Category Archives: Finance & Investments

All that glitters might be gold

Sometime back on the 4th October, I went to a seminar conducted by POEMS on ETFs and gold. Back then, it was chaos in the financial markets. Lehman Brothers just filed for bankruptcy protection, Merrill Lynch jus sold herself to BOA for 50billion, AIG managed to stay afloat with a 85billion dollars lifeline from the Feds and there was trouble trying to pass the 700billion bailout plan.

 

During the seminar, there were doubts about the 700billion bailout plan.

Will it be too late?

How will the 700billion dollars of taxpayers’ money be used?

Will it be sufficient to even buy up the toxic debts from the banks’ balance sheet?

Even so, what will be the consequences of the 700billion dollars on the world’s biggest economy?

Further inflation?

 

Given all these uncertainty and volatility in the financial markets, equities were not as attractive as before. That brought us to the topic of the seminar, the investment case for gold as a financial asset. The speaker for the seminar was Albert Cheng from World Gold Council, his explanation on gold was succinct and informative, and I learnt more about gold than I ever did for the last 22 years of my life.

 

Basically, gold can be used as insurance in your portfolio due to its minimal correlation will the volatility in the financial markets and inflationary pressures. The next function of gold is liquid asset in your portfolio, when times are bad and equities have taken a beating, gold would probably increase in value and can be liquidated for cash when you are hard-pressed for cash.

 

As gold price is also affected by the underlying supply and demand, the rising of the emerging economies and the significance of gold in their culture will invariably increase the world’s demand of gold. At this point, Albert flashed a few slides which showed the breakdown of gold supply and demand; a striking point to note was that a huge percentage of gold supply came from new gold which is decreasing. The reason being high exploration and production costs and that even capital exploitation will take 6-7 years. Albert went on to explain the technicalities and difficulties of the process.

 

 Lastly, Alfred explained how gold was available for investment via ETF in the secondary market, whereby 10 shares of gold EFT approximately 80USD will get you an equivalent of 1 ounce of allocated gold stored in London. That will save you the hassle as compared to buying jewelries which command the craftsman premium and GST, or buying the physical bar from bank which will incur delivery charges and GST.

 

On the whole, it is was a very informative seminar whereby we not only get to listen with the speakers but also interact with them; not to mention the scrumptious refreshment they provide. If POEM is going to conduct such interesting seminars during the subsequent Saturdays, I do not mind making this a permanent activity for my Saturdays.

Invest Fair 08

Since my last post, I have been busy with my assignment and project in school doing research and meeting deadlines. Now that I have completed the more pressing projects, I managed to get a few days off to rest my body.

 

Invest Fair is an annual event that I religiously attend due to the exposure to different kinds of investment instruments and the insights I can gain from the free informative seminars.

 

My agenda for when attending this Invest Fair’08 is to get exposure and greater understanding of warrants, technical analysis, the outlook of the next half of the year and alternate investments like premium liquids. I also want to activate an account to do trading in the US and Hong Kong market; and get some freebies too (yes, I am a Singaporean)

 

Knowing from my past experience that the place will be packed with many interesting booth and it will be challenging to enter a seminar at the last minute, I went to Invest Fair’08 website to procure the seminar schedule and promptly filter them down to those I am interested in. based on my objectives, I chose to visit CapitaLand to learn more about Singapore reits, CIMB-GK Securities to learn about 2H08 macro outlook, 2008 Market Focus to listen to the interesting views by the panels, E*Trading Financial for access to the US financial markets, Online Trading Academy for fundamental technical indicator analysis and T3B Holdings to learn about basic forex.

 

As anticipated, I arrived at the fair at around 1030am and started browsing different booths to check out for my objectives, freebies, offers and immersed myself in that atmosphere. The different seminars provided me with extensive insights about the direction of the market and leads to do my own due diligence. I managed to activate and open accounts to do trading in the US and Hong Kong financial markets and introduced me to more investing instruments. Land banking and premium liquid were nothing new, however there seem to be a large increase of warrant players in the market like Rabobank, Societe Generale, Philips and more…

 

It was a pretty fruitful day as I had learnt lots of new things. I will be going through all the brochures when I reach home tonight and be anticipating the financial reports which I placed order today.

Another 1st: Annual Report & Dividends

The few interesting things that happened to me, between my 8th April post and last paper on 9th May.

Part 1: 11th April

Today, I found a pleasant surprise lying in my mailbox; it is the 2007 Annual Report for Banyan Tree Holdings. For the uninformed, I have bought Banyan Tree shares at a distressed price (and yes, I am a value investor), my current paper gain is in excess of 15%.

Banyan Tree has hotel and property operations, they also manage spa, gallery and designing operations. Their existing operations are mainly in Southeast Asia and Australia, with future developments in America, the Middle East and PRC.

I will be receiving my first dividends sometime in June; it is a small sum, further reduced by POEMS dividends charges (dammit!). Banyan tree has done a good job in maximizing shareholder value so far, pity that markets sentiments on rising oil prices has beaten down this counter.

What I thought was impressive was that they had a societal marketing concept, their 2 initiatives are the green imperative fund which provides financial support for environmental initiatives and environmental protection AND the natural resources conservation initiative with the aim of reducing water and electricity consumption by 10% for the next 3 years. They are also challenging themselves to plant 2000 new trees annually, drive greater awareness of climate changes and concurrently reducing their carbon emissions. I don’t know about you, but I would be a pretty satisfied customer if I am unwinding in a Banyan Tree or Angsana resort, knowing that a portion of the consumer dollars goes back into protecting the environment.

That reminds me of my plans to go turtle riding in RedangJ, I heard from many of my friends that excessive tourism is hurting the coral reefs there and nothing will be left in time to come.

You can click here for their corporate video, enjoy!

                                                              

                                                  nice company, i like em'

                                           

Stocks tabs

here are the few stocks that i have been keeping a tab on:

Banyan Tree 

BUY S$1.32 FSSTI : 3,074.15
Price Target : 12-Month S$ 2.38 (Prev S$ 2.68)
Potential Catalyst: Strong Growth pipeline coming on stream,

Food Empire
Share Price S$0.725
Target Price S$1.01
Upside Potential 39%

BreadTalk Group FY2007
Previous Day Closing price: S$0.595
Target price: S$1.04 (reduced from S$1.07)

Cacola Furniture
Previous close S$0.345
Fair value S$0.630
Share price return 76.81%

all of them have pretty decent PE ratio, bread talk has high dividend payouts and at least 25% ROA within 12 months, sure beats queuing for the microcaps. Of course, i might want to churn out those ratios again to check these darlings’ fundamentals.