Analysis on Wilmar

I realized that I've yet to seriously share a full post analysis on Wilmar on my blog yet. I've shared on numerous occasions that Wilmar is a company that I will like to build my positions on so long the price provides me with an attractive valuation.

Honestly speaking, as far as I'm into Wilmar, the price had all along provided me with the comfort to add onto Wilmar but sadly, I do not have to capability to consistently fire my bullets without any war chest.

Some might wonder.. Why Wilmar?
Wilmar doesn't gives attractive dividend, do they?
The answer is. No.
A big no especially to income investors where they look to receive tasty dividends from Wilmar.

Or maybe a better way to say so is, not at this moment.

Investors of Wilmar would have known that an analysis on Wilmar is not as easy as it seems due to the extensive broad range of service that they are providing. Further more, Wilmar is cyclical business which makes the whole equation look more draggy.

For cyclical business like Wilmar, indicators we are often seeing such as P/E ratio only provides us with the outlook of the current situation and not how it is exactly priced as compared to other periods, as their earnings are fluctuating to the cycles.

When cyclical stocks are in the thriving part, their earnings will soar, which will cause the P/E to look smaller. Having that said, the EPS will also be impacted in the cycle. Assuming that they are having a fixed dividend payout ratio, investors may see a sharp decrease in earnings along with the dividend when these cyclical counters are in their downturn period.

This will naturally cause a sell-down as investors will start to lock in their profit, which subsequently the price will be matched to it's earning.

So a better indicator to use to gauge on how is much Wilmar worth will be it's P/B ratio. In this case, we will have to take a look at their NAV.

During the upper cycle of a cyclical stock, it is normal to see them trading at multiple times their book value. For example, Wilmar in 2010.

Wilmar's FY2010 Financial Report - Page 17

Wilmar at the end of FY2010 (31/12/2010), Wilmar is trading at S$5.63.

Taking a quick look back at the USD rates on 31/12/2010, we have USD-SGD at 1.2813

This will mean that Wilmar is trading at USD 4.39 with respect to it's NAV at USD 1.85, representing a P/B ratio of 2.37.

Wilmar's FY2016 Financial Report - Page 13

Base on their latest AR2016, Wilmar's NAV stand at USD 2.28.

With the USD rate (31/12/16) at 1.44, we will derive with S$3.28 per share.
As the NAV is priced in USD, using the rate today we'll be looking at a different value.
Hence, it's always good to use the same date to compute it's NAV.

Yes, that is right. You did not see that wrongly.
Wilmar has grown and became a more valuable company despite the down cycle and it's book value had grown by 23% in this 8 years when the price is beaten down to $3 from $6.

The lowest point during GFC, Wilmar was traded for $1.95 on 24 Oct 2008.
Back then, Wilmar's NAV stand at USD 1.50 (SGD-USD = 1.47). With that, we will derive a P/B ratio of 0.88. Today's price of 3.08 over latest NAV of 3.28, this comes up to a P/B of 0.93, which isn’t too far off the value we’re buying into during GFC back then

And even at this price, it does represent a small bit of margin of safety.


The shiny thing here I like about Wilmar is the direction the company is heading to, to make Wilmar a more valuable company that it is by placing emphasis on Growth and consistently looking for ways to grow the company.

Wilmar had been rapidly expanding, venturing aboard, acquiring businesses and even carrying new products. Having done so, this will provides the company will a greater moat in the future as well as creating more sources of revenue for the company.

BUT! It's important to remember that when they're fueling such activities, CAPEX will be swelling and it will takes some time for the profit to be seen. When CAPEX eventually tapers down, this is when the company will have a greater FCF and investors could be looking at a greater dividend payout.

Hence, investors of Wilmar will have remember why they are in Wilmar. 

Looking at a P/B ratio of 2 in the upper cycle base on the NAV we see above, we will easily get $6.56 and a more conservative price of $4.92 for 1.5x book value based on the latest NAV ending 2016. But, this will only happen when the cycle goes back north.

I believe that even paying a fair price of 1.2x book value for a company with such impressive management is decent and this will comes to a price of 3.93. At today's price, it even provided me with a margin of safety! Delicious.

Even ADM (Archers Daniel Midland) was paying $3.37 a share in 2016! (Link below)

Buying a good business at fair price VS buying a fair business at good price?

However, being an extremely diversified business, losses incurred will easily wipe out profits, causing performance to be restricted. The other side to this coin is that, the performance will be more stable, and in the most favorable situation where more businesses are performing, you will be see the earnings rocket.

Yes, they're a major super-power in Palm Oil, but today, Wilmar is no longer just about Palm Oil, but many other businesses as well.

Some catalyst that we might be looking at in the coming days will be the upcoming listing onto Shanghai Stock Exchange in Mid-2019. (Link below)
I believe this event will create more funds for Wilmar to continue it's growth and expansion.

In conclusion: 
1. We have to know why we are investing in Wilmar - For it's growth and value
2. For that reason above, we will require patience
3. Some catalyst that will bring in some sparks will be the recovery of sector as CAPEX tapers off
4. Very diversified business provides us with a more stable performance but will also limits earnings due to losses incurred in other businesses, the most desirable outcome will be for the whole sector to thrive
5. We're putting our money with Wilmar for our dollars to grow, and not to rent out houses to collect rental. (Look at Berskhire which does not gives out dividend and reinvesting their dollars)
6. Despite the down cycle, Wilmar is creating value and is in the vision to create more by acquisition, expansion and venturing aboard.



Read: Wilmar's Technical Analysis

Wilmar's FY2017 result (ending 31/12/17) will be released tomorrow (22/02/18) after trading hours.
News on ADM's increase stake in Wilmar can be found here - Reuters
News on Wilmar's IPO in China can be found here - Nikkei  
Wilmar Annual Report 2006-2016 can be found here.

Why DCA Investing Singtel Can Be Good for Your Portfolio

Before entering this post, please pardon me and correct me for any mistakes that is written in this post. Two wise seniors have recently written on DCA for Singtel and I would like to take this chance to write about my thoughts on the DCA for Singtel. Both the post shared by them are very interesting post which triggered some thoughts of mine and I feel that their both their blogs (B and Uncle CW8888) has educated me well throughout my learning.

I would like this opportunity to thank them first before touching more on my post.

Both their blogs can also be found on my blog list located at the right panel on my blog and I've been a fond reader of their blogs for a long time.

Next up, Happy Chinese New Year to everyone that is reading this right now. Wishing everyone a blissful and healthy new year ahead and may everyone huat big big in their financial journey ahead :)

Read:

Why DCA Investing Singtel Can Be Bad For Your Portfolio - B, Forever Financial Freedom

DCA or Simple Average Down -  Uncle CW8888

So what exactly is DCA (Dollar Cost Average)?

A simple check on Google will bring you to the model definition here by Investopedia. Hence, please take a look at the image below:

From Google - Investopedia's definition

Having that said, DCA is a passive way of investing and it is different from averaging down.

Now, there is many different ways that you can actually perform DCA that is available in the market such as POSB Invest-Saver (on Nikko AM STI ETF etc.), OCBC BCIP, Maybank MIP etc.

Such accounts provided by the different institutions offers a relatively low fee for you to perform DCA and not hurt your pocket badly due to the expensive brokerage fees when dealing with small lots. There is also limited selections available for such plans with exception to OCBC BCIP (where you can touch more on the blue chips) and Maybank MIP (which offers a wide range of counters for you to choose from). 

A downside of such plans which I do not particularly enjoy is that, the shares purchased will be held under their custody and not deposited into your CDP account.

However, today's topic - DCA on Singtel. If one is to seriously do so and does not mind the shares being under their custody, you may wish to consider OCBC BCIP which charges $5 and Maybank MIP which charges SGD 1/1% for amount below S$1,000.

Now let's back to the topic. 

In the case study conducted by B on DCA on Singtel which is done on:

1. A 10-year period from the peak of 4.22 on Oct-07 till today

2. DCA done when dividends is given by Singtel (Jan and Aug)

In the post shared by B, there was several people that had dropped by and commented that the DCA should be done on a fixed amount rather than fixed units, which is true to reflect the actual concept behind DCA. 

Another thing I felt is the interval/frequency of performing the 'DCA'.

As the frequency (Jan & Aug), twice a year is relatively small. I feel that the DCA concept is not well made use of. To improve on the model slightly, I have done a tweak and had increased the frequency DCA is performed on Singtel.

On a side note, I've believe that the prices during the CD/XD period or weeks due to release of it's financial report are slightly irrelevant as the volume during such periods are relatively higher due to the increased speculators that are on board or shorting it in anticipation of it's result, which does not reflect it's prices well, hence explaining the increased frequency.

Thus, with the increased frequency, I believe that the DCA concept can be better make used of.

In the table below, I've controlled certain parameters for this exercise which is listed as such:

1. Amount of S$500 in each purchase.

2. An interval of 2 months between each purchase (ie. 6 purchase/year) 

3. Purchase conducted on first of every month (Aside first purchase of 4.22)

4. Dividends reinvested

Unchanged factor is:

1. Buying at the peak of 4.22 (10 October 2007)

2. Starting and Ending Duration (Oct-07 to Feb-18)

3. Price as of 17 Feb at 3.33

Note: Dividends for Jan will be added to Feb's amount for dividend reinvestment

The list ahead is very long, hence, please pardon me once again:

Page 1

Page 2

Page 3

As shown in the 3 images above, here's some conclusion:

I will round the total units to the nearest purchasable lot on SGX (Singtel10, Z77):

From the above set of data, we will derive with a P/L of $10,424.70

This translates to a P/L of 33.09%

However, this will only happen if your dividends are reinvested. 

If you notice, the P/L (dividends) I've labelled is negative. This is because the amount of dividends received at $11,406.13 is more than the the P/L of actual value $10,424.70. Which in another words, the recent price movement has caused the returns to be lesser than the original dividends received. 

However, you're still sitting on a profit of 33.09% based on your capital of $31,500

Two flaws represented by this set of data are the odd number of lots during each purchase and transaction fees that is excluded and definitely the chances of having your orders fulfilled.

Allow me to rectify these flaws one by one:

Adjusting the units purchased each time to the nearest 10 unit which can be purchased from the market (Singtel10,  Z77). We will have $883.86 lesser in capital injection. This will result in lesser dividends receive, lesser total units and higher average price. This will impact directly onto our returns for this activity. The updated tab now tells me that we will have an average price of $2.58 compared to the earlier. I will not be sharing the lengthy 70 odds column of data in the second example to avoid further confusion.

Nonetheless, you're still sitting on a P/L of 29.19% based on your entry price.

Next part, transaction fees:

Example 1:
Now let me play with the transaction fee (assuming that all these trade are executed by using the big brokers available around. 

The average transaction amount across the 10 years comes up to roughly $681.05

Taking that amount into consideration for the transaction fee imposed by the brokers around $25 + 0.0075% (SGX Access Fee) + 7% (GST) + Clearing Fee, we will derive with a sum of $27.04 for each trade. 

Total Transaction Fees = $27.04 x 63 sessions = $1,703.52

Now, this is massive transaction fees and it eats into the profit by nearly 20%! 

Nonetheless, having that said, We're still positive!!

Our new P/L with transaction fees in will come up to = $10,424.70 - 1,703.52 = $8,717.18

This will translate to a P/L of 27.67%

This work out to an annalized return of 2.9%

I do agree with B that this is nothing to shout about compared to our CPF OA account at 2.5% and not forgetting our SA. The key difference here is the liquidity and availability of the funds.  

Total Duration = 3785 Days (10 Oct 07 - 19 Feb 18)

Example 2: 
Average Transaction amount across 10 years: $662.12
Average Transaction Fees: $27.04
Total Transaction Fees: $27.04 x 63 = $1,703.52
P/L = 9193.48 - 1703.52 = $7489.96
P/L (%) = 23.77%
This work out to an annualized return of 2.15%, which is lesser than what our CPF account is able to provide us. 

Finally, in this exercise, I would now conclude that:
1. Compounding interest is really the 8th wonder of the world.
2. Panadols are indeed effective in this exercise
3. DCA is not a scam but a passive way of investing
4. Transaction fees does matters in this higher frequency and small amount orders
5. There is no foolproof method in buying stocks and that passive investing might not be better than active investing. Fortunately, for this exercise with Singtel, you does not lose out much.

Though this exercise, we see positive returns on both hands which might mean that this approach of DCA on Singtel might be good on your portfolio, I do have some thoughts which I've left out in the lengthy post on top.

With the increased frequency in this exercise, we also managed to obtain 2 positive results as compared to the negative return on B's case study. Adding on, with the dividends reinvested, we do see another different horizon to amount of shares we hold as well as the P/L.

I'm sure that we will be able to find better companies for this activity which I agree with B and Singtel is not bullet-proof despite Singtel being my greatest holding. We must remember that our average price, entry price and exit price matters in each investment.

With this 12,000 odd units from this tweaked DCA in this past 10 years and dividends reinvested, we will be able to receive roughly $175/month of passive income assuming Singtel's dividend of 17.5 cents is maintained and based on the average price of $2.50, we are looking at a yield of 7%.

Indeed, the numbers is really attractive.

However, if you have purchased this 12,500 when it's $2.50 in Feb-09, the dividends you've received in this 10 year be added to the bulk of sum you see here, which you can look at it in 2 different glasses - you Singtel shares cost you $0.74 each ($1.76 dividends) and in 5 years time (assuming dividends maintained), these 12,500 shares of Singtel would be free of cost :)

See the difference now? :)

Wilmar's Technical Analysis

It's Sunday again. Time truly flies. And on this boring Sunday today, I've decided to do another Technical Analysis post on another company that I own - Wilmar. Once again, please pardon me for the poorly done TA.

Pretty much similar to Singtel, Wilmar's share took a beating and fell from the 3.4 range in November to the recent days where it broke it's 3.00 mark.

Wilmar's chart today display a relatively bearish trend.

You can plot your own graph on InvestingNote

The price for Wilmar gapped down on Friday when the market open and Wilmar started trading at 2.97. Shortly after this level of support is tested, the price rebounded back to the 2.99-3.00 range, before finally closing at 3.00.

We can see a small pinch in Bollinger Band somewhere around late Jan. This action suggest that the moving average is constricted and pretty much. volatility increased after the pinch. The price on Friday has breached the lower band slightly which is indicating that Wilmar is entering the over-sold region.

Taking a look at the next indicators of RSI, we obtain a value of 28.80 which suggest that Wilmar is oversold. The price today has fell below it's EMA, 20D MA and 50D MA which signals that Wilmar is currently in a downtrend.

The negative MACD value we can see also tells us that the short term moving average is below the long term moving average. As per pointed above, this signals a downward momentum and our dear Bear is in action.


While looking at the MACD graph below (most bottom), we can also see that the MACD line (Blue) is away and below from the Signal Line (Red), signalling a Bearish market. At this point, there is no divergence seen as both MACD and Wilmar's share price is moving downwards, this will also tell us that this bear attack might continue.

While MFI does not suggest that Wilmar today is over-sold, but it is much closer to that region than it is to the over-bought region at 36.73. If we get the formula in, we will be able to obtain the MFR base on MSI = 100 - 100/(1 + MFR). Work it backwards, we will obtain a value lesser than zero.

This will suggest to me that the money flowing out is greater than the money that is coming into it. The situation here is much better than Singtel's situation where greater amount of money is flowing out of it.

Using the Fibonacci Retracement certain potential areas of support could be seen at 2.86, 2.79, 2.74 should it once again break the support at 2.97. Likewise, the next area of resistance can be identified at 3.06, 3.14, 3.19 and 3.24. 

At today's price, I can see an attractive value and opportunity presenting for myself to buy more shares from Wilmar. However, as I've promised to strap my fingers to myself, I should now learn to resist onto the temptations!

Also, at this current point where the downtrend might continues, it is better to stay at the side while monitoring the situation.

Wilmar's 1 year chart from Google

Do remember that, TA is all about the probability and not certainty.
Most importantly, the high can get higher and the low can get lower. Once again, please only take this poorly done TA as a pinch of salt.


Oh yes.

Technical indicators and charts aside, the price we see today is below it's NAV and it's priced below 11x their earnings. Concerns about the major market for palm oil, Europe to phase out palm oil in biofuels also posted a threat to Wilmar recently. Aside the European, the 2 other biggest market for palm oil are China, India and not forgetting the other markets like Africa and Middle-East market.

However, Wilmar's investor should also remember that their operation does not only consist of this segment and it compasses a wide breath of operations.

Factoring the uncertainty and pessimism in, the price looks rather appetizing. On a side note, the price we're paying today for the wonderful management in Wilmar does provides some comfort.

We should also remember that Wilmar had conducted share-buy back in 2015 at 3.03 when they felt that the share is currently undervalued. Considering that it had fallen below the price they paid during the last buy back, history might repeats itself and should that happen again, we will get to see some tale from this action.

Once again, I must remind you that, this counter we see here, is a not an ordinary counter. We must also be reminded that by investing in Wilmar, we must be able to see the value and upcoming growth prospect.

Another catalyst in the upcoming days that we can look upon aside the delicious growth prospects of Wilmar will be the listing of it's China unit and list on the Shanghai Stock Exchange in the second half of 2019.

I continue to love the confidence and optimism Mr Kuok has on Wilmar and this brings in another layer of confidence for myself as a pico investor of Wilmar.


Read: Analysis on Wilmar

ST news on Wilmar's share buy-back in 2015 can be found here.
CNA article on EU's Palm Oil Ban can be found here.
Nikkei Asian Review article on Wilmar's listing of China unit can be found here.

Please don't forget about the disclaimer!

All information published on this site is only meant for general information purpose. No warranties should be carried out on the action that is taken based on information found in this blog and no liabilities will be undertaken by the owner for any losses/damages incurred from the use of this information.

How will your portfolio look like during the next financial crisis?

With the recent sell down that is happening around the global markets, many financial bloggers around have posted about their thoughts.

I thought it would be a great chance for me to do so as well, after all, this is the first time that I'm experiencing the sea of reds!

Dow Jones Industrial Average (DJIA) have experienced a 10.36% drop from it's high at 26,616.71 since January 26, which technically is 14 days ago. This also means that for every $100 you put into DJIA on January 26, you'll be left with $90 today.

If we were to take a look at the bigger picture, this is the first correction since 2016 that DJIA is experiencing after a 49.37% bull run (even till closing today), and 66.63% bull run to it's ATH on January 26 2018.

Now, it's pretty obvious that we are in Mr Bear's territory today.

According to what Investopedia has jotted down, this is the definition for 'Bear Market'

from Investopedia

"Downturn of 20% or more from a peak in multiple broad market indexes, such as the Dow Jones Industrial Average (DJIA) or Standard & Poor's 500 Index (S&P 500), over a two-month period is considered an entry into a bear market"

After DJIA closes earlier today, we're steps away from entering the '20% downturn'

Just a moment.. our local STI does not sway too far from DJIA too!

From it's high of 3,609.24 a month after X'mas eve till today, STI has also shredded close to 7% from it's high over 2 weeks! 

Here's a difference between DJIA and STI. 

DJIA has scaled up to it's historical high.

While STI on the other hand have barely touch it's high since pre-GFC.

So is there really still room for the recovery?

Does this look like a technical correction? 

Or the crash is coming? 

While most commonly, there is usually a catalyst to trigger a crash from such sell-downs to put investors into panic mode, for this very moment now, there is not such a catalyst like the collapse of Lehman Brother (credit crisis). To further categorize these crisis, I believe the one in 2018 that we're leaning towards to are more to bubbles and speculations based on the current looks of it. 

Well, it doesn't matter.

Now, towards the title of this post: How will your portfolio look like during the next financial crisis?

A bear market is described as 20% or more downturn, so what exactly is a crash?

During Black Monday 1987, DJIA had fallen close to 40%.

During Asian Financial Crisis 1997, STI had fallen by 65%.

During Global Financial Crisis 2008, DJIA had fallen by slightly over 50% while STI had fallen close to 60%. 

Base on some of the few crashes from the indexes listed above, a crash is basically a drop somewhere between 40 to 60%. 

Factoring that in, I've done a rough calculation based on my current equities holding.

I should be looking at a value somewhere between S$2,600 - S$3,900. 

At this very moment of writing, I'm already seeing a drop of ~5% since the peak on January.

While there is some ways like having a sufficient war chest/taking profit for some of your holdings or even diversifying it into gold for hedge that you'll be able to do now to fully make use of this crash. 

I guess I should now start to digest this value I'm seeing up there.

Holy!

 

How will your portfolio look like? :)

Read:

A lookback into 1987 Black Monday 

A lookback into 1997 Asian Financial Crisis 

Increasing stake in Singtel by 250%

It's a day till the release of Singtel's 3Q result.
Anticipating it? Pretty much.

Some mini bloodshed is seen in the recent days across the global market. While there is no sufficient supporting reasons for such, it is looking more like a technical correction and the market has recover very briefly today. For now, I still feel that this market we are seeing today belongs more to the over-valued region than it used to be. 

Well. I should first apologize as the numbers on the title might look rather deceiving.
If I own 5000 shares of Singtel and doing so - Increasing stake by 250%, it will essentially means that I'm adding 12,500 shares or in another words, plonking S$43,000 into Singtel.

However, as much as I'd wish to say that, sadly, that's not the case. I guess I will need a couple of years more before I can write the same thing with a different set of results.

I did increased my stake in Singtel by 250% and had accumulated 360 shares of Singtel at 3.42
But, base on my holdings of 140 shares previously, this will only means that I've accumulated another 360 shares from Singtel.

Rounding them up to the nearest lot of hundred at 500 shares.
With this event in place, Singtel had became my greatest holdings at this moment.


Based on my poorly done TA post on Singtel, I've queued behind the support line of 3.42 yesterday and the trade was fulfilled shortly after the market opens.

Based on this entry price, it had brought my average price of Singtel down to 3.55 from 3.84 when I got in earlier last year. Based on the usual dividends of 17.5 cents that Singtel have been giving out for the past years, this price will translate to 4.92% yield on my average price or 5.11% yield on the price I've entered (3.42).

Attractive yield? Pretty much for Singtel. But the next question will comes in if they are able to continue paying off their dividend of 17.5 cents with their FCF. Many investors would have known that Singtel might be having some problem in ensuring sustainable dividend based on the recent years free cash flow. Nonetheless, I believe in Singtel's highly paid management team in doing the job.

For an investor like we are, we will need to know what is going on and how this management is doing their job. In the recent days, Singtel is also said to increase it's stake on Bharti Airtel to 39.5%.

"Singtel will be allotted up to 85.45 million new equity shares in Bharti Telecom at 310 rupees apiece, which will raise its stake by up to 1.7 per cent for a total consideration of around 26.5 billion rupees (S$545 million).

The allotment, expected to close by next month, will see Singtel's economic interest in Bharti Airtel increase by 0.9 percentage point to 39.5 per cent.

...

Singtel's total stake in Bharti Telecom will increase to 48.9 per cent with this current investment, according to a press statement by Bharti Airtel."  - from Straits Time


As an investor, I view this move by Singtel to be a move for the longer term, which will be paid off in the next couple of years. With the intensive price war today in India's telco market, I believe that we will be able to see a couple of reds in the next few financial reports.

Singtel's 3Q result will be released in hours time, and we will be able to take a look at it when we wakes up tomorrow! If the results is poor, we should be able to see the support lines be retested once again.

Sigh.. this silly devil here is trying to buy before the results..


Attentive readers will find out that this purchase will not look like a nibble if I were to base this purchase on the weight of my portfolio. However, on my side, I'm trying to increase the amount of shares purchased each time in the late few trades to further reduce on transaction cost.

Time to strap my hands to myself!! No more itchy hand.. no more..

Read:
Singtel's Technical Analysis
Singtel - Special Dividend of 3.0 cents per share

ST News on Singtel increasing it's stake on Bharti Airtel can be found here

Singtel's Technical Analysis

Singtel, one of my favorite stock is the current most frequently debated topic based on the latest movement of it's share price and the tremendous increase in volatility in the recent days. Do pardon me, on my very first post on Technical Analysis, and to trading gurus and seniors, feel free to correct me should you have spotted any mistakes in this post :)

Coming to it, here, we see a very bearish chart from Singtel.

You can plot your own graph for free on InvestingNote as well!

With just a simple look at it, one will be able to easily tell that Singtel in currently in a downtrend.

The price today at 3.49 has breached both it's 20D MA (3.59) and 50D MA (3.63). As much as it had slightly breached the 3.49 mark, slipping to 3.48, immediate support can be seen building at 3.49 which have held the price up till it finally closes.


The Bolliger Band can be seen expanding much in the later days, which suggest that currently, the price are relatively volatile and if anyone notices, the lower band has also been breached with it's most recent price movement, suggesting that it might be oversold.

RSI at 28.45 also shows that it Singtel is currently at the oversold region. The negative MACD value we can see also tells us that the short term moving average is below the long term moving average. As per pointed above, this signals a downward momentum and Mr Bear is in action. 

Using the key Fibonacci Retracement ratio where potential areas of support could be seen at, we can see the next support level at 3.42, 3.38, 3.35 and 3.31, should it once again break the support at 3.49

I will standby at these beautiful levels, to queue behind while waiting to get some Singtel shares that is on promotion.


Now, let's take a look at the more esoteric indicators and see if tells any tale.

The MSI today (16.7594) also suggest Singtel is in the Oversold region.
However, if the downtrend is strong, this will also brings the MSI lower.

Taking a closer look, we will be able to find a relatively small money flow ratio that is below 1 if we work the formula backwards. Now this signal here is telling me that positive money flow is lesser than the negative money flow. In layman term, the money flowing out is greater than the money that is coming into it, which is not very healthy here.

Want something more esoteric?
Based on the chart, we have entered a relatively sharp zig-zac corrective wave based on Mr Elliot's theory and it seemed like we might be entering the end of a wave soon.
 


While waiting for the financial results for 3Q18 to be released, fundamental wise, all else remains equal apart from the latest news on it's cyber security business which is said to hit around $550 million in revenue this financial year.

Singtel's 3Q18 financial results will be released on 8th Feb 2018, which is 5 days away.

Cyber security is a good business that Singtel today is diversifying on, which will further reduce the dependence on mobile communication sector. The increased exposure in ICT will also reduces the risk of facing the declining revenue from TPG's entrant.

I remember one good phase from one wise senior - TA is all about the probability and not certainty. Hence, do take them as a pinch of salt and pardon me once again for this poorly done TA.

Do remember that the high can get higher and the low can get lower. The latter example is clearly exhibited today.

Singtel's chart from Google

If we look back into time, the last time Singtel enter the 3.4 range is 2 years back during January 2016 and back in early 2013. Doing a quick search, the last time (Jan 2016) Singtel entered this price region, is the period when China's stock market bubble back in 2015-16 exploded. (Yes, I like the word exploded.. hehe).

Hence, if we were put our glasses back on, today's market does not exhibit any significant trait that I know of that was as impactful as the China's market crash which might drag Singtel's price down back to this region.

And given that, Singtel in 2018 today, should be a company that is in a relatively well position compared to they are in 2016 with the cash on hand, reduced debt and divestment of Netlink Trust.

Nibble time.. Nibble nibble. Time to be a small little rat!

I do not recommend any buying or selling of any securities based on any post that I've written.
If you're buying in and not too sure why, do remember to find a reason to support your buying.
Buying for income? You have many other alternatives available.
Buying because it's the biggest company in SGX? It's now DBS.
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Straits Times news on Singtel Cyber Security Business can be found here.

Read:
Singtel - Special Dividends of 3.0 cents per share 

Portfolio - January 2018

Current Portfolio (31/01/2018)

No.	Counters	No. of Shares	Market Price (SGD)	Total Value (SGD) based on market price	Allocation %
1.	ComfortDelGro	700	2.10	1,449.00	18.52%
2.	Far East Orchard	800	1.50	1,200.00	15.12%
3.	Wilmar Intl	300	3.20	960.00	12.09%
4.	AIMS AMP Cap REIT	400	1.37	548.00	6.90%
5.	Singtel	140	3.54	495.60	6.24%
6.	Guocoland	200	2.26	452.00	5.69%
7.	Starhill Global REIT	500	0.77	385.00	4.85%
8.	Cryptocurrency Funds	1	1,076.71	1,076.71	13.57%
9.	Singapore Saving Bonds	1	500.00	500.00	6.30%
10.	Warchest	1	850.00	850.00	10.71%
	Total SGD:			7,937.31	100.00%

This is the first monthly portfolio update for year 2018. For this month, there have been a slight recovery on the counters I own along with some profit booking session from cryptocurrency. With these events, the overall portfolio value had increased by 6.15% month on month.

STI historic graph

In this month, DJIA has continued to scale further and breaking it's all time high with it's pricing at 26,076 while our local STI on the other hand, also had a bull run and broke it's 3600 resistance days ago, before finally closing at 3,534 today. STI broke it's 5 year high price and currently, it's heading  higher.

Now..this situation today is starting to look a little bit like 2008.
 

Yes, it's snowing and the snow is really pretty and heavy in Japan, and not soon later, I will be back to the sunny land somewhere along the equator. There is no capital injection this month. On a side note, I've also revealed in my post earlier on The 19 Year Old Year Review, Reflection and 2018 Resolutions that I'm trying to build up a sizable cash position. You might have noticed that I have added another column on my portfolio on 'Warchest'. Also, shared in the same post, the war chest here is a separate war chest that is established for the purpose of building a more sizable cash position. Probably this 'war-chest' should be better called 'opportunity funds'

I've also done some portfolio balancing this month of which I have shifted some funds over from the cryptocurrency funds onto the new war chest and also divesting FCOT. Should I not do this balancing, the cryptocurrency funds would had officially became my greatest holding in January, taking up a whooping 25% of my entire portfolio. Take note that this is not due to injections and I've only injected once into my cryptocurrency funds. The big increase is due to the strong performance of the cryptocurrency market and the trading activity that had taken place.

On a side note, I've also jumped into Singapore Saving Bonds (SSB) from the previous issue and was allocated with S$500.00 of SSB. With the interest at 1.55% for the first year, the SSB is a relatively good place to park your money there. The no capital loss along with the flexibility in your funds is the real shiny points here when speaking about the SSB.

The purchase of SSB to me serves as a small form of diversification and I view it as a very good place for me to temporarily park my funds in. This is also done to balance out the volatility of my portfolio. You may wish to read more from the link below to my earlier post about the SSB.

Read: Singapore Saving Bonds (SSB) - 1.55%

FCOT announced it's 1Q18 results and had since declared a 2.40 cents distribution for the period. It had since went XD. With this result in hand, it had poses a 4% decrease in DPU yoy. At the same price today, I feel that FCOT is no longer cheap and is moving towards the over-value region despite trading at a 5% discount to NAV. With that in mind and the uncertainties ahead together with the beautiful run, I've officially divested FCOT at 1.46 on XD. I will still be receiving my latest cash distribution of S$7.39 on 1 March from FCOT. As for the small little balance of script dividends that I'm having, I guess, that will be my 'legacy' positions in FCOT.  Haha!

The divestment of FCOT had given me a profit of 8.29% or S$33.10 (without dividends) and 15.66% or S$62.53 (with dividends) based on my purchase price at 1.295 earlier last year.

FCOT's results presentation here.

Read: Portfolio Update - Divestment of FCOT and SSB Allotment 

SGR had also announced it's result earlier on 29/01/18. Similarly to FCOT, it's DPU is down by 7.1% yoy with the declared distribution at 1.17 cents. The decrease is mainly due to lower NPI received from it's Australia properties, and fortunately, it is slightly pulled up by the appreciating Ringgit. A simple calculation will gives me an annualized dividend of 6% based on the latest closing price of SGR at 0.78. It is a hold for now. XD will fall on 6 Feb, while distribution will be paid on 28 Feb.

SGR's financial statement here and results presentation here.

In this month, I've also received $21.36 worth of dividends from Singtel and AIMS AMP Cap REIT's advance distribution.

Dividends received in January: $21.36/-

Current Portfolio Value: S$7,937.31 (+6.46% m.o.m due to capital injection, dividends and portfolio performance)

Capital Injection for January: S$ 0/-
Total dividends received in 2018: $21.36
Average dividends/month: $1.78