Jan
17
2012
SGX has recently launched an online portal called My Gateway providing investment education for investors.
My Gateway provides market updates, recorded webcasts, calculation tools and information about the various products on SGX.
You can view historical charts of traded securities on SGX and there is also information about upcoming events and courses.
For now, stand up to win one of 5 iPads if you sign up to be on SGX’s investment updates mailing list.
Permanent link to this article: http://www.martinlee.sg/sgx-my-gateway/
Dec
16
2011
Many people like to track their stock holdings via the brokerage platform that they bought their shares with.
As each platform will only tabulates the holdings based on the transactions you have executed with them, this could lead to inaccurate results and erroneous trades (example selling shares you don’t own).
Even if a person uses only one platform for all his trades, you can still be given the wrong information as the platform will not track corporate actions like share consolidation, stock splits, bonus issues and rights issues.
The correct way would be to track your holdings via the The Central Depository, which will give a true indication of your current stock holdings. This can be done simply via the online platform of CDP.
SGX has announced a revamp of this existing system, which will take about three years to complete.
Under the new system, Singapore’s stock brokerage firms will have access to your CDP account and your broker will be able to tell how many shares you have.
You can also choose to receive electronic version of the CDP statements instead of the physical copies that you are currently receiving. Now, that would really cut down on a lot of wasteful paper!
Permanent link to this article: http://www.martinlee.sg/tracking-holding-of-shares-in-cdp/
Dec
14
2011
The iShares Asia Local Currency 1-3 Year Bond Index ETF was listed on SGX on 8th December 2011 last week.
The investment objective of iShares Barclays Capital Asia Local Currency 1-3 Year Bond Index ETF is to provide investment results that, before fees and expenses, closely correspond to the performance of the Barclays Capital Asia Local Currency Short Duration Bond Index in US dollar terms.
Being short duration bonds, the average yield to maturity is expected to be low, in the region of 2-4+%.
The ETF has a management fee of 0.35% p.a with a fund size of about US$9 million and uses sampling replication.
Even though the ETF is denominated in USD, the currency exposure of an investor of the ETF is really in the local currencies of the underlying Asian bonds. These include (as of 13th December 2011):
Thailand 25.15%
South Korea 24.93%
Malaysia 23.15%
Singapore 16.40%
Indonesia 4.98%
Philippines 4.02%
Hong Kong 1.38%
The returns of an investor would come from the bond returns as well as any gain or losses in the local currencies.
To give an example of why you are not exposed to the currency that an ETF is denominated in, say you have an ETF that invests into S$130 million worth of Singapore bonds. With 100 million shares, each share is worth US$1 (at an exchange rate of US$1 to S$1.30) and would have cost you S$1.30.
Assume that the value of the Singapore bonds remain unchanged but USD depreciates to US$1 to S$1. If the value of the ETF still remains at US$1, then yes, your shares would only be worth S$1.
However, the S$130 million worth of bonds should now be valued at US$130 million as the exchange rate is 1 is to 1. This means that each share would be worth US$1.30, a 30% appreciation in price. Valued in S$, your shares would still be worth S$1.30.
The main disadvantage of having a US$ denominated ETF is the spread you incur (through your bank or brokerage firm) every time you buy or sell the ETF.
You can find out more product information about this bond ETF here:
iShares Barclays Capital Asia Local Currency 1-3 Year Bond Index ETF
Permanent link to this article: http://www.martinlee.sg/ishares-asia-local-currency-1-3-year-bond-index-etf/
Dec
09
2011
After Teh Hooi Ling wrote her article on the The REIT Myth Busted, there was a lot of debate on online forums both supporting and criticizing her views.
So she came out with another article
The Pros and Cons of REITs that calculates the internal rate of return of the various REITs. My guess is that she might have gotten a fair share of hate mail from her original article which was very negative on REITs. 
Separately, regular columnist Goh Eng Yeow wrote an article this week warning about credit crunch facing REITs.
Back in 2008, many REITs had to do emergency fund raising from their unit holders as they were unable to refinance their short-term debt. It is a dangerous game that many REITs were playing back then. Having a large proportion of short-term debt and using it to finance a long-term investment.
The Business Times carried an article asking questions about corporate governance of REITs.
This was also something that was bought up in a research paper done by CFA institute which talked about poor governance in Asia-Pacific REITs. You can read about their findings and recommendations in the link below:
Asia-Pacific REITs – Building Trust through Better REIT Governance
Section four of the report provides some interesting case studies. 
Permanent link to this article: http://www.martinlee.sg/singapore-reits-in-the-spotlight/
Nov
30
2011
REITs has always been a popular topic of discussion among Singapore investors who want to invest into an instrument that can give them good dividend yields.
I wrote this article Are Singapore REITs a Good Investment? last year to take a closer look at why REITs had failed to deliver on its promise of steady dividend income.
Teh Hooi Ling, Senior Correspondent at SPH, had recently done some analysis on the same topic:
In the article, she wrote about how most of the REITs had taken back all the dividends they had paid out by doing rights issues.
The actual article that was published in last Saturday’s Business Times comes with a table that gave the breakdown of all the dividends that were paid out by Singapore REITs, as well as the capital that they “clawed” back from unit-holders by doing rights issue.
However, it is not an doom and gloom story for Singapore REITs investors.
While the dividend income had indeed failed for most of them, investors who had invested into more than half of the Singapore REITs from IPO and dutifully deployed capital into them to take up their rights entitlement would still have made money.
And for those who are clueless about rights issue, they would have lost a lot of money.
Permanent link to this article: http://www.martinlee.sg/the-dividend-myth-of-reits/
Recent Comments