Wednesday, October 16, 2024

Test My Luck on T-Bill (BY24103N) using SRS funds

  


I have more than $25k of idle funds lying in SRS account earning a meagre 0.05% in the current high interest rate environment.

Great opportunity costs incurred from waiting on the sidelines to add investment for local banks such as OCBC or DBS shares into my ultra long-term SRS portfolio.

The share prices of local banks display no sign of weakening in the short-term hence I decided to deploy the idle SRS funds into either this latest tranche of Treasury Bills.

As the latest tranche of T-Bill will close on 16 Oct 2024, 9pm today, I decided to try my luck to auction for this tranche of T-Bill, a short-term government debt security with 1 year tenor, fully backed by the Singapore government and having an AAA credit rating.

The issue date is on 22 Oct 2024 and maturity date is on 21 Oct 2025. Results will be out on 17 Oct 2024, 1pm.

There it goes.


There is no admin fee for internet banking applications unlike SSB.

Frankly, I am trying my luck with a competitive bid of 3% p.a. with not much confidence in getting it as I believe this round of application may have a cutoff below 3% and there may still be many low-ballers using CPF OA funds. Thus, I am prepared for a failed application, getting back my funds to continue waiting on the sidelines.

Thanks for reading!

With love & peace,
Qiongster

Saturday, October 12, 2024

Net Worth Update October 2024 | SGD1.72m Record High!

  

Net worth reaches a new all-time high of S$1.72 million in October 2024, driven by the rebound of S-Reits, consistent CPF contributions, and disciplined savings habits.

Net Worth Breakdown:

Safe Heavens (62%)

CPF (36%): Forming the bedrock of my retirement savings, attaining Full Retirement Sum FRS in 2022 was a significant achievement.

Cash and war chest (16%): My liquid assets are strategically invested in fixed deposits and Fullerton cash funds, earning around 3% p.a. This provides a cushion for unexpected expenses while generating steady returns.

Bonds (10%): A balanced portfolio of low-risk Singapore Savings Bonds and Astrea Bond ensures stability. I have maxed out my SSB individual limit of $200k in Aug, right before the yield of SSB falls below 3%.

Retirement Savings (13%)

SRS (8%): I have already contributed the annual individual limit of $15.3k, solidifying my retirement savings. My SRS funds are deployed into $30k of SSB and 6 local stocks - Comfortdelgro, DBS, OCBC, Keppel DC Reit, Keppel Reit and Wilmar.

Insurance (5%): I also own Prudential Pru-life multiplier whole life insurance plan and other savings plans which in total, could provide me with 6-digit lump sum payout after my retirement age.

Income and Growth Assets (25%)

Stocks and Reits (25%): This riskier portion of my portfolio caters for generation of passive cashflows and potential growth, with a focus on long-term compounding growth through dividend investing.

Achieving a net worth of S$1.7 million before year-end is a testament to the power of consistent financial discipline. Diversification, strategic investing, and compounding growth have been instrumental in building a robust financial foundation. The ongoing contributions to CPF and the strong performance of my investments have been key drivers of this progress. As I continue my journey towards long-term financial freedom, I remain committed to maximizing returns while managing risks.

Thank you for reading!

With love & peace,
Qiongster

Monday, September 30, 2024

Portfolio Update September 2024

Before we end off September 2024, let me quickly take a snapshot of my investment portfolios. 

Despite the ongoing geopolitical tensions and economic uncertainties in the world, my overall portfolio value has continued to grow, reflecting the resilience of my long-term investment strategy.

My SGX Income Portfolio value has seen a steady increase to $399k from $384k driven by the recovery of local S-Reits benefiting from the interest rate cuts starting from Sep 2024.

My US/HK Growth Portfolio has also seen a positive performance, rising to US$18.8k from US$17.8k.

My SRS Ultra Long-Term Portfolio value has experienced a modest uptick to $183k from $182k.

Market Outlook 

The US stock market has continued its upward trajectory in a healthy bull run on the back of looming presidential election and higher certainty of a lower interest rate environment in the coming future. Nonetheless, there will still be immense volatility from the occasional noises and fears attributable to ongoing geopolitical conflicts, and concerns about a potential economic recession. Despite these challenges, I believe that long-term investors should remain calm and focused on our investment objectives.

Investment Strategy 

My investment strategy remains unchanged. I continue to prioritize high-quality income-producing instruments, such as government-backed risk-free bonds, property related assets, and strong profitable growth businesses. By carefully diversifying my portfolio and remaining disciplined, I aim to weather any market storms and achieve my long-term financial goals.

Portfolio Actions

1. Sold 2,000 shares of PLife Reit at $3.93 in SRS on 9 Sep.

Portfolio Dividends

1. Received $138 of dividends from Savings Bonds in SRS on 2 Sep.

2. Received $299.55 of dividends from Savings Bonds on 2 Sep.

3. Received $752.40 of dividends from Capitaland Ascendas Reit on 2 Sep.

4. Received $418 of dividends from MPACT in SRS on 12 Sep.

5. Received $515.36 of dividends from Mapletree Industrial Trust as 231 shares via DRP on 12 Sep.

6. Received $289.83 of dividends from Keppel Reit in SRS on 13 Sep

7. Received $438.66 of dividends from Mapletree Logistics Trust as 431 shares via DRP on 18 Sep.

8. Received $363.92 of dividends from Keppel DC Reit in SRS on 23 Sep

9. Received $794.50 of dividends from Aims Apac Reit on 25 Sep

10. Received $321.68 of dividends from Capitaland China Trust on 25 Sep

11. Received $1,004.87 of dividends from CICT on 26 Sep

12. Received $42 of dividends from OUE on 26 Sep

SGX Income Portfolio

Portfolio Value = $399k


US/HK Growth Portfolio

Moomoo

US$4.5k


Tiger Broker


US$13.2k


Syfe Trade

US$1.1k


Portfolio Value = US$18.8k

SRS Ultra Long-Term Portfolio

Portfolio Value = S$183k



Thanks for reading.

With love and peace, 
Qiongster

Saturday, September 28, 2024

Passive Income in Q3 and 9 months of 2024

 

Sep 2024 is ending soon and here is an update on my passive income for 3Q and the first 9 months of 2024.

From 1 Jul to 30 Sep 2024, I collected the following dividends.

$147.50 SSB (1 Jul) SRS
$320.73 SSB (1 Jul)
$239.88 Far East Orchard as 239 shares DRP (5 Jul)
$128.70 SSB (1 Aug)
$2,200.00 OCBC (23 Aug) SRS
$880.00 UOB (23 Aug)
$540.54 DBS (26 Aug)
$162.00 DBS (26 Aug) SRS
$303.97 IREIT (28 Aug)
$254.70 Ascott Reit (29 Aug)
$76.55 Suntec Reit (29 Aug)
$176.00 Comfortdelgro (29 Aug) SRS
$90.00 Wilmar (29 Aug) SRS
$150.80 Plife Reit (30 Aug) SRS
$138.00 SSB (2 Sep) SRS
$150.50 SSB (2 Sep)
$149.05 SSB (2 Sep)
$752.40 Ascendas Reit (2 Sep)
$418.00 MPACT (12 Sep)
$515.35 Mapletree Ind Trust (12 Sep) DRP
$289.83 Keppel Reit (13 Sep) SRS
$438.66 Mapletree Log Trust (18 Sep) DRP
$363.92 Keppel DC Reit (23 Sep) SRS
$794.50 Aims Apac Reit (25 Sep)
$321.68 Capitaland China Trust (25 Sep)
$1,004.87 CICT (26 Sep)
$42.00 OUE (26 Sep)

The total amount collected in Q3 2024 is $11,050.13, a 32% YoY increase from Q3 2023's $8,375.53.

Together with the $13,466.19 passive income in the first half of 2024, my passive income in the first 9 months of 2024 is

$24,516.32


On track of achieving my revised target of $28k passive income for 2024.

Time in the market beats timing the market. In the long-term, I am happy to remain primarily invested locally in SGX for passive income, while having a little exposure to US tech stocks for some growth. I may sell of my existing small holdings of HK shares after their recent resurgence.

My ultimate goal is to own an investment portfolio valued at one million dollars yielding at least $50k of passive income annually. Currently, I am at about half of the journey as my SGX income portfolio and SRS ultra long-term portfolios are valued at around $500K and dividends are projected to be around $25k or more for this year.

My motto is to live frugally, save up, invest in any bear or bull market conditions, slowly and steadily build up my investments in stocks, Reits and risk-free government bonds.

I look forward to collecting more dividends as passive income in the last quarter of 2024.

Thanks for reading. Stay focused and remain steadfast as always! Huat ah!

With love and peace, 
Qiongster

Sunday, September 22, 2024

The Illusion of Life: A Rat Race to Nowhere

 


I have been pondering about life, a tapestry woven with threads of joy, sorrow, and the relentless pursuit of meaning. We are often caught in a whirlwind of activities, chasing after the next big thing, yet feeling a profound sense of emptiness. What truly matters? Is life merely a rat race, a relentless struggle for survival and dominance?

The Illusion of Happiness

We are bombarded with messages that equate happiness with material possessions, fame, and success. We strive to gain more wealth and assets, excel at work to gain promotions, chase after the latest gadgets, compete to win in sports, fight to gain control of land and immerse ourselves in a world of superficial distractions. Yet, beneath the surface, a sense of discontent lingers. The pursuit of happiness often leads to a never-ending cycle of desire and dissatisfaction.

The Rat Race of Consumerism: People often feel compelled to keep up with the latest trends and possessions, believing that these will bring them happiness. Look at the queues in front of Apple stores to be the first to get hold of the latest iPhone 16. Months later, the queue will be for Samsung Galaxy 25 phones. Next year, it will be the same for iPhone 17. However, this can lead to a never-ending cycle of consumption and dissatisfaction.

The Illusion of Social Media: Social media platforms often present an idealized version of reality, leading our brains to compare ourselves to unrealistic standards and experience feelings of inadequacy. The curated nature of these platforms creates a false perception of perfection, contributing to unrealistic beauty standards and a fear of missing out. This can erode self-esteem, body image, and overall well-being. To avoid falling into the comparison trap, it is important to remember that social media is often a highlight reel and to focus on building a strong sense of self-worth.


The Survival of the Fittest

The concept of "survival of the fittest" has permeated our society. We're taught to compete, to outshine others, and to strive for dominance. From the corporate world to the sports arena, we're constantly vying for the top spot. However, this relentless competition often comes at a cost. It can lead to stress, anxiety, and a loss of connection with oneself and others.

The Competitive Corporate Culture: Many workplaces foster a highly competitive environment, where employees are constantly striving to outperform their colleagues. This can lead to a toxic work culture and a lack of work-life balance. Despite the benefits of remote work, which has become the norm since the pandemic, many companies are gradually abandoning this flexibility and autonomy, harkening back to traditional workplace models. Corporate giants like Amazon, Tesla, IBM, and Meta, driven by profit, often prioritize leveraging their human resources for business growth and WFH is being perceived as a sign of unproductivity by their shrewd business leaders. In today's capitalist society, physical presence and visible productivity, often manifested in office showboating, remain key performance indicators that make management feel good about their subordinates' work.

The Pressure to Succeed in Academia: Students are often pressured to achieve high grades and get into prestigious universities, which can lead to excessive stress and anxiety. In Singapore, the pressure to attend prestigious schools start from a young age, from attending branded infant school, kindergardens to prestigious primary schools, secondary schools and so on. All these toiling come to nothing because schools rarely impart entrepreneurial skills nor money making abilities to students as teachers are wage slaves trained to educate the next generation of slavers for the modern corporate world. 

The Intense Competition in Sports: The world of sports is often characterized by fierce competition, where athletes strive to be the best in their field. The competition attracts viewership and indirectly brings revenue and profits for the organisers or sponsors. Look at Formula 1, why do 20 driver drive 60 over laps for the past 15 years on Singapore's track? It is all about money from entertainment. Likewise, the same goes for soccer leagues, baseball and cricket leagues, racquet sports and recent Olympics and so on.


The Fear of Death

The fear of death is a universal human experience. It drives our actions, our desires, and our anxieties. We cling to life, desperately trying to avoid the inevitable. Yet, this fear can also limit our ability to live fully. It can prevent us from taking risks, embracing change, and experiencing the beauty of life.

The Fear of Failure: People often avoid taking risks or pursuing their dreams due to the fear of failure and the potential consequences.

The Desire for Immortality: Some people seek to achieve immortality through fame, wealth, or scientific advancements, driven by the fear of death.

The Impact of War: War can have a profound impact on people's lives, instilling fear, uncertainty, and a sense of mortality. The tragic loss of life in conflicts around the world serves as a constant reminder of our own mortality.


The Illusion of Control

We often believe that we have control over our lives. We make plans, set goals, and strive to shape our destiny. However, life is unpredictable. Unexpected events can derail our plans and shatter our illusions of control. It's important to embrace uncertainty and learn to adapt to change.

The Impact of Natural Disasters: Natural disasters can disrupt people's lives and challenge their sense of control. Look at the recent typhoons, hurricanes and earthquakes which bring damages to infrastructure and flooding in several Asian cities.

The Unexpected Loss of a Loved One: The death of a loved one can significantly alter a person's life and their perception of control. It can disrupt one's routine and raise existential questions on the fragility of life. The inability to prevent or reverse the loss can invoke feelings of helplessness and powerlessness.

The Uncertainty of the Future: The world is constantly changing, and it is impossible to predict what will happen next. This uncertainty can be both exciting and daunting.


Conclusion

Life is a complex and multifaceted experiential journey. It can be filled with both joy and sorrow, triumph and defeat. While we may strive for happiness, success, and control, we must also recognize the limitations of these pursuits. Ultimately, the meaning of life is a personal journey that each of us must discover for ourselves. By letting go of fear, embracing uncertainty, and connecting with our inner selves, we can find true fulfillment and meaning in our lives. Remember that we all will die one day so we should live our lives to the maximum without thinking about the meaning of lives.

Thank you all for reading!

With love and peace, 
Qiongster

Friday, September 20, 2024

Subscribed to CICT Preferential Offer Shares

 


The preferential offering by Capitaland Integrated Commercial Trust (CICT) to raise proceeds of around $757 million to fund the acquisition of 50% stake in Ion Orchard is ongoing and will close on 24 Sep 2024 9.30pm by ATM or earlier at 5.30pm by other means.

CICT is offering around 377 million shares to existing shareholders at a ratio of 56 preferential offer shares for every 1,000 existing shares at a price of $2.007.

The sponsor of the Reit, Capitaland Investment has irrevocably undertaken to subscribe their entitled preferential shares in full.

I find no compelling reason to not increase my investment in CICT which established itself as a pioneer in the retail Reit space before merging with Capitaland Commercial Trust in 2020, offering retail investors like us the unique opportunity to owning slices of Singapore's most iconic shopping malls including the likes of Raffles City, Westgate, Funan and top quality grade A commercial skyscrapers in the CBD such as CapitaGreen, Asia Square Tower 2, Capita Sky, and some other high quality commercial properties overseas such as Main Airport Centre in Frankfurt, Germany and 100 Arthur Street in Sydney, Australia. These diverse property types generate stable income streams over the years, making CICT a cornerstone in my income portfolio.

The acquisition of Ion Orchard further solidifes CICT's position as a leading Reit in Singapore. This prime shopping mall portfolio is a highly sought after destination for both locals and tourists contributing significantly to the Reit's income stream and asset under management.

As I own 18,506 shares of CICT, I am entitled to 1,036 preferential offer shares at $2.007.

As this is a slightly yield accretive fund raising project and at a yield of more than 5%, I intend to subscribe to 2,000 preferential offer shares, including excess and hope to get all if possible.

I decided to use the ATM to subscribe for the Preferential Offer Shares as using Paynow on CDP portal would also incur $2 transaction fee.

There it goes.

My investment in CICT is positioned for the long-term, at least the next decade, for passive income.

While the acquisition of Ion Orchard may primarily benefit CICT's sponsor, Capitaland Investment, the timing of the deal appears strategic. It coincides with a potential interest rate pivot and a stabilization of CICT's share price near its book value of $2.12.

Despite this positive backdrop, short-term market volatility remains a concern. CICT's share price could still be influenced by interest rate fluctuations and global economic news. However, I believe that the REIT's long-term prospects remain solid, supported by its diversified portfolio and proven track record.

If CICT's share price dips below $2 in the future, I am prepared to increase my holdings, as I view this as a potential buying opportunity. This confidence stems from my belief in the REIT's ability to navigate challenges and generate sustainable returns.

In the coming months, years and decade, I look forward to collecting more dividends from CICT perpetually effortlessly.

Thank you all for reading!

With love and peace, 
Qiongster

Sunday, September 15, 2024

Will Singapore Bank (DBS, OCBC, UOB) Shares Keep Rising?

 

The recent performance of Singapore's major banks has been impressive, with their shares hitting all-time highs. As at time of writing, DBS Group (SGX: D05) and Oversea-Chinese Banking Corporation (OCBC) both achieved record share prices, with DBS surpassing S$38 per share and OCBC reaching S$15.28. United Overseas Bank (UOB) also performed strongly, hitting an all-time high of S$32.64 during the same period.

The surge in share prices has been attributed to several factors, including high interest rates that boost net interest income, positive earnings reports, and investor optimism ahead of upcoming financial results. he overall performance of these banks has significantly contributed to the Straits Times Index (STI), which itself reached a one-year high, reflecting the banks' substantial market presence.

However, the question remains: will this upward trend continue? Several factors need to be considered, including dividend yield, payout ratio, and the potential impact of interest rate cuts.

Current Performance and Dividend Yield

Currently the dividend yields for Singapore's banks are notably attractive, ranging from approximately 5 to 6 %. Even at $38, DBS has a trailing dividend yield of 5.29%. After its run-up to $15.28, OCBC's dividend yield is at 5.63%. UOB at above $32 still can yield 5.3%. These yields are appealing to income-focused investors, especially in an increasingly probable lower interest-rate environment. Institutional investors and fund managers are also inclined to shift their funds from low-risk government-backed bonds, treasury bills and fixed income bonds to high yield yet fundamentally safe stocks of Singapore banks.

The banks have consistently increased their dividends, with payout ratios hovering between 50-55% of their earnings. This stability in dividend payments is a key factor that supports investor confidence and can help sustain share prices even if growth slows down.

Personally, I believe that as the yields of safe financial instruments such as Singapore Savings Bonds, T-Bills and fixed deposits continue to fall in the coming months, more funds will be shifted into Singapore local bank shares, further compressing their yields to closer to 4%. Hence, they may still be headroom for the bank shares to continue rising. At 4% yield, DBS will be priced at $54, OCBC at $22 and UOB at $44.

Payout ratios and Financial Health

As of recent reports, the payout ratios for Singapore's banks are generally between 50% and 55%. This range indicates a balanced approach to dividend distribution, allowing banks to reward shareholders while still retaining enough earnings to support future growth initiatives.

  • DBS Group: Historically, DBS has shown a strong commitment to dividends, with a payout ratio around 51% for its recent interim dividend. The bank has also demonstrated significant growth in its dividend payouts, with a compound annual growth rate (CAGR) of 9.3% over the past five years.
  • OCBC: OCBC has maintained a target payout ratio of approximately 50%. This disciplined approach allows OCBC to manage its capital effectively while providing consistent returns to shareholders. The bank's dividend payout has also seen a CAGR of 9.1% in recent years, showcasing its commitment to rewarding investors.
  • United Overseas Bank (UOB): UOB's payout ratio is similar, hovering around 55%. This reflects its strategy of balancing shareholder returns with the need for capital to support its growth initiatives, particularly in expanding its regional footprint.

The banks' consistent payout ratios signal financial stability, which is crucial for investor confidence, especially in uncertain economic conditions.

While high payout ratios such as REITs are appealing, they must be balanced with the need for capital to fund expansion and innovation. The Singapore banks have shown a strong ability to grow their earnings, which supports their dividend policies.

The recent high-interest rate environment has positively impacted the banks' profitability, allowing them to maintain and even increase dividends. However, potential interest rate cuts in the future could affect their net interest margins and, consequently, their ability to sustain high payout ratios. 

As the payout ratios of these local banks are rather conservative and sustainable, it should not be difficult for them to continue paying the same or even more dividends in a lower interest rate environment.

Interest Rate Cuts and their Impact

The outlook for interest rates is a pivotal factor influencing bank profitability. Following a period of high interest rates, there are expectations for potential cuts later in 2024. While high interest rates have bolstered net interest income—essentially the difference between what banks earn on loans and what they pay on deposits—any cuts could compress these margins. Analysts suggest that while the banks have benefited from elevated rates, the net interest margins (NIM) may have peaked.

The anticipated cuts could lead to a decrease in profitability, particularly if banks are unable to adjust their lending rates downward in tandem with deposit rates. However, the banks are also diversifying their revenue streams. For instance, non-interest income, particularly from fees related to wealth management and credit card transactions, is expected to grow, which could help offset any declines in net interest income.

Technical Analysis

DBS

DBS share price will face an immediate resistance at $38.38. Should it break through this resistance with volume, it may propel towards $40. Otherwise, it may consolidate above the $36 range above its 100, 50 and 20 days moving averages. There is strong immediate support at $35.55, which if breached will see it tank towards the $33 range, which is an attractive point where long-term investors could start nibbling shares of DBS.


OCBC

OCBC share price will face an immediate resistance at $15.33. Should it break through this resistance with volume, it may propel towards $16.50. Otherwise, it may consolidate above the $14.50 range above its 100, 50 and 20 days moving averages. There is strong immediate support at $14.25, which if breached will see it tank towards the $13.80 range, which is an attractive point where long-term investors could start nibbling shares of OCBC.


UOB

UOB share price will face an immediate resistance at $33.10. Should it break through this resistance with volume, it may propel towards $35. Otherwise, it may consolidate above the $31.20 range above its 100, 50 and 20 days moving averages. There is strong immediate support at $30.50, which if breached will see it tank towards the $29 range, which is an attractive point where long-term investors could start nibbling shares of UOB.



In summary, while Singapore bank shares have reached new heights, several factors will determine whether this momentum can be sustained. The attractive dividend yields and stable payout ratios provide a solid foundation for continued investment interest. However, the potential for interest rate cuts poses a significant risk to future profitability. As the banks adapt to changing market conditions and focus on diversifying their income, they may still offer growth opportunities, albeit at a potentially slower pace than in the recent past. Investors should closely monitor these developments to make informed decisions about our investments in Singapore's banking sector.

I am on the lookout for any correction or retracement of the bank share prices and may consider to start nibbling more shares of DBS at around $35, OCBC at around $13.80 and UOB at around $30.

Thank you for reading!

With love & peace,
Qiongster