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ISSUE 2 | JAN 2016
Y O U R I N V E S T M E N T I N S P I R AT I O N S B Y S H A R E I N V E S T O R
MONEY HABITSLorna Tan
ANYONE CAN TRADEJeff Sun
CEO SIGNATURE Lim Chung Chun
& Or Toh Wat
DOWNLOAD YOUR DIGITAL COPY AT WWW.SHAREINVESTOR.COM.SG/INSIDEINVEST
ForewordHappy New Year!
Just as we hope to put a lacklustre year behind us, the unexpected dive in the China market at the start of the year sent panic selling across major financial markets. While we expect 2016 to be challenging, it is also during such market cycles that a knowledgeable investor will find good investment opportunities.
In this issue of Inside INVEST, the spotlight is on investment themes for 2016 and how we can ride the markets to optimize our investments.
SGX Market Strategist, Geoff Howie, shares the performance of STI in 2015. Constantly reviewing and balancing our portfolios may sound easy but putting it into practice takes a lot of effort. Lorna Tan, Invest Editor of The Straits Times, offers her views on how to manage our personal finances efficiently.
Our CEO signature column features two Singapore success stories. iFast Corporation’s Chairman, Mr Lim Chung Chun, tells us how the company’s Internet-based investment products distribution platform has grown to offer products from over 80 global and local fund houses, including bonds and ETFs. OKP Holdings Managing Director, Mr Or Toh Wat, sheds light on the company’s prospects after a stellar year of six contracts, worth close to S$300 million, from JTC and LTA.
Like many in the industry, I am anticipating that the Federal Reserve will continue with its calibrated and gradual interest rate hike in 2016, signaling a more stable global economy. Our bank savings will be the first to benefit from the higher interest rates, while certain sectors like banking and consumer discretionary sectors should perform well in a rising rate environment.
Every investor has his or her own investment strategy. For myself, instead of diversifying my portfolio, I choose to focus on industries which I am familiar with so that I can invest with confidence. I am comfortable with companies with consistent financial performance and relatively low gearing ratios. There is no right or wrong. Ultimately, you should adopt a strategy that you are comfortable with.
Multi-market investment is a big theme in 2016 as it offers access to the growth across various economies. To cater to investors who are keen to invest overseas, ShareInvestor’s database has expanded in August 2015 to include multi-market information from seven different countries. The move aims to equip us with the right knowledge to invest wisely in these markets.
We started ShareInvestor in 2000 for like-minded traders and investors to exchange ideas. 15 years later, we are now a stronger entity that is behind many initiatives that help traders and investors to be more confident, through our market tool sets and education programs. Our latest initiative is the partnership with Investing Note – a social media platform that allows you to find out what investors are currently “stocking”.
Please visit www.investingnote.com to learn how the crowdsource estimate feature in the website can help in your investing journey.
Stay tuned as we bring the REITs Symposium and INVEST Carnival to you – all happening in the first half of the year. Do check out our website for ShareInvestor’s 2016 investor education calendar.
On behalf of my team who has been working tirelessly to build a stronger investing community, here’s wishing you good health and a fruitful investment ride in the year of the Monkey.
Christopher LeeCEO
A publication of
2016
FOREX
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While care has been taken to ensure the accuracy of the
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ShareInvestor and its group of companies make no warranty
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any purpose, of the information contained in this publication or
as to the results obtained by any person from the use of any
information or investment product mentioned in this publication.
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ISSUE 2 | JAN 2016
Y O U R I N V E S T M E N T I N S P I R AT I O N S B Y S H A R E I N V E S T O R
MONEY HABITSLorna Tan
ANYONE CAN TRADEJeff Sun
CEO SIGNATURE Lim Chung Chun
& Or Toh Wat
DOWNLOAD YOUR DIGITAL COPY AT WWW.SHAREINVESTOR.COM.SG/INSIDEINVEST
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“The start of any new year is an opportune time to dust down some of our longstanding financial habits and make new resolutions.”
Money Habits
1. Take stock of your cash position
It is prudent to set aside sufficient cash
to cover at least six to 12 months of your
monthly household expenses.
Adhering to a realistic budget will
go a long way towards helping one
live within one’s means. Review your
budget every 12 months, or when your
circumstances change, such as when
you receive a windfall or inheritance, or
when you have a new addition to your
family.
2. Managing your debt
Calculate your debt servicing ratio,
which is a guide to how much of your
take-home pay is used to pay debts,
like your mortgage, car loans, personal
loans or even credit card debts. A healthy
debt servicing ratio – derived from debt
divided by income – should be 35 per
cent or less.
To put it another way, out of every
$1,000 of after-tax and CPF income,
you should spend $350 or less in debt
repayments.
Consider refinancing your home
loan if you are on a variable loan package.
With rising interest rates, you may want
to consider switching to something less
variable like a fixed deposit-linked home
loan or a fixed rate loan package.
If you have to spend via credit cards,
adopt the habit of paying your bills in
full each month. Avoid rolling over your
balance and accumulating debts at a
high interest rate of 24 per cent a year.
3. Adopt a long-term view for
investments
Findings suggest that the longer the
holding period, the higher the probability
of positive returns and the greater the
expected return.
After studying historical probabili-
ties using the MSCI World Index, studies
have found that the probability of posi-
tive returns increased to 100 per cent for
both the 15-year and 20-year holding
periods, while there was a 96.7 per cent
probability of a positive return for a 10-
year holding period.
This presents a strong case for having
a longer holding period of 10 to 20 years
when investing in the equity market.
4. Understand your risk appetite
There are three factors to consider before
investing.
They include the willingness to take
risk – risk tolerance – which reflects your
attitude towards risk and the degree of
uncertainty you can handle; how much
risk you need to take to achieve your
financial objectives; and your ability to
take risk.
The usual risk profiling exercise
carried out during a financial planning
process helps determines your
willingness to take risk but it does not
represent your ability to take risk. A
holistic financial planning process is
essential when gauging your ability to
take risk.
5. Go for low-cost funds
You can select funds based on a few
criteria. They include funds with a track
record of at least three years and lower
expense ratios, that is, what investors
pay to the fund manager on an annual
basis.
For bond funds, low expense ratios
could range from 0.25 to 0.75 per cent,
depending on the nature of the fund.
For example, emerging market funds
and high yield bond funds typically have
higher expense ratios.
For equity funds, which are actively
managed, a rule of thumb would be an
expense ratio of 2 per cent and below.
6. Pick robust stocks
As market conditions are still fairly
volatile, risks will continue to prevail.
The Singapore market appears to be
range bound in the first half of this year
with recovery only likely in the second
half. As such, investors are advised to
stay nimble and buy selectively on pull-
backs.
For investors with a lower risk
appetite, they may wish to consider
blue-chip companies with established
business track records and sustainable
business models. This is vital as it means
that the organisations are more likely to
have the right business models to ride
out difficult times.
Ms Carmen Lee, head of OCBC
Investment Research, favours companies
with a differentiated business strategy
Many of us are only too glad to bid farewell to 2015. It was a year marked by much panic resulting from financial volatility due to the Chinese market rout and the uncertainty over the next United States Federal Reserve interest rate hike, particularly in the second half. However, financial experts warn of another uncertain year ahead.But just because the outlook is bleak, this is no time to bury your head in the sand. The start of any new year is an opportune time to dust down some of our longstanding financial habits and make new resolutions. Here are six good money habits to help you do just that.
and sustainable business model, placing
them in a better position to ride out any
near-to-medium term uncertainty.
Favourites include A-REIT, Frasers
Centrepoint Trust, DBS Group Holdings,
Keppel DC REIT, Raffles Medical, Sheng
Siong, Singapore Post, Singtel, QAF, UOL,
Venture Corp and Wing Tai. i
BY LORNA TAN
PERSONAL FINANCE
The trading community in Singapore is not just getting
bigger, but also growing in sophistication. Investment
Trends’ annual Singapore CFD and FX report revealed
that the number of Singaporeans trading contracts
for difference (CFDs) and foreign exchange (FX) has
risen by 21 per cent, and more traders are embracing
technology. CMC Markets, a pioneer in online trading
and an award-winning financial services provider, tells
us why.
Describe the trading community in Singapore.
Traders in Singapore are ahead of the game when it
comes to adoption of technology. A whopping 89 per
cent of them use a smartphone or tablet to trade. This
is consistent with what we have noticed in recent
months where there is a shift from CMC Markets’ online
platform to our mobile applications. We don’t see such a
high level of technology adoption in other regions.
Has there been a shift in trading preference among
Singapore traders?
Volumes traded on SGX equities have declined
recently, as some Singapore investors went hunting
for opportunities in either alternative investments
or overseas markets. By contrast, the number of
FX and CFD traders grew from 20,200 in 2014, to
24,500 in 2015, a 21 per cent surge, which is a strong
testament to the growing popularity of these products.
Traders in Singapore are turning to CFDs and FX
Describe the risk appetite of traders in Singapore.
Relative to other regions, traders in Singapore are
sensible in their use of leverage. They also recognise -
more acutely than traders in other regions - that volatile
and falling markets offer trading opportunities.
How does CMC Markets help to grow the trading
community in Singapore?
Our approach over the last 25 years has always centred
around enabling people to trade. In Singapore we
are very active in trading education, seminars and
webinars, both on a large scale and in more intimate
sessions. We don’t charge for these education initiatives
as we consider it an investment in Singapore’s trading
community.
Tell us about CMC Markets’ Next Generation online
trading platform.
More Singaporeans are trading on our Next Generation
platform than ever before. The platform provides
over 10,000 products, professional-grade charts and
advanced trading features, many of which are unique
to CMC Markets.
Available online and on mobile, it is slick and
robust, and it is free. The platform received the highest
ratings for charting, educational materials and for its
ease of use in the latest Investment Trends’ survey of
Singaporean traders.
Trading on margin, our clients use the Guaranteed
Stop Loss Order feature as a type of insurance premium,
providing protection. Half of the cost is refunded if
it isn’t used. In 2015, the platform received several
accolades, including the “Best Mobile/Tablet App” for
the third year running at the Shares Awards and the
“Best Mobile/Tablet Application” at the Online Personal
Wealth Awards. i
SPECIAL FEATURE
JASON HUGHES, Head of Singapore Office
More are using mobile applications to trade
LORNA TANThe Straits Times, Invest Editor
Author of Talk Money & More Talk Money
2
FOCUS
The Federal Reserve (Fed) has recently
raised interest rates for the first time in
nearly a decade, signaling faith that the
US economy is on the road to recovery.
Prior to the interest rate hike
announcement in December 2015, the Fed had kept the
markets in suspense for months, with many doubting
the ability of the US economy to withstand higher
borrowing costs. The uncertain global economic
outlook had affected at least four stock indices in the
ASEAN region. In 2015, the Straits Times Index (STI),
FTSE Malaysia KLCI, Stock Exchange of Thailand SET
Index and Jakarta Composite Index, declined by an
average of 17% in SGD terms.
The STI maintained its lead
Despite the decline, the STI turned in the best report
card among the four indices, outperforming the average
by two per cent in 2015.
In the last 10 years since November 2005, although
trailing behind the Dow Jones Industrial Average, the
STI had generated risk-adjusted returns that surpassed
the Hang Seng Index, the Nikkei 225 Index and the FTSE
100 Index. Notably, the STI had weathered events that
impacted the global economy, including the 2006 Fed
hike, the Northern Atlantic financial crisis in 2008 and
the subsequent recovery the year after.
Highest dividend yield
The STI’s 10-year annualised return of 6% was helped
by its four per cent dividend yield, which remains the
highest among global benchmarks. The yield is also
three-fifths higher than the Asia average, way ahead of
its peers.
Its strong showing in 2015 was in part due to five
high yield STI stocks, namely the Hutchison Port
STI maintains Asia’s Highest Yield in 2015
Holdings Trust, Keppel Corporation, Ascendas REIT,
Sembcorp Marine and CapitaLand Mall Trust. During
the year, each of these stocks generated an average of
seven per cent yield.
One-third of STI stocks generated higher ROE
Like Singapore, the STI and the broader Singapore stock
market have significant elements of business diversity,
international reach and financial stability, which help
to cushion the STI’s performance. Amidst a global trend
of declining business returns on equity (ROE), almost
one third of the STI stocks reported higher year-on-year
ROE in 2015.
Review of the STI performance
The year 2015 saw continued contractions in global
trade, manufacturing and energy prices - important
drivers of economic developments. Reflecting the
China effect, over the four quarters ending June 2015,
Singapore’s value of global trade registered consecutive
decline of one per cent, seven per cent, 16 per cent
and 12 per cent year-on-year. International goods and
services also form an important part of the STI. In 2015,
less than half the revenue associated with the STI was
from Singapore, with the bulk coming mainly from Asia
Pacific.
Winners and underperformers in 2015
Sectors that were more sensitive to global trade,
manufacturing and energy in 2015, such as the
Maritime & Offshore (MOE) businesses were amongst
the weaker performers. The SGX MOE Index generated
a 31% decline in 2015. Meanwhile, the healthcare sector
was the most resilient. During the year, the SGX All
Healthcare Index generated an 11% total return.
Focus in 2016
If corporate activities such as initial public offerings,
secondary raisings or investor conferences in the later
half of 2015 were to serve as any indicators, investors can
expect the spotlight to be on international relations, and
small-to-medium sized enterprises in 2016. Consumer
services and retailing, a key subtheme of IPOs in the
later part of 2015, will also continue to play a key role
in the growth of the region. Investors can access the
full profile of stocks that make up the various sectors at
www.sgx.com/stockfacts. i
Geoff Howie is the Market Strategist at Singapore Exchange.
This document is not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject SGX to any registration or licensing requirement. This document is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This document has been published for general circulation only. It does not address the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a financial adviser regarding the suitability of any investment product before investing or adopting any investment strategies. Investment products are subject to significant investment risks, including the possible loss of the principal amount invested. Past performance of investment products is not indicative of their future performance. While SGX and its affiliates have taken reasonable care to ensure the accuracy and completeness of the information provided, they will not be liable for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information. Neither SGX nor any of its affiliates shall be liable for the content of information provided by third parties. SGX and its affiliates may deal in investment products in the usual course of their business, and may be on the opposite side of any trades. SGX is an exempt financial adviser under the Financial Advisers Act (Cap. 110) of Singapore. The information in this document is subject to change without notice.
BY GEOFF HOWIE
“The STI’s 10-year annualised return of 6% was helped by its four per cent dividend yield, which remains the highest among global benchmarks.”
4
iFAST Corporation Ltd. (Stock code: AIY)
iFAST Corporation Ltd. (“iFAST Corp” and
together with its subsidiaries, the “Group”) was
listed on the SGX-Mainboard in December 2014.
iFAST Corp has two main business divisions,
namely its Business-to-Consumer (B2C) website,
Fundsupermart.com (FSM), targeted at investors
who prefer to manage their own investments; and its
Business-to-Business (B2B) platform that caters to the
specialised needs of over 150 financial advisory (FA)
companies, banks and financial institutions. Besides
Singapore, iFAST Corp is also present in Hong Kong,
Malaysia and China.
The Group’s mission statement is, “To help investors
around the world invest globally and profitably”. The
Group won the “Most Transparent Company Award
2015, New Issues Category” at the SIAS Investors’ Choice
Awards 2015 held in October 2015 in Singapore.
How did your company start its business and what is
the value proposition you offer to investors?
Mr Lim: 15 years ago, we launched FSM in Singapore
because we saw demand from investors for an easy-to-
use website offering a wide range of unit trusts across
different product providers, with a transparent and
competitive pricing.
Today, FSM in Singapore offers over 950 unit trusts
from over 80 global and local fund houses, and more
recently, we have added over 300 bonds, including
corporate bonds and Singapore Government Securities
(which we have been distributing for a number of
years), and simple insurance plans such as term and
hospitalisation plans.
Our strategy to investors is simple: we want to
stay true to our mission statement, “To help investors
around the world invest globally and profitably”. In
order to help investors achieve their financial goals, we
intend to continue improving the range of investment
products that are relatively simple with no hidden
complicated structures, and with a transparent fee
structure, all under one roof.
Till now, we continue to emphasise good research
and user-friendly tools on our website and mobile
applications, to make it easier for investors to do their
own comparisons of investment products that best
match their investment objectives.
Tell us more about your value proposition to wealth
advisers who use your B2B platform.
Mr Lim: We provide a comprehensive range of services,
including investment administration and transactions
services, research and trainings, IT services and
backroom functions to over 150 financial advisory (FA)
companies, banks and financial institutions across the
Group.
LIM CHUNG CHUN, Co-founder, Chairman and CEO, iFAST Corporation Ltd.
Our mission for the wealth advisers using our B2B
platform is to provide the capabilities of a ‘mini private
bank’ to them, so that they can also broaden their
clientele to include more high net worth individuals.
We believe that the range of investment products and
services we provide has to improve in that respect. More
recently, we have added new investment products and
our suite of products for B2B clients include unit trusts,
bonds and Exchange Traded Funds (ETFs).
What is the significance of recent developments for
your company?
Mr Lim: 2015 was a momentous year for the Group.
We received approval to distribute bonds and ETFs in
Singapore in April. In Hong Kong, our FSM business
rolled out the “Online Discretionary Portfolio
Management Services”, which caters to investors who
wish to leave the challenge of actively managing their
portfolios to our portfolio management team.
The Group received a Funds Distributor
Qualification from the regulator to operate an
investment funds platform in China. We believe that
the China market offers strong potential in the medium
to long term, as we will intend to meet the wealth
management needs of Chinese investors, in both
onshore and offshore investment products.
In October 2015, we were honoured to receive the
“Most Transparent Company Award” under the New
Issues category at the SIAS Investors’ Choice Awards.
Transparency has always been a core focus in our
business and that has guided us from the time we
started business 15 years ago with the launch of FSM.
Back then, information on funds was seen to be limited
and we wanted to change the way the funds distribution
business worked by giving transparent information on
funds, including the fees and research, to investors.
This focus on giving transparent information
to investors is again what drove us to launch
Bondsupermart.com recently, by providing transparent
information on bonds, as we believe bonds are a simple
investment product that has so far been mainly offered
to institutional clients only. We have wanted to change
this by empowering investors with our transparent
information on bonds, including our research, tools and
pricing, so that more investors can better understand
this type of investment product. i
CEO SIGNATURE
iFAST Corporation Ltd.iFAST Corporation Ltd. was listed on the SGX Mainboard in December 2014. One year on, we speak to the CEO, Mr Lim Chung Chun, to find out what the company has done over the past year.
OKP Holdings Ltd. (Stock code: 5CF)
These projects, which range from road extension, drain and sewer works,
as well as construction of linkways and viaducts, showcase OKP’s wide-
ranging capabilities and civil engineering prowess. In particular, three
are complex design and build projects for the construction of sheltered
link ways under the Walk2Ride Programme, and a viaduct from the
Tampines Expressway to the Pan Island Expressway (Westbound) and Upper Changi
Road East. For the nine months ended 30 September 2015, OKP’s net profit jumped
almost 200 per cent to S$5.1 million on revenue of S$78.8 million.
OKP’s Group Managing Director, Mr Or Toh Wat, shares his thoughts on the
Group’s prospects.
Tell us more about the Group’s project pipeline.
Mr Or: As at 30 October 2015, our net construction order book stood at S$266.4 million,
with projects extending till 2019.
We anticipate Changi Airport’s future Terminal 5 to present possible construction
and civil engineering opportunities. We also foresee exciting opportunities in the
infrastructure space, particularly from several major developments announced
by the Land Transport Authority, including the construction of the North-South
Expressway, and the S$24 billion Thomson-East Coast MRT line.
What do you think is OKP’s greatest asset?
Mr Or: We have a dedicated and experienced team of employees, and a hands-on
management team who is not afraid to roll up their sleeves to handle the nuts and
bolts of the business. This is why we have been able to take on complex design and
build projects that require high technical expertise.
What is OKP’s greatest challenge?
Mr Or: There is a shortage of skilled and experienced manpower within the
construction industry. To tackle this, we will continue to raise productivity by holding
regular training, and adopt new construction technology to drive higher efficiencies
and effectiveness in our processes.
Our staff development initiatives include immersion programmes overseas, which
allow staff to gain new skills and experience, while our post-graduate sponsorship
programmes aim to groom promising employees to take on leadership roles in OKP.
What is OKP’s growth strategy?
Mr Or: We remain focused on our core market in Singapore, particularly within the
civil engineering sector. We are also on the lookout for good overseas opportunities,
and business collaborations that will enhance our competitive edge.
Why should investors park their money with OKP?
Mr Or: Over the last 50 years, we have built a firm reputation as an experienced civil
engineering specialist, led by a hands-on management team.
We maintain close relationships with our wide spectrum of well-established
clients from the public and private sectors, including the HDB, JTC, LTA, PUB, URA,
the Changi Airport Group and ExxonMobil.
As a listed entity, it is important that we continue to uphold good corporate
governance standards, maintain high levels of transparency, and engage with
investors. We are heartened to be recognised at the Singapore Corporate Awards and
the SIAS Investors’ Choice Awards for our investor relations and governance efforts
in 2015.
We will continue to ride on our achievements to build shareholder value. i
CEO SIGNATURE
OKP cements foothold in construction and maintenance worksOKP Holdings is on a roll. Staying true to its core civil engineering expertise in public sector projects, the infrastructure and civil engineering company clinched a total of six contracts from JTC Corporation and the Land Transport Authority, amounting to S$291.3 million last year.
OKP’s contract to improve Alexandra Canal between Zion Road and Kim Seng Road involves the reconstruction of the Zion Road Bridge and Kim Seng Road Bridge into wider road culverts, the construction of underpasses crossing Zion Road and Kim Seng Road, and the de-silting of the canal from Tanglin Road to Zion Road.
OKP’s largest public sector project to date involved the widening of the Central Expressway from Pan Island Expressway to Braddell Interchange.
6
Anyone can tradeIN DEPTH
In his book “High Probability Trading”, the
derivatives trader shares the universal principals
of successful trading, and the tried-and-tested
methods on creating and refining a trading
portfolio. More than 3,000 copies of the book
have been sold since June 2014. The second edition of
the book recently hit the bookshelves.
The 27 year-old Professional Trader’s
passion for trading shines through in his blog
SingaporeStocksTrading.com, where he demonstrates
the simple methodologies of money management and
diversification in trading. He also helms the largest
LIVE trading and investment community in Singapore
with over 1,000 members, and has conducted over 100
full-house trading seminars.
What motivated you to write the book “High
Probability Trading”?
Jeff: When I was studying Civil Engineering and
Construction Management in University of Leeds, I
developed a keen interest in sharing my trades in a
finance blog. At that time, I had lots of emails asking
“why this, and why that?”. I thought, what better way to
centralise all ideas than writing a book which will allow
me to share my thoughts freely.
I read extensively about trading and psychology,
particularly about how a successful trader thinks and
works. A long time was spent applying what I read into
the market, where I picked up common mistakes, and
refined my trading strategies until they were proven to
have a positive expectancy. You can read all about these
strategies, as well as trading patterns in my book.
What was the greatest challenge in writing the book?
Jeff: Time management, as I had to juggle writing,
studies and work at the same time. I took half a year to
write the book – three months when I was completing
my University studies, and three months when I was
back in Singapore as a full time construction engineer.
I learned a lot of self-discipline and time
management from the book experience, which
put me in a good shape today to hold a day job,
trade, write and conduct seminars outside of work.
When did you start trading in shares and who has
influenced you the most?
Jeff: I started investing when I was 21. During my
polytechnic years, I was making some money as a
reseller in various fashionable products and Disc Jockey
(DJ), and wanted the money to grow.
I particularly admire a female blogger who grew
her wealth many folds, from $112,000 to $1 million in
a short span of seven years. She now generates a yearly
dividend income of $51,000. Like many of us, she lives a
simple life. Her story is an inspiration to many people as
it proves that with financial literacy, anyone can build a
successful portfolio.
What is the key takeaway in your book?
Jeff: Trading is for everyone with the right attitude, and
not just for the wealthy. We should take a longer-term
view - trade for capital growth (compound on profit),
rather than for short-term income.
To be a successful trader, is it is not just important
to spend time on extensive research like examining
market trends, charting, and reading reference books,
or spend time looking for one signal point that can help
you be profitable in a trade. But the key principles still
consist of a defensive risk and money management,
psychological toughness, managing expectation and
ultimately, perseverance to continue during a bad run.
Different traders have different views. In the book, I
have written about my preferred approach, which has
been tried and tested.
Tell us about your achievements in the last two years.
Jeff: After graduating with a first class honours in Civil
Engineering and Construction Management more than
two years ago, I started pursuing my trading passion
and gathered a community of over 1,000 investment
students to exchange ideas. During the period, I have
attained my CFTe (Certified Financial Technician)
conferred by International Federation of Technical
Analyst (IFTA), and Institute of Professional Trading and
Portfolio Management (UK). I am also thankful to have
forged a closer relationship with the broking houses in
Singapore, which offered seminar opportunities for me
to share insights with like-minded traders. Recently, I
bought a detached house and a car – two biggest gifts
from professional trading. i
If you are mentally strong and display a healthy dose of optimism, you can well be a successful trader, according to best-selling author, Jeff Sun; CFTe.
“Trading is for everyone with the right attitude, and not just for the wealthy.”
BRANDON WENDELL, Master Instructor of Online Trading Academy
Successful traders follow the rules
SPECIAL FEATURE
What makes a good trader? Someone who simply has the money and a huge risk appetite, or is there more to it? In this issue of Inside INVEST, we speak with Brandon Wendell, the Master Instructor of Online Trading Academy. The Chartered Master Technician and former stockbroker, brokerage trader and hedge fund trader, shares his market views and trading strategies, as well as tips on how to identify market moves before they happen.
What are some tried-and-tested trading strategies that work
well in today’s market?
Brandon: To be successful in trading, we need to invest the same
way institutional traders do. We may not have their purchasing
power, nor are we able to see their order flow. However, we can
head towards the same direction as there are patterns on all
price charts that hint at where these institutions are trading.
Institutions have to “work” large orders. When buying or selling,
they would only get partial fills and have to get the leftover orders
filled when prices returned. We should buy and sell where these
leftover orders are.
What are some of the common mistakes made by traders?
Brandon: Many traders try to trade too much or with too little
capital in their accounts. Remember, more trades mean more
commission and higher potential for making bad trades. When
an account is underfunded, one tends to be more nervous when
taking a position. Also, traders who trade with high emotion are
more susceptible to making errors. It is important to be level
headed.
How do the courses offered by Online Trading Academy help
traders?
Brandon: The courses teach you to trade the way institutional
traders do. It emphasises a rules-based strategy that reduces the
emotional effect on your trading. You also gain mentors and a
community of like-minded traders who can support and help
you in your trading journey.
In your opinion, what makes a successful trader?
Brandon: I cannot emphasise more on the importance
of discipline. Create a trading plan and stick
to it. If the markets change and the plan
needs to be adapted, do it quickly.
Just don’t do it with open positions. i
AN INTERVIEW WITH JEFF SUN
9
3 SERIOUS Market Events in 2016 that will cause STI to revive its fortunes!The bad stock market since 2011
Ever since 2011, the stock market has been slow.
STI has consolidated in a range between 2700 to
3500 (please refer to the chart below). Although
STI ranges, some stocks in recent years have
tumbled. It all started in 2011 with the clampdown in
the Chinese economy by ex-China premier Wen Jia Bao.
A lot of local listed China stocks collapsed.
In 2012, Singapore government made a decision to
introduce Additional Buyer’s Stamp Duties. Since then,
the local property market remained listless, bringing
down a lot of property stocks.
In mid 2013, the REITs sector crashed due to a
warning by Ben Bernanke that QE3 might stop, followed
by penny stocks crash in Oct 2013. In 2014, Oil and Gas
sector crashed as oil price collapsed. Many Singapore
investors lost money.
Expect STI to revive its fortunes in 2016
However, Daniel Loh – popular stock market analyst
and financial educator who regularly appears on
television and radio financial programmes – thinks that
2016 might be the year where Singapore stock market
will revive.
He thinks that 2016 might be the turning point
for some sectors and there are 3 IMPORTANT world events that might cause this turnaround. Take note of
the economy of China, Japan and Europe – with their
massive stimulus measures, he believes that their
economies will reach the bottom just like US in 2012.
Event 1: Rise of interest Rate is Good for Economy
A lot of investors fear the rise of interest rates. However,
looking at history, it shows that a little rise in the interest
rates do not dent the stock market. In fact, it contributes
to the rise of it. At the same time, it also means that
inflation will start to kick in and the economy will start
to get better. The increase in demand for the goods
and services serves no harm for the earnings of stocks.
Event 2: China Economy may recover in April 2016
He also pointed out that the economy slowdown in
China since 2011 have a tremendous impact on local
stock market because a lot of the local listed stocks have
businesses in China. The performances of S-chip stocks
are poor. However, looking at the aggressive nature of
the stimulus measures China have implemented since
April 2014, Daniel believes that China will recover soon
as it takes approximately 2 years for the economy to feel
the effect. Similarly, US economy took 2 years to show
progress after its stimulus measures were implemented.
If China economy recovers, expect a more vibrant
Singapore stock market!
Event 3: The start of a Super Bull Run in commodities
Commodities market started its 4 years bear run in
2011; commodity related stocks, namely agriculture
and precious metal, tanked in 2011.Similarly, Oil and
Gas stocks crashed in 2014.
There is a correlation between economy and
commodities prices. For example, when the economy
of China and Europe declined in 2011, the demand and
prices of commodities dropped.
Nevertheless with the turnaround in global
economy that is expected in 2016, Daniel believes that
commodities will reach a bottom and start its Super
Bull Run. The depressed commodities-related futures
and stocks might be the bargain of this decade!
SPECIAL FEATURE
(English) 2nd Feb 2016 ( 3rd Feb 2016
7.00pm – 10.00pm(Registration starts at 6.30pm)
International Plaza10 Anson Road,
#34-07, Singapore 079903(Tanjong Pagar MRT, Exit C)
PRESENTED BY:
Daniel Loh is an established trader with over 15 years of profound experience acclaimed for his remarkable techniques at predicting
and live interviews across television and radio programmes.
WHAT YOU CAN LEARN
3 Sectors that most likely will be propelled by the bottoming ECONOMY in 2016!
What are the Fundamental Strong Stocks to watch out for in 2016!What should investors do with stocks that have collapsed?How do you make 5-10% return on your portfolio every month consistently?
How do you make 400% return in stock market this year?
Strategic Sector and Stock Picking in Year 2016 amid STI revival!
WHAT YOU CAN LEARN
What should investors do with stocks that have collapsed?What are the Fundamental Strong Stocks to watch out for in 2016!What are the Fundamental Strong Stocks to watch out for in 2016!
How do you make 5-10% return on your portfolio every month consistently?
How do you make 400% return in stock market this year?
3 Sectors that most likely will be propelled by the bottoming ECONOMY in 2016!
Get on the ETF bandwagon
Listed and traded like a stock, ETFs are investment
funds that track an index. The biggest appeal of this
investment vehicle is that it offers instant diversification
in a single trade, which in turn minimises concentration
risks. Extremely useful in today’s volatile markets, this
simple way of achieving well-diversified exposure is
far more efficient and cost effective than if you were to
accumulate individual stocks. A portfolio comprising
broadly diversified ETFs can help to optimise risk
and reward according to your unique asset allocation
decisions.
Ideal for retirement planning
Contrary to popular belief that ETFs are only suitable for
short-term traders, the spotlight is increasingly on ETFs
as part of one’s retirement portfolio due to the liquidity
and potential yields. For example, SPDR® Straits Times
Index (STI) ETF, which aims to pay dividends twice a
year, has an average annualised total return of 6.28 per
cent in the last 10 years as of end of November 2015.
Nikko AM’s ABF Singapore Bond Index Fund - which
primarily invests in Singapore government bonds, one
of the world’s highest-yielding AAA-rated government
bonds - has returned 2.59 per cent per annum (as of 31
October 2015) since the fund’s inception in August 2005.
This ETF offers potentially higher returns over current
fixed deposit accounts, or the Singapore Savings bonds.
Incorporates various asset classes for different
investment strategies
Apart from stock indices, ETFs also track the
performance of other asset classes like bonds and
commodities. Singapore Exchange (SGX) is the only
place that lists iShares Barclays Capital USD Asia High
Yield Bond Index ETF and iShares J.P.Morgan USD Asia
Credit Bond Index ETF. Also listed on SGX is SPDR®
Gold Shares that tracks the price of gold bullion, which
is known to be a defensive asset class, especially in
challenging times.
Access to international markets
ETFs also allow investors to participate in the growth
of other markets, and generally in a lower risk manner,
compared to investing in individual stocks. Deutsche
Asset Management offers ETFs that cover a wide
geographical spread of both developed and emerging
economies, including Brazil, China, South Korea and
Thailand. iShares MSCI India Index ETF offers access to
the Indian equity market, while SPDR® S&P 500 ETF
and SPDR® Dow Jones® Industrial Average ETF invest
in the US economy.
Market outlook in 2016
The Federal Reserve has recently raised interest rates,
signaling a more stable US market. The developed world
continues to enjoy strong economic fundamentals,
while the emerging markets have been impacted
by lower commodity prices and China’s slowdown.
Notwithstanding this, DBS Vickers pointed out that
China’s short-term cyclical risks have been overblown
because the economy is still growing at a phenomenal
six or seven per cent.
ETF opportunities in Korea, China and ASEAN
DBS Vickers has singled out China, Korea and ASEAN as
its top picked markets. Reforms and structural changes
are to be expected if China wishes to sustain or surpass
its current growth rates. The ‘A’ share market is also
seen to have bottomed in the third quarter of 2015,
while the potential inclusion of China ‘A’ shares in the
global MSCI Emerging Markets benchmark may also
act as a further market catalyst.
Korea has gotten its formula right. Its interest rate
cuts and stimulus packages are clearly working, and
its economic re-structuring to nurture new industries
is shaping up well. This probably explains why Korea’s
domestic demand has remained resilient even in a
slowing global growth environment.
Investing in ASEAN is a longer term structural
theme that is driven by favourable demographics
and domestic demand story. Given that the ASEAN
region is down by 21 per cent in USD terms this year,
there is a strong case for reversal in 2016, once the USD
strengthening trend has peaked. i
For more info on SGX-ETFs, please visit sgx.com/etf
Investing your hard-earned money does not have to be a complicated process. Increasingly, investors are turning their attention to exchange traded funds (ETFs) as they are an ideal vehicle for those who do not have the time nor technical experience to originate investment strategies to meet their financial goals.
Of the 87 ETFs listed on SGX, 19 are classified as Excluded Investment Products (EIP) which are accessible to investors without enhanced safeguards.
Stockcode
Tradedcurrency
Fund description
Fixed Income
ABF Singapore Bond Index Fund A35 SGD Comprises mainly of Singapore government bonds
iShares Barclays Capital USD Asia High Yield Bond Index ETF
O9P USD USD-denominated government and corporate high yield bonds, in Asia Ex Japan
iShares J.P Morgan USD Asia Credit Bond Index ETF
N6M USD USD-denominated bonds, in Asia Ex Japan
Equities
Country
db x-trackers FTSE China 50 UCITS ETF (DR)
HD8 USDTracks FTSE China 50 Index, which comprises of 50 largest and most liquid Chinese stocks listed on Hong Kong
db x-trackers MSCI Brazil IndexUCITS ETF (DR)
J0O USD Tracks MSCI Brazil Index, which comprises of large and mid cap Brazilian equities
db x-trackers MSCI China IndexUCITS ETF (DR)
LG9 USD Tracks MSCI China Index, which comprises of large and mid cap Chinese equities
db x-trackers MSCI Korea UCITSIndex ETF (DR)
IH2 USDTracks MSCI Total Return Net Korea Index, an index of107 large and mid cap Korean equities
db x-trackers MSCI Malaysia IndexUCITS ETF (DR)
LG6 USDTracks MSCI Malaysia Index, which is made of large and mid cap Malaysian equities
db x-trackers MSCI Philippines IMIndex UCITS ETF (DR)
N2E USDTracks MSCI Philippines Investable Market Total Return Net Index’s small to large cap equities
db x-trackers MSCI Singapore IMIndex UCITS ETF (DR)
O9A USDTracks MSCI Singapore Investable Market Total ReturnNet Index’s small to large cap Singapore equities
db x-trackers MSCI Taiwan IndexUCITS ETF (DR)
HD7 USDTracks MSCI Total Return Net Taiwan Index, comprised of mid and large Taiwanese equities
db x-trackers MSCI Thailand IndexUCITS ETF (DR)
LG7 USDTracks MSCI Thailand Index, an index of large and midcap Thai equities
iShares MSCI India Index ETF I98 USDTracks MSCI India Index, which comprises of mainly large and mid cap Indian equities
Nikko AM Singapore STI ETF G3B SGDTracks Straits Times Index, the benchmark index ofSingapore
SPDR® Straits Times Index ETF ES3 SGDTracks Straits Times Index, the benchmark index ofSingapore
Region
CIMB FTSE ASEAN 40 ETF M62 USDTracks 40 largest companies (by market capitalisation)listed on ASEAN exchanges
CIMB S&P Ethical Asia PacificDividend ETF
P5P USDTracks 40 ethically conscious, high dividend yield stocks from the Asia Pacific region
db x-trackers MSCI Pacifi c Ex Japan Index UCITS ETF (DR)
J0Q USDTracks MSCI Pacific Ex Japan Index, a market capweighted index measuring equity performance in exJapan Pacific
Commodities
SPDR® Gold Shares O87 USD Tracks the price of Gold
Sponsored By:
This document is (a) intended for general circulation in Singapore and (b) not intended for general circulation outside of Singapore. This document does not constitute an offer or solicitation to buy or sell any investment product(s). It does not take into
account the specific investment objectives, financial situation or particular needs of any person. Investors should seek advice from a financial adviser before investing in any investment products or adopting any investment strategies. In the event that the
investor chooses not to seek advice from a financial adviser, he/she should consider whether the product in question is suitable for him/her. The investment product(s) discussed herein are subject to significant investment risks, including the possible loss
of the principal amount invested. Any examples provided are for illustrative purposes only. Past performance of investment products is not necessarily a guide to future performance. SGX and its affiliates may deal in investment products in the usual course
of their business, and may at any given time be on the opposite side of trades by investors and market participants. Any statements or information expressed by other organisations are of the respective authors. SGX and its affiliates make no warranty as to
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is an exempt financial adviser under the Singapore Financial Advisers Act (“FAA”) and is exempt from certain provisions of the FAA, when providing financial advisory services or making recommendations to accredited and/or expert investors, and overseas
investors, as provided for under Regulation 34, 35 and 36 of the Singapore Financial Advisers (Amendment) Regulations 2005. This document is being made available to only certain qualified recipients outside Singapore. In the event that this document or
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FINANCIAL PLANNING
All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone. Past performance is not necessarily indicative of future performance, even if the same strategies are adopted.
STI has been going nowhere since 2011
10
ALVIN CHOW
www.bigfatpurse.com
DAVID KUO
www.fool.sg
ERNEST LIM
www.ernest15percent.
com
JEFF SUN
www.singaporestockstrading.
com
EZRA HOLDINGS (5DN) GENTING SING (G13) NOBLE GROUP (N21)
BLOGGERS SPEAK
Information provided is based on the closing prices for period ending 31 December 2015. This report is solely for information and general circulation only, and not be construed as an offer or solicitation for the subscription, purchase or sale of the securities mentioned herein or to participate in
any particular trading or investment strategy. Any opinion or estimate contained in this report are those of the bloggers only and is subject to change without notice.
g.
W
m
O
M
Co-founder Lee Kian Soo has recently taken up the non-executive chairman role and also the recent subsea joint venture with Chiyoda Corporation. Given the poor performance the stock had over the past 5 years, any positive surprise in 2016 will easily cause the price to have a good rebound.
Since the initial hype of its first opening in January 2010, the share price of Resorts World Sentosa has been declining through 2011. The recent drop of tourists’ arrival, which is expected to remain for the upcoming year, proves that the stock will likely continue to fare poorly.
Over the last 5 years, price for Noble Group has dropped by half. On top of that, after Iceberg Research and Muddy Waters questioned its accounting transparency in September, there is a further $5 billion market value lost. Being a big player in the market and with the price to earning trading at 10 years low, 2016 might be the year for rebound.
This is an example of a “picks and shovel” business that could outperform when demand for oil is high. Fortunes in 2016 depend on oil prices, which could recover.
The days of high-octane growth are probably behind Genting. Future growth could be slow and steady, which could mean a de-rating of the shares. A hike in dividends could help.
Noble is a complex business with many moving parts. A recovery in 2016 hinges greatly on commodity prices and how the company plans to handle its $7 billion debt pile.
Assuming the proposed joint venture with Chiyoda is successful, Ezra’s balance sheet will be strengthened. With US$2.0 billion order book, low P/BV of 0.19x and trading at near all-time low levels, it should perform better in 2016.
I am neutral on Genting due to its exposure to the weak Singapore economy, China’s slowing economy - coupled with its anti-corruption measures, weakness in Indonesia and Malaysia currencies, and the volatile quarterly results. However, it has slumped 29% YTD which may have priced in the negatives to some extent.
Notwithstanding the low 0.38x P/BV and trading at near 7 years low, I am neutral on Noble due to its complicated business and accounting treatment, coupled with the potential down-grade of its debt.
Bullish Divergence has been reflected on absolute price, against RSI and MACD indicator. Critical levels to watch are $0.13, for near term upside target (horizontal resistance) and breach of mid-term downtrend channel, and $0.093 for an acceleration of further downside.
Downtrend channel remains intact since April 2014. For a negation of this downtrend channel, $0.885 immediate resistance has to be breached.
Bullish Divergence has been reflected on absolute price, against RSI and MACD indicator. Critical levels to watch are $0.555, for near term upside target (horizontal resistance) and breach of mid-term downtrend channel, and $0.375 for an acceleration of further downside.
An investor manages risk better when well-informed. Before investing your hard-earned money, it is important to do your research, keep your ear to the ground and listen to the market. In this issue of Inside INVEST, ShareInvestor invited four renowned investment bloggers to share their take on three popular Singapore-listed companies’ performance in 2016.
1By primary relationship. Results from Investment Trends 2015 Singapore CFD & FX Report, based on an online survey of 11,327 investors/traders. 2ShareInvestor Awards 2015. 3Global Banking & Finance Review Awards – 2015, Global Banking & Finance Review magazine. Leveraged trading may not be suitable for everyone. Losses can exceed investments. OANDA Asia Pacific Pte Ltd holds a Capital
Markets Service Licence issued by the Monetary Authority of Singapore.
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