Why DBS, now at $50.74, is still cheap?

  

In my previous article in Nov 2024, we explored why DBS (SGX: D05), even at a price of $42.40, was a compelling "cheap" buy for long-term investors. We highlighted its robust financial foundation, its position as a "dividend powerhouse," and its strategic focus on growth. Fast forward to today, and the market has affirmed that view, with the stock price now comfortably trading above the $50 mark, reaching new all-time highs.

This surge isn't just about market momentum; it's a reflection of DBS's continued strong performance and strategic resilience. The bank recently announced a solid second-quarter profit of S$2.82 billion, beating consensus estimates and demonstrating its ability to deliver amidst a dynamic economic environment.

What's driving this performance?

1. A resilient business model: While many were concerned about the impact of falling interest rates on net interest margins (NIM), DBS has shown its ability to look beyond this. The bank's CEO has emphasized focusing on net interest income (NII), which continues to grow due to higher loan and deposit volumes. This demonstrates a robust business model that can thrive even when a key metric like NIM faces pressure.

2. A "dividend powerhouse" that keeps on giving: The original article noted a quarterly dividend of 54 cents per share. DBS has since raised its quarterly dividend to 75 cents (comprising 60 cents ordinary dividend and 15 cents capital return dividend), further cementing its status as a top choice for income-focused investors. Furthermore, the bank has extended its dividend guidance, promising an additional 24 cents per share for the next financial year, a strong signal of management's confidence in future earnings.

3. Growth beyond Singapore: The bank's strategic initiatives, such as its expansion into Malaysia and its focus on wealth management, continue to bear fruit. The strong performance in fee and trading income, coupled with a healthy non-performing loan (NPL) ratio, showcases a well-diversified and stable financial institution.

4. Bullish analyst sentiment: The market's positive reaction to DBS's recent earnings report has been accompanied by a series of target price upgrades from analysts. This renewed bullish sentiment is a testament to the bank's strong fundamentals and positive outlook.

Is DBS still a buy at $50.74?

While the share price has moved significantly, the core arguments for investing in DBS remain valid. Its strong capital position, consistent profitability, and commitment to rewarding shareholders with a high dividend payout make it a standout in the banking sector. Here's a breakdown of the numbers that support this view.

1. A High and Growing Dividend Yield

At the current price of S$50.74, DBS offers a compelling dividend yield. The bank recently declared a quarterly dividend of 75 cents per share, which includes a 60-cent ordinary dividend and a 15-cent capital return. On an annualized basis, this translates to a forward dividend yield of approximately 6.2%. This is a significant premium to many other blue-chip stocks and well above the bank’s historical average. Moreover, management has signaled its confidence in future earnings by extending guidance for an annual step-up of 24 cents in its core dividend for the next financial year.

2. Exceptional Profitability and Capital Strength

DBS’s valuation is backed by its superior financial health. The bank consistently delivers a high Return on Equity (ROE), which recently stood at an impressive 18.2% for the second quarter. This is a testament to its operational efficiency and effectiveness in generating profit from its capital. Furthermore, its balance sheet remains exceptionally strong, with a Common Equity Tier 1 (CET1) ratio of 14.8%, well above the regulatory requirements. This robust capital position provides a solid buffer against market volatility and supports its ability to pursue strategic growth and shareholder returns.

3. The Intrinsic Value Argument

While the stock price has surged, various valuation models suggest it may still not be expensive.

 * A Discounted Cash Flow (DCF) analysis by Alphaspread pegs the intrinsic value at $63.38 per share, suggesting the stock may still be undervalued by about 20%. Gurufocus valuates DBS much higher at $76.62. Simplywall.st's fair value of DBS is at $75.70. 

 * Analyst consensus paints a more mixed picture, with 12-month price targets ranging from a low of S$39.48 to a high of S$57.20, and an average of around S$50.61. This average is very close to the current price, indicating that for many analysts, the stock is fairly valued, but not overvalued. Citibank has raised its target price for DBS conservatively to $56.50 from $48.10. Goldman Sachs has a 1 year price target of $57.20 for DBS.

Of course, no investment is without risk. While DBS's earnings have been resilient, the global economic environment and potential for heightened volatility remain factors to watch. However, for a long-term investor with a focus on stable, high-quality companies, DBS continues to represent a solid foundation for a portfolio and might continue to rocket to greater heights.

If we have no position in DBS, it would be harmless to consistently nibble small quantity of eg. 10 to 100 shares monthly as part of dollar cost averaging strategy. However if we already own positions in DBS, we could wait for a pullback before adding on to DBS investments. As long-term investors, we need to be patient. I added DBS earlier this year at $45.68 followed by another bargain scoop at $38.08 after the global tariffs fears.

On the back of macroeconomic factors such as economic recession fears, global political landscape uncertainties and interest rate noises, DBS stock price as the top constituent of Singapore's Straits Times Index can be very volatile. At above $50, the margin of safety is much lower compared to if we were to invest in DBS earlier in the past few months to past years when its stock prices hover between $30 to $40+. As we have witnessed several times in the past, DBS share price could plunge or tank heavily by more than $2 or 5% a day whenever noise or bad news hit due to macroeconomic factors or global uncertainties, incurring huge losses or even margin calls if our purchases are on margin or borrowed funds.

(Disclaimer: This article is for informational purposes only and is not financial advice. Readers should conduct their own research and consult with a financial professional before making any investment decisions.)

Thanks for reading.

With love and peace, 

Qiongster

Why I Subscribe to the Astrea 9 PE Bond

 

The financial world can often feel like a series of exclusive clubs. Private equity, with its high barriers to entry and institutional focus, has always been one of the most exclusive. That's why when the Astrea 9 PE bond was announced, it immediately piqued my interest. This series of bonds, designed to give retail investors a foothold in private equity, felt like an open invitation. After a deep dive into the details, I've decided to subscribe, and I want to share the reasons behind my decision.

Accessing Private Equity with Confidence

For me, the primary appeal of the Astrea 9 bond is the opportunity to gain exposure to private equity in a structured, relatively low-risk way. Instead of needing a massive amount of capital to invest directly in a single fund, I can get a small, diversified piece of a large, mature portfolio. This particular portfolio is made up of investments across 40 different private equity funds, which significantly spreads out the risk. It's a way to participate in a market that's otherwise out of reach, but with a layer of safety built into the structure.

The Allure of a Predictable Income Stream

In an era of market volatility, finding a reliable source of income is a key goal for my portfolio. The Astrea 9 Class A-1 bond offers a fixed interest rate of 3.4% per annum. For me, this isn't just a number; it's a predictable, semi-annual income stream. Currently, 3.4% p.a. is higher than the Singapore savings bond yield of 2.1% and bank fixed deposit rates of below 2% p.a. This stability is a cornerstone of my investment strategy, providing a steady return that isn't dependent on daily market fluctuations. It's about building a portfolio that works for me, generating consistent cash flow that I can count on.

Prioritizing Investor Protection

As a cautious investor, the structural safeguards of the Astrea bonds are a major selling point. The bonds have a priority of payments mechanism, meaning that bondholders are first in line to get paid from the underlying portfolio's cash flows. There are also reserve accounts that are gradually funded to ensure there's cash available for eventual bond redemptions. These features give me a level of confidence that is hard to find in other corporate bonds. It’s an investment where the issuer has gone the extra mile to protect bondholders.

The Interest Rate Step-Up Feature

The mandatory call date at the end of five years is a key feature that provides both an exit opportunity and a potential benefit if the bond is held longer. If the issuer, Azalea Group, chooses not to redeem the bonds on this date, the interest rate for the remaining term steps up by 1.0% per annum. This step-up serves as an incentive for the issuer to redeem the bonds, but if they don't, it provides a significantly higher yield for bondholders as compensation for the extended duration.

Favorable Credit Ratings

The Class A-1 and A-2 bonds are expected to be investment-grade rated by Fitch (A+sf and Asf, respectively). These ratings indicate a high degree of creditworthiness and a strong capacity to meet financial commitments. Compared to many corporate bonds that are also available to retail investors, these ratings are often a notch higher, reflecting the robust structural safeguards and the quality of the underlying portfolio.

A Strong Track Record of Prior Issuances

The Astrea series has a history of successful redemptions and credit upgrades. Previous Astrea bonds, such as Astrea III, IV, and V, have been fully redeemed on or before their respective mandatory call dates, and some have even seen their credit ratings upgraded over time as their portfolios matured and reserves grew. This established track record provides a level of confidence in Azalea's ability to manage the product and fulfill its obligations to bondholders.

Exposure to a Well-Vetted Portfolio

The private equity funds that back the Astrea 9 bonds have been carefully selected by Azalea Group, which has a long-standing expertise in this area. This means retail investors don't have to perform the complex due diligence required to vet individual PE funds. The portfolio is diversified not just by geography and sector, but also by fund managers, reducing the risk associated with any single manager.

My Choice: The SGD-Denominated Class A-1

While the USD-denominated Class A-2 bond offers a higher interest rate, I've chosen to stick with the SGD-denominated Class A-1. My primary reason is simple: I want to avoid foreign exchange risk. My financial life is in Singapore dollars, and a stable, local currency-denominated income stream is more valuable to me than a potentially higher return that could be negated by currency movements. For my personal goals, the stability and fixed rate of the Class A-1 bond made the most sense.

My decision to apply for the Astrea 9 bond is a strategic one, based on my desire for diversification, stable income, and robust investor protection. It's a unique product that aligns perfectly with what I'm looking for in my portfolio.

There it goes.

Thanks for reading.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

With love & peace,

Qiongster

Portfolio Update July 2025

On the last day of July 2025, here is a quick portfolio update.

My SGX Income Portfolio value increases to $415k from $404k due to the continued recovery of S-REITs as there is more certainty that interest rates will be cut 2 times by year end. Immense fears from global trade war and potential recession have subsided, fueling the US and SG stock markets to hit newer highs.

My US Growth Portfolio rises to US$16.9k from US$16.3k.

My SRS Ultra Long-Term Portfolio value inches up to $223k from $214k.

Portfolio Actions

Nil

Portfolio Dividends

1. Received $544.50 of dividends from SSB on 1 Jul.

2. Received $147.50 of dividends from SSB on 1 Jul in SRS.

3. Received $311.80 of dividends from Netlink Trust on 4 Jul as 310 shares from DRP.

SGX Income Portfolio

Portfolio Value = $415k

US Growth Portfolio

Moomoo

Tiger Broker

Syfe Trade

Portfolio Value = US$16.9k

SRS Ultra Long-Term Portfolio

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster

Why Financial Freedom is now Non-negotiable?

 

Let's be real. The world today feels like it's on a K-pod overdose, constantly shifting and throwing curveballs. From rapid technological advancements disrupting industries to economic uncertainties that can make your head spin, the old rules of financial stability are, well, of the past. In this dizzying landscape, financial freedom isn't just a fancy dream for the super-rich; it's become an absolute necessity.

You might be thinking, "Financial freedom? That sounds great, but I'm just trying to make ends meet!" And I get it. The idea can feel overwhelming. But hear me out: it's not about winning the lottery or having a private jet. It's about building a life where money works for you, instead of you working solely for money. And in today's unpredictable environment, that distinction is more critical than ever.

The Shifting Sands: Why "Job Security" is an Urban Legend

Remember when a stable job for 30 years and a pension was the gold standard? Poof. Gone with the wind.

 1. Automation & AI: Robots aren't just building cars; they're writing articles, analyzing data, and potentially taking over tasks once performed by humans. This means certain jobs could become obsolete faster than you can say "layoff."

 2. Gig Economy & Freelance Culture: While offering flexibility, the rise of the gig economy also means less traditional "job security." Income can be unpredictable, and benefits are often self-funded.

 3. Global Volatility: From pandemics to geopolitical tensions, unforeseen events can send markets into a tailspin and trigger widespread economic downturns. Your job, your industry, even your country's economy can be impacted in ways no one could have predicted.

In this climate, relying on a single income stream from a traditional job is like building a house on quicksand. Financial freedom, on the other hand, builds you an ark.

Beyond the Paycheck: The Real Benefits of Financial Freedom Today

So, what does this "ark" look like?

 A. Your Personal Safety Net (aka Goodbye, Financial Stress!): Imagine an unexpected medical emergency, a sudden job loss, or a global crisis hitting. If you're living pay cheque to pay cheque, these events can be catastrophic, leading to immense stress and potentially crippling debt. Financial freedom means having a robust emergency fund and diversified assets that can weather these storms. It's the ultimate stress reliever, allowing you to focus on solutions, not panic.

 B. Freedom to Choose, Not Just Survive: When you're financially free, your decisions aren't dictated by the need to pay bills.

 C. Career: Hate your boss? Want to pursue a passion project? Financial freedom allows you to pivot careers, take a sabbatical, or even start your own business without the fear of financial ruin. You can choose work that aligns with your values, not just your rent.

   D. Lifestyle: Want to travel the world? Spend more time with family? Invest in your health or education? Financial freedom opens up a world of possibilities, allowing you to design a life that truly fulfills you.

   E. Location: No longer tied to a specific city for work? You can choose where you live based on lifestyle, community, or even the cost of living, optimizing your overall well-being.

  F. Hedge Against Inflation and Rising Costs: Prices for everything – housing, food, education, healthcare – seem to be constantly climbing. If your income isn't keeping pace, you're essentially getting poorer. Financial freedom often involves investments that generate passive income and grow over time, helping you outpace inflation and maintain your purchasing power.

 G. Building Generational Wealth (and a Better Future): Financial freedom isn't just about your life; it's about setting up future generations for success. By building wealth, you can provide opportunities for your children and grandchildren, break cycles of financial struggle, and leave a lasting legacy.

The Wake-Up Call: It's Time to Act

This isn't about scare tactics; it's about empowerment. The world isn't getting less complex or more predictable. Therefore, taking control of your financial destiny is no longer a "nice-to-have"; it's a fundamental pillar of modern resilience and well-being.

So, how do you start?

 * Educate Yourself: Understand budgeting, saving, investing, and debt management.

 * Create a Plan: Set clear financial goals and map out a realistic path to achieve them.

 * Live Below Your Means: The simplest, yet most powerful, principle.

 * Automate Savings & Investments: Make saving a habit, not an afterthought.

 * Diversify Income Streams: Don't put all your eggs in one basket.

 * Invest Early and Consistently: Time is your greatest ally in wealth building.

The journey to financial freedom takes effort, discipline, and often, patience. But in today's rapidly evolving and uncertain world, it's the most valuable investment you can make – an investment in your peace of mind, your choices, and your future. Don't wait for a crisis to realize its importance. Start your first step towards financial freedom today.

Thanks for reading.

With love & peace, 

Qiongster

While STI breaks New Highs, REITs Soar: My Bargain Hunt - $37 Nike Sneakers

 

It has been an exciting time in the financial markets lately. We have seen the S&P 500 and Straits Times Index (STI) breaking new highs, and if you're like me, you've probably watched your REITs portfolio soaring, delivering some truly impressive returns. It's a fantastic feeling to see those numbers tick upwards on your screen, a testament to smart investing and a buoyant market.

But amidst the big financial headlines and the exciting swings of the stock market, I wanted to share a different kind of win – a small, personal victory that proves you don't always need complex algorithms or insider tips to feel financially savvy. I just scored a brand new pair of genuine Nike sneakers on Lazada for a mind-blowing S$37.64 only.

While my REITs are busy recovering, and the STI celebrates its own milestones, I'm celebrating what feels like my own personal "stock bargain" – a classic pair of Nikes at a price that almost defies belief. Forget fighting crowds at the outlet store; this deal came to me yesterday on 25 July promo day when I was commuting to work.

How did this little miracle happen in a world where good sneakers usually cost above $80. It's a testament to the power of being a savvy consumer, even when you're deeply focused on your investments.

Here's a simple playbook that might help you catch similar lightning in a bottle:

 1. Become a Sale Sniper (especially for "Stock Clearances"): Just like monitoring market trends, you need to monitor sales. Lazada (and other platforms!) are constantly running flash sales, 11.11, 12.12, 6.6, payday deals... and often, these include specific "clearance" or "outlet" sections.

 2. Voucher Vulture: This is CRUCIAL. Don't EVER check out without scouring for vouchers. Platform vouchers, seller vouchers, bank promotions, free shipping codes – stack them like Jenga blocks. That $37 price tag? It was likely a combo of an already deeply discounted "stock bargain" item plus a hefty voucher I snagged.

 3. The "Sort by Price: Low to High" Power Move: Sometimes, the best "stock bargain" deals aren't highlighted. Filtering by price can unearth hidden gems from reputable sellers that are clearing inventory.

 4. Seller Reputation is King: When a deal looks too good to be true, always check the seller's ratings and reviews. Authenticity is key! (These Nikes are legit, by the way, not factory rejects – just a fantastic price!)

I'm still buzzing from this steal. It's a prime example that while we're celebrating big financial wins in our portfolios, the everyday act of smart shopping can also bring significant satisfaction and savings. It's all part of a holistic approach to managing your money, from investing wisely to spending shrewdly.

Thanks for reading.

With love & peace, 

Qiongster

 

Why I Stopped Chasing Promotions and Focused on Building Passive Incomes?

 

For most of my working life, I played the game.

I worked hard, stayed late, hit my KPIs, and said “yes” more times than I should have. Like many in Singapore’s fast-paced corporate world, I believed in the promise: climb the ladder, get the promotion, earn more, live better.

But somewhere along the way, the climb stopped feeling like progress — and started feeling like a trap.

This is the story of why I stopped chasing promotions (lie flat) and focused on building passive income instead.

The Corporate Climb: Respectable, But Not Sustainable

Let me be clear — I’m not anti-career. I’m proud of the roles I’ve held, the teams I’ve led, and the skills I’ve built. Promotions brought validation. More money. Fancier titles. But with every new step up, came a heavier load.

More meetings. More politics. More responsibility — not always matched with more fulfillment.

And here's what hit me the hardest: every promotion made me more essential… but also less free.

I was trading time for money — at higher rates, yes — but still stuck in the same cycle. If I stopped working, the income stopped too. I realised I wasn't building wealth. I was just earning a salary.

The Wake-Up Call

The turning point came when I started asking myself hard questions:

• Am I working for growth or just for survival?

• If I stopped working tomorrow, how long could I last?

• Will I still be doing this when I’m 60? 70?

• What does "enough" even look like for me?

These weren’t easy to answer. But the clarity that came was undeniable: I didn’t want to be stuck in meetings forever. I didn’t want my income tied 100% to my energy and availability. I didn’t want to work harder just to earn slightly more, only to be taxed higher, spend more, and start again.

I wanted a system that worked with me — even when I wasn’t working.

Discovering Passive Income: A New Way to Think

Enter: Passive income.

The idea was simple, yet radical to my conditioned mind — build income streams that don’t rely entirely on your time or presence. Let your money, your skills, and your assets do some of the work for you.

At first, I was skeptical. It sounded like a fantasy. But as I explored deeper, I found real, accessible paths:

• Investing in REITs and stocks that paid dividends

• Creating digital products like blog articles

• Selling and declutter old stuffs on Carousell for extra cash

• Selling cash secured put options to collect extra cash from great company stocks

• High-yield cash funds, which quietly compound over the years

None of these made me rich overnight. But together, they created momentum. Every dollar earned passively felt like freedom earned. And that, to me, was far more exciting than another job title.

The Freedom Shift: Redefining Success

The biggest change wasn’t financial — it was mental.

I stopped obsessing over performance reviews and started thinking about net worth, cash flow, and flexibility. I shifted from a mindset of earning more to needing less and keeping more.

I started asking: “How can I design a life where I don’t need to retire from burnout, but can transition into what I love, on my own terms?”

This shift also helped me:

• Say no more easily, because I wasn’t desperate for approval.

• Spend more time with family, without guilt or urgency.

• Explore creative projects I’d shelved for years.

• Sleep better, knowing I wasn’t one bad boss or layoff away from panic.

Isn’t Passive Income Just a Buzzword?

Yes and no.

Yes — it’s overused, and often misrepresented as “do nothing and get rich.”
But no — it’s not a myth. Passive income is real. But it’s earned the hard way: through effort, planning, and consistency.

You work hard once, and then the system keeps giving — whether it's a dividend payout, a recurring sale, or rent arriving on the 1st of every month.

It’s not instant. But it’s powerful. And the best part? You don’t need to quit your job to start. I began mine while still working full-time — 10 minutes a day, one step at a time.

What I Gained by Letting Go

By stepping off the promotion treadmill, I didn’t lose ambition. I gained autonomy.

I stopped trying to prove my worth through job titles. I started proving it to myself — through how wisely I used my time, energy, and money.

I don’t need to be a millionaire. I just need enough to live meaningfully, with options. And now, every dollar of passive income buys me time — the most valuable asset of all.

Final Thoughts: Your Worth Isn’t in Your Title

If you love your job and the climb excites you — keep going. But if you feel stuck, tired, or constantly chasing a moving goalpost, maybe it’s time to ask:

What would it look like if I worked for freedom instead of just a promotion?

You don’t need to quit everything today. Just start building your Plan B. Or better yet — your “Plan Free.”

Because at the end of the day, real wealth isn’t just about money. It’s about choice.

And for the first time in my life, I feel like I truly have one.

Thanks for reading.

With love & peace, 

Qiongster

Net Worth Update July 2025 | SGD 1.93m Record High

In July 2025, my net worth surges to S$1.93 million record high boosted by the recovery of S-REITs in my investment portfolios, salary and bonus savings.

Net Worth Breakdown:

Safe Heavens (62%)

CPF (34.9%): CPF constitutes the bulk of my net worth and foundation of my retirement savings. It is a low hanging fruit tree that we should not ignore.

Cash and war chest (17.5%): Liquid reserves strategically stashed in fixed deposits and Fullerton cash funds earning around 2.0% p.a. provide me with a peace of mind and security for unexpected expenses or investment opportunities.

Bonds (9.3%): A balanced portfolio of low-risk Singapore Savings Bonds and Astrea Bond ensures stability and provides steady source of passive income.

Retirement Savings (16%)

SRS (11.5%): A tax-deferred savings account holding a supplementary source of retirement savings. My SRS funds are invested in $30k of SSB and 6 local stocks - Comfortdelgro, DBS, OCBC, Keppel DC Reit, Keppel Reit and Wilmar. Recently, I have stashed away all the idle SRS funds into Fullerton SGD Money Market Funds to yield ~2% p.a. instead of meagre 0.05%.

Insurance (4.5%): A Prudential whole life insurance plan and other savings plans will provide me with 6-digit lump sum payout after my retirement while offering continual protection for peace of mind. I have also upgraded my MediShield life to integrated shield plan for private hospital coverage.

Equities (22%)

Stocks and Reits (22.4%): A real estate-focused portfolio of stocks and Reits provides long-term dividend income and stability. This financial asset class is riskier, more volatile and sensitive to interest rates but offers me the opportunity to indirectly own diversified portfolios of industrial, retail and commercial properties locally, and around the world for consistent passive income.

The Pursuit of FIRE

Net worth is more than just numbers—it is a snapshot of our financial health calculated by subtracting liabilities from assets. In the context of FIRE (Financial Independence, Retire Early), net worth becomes a critical compass. It reflects not only what we own and owe, but how close we are to reaching financial freedom.

By building passive income streams and increasing net worth, we move toward a point where our investments and savings can cover our living expenses without active work. This is often referred to as the “FI Number”—the amount of net worth needed to sustainably fund your lifestyle, typically based on the 4% rule or similar frameworks.

But the pursuit of FIRE is not merely a race toward early retirement. At its heart, it is about reclaiming control: of our time, our choices, and the way we experience life. It’s about creating flexibility—to work if we want to, to take breaks when needed, or to explore passions full-time.

This journey is a deliberate investment in security. As our net worth grows, so does our buffer against life’s unpredictability. We gain confidence to navigate challenges without the looming pressure of financial instability. Financial independence empowers us to design a life we do not need a vacation from, with space to breathe, to live, and to thrive.

The recent resurgence of stock markets hitting new highs have accelerated my pace of surpassing the short-term milestone of SGD 1.9m. I am looking forward to hit SGD 2m milestone in the coming months and $36k annual passive income by end of this year.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster