All about money

Time shareholders rap SGX execs?

2011-02-22T07:30:00.000-08:00

I am delighted to see the Tokyo Stock Exchane rap the knuckles of the executives of the Singapore Exchange and remind them buying the Australian Exchange isn't a do or die affair.

Rather, given the way SGX's share price has collapsed, the merger is a do-n-die move: do it, especially if SGX raises the bid price, and it's a guaranteed one way ticket to oblivion.

For people like me, who bought into SGX at lowish prices, we would just lose our paper profits.

For the TSE, which are sitting on huge paper losses -- its 5% was bought at $10 per share, if I remember correctly -- it will certainly be worse.

Mayb it's time for SGX shareholders to start a ginger group to the tell the still new SGX CEO that enough is enough?

Feb 22, 2011
Singapore bourse shouldn't raise ASX offer, TSE warns

TOKYO - THE Singapore Exchange should not raise its already generous offer to buy Australian bourse operator ASX because that would bring unnaceptable dilution for its shareholders, said the chief executive of the Tokyo Stock Exchange, which owns a 5 per cent stake in the Singapore bourse.

'The offer now looks big, and we can't be happy with the dilution if it is raised further,' Atsushi Saito said at a regular news briefing at the TSE.

SGX faces pressure to sweeten its US$7.9 billion (S$10 billion) offer for the rival Australian bourse to counter opposition to the deal from politicians and win regulatory approval, which requires an agreement to lift a 15 per cent cap on foreign ownership.

This week SGX agreed to allow ASX to have an equal number of directors in the merged company in an attempt to counter calls for the merger to be scrapped. Yet, under the agreement SGX will still own a 64 per cent share after the merger.

Giving ground on that ratio risks turning some shareholders such as the TSE, which up to now supported the union, into opponents of the merger, which if strong enough could scuttle the first major bid at consolidation by major Asia-Pacific exchanges.

That could leave Asia lagging as bourses in Europe and the United States move ahead with new alliances and mergers. -- REUTERS

Looking to still more good years

2011-02-02T01:07:00.000-08:00

Now back to cooking the Reunion Dinner! :-D :-D :-D

Casino & arithmetics of paying one-year casino levy

2011-01-30T05:42:00.000-08:00

When i paid the $2,000 per annum entry levy for the Marina Bay Sands Casino on Jan 2, I knew I must visit more than 12 times to make the sums work for paying the levy in advance, instead of paying $100 each time I visit.

Also, apart from the upfront payment, I have given up the flexibility of visiting the casino fewer than 12 times during the next 12 months. Because if I go fewer than 12 times, I would in effect be paying more than the government mandated $100 per day levy.

However, I know for sure that I would visit MBS more than 12 times in 2011. I intend to anyway.

Where is the break even point for me? I guess 20 times should do it for me, or two visits over 10 months. That means I would be paying a $50 per visit levy.

Still, that would depend a lot on whether my luck holds out on most of the visits.

If I lose more money than I win, then I may not visit as often as twice a month. On the other hand, if I win more than I lose, then I may even make more than 20 visits over the year.

Stay tune on this blog for more about whether the sums work out for me at MBS!

Marina Sands targetting me to win?

2011-01-26T07:24:00.000-08:00

Well, well, I had another day of wins at Marina Bay Sands today. Following on my last post, I wonder if my speculation has hit bull's eye?

Ever since I bought myself a one-year entry pass to the Marina Bay Sands casino on Jan 2, I’ve been to the casino four times, including Jan 2. The other times I visited are Jan 7, 17 and today, Jan 26.

I’m more convinced than ever that I did the right thing, in buying a one-year pass, in terms of enjoyment from the visit as well as being able to gamble wisely, without over tiring myself — as had been the case on the first four occasions when I paid $100 per entry.

For that amount and limited to only a 24-hour entry, I hung on and on, till I was dog tired. Sure, I didn’t really lose much money, if at all, if the levy fees were ignored. For sure, I had clear cut winnings too – on Dec 23 when I booked myself an early X’mas present from MBS’ coffers.

However, starting from Jan 2, every visit save the first, when i lost some $330 (excluding the levy), I’ve managed to come out on the plus side.

On Jan 7, I came away with handsome winnings; on Jan 17, I’m not entirely sure but leaving with a $90 cash out ticket that day, and all that I had lost having come from winnings from the Jan 7 wins, I guess I must have broken even.

Today, I left the casino after about a 4-hour joust with various slot machines with a cash-out ticket of $230. I had started the day with the Jan 17 $90 cash out ticket and didn’t have to dip into any money from my wallet.

That means I’m up $140 on the day; that’s why I sang all the way home to dinner.

Oh yes, for those who are looking for some successful jousts at MBS, the machines which were kind to me today included Butterfly Kisses, Jackpot Party and Magician.

And oh yes, never bet more than one bet per line. That may explain my longevity to date at MBS

And oh yes, oh yes, I got $16 worth of free parking (could have got my full value of $26 if I stayed longer, but I believe in the adage to get going when the winning is good!). Also, I’m another 5 points closer to having my Premier Advantage membership upgraded. Just another 303 points to go.. lol!

Can Marina Bay Sands target me to win?

2011-01-24T07:02:00.000-08:00

It's a thought that keeps coming to mind. Since the Marina Bay Sands casino knows exactly the amount of money I gamble -- via my Premier Advantage card stuck into a slot in the slot machines, collecting points and Premier Dollars, it must also have a good idea how much I win.

It needs only a little leap in imagination for me to wonder whether MBS could similarly control how much I win?

Sure, pay out rates of machines are supposed to be about 80%. But is it 80% collectively of the 1,600 machines spread across two levels of the casino? Or is it 80% per machine?

With so much of my data in its data bank, doesn't it need only a little tweaking to direct some winnings my way, to encourage me to come back? Or is such targetting not legal?

If the programming of Bejewelled 2 can ensure that every player gets thru level one, why shouldn't a casino have the ability to entice customers with sweeteners, so long as the sweeteners aren't illegal.

Just wondering!

Moi, big time gambler, no?

2011-01-22T19:18:00.000-08:00

Ever since I went to Marina Bay Sands casino for the first time in June, 2010, I’ve been an MBS Premier Advantage red card member, which is the lowest of the low among MBS Premier Advantage membership categories.

The next levels are Gold, Platinum and Diamond respectively.

I had signed up first and foremost because it’s free and is supposed to give me freebies, tho I never really knew what these were at the time of signingup.

Later, I discovered I could redeem the horrendously expensive $24 parking charge by using up some of the Premier $ that resulted from “points” I earned by gambling in the casino.

Since I’ve already visited the casino a grand total of 7 times with the last visit on Jan 17 (other visits: twice in June, once in July and December and three times so far in January), I decided to explore a bit more on what exactly my Premier red card delivers.

So, I logged onto my membership account tonight and discovered

1) I had accumulated 80 points that left me 308 points short of the next level of membership — a gold card that needed 388 points to qualify. As it has taken me almost a year to earn about 25% of the required points for elevation, it will likely take me another three years of the same level of gambling to get upgraded!

2) At my membership level, every 10 points translates into $5 premier. That means I should have a total of $40 premier. However, I’ve had six free parking passes, which at $4 premier per parking pass (one wasted because I misplaced it just be4 I exited the carpark) must have eaten $24 premier. So the balance of $16 premier in my account tallies.

What I’m really curious about is just how much one must gamble to earn 1 gambling point? Can’t find any info on the MBS website. Nor was I any wiser after asking at one of the membership service counters at MBS, the last time I was there.

So I’m left to guess: Is 1 gambling point equal to $100 gambled?

If so, my 80 points would reflect having pumped $8,000 into the slot machines (my only mode of gambling) or more than $1k per visit.

But I’ve only been down at max $350 — and only once on Jan 2 — and lost much much smaller amounts on two other occasions, while coming out quite handsomely on the other four. So most of the gambling points earned must have come from the constant recycling of my capital and that of the casino!

Yes, MBS?

Why save more and spend less?

2011-01-16T04:31:00.000-08:00

Whenever I read on blogs making saving more and spending less their owners' New Year resolutions, I wonder why not choose another route?

Why not make earning more a resolution?

That way, one could save more without saving more, if you know what I mean. Say, you used to save 10% of a monthly salary of $8,000.

If you achieve your target of earning more, say a monthly pay of $10K and you still save 10%, you would in effect be saving more in absolute terms.

Also, with a higher pay or more income, you needn't spend less. You may even consider yourself Scroogie if you spend no more than what you did when your pay was 20% less!

Loot from Marina Bay Sands

2011-01-07T07:59:00.000-08:00

Went back to the casino at Marina Bay Sands today. Still had a voucher for about $37 from last visit on Jan 2. Thank goodness won big -- by my standards -- and so have completely recovered from the last loss, with some fresh capital left over for the next outing. :8)

What I won today. Below is the machine which gave me the best pay-out. I didn't realise I was making a $5 bet: just as well or I won't have made the bet. Better still, I struck lucky with that first bet!

Played 4 machines

2011-01-04T07:38:00.000-08:00

On Jan 2, played 1st machine (above) at Marina Bay Sands which paid very well. I wanted to reach the 10000 credit mark but neve made it.

So, after an hour of nearing my mark and then moved away, I tried my luck elsewhere, starting with Little Emperor. Altho I did better than all beside me, I still lost some of my winnings from Machine 1.

Then I moved to Machine 3, the Glitz machine that paid so well on my Dec 23 visit.

To my horror, I discovered when I was on a losing streak that what i thought was a 60 cents bet (from my previous visit) was actually a $1.50 bet.

Being on a losing streak, I lost the balance of my money: down by $280 in about 3 hours.

Should have gone home but decided to go to ATM and withdrew $200 and went back to the Bank Robber machine which gave me so much play back in July. Lost about $70 and decided to call it quits ... for the time being anyway.

Hungry, tired and unable to concentrate. Best to go home...

Casino notes

2011-01-03T07:23:00.000-08:00

Paid levy for Marina Bay Sands casino for one whole year yesterday. $2000

Lost about $330 after 4 hours of play.

Carpark cost came to $13 but needn't pay as I've got free parking.

Neither a saver nor a spender be

2010-12-07T06:59:00.000-08:00

Crude oil prices have again risen to around USD90 a barrel, almost without much notice or comment, except when prices are raised again and again at the petrol stations, as happened yet again today when the last rise is still in my consciousness.
So I searched for some remarks I sent to friends a couple of years ago when oil prices were at USD114 and no less than Goldman Sachs was forecasting oil at USD200 a barrel!

As it turned out GS was dead wrong but as someone once said, even a stopped clock is right twice a day. So perhaps it's time to share my past remarks with a wider audience.

Below was what i said, with slight modification.

Even as the oil price rises, Singaporeans are somewhat insulated because of the strong Sing dollar which is good

as we import most, if not, all of the stuff we consume from Ribena to rice. So we pay less and get the same or more, depending on whether what we consume has gone up in price in the exporting countries

when GIC and Temasek want to invest massive amounts of tax-payers' money abroad in an uncertain market, our super S$ can buy more assets when used overseas

as super-rich foreigners attracted to buy Singapore assets will have to pay more, instead of buying up our country and our heirlooms on the cheap.

as foreigners who come here to stay, study, seek medical services or pleasure etc, have to pay more in terms of their own currency, so that they will have a higher hurdle to cross and not price out all Singaporeans

as we can have even cheaper foreign labour (or even talents) because the wages we pay when converted into their home currency will be more

However, pity those in Singapore who

saved more, spent less and eschewed going into debt. What’s their reward? Deposit rates have always made up for inflation, according to a friend who pulled an interest vs inflation rate chart going back 30 years. 2007 was the only time where the inflation rate had outpaced deposit rates. Money on deposit is now losing 5% per annum in value and even worse when measured against property prices.

have invested abroad and now see both their foreign currency deposits and income decimated by the strong S$.

So what’s the solution for the squirrel Singaporean? My answer:

Get paid in S$ but work abroad to get a better bang for your wages

Retain funds already sent offshore to take advantage of interest rate differentials, though the AUD is probably the only unit that pays decently today

Spend all your loose change, because with inflation at some 3%, bank deposit rate 0.25 to 0.75% for the small saver, and oil prices at USD90, better splurge today and diet tomorrow

Spend more time and money overseas, especially where your money gives you a Singapore standard of living at half the price or less. Time was the lights work, the taps work and the telephone works – seemingly only in Singapore. But which large city today within a six-hour flight time or less from Singapore doesn’t offer the same but with lower price tags? This is made more attractive when return air or coach fares could cost less than a long taxi journey in Singapore!

Time to watch the oil price gyration again and see if GS forecast made in 2008 may come true in 2011!

It's a baaaaad thing: SGX offer for ASX

2010-10-25T07:35:00.000-07:00

as Suze Orman, internationally acclaimed personal finance expert, will say.

And I will echo her and more.

Imagine, the Singapore Exchange is going into $4.5 billion worth of debt ( the sum total of what it earned in the past decade since its listing doesn’t amount to anything like this!) and also issuing the equivalent of 60% of its share capital base to buy into an exchange that’s about to lose its monopoly!

Chi-X Global Inc. is expected to gain clearance to form a rival exchange in Australia possibly as early as the first quarter of 2011. That will create a competitor that is likely to eat away at ASX’s trading volumes.

SGX’s takeover attempt reflects a company that has lost its way and is grabbing at seaweed to remain relevant.

And this is what happens when the stock market senses SGX’s panic in the dowry it wants to give to its dowdy Down Under bride.

Players savaged SGX shares today when they resumed trading after the official announcement of the takeover. Down 6% in one day!

With such a huge debt — which needs to be serviced – how is SGX going to continue with its generous dividend payout? Especially when it has 60% more shares to service?

Add that to the huge overhang that materialises when suddenly there are so many more SGX shares available to the market.

And the mauling might well continue unless, unless a rival bidder arrives.

And of cos, that recovery will depend on whether the new bidder will go for the hand of ASX or SGX!

If the former, SGX would be left truly out in the cold, after having served as the agent provocateur in winkling out the bid. And the bidder could well be the Hongkong Stock Exchange – even though today its spokesman Henry Law said:

“HKEx will not pursue alliances, partnerships or other relationships purely for investment gains. HKEx will consider selected opportunities in the areas where it can enhance its capability and strengths in technology, business and services.”

But it is early days yet. And there could be many a slip betwixt the cup and Mr Magnus Bocker’s lips. He could have biten off more than he can chew!

Make it 24/7 lah, SGX

2010-07-26T02:39:00.000-07:00

Like it or not, I think the Singapore Exchange will be extending its trading hours, sooner or later. This despite the fuss remisiers and some market players are making in response to a reported mass dialgoue between SGX and its stakeholders earlier this month concerning the scrapping of the current lunch break, to make it one continuous session from opening to close.

I say go for it, SGX, no matter what the remisiers n like-minded but parochial thinking people say.

After all, didn't all sorts of dire nay-saying abound when the SGX predecessors decided to reopen the stock market on the 3rd day of Chinese New Year (in line with all other businesses), when it was the tradition for brokers to go back only on the fourth day? And despite all the gloom and doom, our stock market has gone from strength to strength since then.

In fact, why stop at scrapping the lunch break? SGX, under the new CEO, should be bolder. Why not make it 24/7 trading? That way anyone in the world can take a punt on the SGX in their own time zone. Also, no need to trouble the tradition-bound remisiers.

Since our SGX system is an order driven, order matching system and since any investor can trade on SGX via the Internet, I don’t see why the system shouldn’t be used to the max, instead of closing down for week-ends and the better part of every day. This is especially since SGX is going to invest another $250m to supe up the system even more…

As for the k-p-k-b behaviour, these grousers should note that since Jan 11, SGX has already extended its derivatives trading hours till 1am Singapore time the following day for contracts with T-plus-one sessions to accommodate growing international demand for Asian equity derivatives.

The longer trading hours enable traders to respond to market movements and manage their risks across global time zones, including after the close of European equity markets.

Contracts which enjoy the extended trading hours include the Nikkei 225, MSCI Taiwan, MSCI Singapore and S&P CNX Nifty (India) index futures.

With longer, if not 24/7, trading hours, volume is bound to rise, though by how much no one can say till it is put to the test. Also, vloume would depend on what products are available on SGX equities platform.
Asian exchanges, including Sout Korea and Taiwan, that have dropped their lunch-time trading breaks have seen daily volumes rise between 8 per cent and 15 per cent, observers say.

Critics of extended trading hours point to China and Hongkong which have shorter trading hours than Singapore but are among markets in the region enjoying the highest volumes.

Such critics however overlook the fact that China and Hongkong have a far larger critical mass of investors than most of the markets in the region. And markets that have longer hours and desirable products will take nibbles from markets with the critical mass but shorter trading hours. Geddit?

Fortis is merely trying to bait Khazanah Nasional

2010-07-02T08:05:00.000-07:00

In my view, Fortis' offer -- a mere two-cent higher than Khazanah Nasional offer of $3.78 -- for Parkway Holdings is more to block Khazanah's ability to buy on-market than anything else.

That way, it is buying time for itself and making sure that Parkway has to up its offer or else let it have control of Parkway cheap.

I don't think Fortis intends to enter into a bidding war with Khazanah.

So the tussle which everyone is anticipating may not materialise.

Investors should remember that companies taken over after a tussle usually sucks under the new owner. Ditto for those when the suitors walk away.

A takeover may be a good thing for short term flippers and day traders but often not for the long term investors who are left to pick up the pieces which ever side wins! Or when the situation returns to status qyuo ante. Because even then, they are left to foot their share of the advisory bill for the takeover.

Home ownership restrictions skew property prices

2010-06-18T20:00:00.000-07:00

Business Times - 12 Jun 2010

Price of Sentosa Cove home defies gravity

Top-end bungalow sells for $36m at $2,403 psf despite cautious mood in property market

By KALPANA RASHIWALA

AMID the caution that has crept into the market for mainstream condos since last month, a record price has been set for a top-end bungalow on Sentosa Cove. The property at Paradise Island changed hands in the resale market for $36 million or $2,403 per square foot on land area last month. In terms of both, the absolute amount and unit land price, this is believed to be the priciest bungalow deal in the upscale waterfront housing district, based on caveat records captured by the URA Realis system.

The $2,403 psf unit land price is also probably the highest for a bungalow transaction anywhere in Singapore, property agents say. The deal is understood to have been brokered by DTZ. The two-and-a-half storey bungalow fronting the waterway has a private pool and a berth for a yacht. Homes on Sentosa Cove are sold on 99-year leasehold tenure sites.

The new owner of the Paradise Island bungalow is believed to be a Chinese national who is a Singapore permanent resident. The sellers, who are understood to be Singaporeans, have reaped a handsome profit. According to caveats data, the house was last transacted in September last year at $20.18 million or $1,347 psf. The property was first sold in April 2007 by Ho Bee, the developer of Paradise Island, for $18.1 million or $1,208 psf. The bungalow has a land area of 14,983 sq ft and a built up area of about 17,000 sq ft.

A nearby property on Paradise Island also changed hands in March at $2,390 psf in the resale market but as its land area was smaller at about 8,105 sq ft, the lumpsum price was lower at $19.38 million. Ho Bee's Pardise Island project received Temporary Occupation Permit (TOP) in May last year.

A new record bungalow price could be set for the location if Satinder Garcha's Elevation Developments gets the $3,000 psf it is looking at for its three-storey bungalow at 81 Ocean Drive, which has been completed. With a land area of 9,436 sq ft, the total price would work out to $28.3 million sq ft. The unit's built-up area is 11,500 sq ft. According to KH Tan, managing director of Newsman Realty, which is marketing the property, an offer for $2,700 psf from an American has been received, but Elevation is waiting for its target price.

The unit comes with a glass lift, two master suites, three smaller en-suite bedrooms, an infinity pool, a home theatre room and a spacious lawn. Elevation is offering the property furnished and fitted.

Foreign buyers, including mainland Chinese, have been active buying landed homes in Sentosa Cove, say property agents.

In March, four members of a Liu family from Liaoning are said to have acquired a bungalow each at Kasara - The Lake collection at Sentosa Cove from YTL Corporation. Their purchase prices range from about $15.9 million to nearly $26 million per bungalow or $1,731-1,780 psf on land area. The villas are slated to receive TOP in June 2012.

DTZ executive director (consulting) Ong Choon Fah is not expecting bungalow prices on Sentosa Cove to keep climbing at the same pace, given the more cautious global economic climate which could dent foreign interest. 'However, there is limited supply of just 400 landed homes on Sentosa Cove. And long-term investors may draw the conclusion that putting their money in the Singapore property market is a good investment when you consider the alternatives,' she added. Some market watchers say that the opening of Resorts World Sentosa has also boosted the appeal of owning a home on Sentosa Cove to some foreigners.

Sentosa Cove is the the only place where foreigners who are not Singapore permanent residents are allowed to buy landed homes, although this is still subject to approval from the Land Dealings (Approval) Unit. Also, foreigners buying a landed home on Sentosa Cove do not have to hold the property for at least three years before they can resell it, unlike the case when they buy a landed property on the mainland.

Whether on the mainland or on Sentosa Cove, foreigners may at any one time own just one landed home in Singapore and that too for owner occupation only.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

Buffet past his eat by date?

2010-06-08T01:58:00.000-07:00

Last week, on Wednesday night, I listened to the testimony of Warren Buffet -- the sage of Omaha -- and that of the man from Moody, Raymond McDaniele, at the Financial Crisis Inquiry Commission, broadcast live by CNBC.

To say I was unimpressed by either's testimony is to put it mildly. The issue was about whether rating agencies did their job well when they gave AAA-OK's to bonds and derivatives of bonds and options, swaps and what-have-you structured out of these instruments.

McDaniele's testimony was most telling.

Moody's took the assumptions from the issuers; its staff never went to the ground and tested by sight, sound and interviews whether the assumptions on the subprime mortgages were sound, perhaps even sane. None of that was done because why would the big-name issuers lie, right? Also, with the billions $ of products being churned out, there just weren't enough grunts to do the leg work. It was like money for jam; rubber stamping other people's formulae and algorithms.

For a full, more incisive and devastating account of what the rating agencies did (Sweet, F-all, it seems), read Michael Lewis latest hot-seller, The Big Short.

The fact that Mr Buffet could have taken such a large stake in Moody's while the subprime worms were multiplying fast and furious may explain why he couldn't bring himself to give voluntary testimony to the crisis commission -- he had to be subpoenaed!

Below is a Business Times report of Wednesday's testimony:

Business Times - 04 Jun 2010

Buffett fails to impress panel on rating agencies

Reforms should target financial firms with too much leverage, he says

(NEW YORK) The Oracle of Omaha, for once, may have failed to impress his audience.

Warren Buffett, the billionaire whose investments are followed religiously on Wall Street, had no easy remedies when grilled on Wednesday about the role of credit rating agencies in fuelling the financial crisis.

Testifying before the Financial Crisis Inquiry Commission, Mr Buffett did not meaningfully retreat from his defence of Moody's business model, though his Berkshire Hathaway has cut its stake in Moody's to 13 per cent from nearly 20 per cent a year ago.

Moody's shares have fallen 74 per cent since February 2007, and Mr Buffett said he would have sold more shares had he foreseen the housing downturn. Yet the 79-year-old appeared to dismay panel members in offering no clear fixes to one of the rating industry's most criticised practices - the payment by issuers for ratings.

'I'm not sure he fully comprehends the range of questions raised about Moody's business practices and culture,' chairman Phil Angelides said in an interview after the hearing.

During the hearing, vice-chairman Bill Thomas appeared exasperated as Mr Buffett hesitated to endorse specific reforms.

'You've got to do more,' Mr Thomas, a former chairman of the House of Representatives Ways and Means Committee, told him.

'Certainly I could have done more,' Mr Buffett responded.

Testifying under subpoena after resisting entreaties to come forth voluntarily, Mr Buffett said rating agencies and others miscalculated the housing market after being lulled by the 'narcotic' of seemingly ever-increasing home prices.

Admitting he had been no more prescient, Mr Buffett said Moody's and McGraw-Hill Cos' Standard & Poor's unit 'made a mistake that virtually everybody in the country made.

'It was the granddaddy of all bubbles,' he added.

Mr Buffett declined to advocate harsh remedies such as the removal of top executives from credit raters. He said reforms should instead target financial companies with too much leverage, and punish chief executives and boards that require unusual government aid. Rating agencies did not take taxpayer bailouts during the crisis.

'I am much more inclined to come down hard on the CEOs of the institutions that caused the United States government to necessarily bolster them, than I am on someone who made a mistake that 300 million other Americans made,' he said.

Congress is weighing legislation to curb the agencies' power, and up-end their decades-old model of having issuers pay for ratings and shop around among agencies.

Moody's, S&P and Fimalac SA's Fitch Ratings are widely faulted for fuelling the crisis by assigning unreasonably high ratings for too long, and then downgrading them too fast.

Also testifying was Moody's chief executive Raymond McDaniel, a lightning rod for criticism of the industry. More than two-thirds of Moody's revenue comes from ratings.

'We believed that ratings were our best opinion at the time that we assigned them,' Mr McDaniel testified. 'The regret is genuine and deep.' He also said there is an 'important public good' served by the current issuer-pays model, saying that ratings are later released publicly for free. Mr McDaniel blamed the financial crisis mainly on weakened housing and tightened credit.
For his part, Mr Buffett said he still loves credit raters' business model, citing a 'duopoly' that Moody's and S&P enjoy, but said investors should do their own credit homework rather than rely on agencies to do it for them, perhaps incorrectly.

Mr Buffett has used a similar argument to defend Goldman Sachs Group Inc's marketing of securities that led to a US Securities and Exchange Commission civil fraud lawsuit against the Wall Street bank in April.

Berkshire owns US$5 billion of Goldman preferred securities and warrants to buy an equal amount of common stock.

'Buffett continues to talk his book,' said Joshua Rosner, managing director of Graham Fisher & Co in New York. 'He appeared to own Moody's not because it was either a well-run or fundamentally defensible business, but rather because it was legislated and mandated into being.'

The billionaire also had supporters. Panel members were 'looking for someone to hang, and they were trying to enlist Buffett in their lynch squad,' said Jerry Bruni, who oversees US$425 million at JV Bruni in Colorado Springs, Colorado. 'Buffett was not taking them up.'

The crisis panel has held several hearings featuring top finance officials, including Goldman chief executive Lloyd Blankfein. Its findings are due by Dec 15.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

Never go short on property, ever

2010-05-28T01:49:00.000-07:00

This is a mantra that should be taught to everyone, unless he/she lives in the heart of th Amazon or Gobi Desert.

I'm reminded of this again when I found a flyer in my mailbox from a property agency/fund manager wannabe.

The flyer says:
Why Invest In Real Estate?

Then goes on to list out the reasons

50% of the names mentioned on The Times Rich List made their money through real estate
A stable & simple wealth building vehicle through rental yield &/or capital appreciation
Hedge against inflation
Power of Financial leveraging
Land is scarce in Singapore
Population will grow

Actually, except for the first fact, the rest are really points that could be debated and/or have to be moderated with several caveats. True, it doesn't mean that all the factors won't hold up to scrutiny. It's all a matter of timing and time-frame.
Those who understand about property, economics and finance will know what I mean, so I don't need to elaborate.

This said, there's an invisible elephant in the room that will make property a cinch for those with the holding power, especially in Singapore.

And this is what I wrote about that elephant in my main blog at http://singaporegirl.wordpress.com/2010/04/18/nuts-to-promise-affordable-homes-for-all/

Globalisation ensures that a small, well-run place like S’pore will have high demand for property, internally and externally. U just figure the sums. China’s 1.3 billion = 325 million households. If even 5% of such households can afford foreign property, it translates to about 16 million households. Add another 10 million from India. Then another 10 million from the rest of the world and we are talking about 36 to 40 million households looking for foreign, mostly high-end homes. Perhaps even 50 million. Of cos not all of these will come to S’pore; only a fraction but from the numbers alone and considering that our entire home property stock is about 1.2 million, then you can see why property prices here have only one way to go in the long run. Especially in today’s low interest rate climate.

More doomsday scenario...

2010-05-17T00:48:00.000-07:00

My broker just sent me a doomsday scenario for the rest of the month which she ripped off from dowjones.com:

"Weak U.S. stock futures suggest Singapore shares unlikely to turn around for rest of session. Whether prices fall further may hinge on how European markets open later. STI off 1.5% at 2813.41, with immediate support at 2800, followed by current month low of 2775. Outlook may not improve any time soon, says SIAS Research head Roger Tan; "with the World Cup coming in June 2010, we believe that we will continue to see a lackluster and directionless equity market for the rest of May 2010."

Wanna bet?

Didn't I say, in the post be4 this, that what goes up will come down? It's done so with a thud as of last Friday (May 14).

Now this despite the US1 trillion bucks to be injected into the Old World's various teethering economies so that the stitched together euro won't crumble like a piece of chalk from the cliffs of Dover.

The new, for which read, the overbought scenario this week is that worries abound about the effectiveness of the USD1 trillion bail out. Will it take too long to cobble together let alone disburse before the patient evaporates right be4 everyone's eyes, very much like an ice-carving apres a function.

Other worries is that to pay back the bail-out, European governments would have to go into austerity overdrive, cut spending and raise interest rates. Or if this doesn't pan out, there will be hyperinflation, further euro devaluation, possibly changes of governments, riots in the streets etc to help debt laden nations get out of repaying their debts at their true value...

Whatever the scenario, my prediction is, if the falls are swift and large, there will be a rebound. Hey oil is at its lowest levels for several weeks. Now, isn't that a reason for share prices to resume climbing, albeit up a rather slippery pole! :-D

Sell in May and go away?

2010-05-10T03:57:00.000-07:00

Not on your Nelly...

Such adages were good for days when stock markets weren't global and no one can access the market once it's officially closed for the day or the week end.

Not any more when you can buy options, futures and every sort of derivatives you can think of on the market or around the market. Also, not any more when you don't need to talk to your stockbroker whether you want to buy or sell. Like Nike, you just do it via the Internet or intranet.

So, Singapore fell for five straight days last week, as did some of the major (read, influential) markets, it doesn't really need a USD1 trillion package from the Old World of Europe to ring fence the euro and Greece for share prices to pick up.

It and other markets that had been crumbling will rise because what falls must rise, and what has risen must fall. This is the law of people using spare cash earning almost zero interest rates to churn their portfolios.

So next time, when the markets are falling, no need to wait for experts or analysts to tell you the markets will rise beause of this or that. Ditto when the markets are galloping, no need to listen to those who warn of bubbles or unsustainability.

Such forecasts are simply no-brainers!

Making it big: here's how

2010-05-02T01:26:00.000-07:00

Most of Singapore who read the newspapers today must be agogged by the asset split ordered by the High Court. Yeo Chong Lin has been ordered to give one third of his assets to his ex-wife. That amounts to a cool S$40.7 million.

Mr Yeo claims his assets to be only S$52 million whereas the High Court has put them as S$115 million. Yet whichever is the real figure, the self-made multi-millionaire sure didn't waste the last 58 years, as shown by the following extracted from court documents:

"The parties had only primary school education. The husband’s first job was as a hawker’s assistant. In 1952, he joined the Singapore Harbour Board (subsequently the Port of Singapore Authority (“PSA”)) as a tally clerk. In 1970, the husband set up a firm known as Sea Well Industrial and Ship Supply Company (“Swissco”) which was a sole proprietorship carrying on business as a ship-chandler. He left the PSA in 1970 to concentrate on Swissco and it gradually expanded. In November 1970, it was converted into a private limited company called Swissco Pte Ltd.

The husband’s first office was rented from the wife’s elder brother and it was a small space in Chow House in Robinson Road. There was no telephone line in the office and the husband used the home telephone line to receive purchase orders from his customers and to communicate with them. At that time, the wife would take these telephone calls and relay messages to the husband. In the initial stages of the business, there were occasions when the husband took the wife along to dine with his customers. On other occasions, she took the customers’ wives out for sightseeing and shopping.

According to the wife, apart from entertaining customers, she also accompanied the husband on his trips to deliver goods. Additionally, she often cooked and delivered lunch meals to the office staff. The wife also asserted that in the late 1960s, she had borrowed $20,000 from her mother and passed the sum to the husband to assist him in meeting the start up costs for the business. The husband was also able to obtain favourable credit terms from a company known as Wah Hong Pte Ltd which was a major ship supplier belonging to the wife’s father because of his relationship with the wife."

Never put all your talents into one plane

2010-04-12T05:50:00.000-07:00

Alack and alas for Poland. Obviously no one at the highest level thought it dangerous for their president, central bank boss, head of military and what not to all travel in one plane.

Now the unexpected but not impossible happened.

The plane, carrying about a century worth of Polish dignatories, crashed and all on board are so dead that most couldn't be identified.

If anything, this sad episode should reinforce the belief not to put all your eggs in one basket, if you don't want to end up accidentally with having to make omelette.

Ditto when it comes to investments.

Never have 100% in property; 100% in cash (even in eras of super low inflation, buying power depreciating at the rate of 1 or 2% could erode that nest egg under the bed); 100% in equities (even if they are industry and geographically diversified).

Given this, I wonder why all of us stake our lives on one country? And our happiness in one person? :-D

Oh what a tangled web ...

2010-03-17T07:29:00.000-07:00

... the latest Government moves, in response to the vocal minority wanting rules to rein in non-citizens from the HDB market, have proven!

As a result of new rulings recently instituted to placate those Singaporeans who can't afford to compete with permanent residents in the HDB resale market, many non-Malaysian* PRs would now have to widen their search beyond popular areas. This is because some parts of the island have already reached the limits set out in the new quota system.

Now what does this mean for Singaporeans who own HDB flats wanting either to upgrade or downgrade?

The market for their flat will be smaller as a result of the quota, if their flat is so unfortunate as to be in a block where PRs already form 8 per cent of the households. Even if their block has fewer than 8 per cent of PR households, these Singaporean owners can't breathe a sigh of relief until they determine that their neighbourhood doesn't have PRs forming 5 per cent of households.

This is what I call shooting Singaporeans in the foot!

But it serves citizen owners right, if they are among those who had been badgering the Government to rein in the PR buyers, forgetting that when their turn comes to sell, the bigger the market, the better it is for their assets.

What is even more galling about the "restrict the PRs" move is that it makes those HDB flats already owned by PRs potentially even more valuable than rising property prices have already made them.

This is because PRs without a HDB home -- who for whatever reason want to move into a block or neighbourhood where the quota is already filled -- have no choice but to buy from other PRs. So suddenly HDB flats owned by PRs in such blocks and neighbourhoods can demand from fellow PRs a premium over the asking price.

Of course the Government could stop the PRs from enjoying this unintentional benefit by decreeing that PRs in a quota filled neighbourhood wishing to sell must sell it to a Singaporean or the Government.

But I'm certain it won't be so dumb as to further complicate an already complicated move.

So far, it has been dumb enough to open the HDB resale market to all PRs. Sure, when that step was taken, the intention was good -- to allow Singaporean sellers to enjoy a larger pool of buyers.

Having taken that step, it was dumb enough to respond to those citizens who want an easy ( read "cheap") way into the HDB resale market -- by imposing the PR quota as well as by making resale buyers keep their flats longer.

As I've pointed out in my March 8 post, the move to make resale flat buyers keep their flats for three years won't bring down prices; instead, by locking up chunks of flats from the market for 36 months, the Government is effectively underwriting a better price for those who are able to sell.

How that is going to please Singaporeans whinging to buy at lower prices I don't know. I also don't know how the Government is going to appease those Singaporeans who are unitended victims of the PR quota. These have to sell to Singaporeans, at perhaps a lower price than would be the case.

Tell them that this is national service? They will tell Mr Mah Bow Tan to tell that to the marines.

*PRs refer to non-Malaysian PRs only, as the quota rules don't apply to Malaysian PRs.

Any takers for a prestigious fund raising job?

2010-03-09T02:28:00.000-08:00

At the behest of a friend, I'm putting up this post which is about a career that's available with SingHealth and/or SGH.

(I don't want to blow my own trumpet but I've been very successful in matching employers and potential employees in at least three instances and would be happy to continue this -- all for no more than a word of thanks!)

Anyway here goes ..

Manager, Fundraising

Reporting to the Director, Fundraising & Development, the job involves executing approved fundraising and sponsorship projects, and overseeing administrative aspects of the Fundraising and Development Office.

The successful candidate will be directly responsible for supporting the Office in building and maintaining close relationships with donor and potential donors.

Requirements

An energetic, self-motivated and goal-oriented person who

has a good university degree with at least 4 years of fundraising or related experience in Singapore

is familiar with governance of Institutions of Public Character and

possesses good interpersonal and effective communication skills

Interested applicants should send their resume to lim.may.ling@sgh.com.sg citing this website or email me at lucy.lucytan@gmail.com asking me to forward to the relevant party concerned.

HDB moves: good or bad?

2010-03-08T02:28:00.000-08:00

As someone who enjoys having our Government step in whenever I feel the lone individual is no match -- whether for an aggressive neighbour or an overbearing big corporation -- I'm surprised at myself for thinking that the latest HDB move to "curb" speculators may be a bad thing.

To reduce the number of people using HDB flats to speculate in the property market, the time that buyers are required to live in their flats before reselling them (minimum occupation period or MOP) will be increased to three years for all flats bought in the resale market, Minister for National Development Mah Bow Tan announced last week.

Currently, the MOP is 2.5 years for buyers who choose to take up an HDB concessionary loan and just one year for buyers who either take a commercial bank loan or do not take any loan.

'I want to emphasise that HDB flats are provided primarily for owner-occupation and not speculative profit or rental return,' said Mr Mah.

OK, sir, i hear you loud and clear.

But seriously, do you think the measure will help buyers hoping for a collapse of the property market be4 they buy? Will it help those who are anxious to get on the boat be4 it chugs out of the harbour, leaving them behind for good?

The latest action has been prompted by many MPs' concern that some buyers were using HDB flats to speculate in the property market and driving up prices in the process. HDB resale prices hit a new high in Q4 2009, with prices climbing 3.9 per cent from the previous quarter. The median cash-over-valuation (COV) for all resale transactions doubled to $24,000 in Q4 from $12,000 in Q3.

Data from HDB show that the proportion of flat owners who sell their units within three years of purchase rose to 8.9 per cent for the first 10 months of last year. And in 2008, 7.9 per cent of buyers sold their units within three years. In comparison, less than 7 per cent of buyers sold their flats within three years from 2005 to 2007.

IMHO, this trend isn't about speculating but about buyers having more options: more attractive alternatives springing up in the market, though not necessarily price-wise; buyers having more mobile lifestyles such as moving abroad to work or study; owners receiving irresistible offers etc

True speculators won't want to be stuck for even one year! Twelve months are an eternity for the genuine flipper. So, they are unlikely to have gotten into HDB in any meaningful way.

Too much shouldn't be read into the rising trend of buyers quitting within three years, unless the bulk of them falls within the minimum one-year period. Also, how does this quit-within-3-year trend compare with the trend in the private property market?

Now while the thrust of my argument is that Mr Mah has made a pointless move, the worst part is that it may in fact turn out to hurt those it most intends to help.

Instead of removing competition from the resale market for the so-called "genuine" buyers to have freer rein, the move may have the effect of making the market less liquid.

Speculators and genuine buyers will be locked up for longer and with interest rates remaining low and private property getting more and more beyond the ordinary heartlander not yet on the HDB boat, I predict that HDB prices will go higher, even as dear Mr Mah launches a frenzy of BTOs.

But there's just so many BTOs that can be launched in a year compared to how many resale flats there are that could be prised from the fingers of loose holders.

Capricorn effect? BS!

2010-02-14T02:20:00.000-08:00

January has come and gone and we are mid-way through February. If any of the old stock market sages had been hoping for the Capricorn effect to save their over-optimistic forecasts from being exposed, they must be sorely disappointed.

January was a bad month for most stock markets, although "bad" is a relative word, because bad depends on when you got in. Because given the volatility, everyone and his aunt are trading for beer and pocket money. There have been some lucky souls who managed to make enough to have a few rounds of yusheng.

So if the Capricorn effect has gone with the wind, what about a pre-Chinese New Year rally? Again, it was more hope than reality, especially this year. Especially with China -- the fount of Chinese New Years -- deciding to tighten lending and then to turn on the screws some more just before the arrival of the Tiger.

Shall we then wait for the Chinese New Year rally when SGX reopens on Wednesday, Feb17? Will the Tiger come bounding in and chase out the dozy Bull which, where stock markets were concerned, was really more a sick cow than a bull..

I shan't hold my breath.

Still in the best tradition of sooth-sayers, I shall say SGX will have its ups and downs this year, and know that I can never be wrong :-D