resources and motivation needed to no longer need to rely on American companies in this area.

Given the scale China could bring to the table, it is possible that China could drive down the price of semiconductors for the whole industry, thereby not only producing to serve itself, but also driving foreign companies into a new economic reality.

Could be another case of Trump’s geopolitics resulting in isolation of US industry from globalization leading to heart ache for US companies, that did not have to happen.

Sometimes in life the worst thing to happen is to get what you thought you wanted.

Blog Archive