My first IPO - After Action Report

Despite being in the market for like 4-5 years, I've never played any IPO before. I used the word 'play' because since all IPOs are described in the prospectus as the best company ever listed, and there are no history of any price to do any TA, the only way to make a buck is to punt and to speculate. I applied for the Global Logistic Prop Limited (known as GLP) and got myself 1 lot. Actually it's half a lot because I shared with my father, who don't have any account with CDP, hence he can't apply it.



The IPO price was top of the range at $1.96 per share, but there's a pedigree name behind it - GIC. Since Ah gong is giving us money in the market, I say we take it. I believe many others are thinking along the same line too, so just whack and see how many lots we'll get. At least for GLP, the retail tranche is much bigger than MIT, so for those who applied, most will get at least 1 lot. Nothing much but better than nothing. On the other hand, I've not heard of anyone who got MIT. I applied for around 30 lots but got back nothing.



I eventually sold it at 2.17 very early in the morning, about a few minutes after 9am. I had studied the past IPO performance and decided before debut trading that this is unlike the pennies IPO (around 20cts to 40 cts range). Those have around 20-30% gains on the first day before sliding down. GLP should be around the performance level of Tiger airways (IPO price 1.50, highest of the debut trading is 1.60), which is around 6-7%. Taking 7% of the IPO price of GLP, I get around 2.10, so that's my target price.

Price of GLP for the last 5 days

I woke up early in the morning at 830am to prepare myself to sell it off and was surprised to see that there are many married deals (marked with x next to the transactions) even before market opens. The married deals are around the range of 2.10 to 2.15 so I knew it must be a hot IPO. Since the opening price is already above my target price, I just queued at the next bid at 2.17. Within seconds, I got my order filled and I'm out of the game.



All in all, it was quite an interesting experience since I've never had an IPO before. I got 9.19% after all commission charges and application fee and taken into account, which is not a bad deal even though I got only $90 out of it (half of which is shared by my father). The price can continue to go up, but it doesn't affect me because I'm happy to exit at a price higher than my target price. This kind of punting game wouldn't make me richer nor poorer, so it's best not to think too much about it.



I think I've enough of IPO for now, since I didn't get any MIT. There are a few more IPOs coming up, and no doubt they will be hot. But I don't think I'll subscribe to them. Let others take the thrill. Interesting, there's no seller's remorse nor buyer's 'high' after this IPO. It's just slightly irritating because I've to wake up earlier than normal to watch prices tick on the market so that I can sell. I think I've changed a lot since I started this stock market thingy.

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Quit whining and start going

The wedding is seriously stressing me up. There's so many things to be done and suddenly I felt that I was the only one handling things. I wasn't the one who wanted to have it and now it feels that I'm being pushed to do the bulk of the adminstration and left to pay the bills too. It's a show that I am forced to do and nobody seems to enjoy it. Still, I must step up to the challenge and soon it'll be just another notch in my belt.



In view of the stress building up, I started doing my "things to do" list, broken up into different priorities and mentally dividing them into things that I can control and things that I cannot control. I realised that the most frustrating ones are those items in my checklist that I cannot control and have to wait for others to catch up with me. This is something that I realised about myself - I don't like to wait for people to catch up and I like to determine the direction and pace of things. As such, being a lone ranger will be easiest for me and least stressful while being a team player I will have to play the role of leader or the leader will have to move faster than I can do. I think this is an important realisation for me because I'm so used to doing things my way, so I definitely need to learn how to relax and let things flow their way.

Drink some wine and whine, then have a hangover and cry

I think the ups and downs of the stock market made me more 'zen', in the sense that I can just snap my fingers and get on to business (okay, not as easy as I make it to be, but it's much better than say, 5 years ago). Very good training ground for stress management and basically training to divorce yourself from emotions.



I also realised that complaining gives a limited release from the pressure. It's like treating the symptoms of the illness but not really the problem that causes the symptoms. The better thing to do is to treat the cause of the problem and remove that source, and that's what my "to-do" list is for. You can whine and whine and people will understanding and say good things to you to make you feel better, but at the end of the day, you still have to pick up the pieces yourself. So I say save the energy to complain and get to the business straight. About the only use of complaining is to release that pressure lid slightly so that the stress buildup will not cause an explosion within you.

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3 steps to success

As my work load lessens, I suddenly have the time to think about the crazy busy period that had just passed. 'Suddenly' because all the non-milestone exams (those not in A'lvls, not in O'lvls) finish on the same week, so I ended up having a lot of free time which I need to get used to. It was very liberating to end my workday with still so much daylight left.



I started to think about the differences between the better students and the not so good students. It's been a perennial problem for me to analyse each batch of students, hopefully to derive and distill some qualities about them that I can inculcate to myself and to others. I think the same qualities apply to success in general, rather than just academic success. Gf and I analysed it broke it down to just 3 steps:

1. Reading

Reading gives you brain nutrients, just like eating food gives you body nutrients. (Hmm, how about soul nutrients?) It's been my constant complaint that young people don't read these day. As a consequence of not reading, you find that the only source of information they get will be from things from internet (talking about the facebook and youtube variety) and perhaps TV. Without this habit of reading, it's hard to improve yourself beyond the beta version of the worldview that you had when you left formal schooling. If I have a kid, I'll definitely try to put in this habit because I think it's a very good determinant of success, especially so in formal schooling years. You'll be surprised that most students do not even read their textbooks, preferring to have someone to tell them the information (like me) or just ask someone. Silly isn't it?



I think reading will give you different sorts of mental models to apply to problems. Each 'subject' like maths, psychology, economics, philosophy, science, accountings...all gives different ways of thinking about things. Recently, I found that fiction is very very satisfying too and I had been neglecting that for years (I never read fiction again after secondary school).

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I came back and re-write this part because to make it more general, the first step is more of a learning attitude than just reading more. You can learn more by talking to people, reading about it from books or from internet as well.

2. Reflection

By reflection, I mean to think about events or information that bombards us everyday. In terms of education, it's to think about the worksheet you had just done and see why you got it wrong and if there are are places to improve on the answers. I remembered that I used to do a problem twice in different ways just to see which method is more efficient (it's a geeky sort of amusement for me as well). For example, there is a geometry rule that angle in a semi-circle will form a right angle triangle. When I read about it, I refused to believe it. So, I really drew many circles and started proving to myself, empirically though, that each of these rules are true. It was years later on when I realised that the knowledge that you had isn't yours until you had to fight for it.

I don't believe that it's really true, until I proved it to myself

I find that the reading good books makes reflection easier. If the information in the book leads to easy understanding, it leads to easy absorption and assimilation. Thereafter, it's easier to link up previous ideas that you have inside you to build up the connections between your mental models.

3. Action

Thinking and not doing will not lead to anything. There's a very interesting discussion in the cbox about the book title - Think and Grow rich. Of course thinking alone will not lead one to becoming richer, and most people would stop at the thinking phase. Getting down to do it is actually the last step.


Three simple steps to success, but it's not easy to do it at all. The steps can be re-iterated to get the desired results, like 1 and 2 can be looped until a desired solution is formed, or 2 and 3 can be looped until the desired results is produced, but you can't skip any of it.

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Lending of scrips deposited in CDP

I'm once again interested in lending my scrips deposited in CDP (central depository) to earn some interest. I checked the borrowing rates, it's 6%. The lending rate is however lower at 4%. I suppose CDP will take the cut for being the middleman. I'm interested partly because I read that there are new rulings by the new chief at SGX regarding borrowing/lending of scrips, but I didn't read too closely. Something like making it easier for retailers to borrow scrips for shorting. Currently there are like 600+ stocks you can borrow for the the purpose of shorting.



After doing some casual research, I realized why I didn't sign up the last time when I was interested. You can only lend out eligible securities in the stocks held by CDP. Eligible securities is defined as securities:

a) where price is less than S$1, fifty thousand (50,000) or more units; and

b) Where price is S$1 or more, S$50,000 divided by price rounded up to the next units.

In any one of the Securities found in Appendix A of this circular.


That's quite a lot to begin with. I looked though my holdings and I don't seem to have so many lots of the same counter, so I dropped the idea. But for anyone of you who had a lot of scrips stored in the CDP, you can make them work a little harder by lending it out to anyone who wants to borrow it at a rate of 4% per year.

Looks as easy as that. Click a few buttons and get money sent to you

The fees for the lending of scrips can be calculated by the following formula:

Lending Fee = Rate % x Loan Value x Days / 365

Where Rate % = Prevailing lending rate
Loan Value = No. of shares x share closing price at end of each day
Days = Loan duration



I'll quote an example given by CDP for the purpose of illustrating the application of the formula. I certainly have no use for it now, but in the future, who knows? I'll just put it here for my future reference.


  
If the loaned securities are 10,000 XYZ shares and the lending rate is 4%:


Start date of Loan : 1/10/2001 (Effective date)

Return date of Loan : 4/10/2001 (Expiry date)



Closing price on 1/10/2001 = S$10.00 Market Value of Loaned Securities = 10,000 x S$10.00 = S$100,000

Closing price on 2/10/2001 = S$10.20 Market Value of Loaned Securities = 10,000 x S$10.20 = S$102,000

Closing price on 3/10/2001 = S$10.40 Market Value of Loaned Securities = 10,000 x S$10.40 = S$104,000



Daily fee computation
 
Fee accrued on 1/10/2001 = 4% x S$100,000/365 = S$10.96

Fee accrued on 2/10/2001 = 4% x S$102,000/365 = S$11.18

Fee accrued on 3/10/2001 = 4% x S$104,000/365 = S$11.40


Lending fee = S$10.96 + S$11.18 + S$11.40 = S$33.54

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Warning bells are ringing?

With STI coming to 3200, I can almost hear the silent (and maybe not so silent) cheering for the market by people in the forums or in this cbox. With the number of unique users in the blog climbing up steadily, it meant only one thing - that we're back in the bullish period again. Have people started selling their mothers and mothers-in-law to get a bigger stake to play the game? I think not, but perhaps we'll see it coming soon.



One of the most obvious signs of market overheating is when newspaper start reporting, with bullish tones no doubt, that market had reached yet another high. This is precisely the warning bells that one must be aware of when staking your money in the stock market. Call me a perm bear if you will, but I would rather be cautious when others are so fearlessly chasing the oh-so-high prices. I don't know how people can whack the recently launched Yamada Green resources to make it reach above 60+% on debut, above IPO price. I've not seen such things for a very long time since I'm in the market. The last I saw such things, I was a newbie chasing after high prices and being the last one to leave the party, holding the hot potato.

What are some of the warning signs:



1. Newspaper reporting people with no knowledge or skills, perhaps students, playing the market and earning thousands in a day. Some might go as far as thinking of quitting their jobs to go full time because it's such easy money. When the majority are making money in the market, it's really time to leave the party.


2. You'll see many IPOs rushing to launch itself. Companies are not stupid - why sell equities when the times are bad and they can't get good money for them? Government related companies might try their luck too. Singtel IPO was just before the dot com bust, if you remember.


3. You go to public area and see people reading books on market. Esp trading books, because it's perceived to be easier than investing fundamentally. In truth, it's not, and it requires just as much hard work as investing. I remember watching a couple at mac discussing what stocks to buy for the coming week, the table full of charts and figures.


4. You see champions talking on TV and forums, well, like champions. The moment they remove fear out of their discussion, as if the market will continue this way forever, full of confidence because all their recent picks are all winners - ah...we had better slowly exit before the mad rush out of the party begins.


5. Analyst started using PE ratios instead of PB or NAV in their reports. I started an article on this way back  when I noticed the terminologies used in reports vary according to times. They must have something to write, so the emphasis to sell their point will vary according to the times.




I'm a net seller these few months, taking out more money than putting them into the market. If the market allows me to remove stuck positions, I'll gladly and gratefully do so with no remorse. In the meantime, I'll be very careful before adding new positions. Based on bro8888's latest article on the different types of animal, I think I'm a cross between a bo chup bull and a bearish bull wanting to be a bullish bear. Yea, I'm complicated.

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Up and coming IPOs

As market marches upwards, we'll see IPO in fashion again. What's scary is that my parents asked me about it too, as they mentioned that their money in the bank is idling, so they might as well make some use of it. If my non-investing parents are saying this, there must be others who are eager to do it too. Ignoring my tingling spidey sense for now, let's see if it's worth a shot at it. I'm not interested in the fundamentals of it, but as the IPO suggests, It's Probably Overpriced. It's definitely not for keeps too. Trading? That's not enough data to do anything from it, so let's analyse it from statistical point of view.



No companies worth its salt would want to do an IPO when times are bearish, because their shares would be sold at a lower valuation than in a more bullish environment. The fact that we're seeing the gahmen selling off their stake in the upcoming IPOs must be indicative of bullish times. Whether that party would end soon, I don't know, but since I'm already at the party, might as well take some calculated bet. I did a post on IPO before, it's found here. In it, I stated that the chances of doing a quickie (defined as selling on first day of trading) is quite high. Let's add three more data points:

As can be seen, the most recent IPO samples that we had did very well on their first trading day before crashing down. This can be seen on their charts. The 4th one on the lower right is TTJ, IPO price 0.200, trading on 1st April 2010.

Taking the first day data, I calculated the gains made by making an assumption - the selling price is made at the lowest price of the first trading day:


Leader Env - 7.1% gains
Consciencefood - 31.8% gains
Yamada green - 61.4% gains
TTJ - 5% loss


It seems like the chances of making a loss is quite slim.  However, since all the trading price of the IPOs mentioned are around the range of 20 cts, but the upcoming IPOs are not in the penny realm, perhaps the gains would more muted.



Not a lot of shares are out there for GLP, so I think it'll be a catch 22 situation. If you get it it's no good, if you don't get it, it's good. The IPO closes on 14th Oct, 2010 at 10am and begin trading on Monday 18th Oct. If you're interested, you can go to ATM to apply or better yet, do it at the comfort of your own home using internet banking. Just go to the DBS/POSB account, log in and look for investment services on the left column. Then go to electronic security application (ESA) and click yes on the questions at the bottom of the screen. Follow the rest of the instructions and you'll see GLP, priced at 1.96.


Good luck!

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Personal quick reference:

GLP : Deadline for IPO application 14th Oct 2010, listing date 18th Oct
MI :Deadline for IPO application 18th Oct 2010, listing date 21st Oct

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How to kick start your savings plan?

Quite a number of people asked me how I managed to save in such disciplined manner. The equation of saving never changes: Savings = Income - Expenses. You can either increase your income, decrease your expenses or do both at the same time. I prefer the first method of increasing your income, because seriously how much can you cut from your expenses? There will be a limit to the numbers of needs that you can convince yourself to change to a want, and the flow of life will just increase your expenses especially once you have a family. As mentioned in a previous post, I estimated that you need roughly $2,650 expenses to have a comfortable life. Let's say you don't intend to have such a comfortable life and cut it down to $1,500. If you're earning 2k per month, I'll still say it's hard to save a lot by cutting expenses. The better way is still to see how you can increase your income instead.



But the purpose of the post here is not to give ways on how you can increase your income. Everyone's talents and strengths (and chances) are different, so you got to be self-aware of what you can do. If you're good in sports, maybe can you teach swimming on weekends to earn some extra bit. If you have excellent skills in bakery, perhaps you can sell some to neighbors and take orders during festivals. The point is that there's always something you can do if you put your mind to it. The best way is to monetize things that you do habitually into an income stream. You think about it.



I believe that if you do not know where you stand now, it's hard to set a suitable goal forward. I feel very uneasy when I asked these few questions to myself:

1. How much do I spend on food per month?

2. Out of the food expenses, how much did I spend it on restaurants?

3. How much do I spend on transportation?

4. Out of the transportation expenses, how much did I use it on cabs?

And questions like that. It makes me uneasy because from the money that I earned, I have no idea where it went to. I lead a very blurry life between 2003 to 2007 because I have no idea where my income goes to. At the end of the month, it seems like the money I get 'disappears' and I looked forward to the next paycheck. When I do have a sum of money, I will feel rich and buy myself something expensive to reward myself for the work well done. This goes on for years and despite working hard, I've nothing to show for in my bank account.



I felt increasingly uneasy until I finally took action to remedy it. The very first thing I did is to sort out how much money and assets that I have right now. In other words, I need to find out my net worth - how much assets I have and how much debts I owe. Since I do not have any debts at that time, it's just a matter of adding up the amount that I have in all my bank accounts, money in the money market fund, net value of my stock investments, cash surrender values of my whole life plans and CPF. I put it in an excel spreadsheet to see the changes from month to month so that I know to a great amount of accuracy (it's not 100% for sure, there will be some 'losses' but that's okay) where my money is sitting at the end of every month.



After doing up my net worth, I proceeded on to the monumental task of constructing my cash flow statement. In my line of work, my booked earnings is divorced from the cash that I actually get per month. This means that on one spreadsheet, I've to record down how much work I did on that month and on another spreadsheet, I've to record the actual amount of cash that I received. I also started recording my expenses to have an idea of how much I spend. I'm detailed in my recordings, because I would put in the amount that I spend and the categorized item (e.g. food, transport, parents, insurance etc) with a short comment. So if I spent $50 at Tony Roma's restaurant alone, I would put it under 'Food' catergory, with the comment "Tony Roma - alone". This is to track my expenses so that I know how much I spend on what at the end of each month.

 
Now isn't that very similar to companies too, where they have their earned revenues and cash flow statements? I thought it's the very same thing and started thinking of myself as a company and I'm the CEO of myself. I started doing this networth, cashflow, income statements after reading intensively about financial accounting to jumpstart my interest on investing as opposed to trading. 



Once all my 3 personal statements are up, I really sat down and started analyzing what went wrong with this 'company'. Why is it that I can make an income every month but at the end of 4 years, I've nothing much to show in my bank accounts? Now here is where the expenses can come in very handily. I think by looking at the cold hard facts of your expenses per month, you can see where all the leakages are in all its glory details. Perhaps you've been spending too much on drinks, perhaps you've been buying too many clothes, perhaps you've been ebaying too much. This fact finding exercise will remove all traces of faulty mental accounting that we will do all the time. Oh, I got a bonus this month so it's okay if I spend it on this plasma tv. Oh, I got some trading profits, it's enough to offset some losses I had and the change can be used to buy a new gadget. Some mentioned that this detailed tracking is too much for them...well, I would say it depends on how much and how desperate you want to know. I did a very detailed account of close to 6 months before doing a less detailed one from now onwards because I already know my spending pattern. The interesting thing is that initially I wanted to do it for only 3 months to have an idea but eventually it became such a habit that I extended the 'trial' for almost 2 years now.



I think after the fact finding exercises to determine where you stand currently, a plan to remedy it should already be materializing in your mind now. If you have the discipline to write down your all your expenses for 3 months and above, carrying out the plan to change your spending pattern should be a walk in the park. I think most people would give up on the expenditure recording part.



I came to the realization that I am not spending a lot of money on myself, and most of my expenditures are actually on three things - food, transportation and parents. Hence to limit my expenditures would be foolhardy, because there is a limit to how much I can cut. The only way forward to improve the financial health of me as the company, is to increase my topline - my earnings. I also realised that I can afford the little things here and there to reward myself (as I've always suspected, I'm a very horrible slavedriver to myself). I can well afford it and I should do it so that I can stay longer in this game. Having a very concrete understanding of my financial circumstances, I also made a few plans to have a merger & acquisition exercise towards the end of this month, an acquisition on property towards middle of next year and perhaps spinoff a new company (or two) in about 2 years time. All these need huge capital expenses and being a private company, I can't sell shares to the public at all. So what do I have to do?



The plan is easy enough though the execution is not at all. Just bloody save 50k per year for 2-3 yrs. There you have it - the method (work and save), the motivation (preparation of life's milestones) and the killer (me).


To summarise this very lengthy post:

1. Have an idea on where you stand financially at this moment

- Do up your net worth and cash flow, including the expenditure statements

2. Analyze your statements

- See where the leaks are and how to remedy them

3. Set progressive goals 

- Set action plans on how to reach these goals

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The little things

In my job, I can get to see really wonderful scenes of nature unfolding as I walk along the streets. The world is my office and the flowers, the trees and the living things are my colleagues. Recently, I've been taking out my mp3 player in my bag and started listening to it while walking alone to work. Being alone and being lonely are really two different things. You can be alone but never feel lonely, or you can be surrounded by people yet lonely. I think loneliness is a state of mind.



Anyway, equipped with my multi purpose handphone, I get the urge occasionally to take some really breath taking sunsets. This particular one takes place while I was walking along to another workplace around evening time. You can always tell that you'll have a beautiful sunset by looking at the orangey glow (if it happens) around that time. If the cloud cover and the angle that that the last rays of the sun is just right, the whole sky will be flooded by an orange glow which is perfect for taking pictures. Here's a few that I took quite a while ago:

The cloud looks like the temple of ancient Greeks, with the three pillars supporting the roof. Hey, looks like MBS??

After a few minutes of walking, the great drama of the sky plays out further

Breath-taking isn't it?

The pictures are breath-taking enough even with my sucky handphone camera, so can you imagine the real scene unfolding in front of me? This is really one of the things that I liked about my job. My gf always say that I'm simple minded and is easily amused/contented by little things. I agree. If we strip away the nonsense that surrounds our life, the little things are all that matters isn't it?



Did I tell you about the activity that I will do after a rainy day, especially at night? I learned of this from my very kind hearted gf, who will pick up snails that happen to stray away from their grassy territory into the man-made pavements. There are many people walking on the pavements and occasionally you'll see a crushed snail whose life is snuffed out by a big giant foot. I wonder why nature made snails with shells that are so easily crushed...it doesn't serve them any better by sailing along so slowly either. Imagine you are walking along the streets, ambling gently perhaps window shopping, then a huge feet just came from nowhere and crushes you to death. Quick death no doubt, but such a wanton waste of life.... As such, I will do my part to pick up snails that happen to be in the pavements. Pluck them out of the pavements, and teleport them to their intended direction (I hope) towards a grassy patch. They will be all frightened and retreat into their backpacked home but at least they will be safe.



What's the purpose of this blog post? Nothing, haha :) In a rare rojak of events that happened, I am not working on a Sunday so I can afford some luxury thinking about the little things that happened in my life. If you see someone picking up snails after a rainy day at night, it could well be me.

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SIA bonds oversubscribed

Sfry, a regular at the cbox, put up a link on the enthusiastic subscription of the recently launched SIA bonds. The bond carries a coupon of 2.15% pa and matures over 5 yrs. To subscribe for it, you need to have a minimum of $10,000 though you can buy off the market (it starts trading on 1st Oct 2010) at around $1k, depending on the price.



I'm just wondering why there are so many subscribers to this. I think one of the main reason is that people are getting the super lousy returns from savings deposits of 0.125%, so this SIA bond of 2.15% seems like heaven sent. Retail investors must be very frustrated with the measly returns they get from the banks, given the low interest rate environment. Recently I was also shocked to learn that the fixed deposit rates for a particular bank gives the same returns for 5k to 1mil if you compare the same periods of lock-up. I thought that the more you put it the better the returns? Apparently not anymore.


I believe that there are so many equally stable alternatives to the rather undesirable SIA bond (to me, at least), but the difference lies in the liquidity of that particular alternative (or the lock up period, so to speak):

1. CPF

Bro8888 mentioned in one of his post that his colleagues asked him if this is a good idea to invest their monies in. He mentioned that by putting it in the risk free SA account, you can get 4% already, so what's the big deal right? The bad thing is that by putting extra money into the CPF, you can put in but you can't take it out, so careful planning have to be done. This is definitely not for people who needed to use the money in the short term because the only time you can withdraw the money is when you touched the withdrawal age, which is increasing all the time. CPF is also subjected to 'government risk', so changes in the policy regarding CPF will affect all CPF members.

2. Preference shares

If you take a look at just those preference shares alone in Singapore, there are quite a few gems that offer greater returns than the SIA bonds.

Disclaimer: Do read up more on the preference shares, their yield may not be what is displayed on the name

Again, with higher returns comes greater market volatility in terms of price. I remembered seeing the price of these preferred shares plummeting in the deepest of the crisis. Just take a look at the historical charts of these preference shares and you can see it. Personally I didn't see it as something bad, unless you happen to want to cash out during the deepest crisis. I see it as a chance to get more below the par value, so when they start redeeming your bonds at par value, you not only get the coupon payment throughout the holding period but also book a good capital gains. But do buy those from companies you can trust. The capital guarantee upon maturity is only as good as the standing status of the companies.



Take a look at the OCC 3.93% NCPS 10, trading at 94.60, it's quite a good one compared to SIA bond. First of all OCC stands for OCBC...Singapore banks, so I think it's as safe as SIA, if not safer. 3.93% yield is on the par value of 100, since the price now is 94.60, you'll actually get a yield of 4.15%. NCPS stands for non-convertible (or cumulative) preference shares, meaning that you can't exchange it for ordinary OCBC shares nor can the payments be accrued to the next payment date should they decide not to payout on this payment date. The payments are not guaranteed, unlike the bonds, but it's almost as good as a guarantee. You can read more about the details here. Do read more about it, because I know that some preference shares change their yield after a certain date, so it might not be the 3.93% coupon rate displayed on the name of the counter.



Most of the other preference shares are trading at 5-6% yield, even after taking into account their price which is trading at higher than par value. Can really take a look at these alternatives seriously.


These are the few alternatives that I can think of. Of course there are other investments that gives dividend yield much greater than the 2+% given by SIA bond, but those are different classes of assets with different risk altogether. I would gladly wait for more bonds to be traded on SGX to see if there are better investment ideas now that SIA started the ball rolling. Price matters a lot in all cases because buying even the most riskiest product at a super cheap price can turn out to be a profitable and not-so-risky experience. I would wait for SIA bond to go around 0.70+ to get a 3%+ yield before entering. Don't laugh at me, it just might happen within the next 5 years .

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