CapitaLand Restructuring Is it good or bad

CapitaLand Restructuring: Is it good or bad?

CapitaLand Restructuring Is it good or bad

CapitaLand Restructuring Is it good or bad

CapitaLand shares was halted on Monday morning (22nd March 2021). Along with it, Ascott Residence Trust, Capitaland Integrated Commercial Trust, Ascendas Reit, CapitaLand China Trust and Ascendas India Trust, was also halted pending a released of an announcement.

On the same day, we got an answer. CapitaLand Limited (SGX: C31)is going to be restructured. In this article, we are going to figure out what is happening and also what is the good or bad about this restructuring. Should it be part of our wealth management journey or in our SRS portfolio?

Disclaimer: This is not a buy/sell recommendation. I do not hold any SGX:C31 shares.

 

Brief Information About CapitaLand Limited

CapitaLand owns 1090 properties in 242 cities spanning over 35 countries (as of 23 March 2021). It is the 3rd largest listed global REIM and Asia’s largest REIM.

They own a stable collection of REITs and business trusts comprising of CapitaLand Integrated Commercial Trust, Ascendas Real Estate Investment Trust, Ascott Residence Trust, CapitaLand China Trust, Ascendas India Trust and CapitaLand Malaysia Mall Trust.

CapitaLand Restructuring Top Real Estate Investment Managers

CapitaLand Restructuring Top Real Estate Investment Managers

That being said, the share price trend has been extremely disappointing over the long horizon. Most investors probably bought into CapitaLand for it’s dividend yields.

CapitaLand Restructuring Share Prices History

CapitaLand Restructuring Share Prices History

 

Summary of Restructuring: The Development Arm is going to be Privatized

CapitaLand Restructuring Development Arm Privatized

CapitaLand Restructuring Development Arm Privatized

Shareholders will now see the development part of the business privatized. They will be “compensated” with a combination of $0.951 cash, 1x CLIM (CapitaLand Investment Management) shares and also 0.155x CICT (CapitaLand Integrated Commercial Trust) shares. It does sounds like a very good deal.

(The assumption here is that CLIM trades at a fair value of 1x NAV. I’m trying to find data to share how CapitaLand has traded on NAV over the years. Do let me know if you can find the source for this.)

CapitaLand Restructuring Proposed Offer

CapitaLand Restructuring Proposed Offer

According to the Chairman of CLA Real Estate Holding response in the news release, the privatization will provide flexibility for the development business to pursue longer gestation and capital-intensive projects.

This is where I felt a bit uncomfortable with the restructuring which I will explain below.

 

The Good Part About The Restructuring

Firstly, I believe that the restructuring is excellent if you think about the conglomerate discount that CapitaLand may be facing. Conglomerates often trade at a discount versus companies that are more focused on their core products and services.

Mr Lee Chee Koon, Group CEO of CapitaLand Group says the same thing but in another way. As listed REIMs generally trade at a premium to their NAVs in the capital markets, we are confident that CLIM will be able to drive returns for our shareholders given its scale, capabilities and a strong ecosystem.” (Developers are usually traded at a discount).

Secondly, for those that feel that the development part of the business is hard to analyze or “risky”, this new structure becomes a “cleaner” and easier to analyze. There is more certainty in CLIM and probably that’s what local investors want. They will be paid a mixture of cash and CICT stocks for the development part of the business.

 

The Not So Good Part About The Restructuring

The growth driver of the company (CLIM) is now gone and the price CLA is paying is cheap (in my own opinion). I personally feel that the $1.279 (cash + CICT shares) are a cheap price to pay for the development arm of CapitaLand. Effectively, if CapitaLand were to grow in future, they have to then acquire new development property from (guess who) the CLA. I have no figures to back any statement down below so treat the following opinion with caution.

At this moment, the price for the development arm is not priced in or in fact, unknown to a retail investor.

I’m certain in the distant future that CLA will sell and offload some of the properties that they are developing now back to CapitaLand. According to FY2020 CapitaLand results, the development arm is pivoting towards ‘new economy’ asset classes. S$3.4 billion of new investments were made in business park, logistics etc. There are mentions of investing in Japan’s logistics sector (completing in 4Q 2022), Korea Data Centre Fund 1 (invest in an offmarket data centre development project near Seoul in South Korea), Two Class A tech office properties in San Francisco, etc. I believe these are interesting developments which may be sold back to CapitaLand in future.

Since the development arm is privatised, we will no longer have a visuals or information on properties/land that are developed. It might be difficult to see if the cost are justifiable or not.

There is also no more vested interest for CLA to give CLIM a good price for those properties. This means that properties that are acquired by CLIM moving forward may be more richly valued and CLIM may need to fund these properties using issuing of new shares.

 

Final Thoughts By Wealthdojo

On a business point of view, I personally feel that CLIM may not be as attractive as before.

On a share price point of view, I believe if people value CLIM differently moving forward, we may see the share price performing better.

If you do have any other views, whether it is similar or contrasting, I would love to hear from you in the comments below.

Invest safe.

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

My SRS Portfolio March 2021

My SRS Portfolio and Thoughts [March 2021]

My SRS Portfolio March 2021

My SRS Portfolio March 2021

After a series of SRS related articles in 2020, there are some readers from investingnote and my telegram channel that asked me to be transparent with my SRS investments. After some discussion with some of my readers, I will be doing regular updates on my thought process of investing using my SRS and the reasons why I invest in some of these funds or products.

The Standard Disclaimer: This is not and should not be taken as a buy/sell recommendation.

Before looking into using SRS to invest, these are some links you should read first before continuing.

Start Here: The $1 SRS Strategy

Basic Knowledge: 5 things you need to know about SRS when you are 40 and older

Your SRS Overseas Retirement Guide: 3 things you need to know about SRS if you plan to leave Singapore

For 40s and above: 10 SRS Investments to Consider Especially if you are 40 and older

Income Tax and SRS: How Much Is My Income Taxes [2021 Edition]

 

SRS Objective

To invest in sectors that are growing and balance it with reits exposure.

 

My Considerations

There are 3 instruments that I personally think is interesting and of investing value at this moment of time.

Lion-OCBC Securities Hang Seng TECH ETF (HST.SI)

This ETF is investing into the 30 largest TECH-themed companies listed in Hong Kong. It is diversified across 30 companies ranging from Alibaba to ZTO. While it is undeniable that there may be regulatory risk associated with this ETF, I believe that companies such as Tencent, Alibaba, JD, SMIC is going to propel China’s economy into the future. I’m not going in depth into the reason of investing in this article. Currently, I’m already vested into this ETF.

LGI HST ETF

LGI HST ETF

 

Manulife US Reits (SGX:BTOU)

Manulife US Reits is one that I have been eyeing for a look time. The reits is exposed to income-producing office real estate in key markets in the United States. I personally like the WALE by NLA and also occupancy rates of this reits.

Manulife US Reits Portfolio

Manulife US Reits Portfolio

Let me address one common question about COVID-19 affecting office real estates in USA. USA has been adopting working from home for a long time. Beyond the financials, it is important for the company to have a good working culture. The synergy fortunately is created from social interactions in office.

From the corporate presentation in March 2021, only 5% of companies mentioned that there will no longer be a need for an office. Around 70% of bosses expected employees to working from office at least 3 days a week. Similarly, around 70% of bosses expect that they would need more space due to rising headcount and also social distancing needs. Manulife reits rents to a well diversified tenant base ranging from Legal (21% of gross rental income), Finance and Insurance (18.1% of gross rental income), retail trade (13.8% of gross rental income) and so on. Personally, I’m comfortable with this even with the new norms that we might be experiencing. Currently, I’m vested into this reit.

Manulife US Reits Portfolio Work From Home

Manulife US Reits Portfolio Work From Home

 

Exposure to Institutional Investors (Ballie Gifford, Blackrock, Wellington)

Currently, I’m not invested into this yet because my SRS funds are insufficient to purchase into them yet. As I’m a representative from AIA Singapore, I would not be able to write the product. Feel free to reach out to me for more details regarding this.

The reason why I think it would make an great investment thesis is because of the expertise of the 3 companies. Wellington is famous for their exposure in the value investing companies. Ballie Gifford is well known for investing in growth companies (such as Tesla). Blackrock is famous for their fixed income. Depending on your intended risk profile, the 3 funds will be allocated accordingly.

I am planning to contribute to SRS in 2021 again for tax purposes. That will be the moment of time where I will be investing into this instrument.

 

Final Thoughts By Wealthdojo

I reckon my positions will not be changing much. The next change will probably be after the addition of new funds into my SRS to purchase the plan that give me exposure to the institutional investors. Wishing everyone the best in their investment journey.

Do reach out to me if you wish to explore your SRS options.

My SRS Portfolio

My SRS Portfolio

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

Moomoo FUTU Singapore

Say Hi to MooMoo Mobile Brokerage

Good bye Interactive Broker, Hello Moomoo. For those of you who have been following me for a while, you would know that I’m using interactive broker. However, the user-unfriendly interface (at least to me) has been annoying me for the past 3 to 4 years. I continued my use of interactive broker because of their exposure to the Hongkong market and also cheap commission rates. The deal breaker was the need to pay for platform fees whether I used the platform or not.

Then came Moomoo in Feb 2021 getting us to be part of the first 1500. I signed up immediately to see if I can do the switch from Interactive Broker. Here’s my experience with Moomoo so far.

By the way, if like this sharing, I would appreciate if you can use my referral link over here.

 

 

 

Futu Singapore Moomoo Brokerage Account

Futu Singapore Moomoo Brokerage Account

 

Introduction To Moomoo Brokerage Account

Moomoo is a subsidiary of Futu Holdings Limited, backed by big names such as Tencent, Sequoia Capital and Matrix Partners. Futu SG is a broker-dealer and custodian licensed by the Monetary Authority of Singapore, (License No. CMS101000).

The beautiful thing about Moomoo is the speed of my account opening and also the time taken for my money to be deposited into Moomoo. It took me 3 minutes to set up the account from the start to the end. In contrast, I remember it used to take me around 3 working days before my ThinkorSwim or Interactive Brokerage to be set up. Because of the free Apple share promotion at that time, I transferred USD$2000 into the account. In less than 5 minutes, my account has been funded and ready to be invested.

Disclaimer: My experience could be an one-off experience. However, listening to some of my other friend’s experience. the timing is roughly the same.

 

How it looks like

Futu Singapore Moomoo Brokerage Mobile Interface

Futu Singapore Moomoo Brokerage Mobile Interface

Futu Singapore Moomoo Brokerage Desktop Interface

Futu Singapore Moomoo Brokerage Desktop Interface

As you can see, this looks very similar to most brokerage interfaces out there. It is easy to find basic information about the company, your current balance, how to deposit money etc.

 

My Customer Service Experience

Moomoo FUTU Singapore Customer Service

Moomoo FUTU Singapore Customer Service

Customer support/service is very important in a brokerage account. I used to wait for ages when I needed to ask a question on Interactive Brokers. To test out Moomoo, I asked a very basic question and a representative came and helped me with the request in less than 2 minutes.

On a personal level, I felt this experience could be more personalised if the customer service representative used their names instead of a number like 7259. Nevertheless, this is just merely picking on bones.

 

Buying and Selling

Navigating the platform can never be easier. This is what you see when you want to buy a stock from the platform.

Moomoo FUTU Singapore Apple Main

Moomoo FUTU Singapore Apple Main

This main page gives sufficient information and I especially like the charts configuration for Moomoo. I personally think that it is slightly easier to use than ThinkorSwim and it gives me a quick and dirty look on how the charts looks in general.

Moomoo FUTU Singapore Apple Financial

Moomoo FUTU Singapore Apple Financial

Moomoo FUTU Singapore Apple Summary

Moomoo FUTU Singapore Apple Summary

The financial section is like gift sent from heaven. It is simple enough to see that iPhone is making 50% of the total revenue. Wearables are up and coming at 11% revenue.

Moomoo FUTU Singapore Apple News

Moomoo FUTU Singapore Apple News

The financial news allows me to be updated of the latest changes in the company. Currently, I’m using Seeking Alpha to get my information but this is another way for me to read about the latest updates.

Moomoo FUTU Singapore Apple Trade

Moomoo FUTU Singapore Apple Trade

Lastly, the buy and sell. Just 2 steps, select the price and the quantity and press buy (after you unlock trade with your password). It will be reflected in your securities account shortly.

 

Undeveloped Feature of Moomoo

Something that is new in Moomoo that I don’t see in other brokerage account is the Streams. I call this the investing influencer network. Basically, it is like twitter. You can follow people, people can follow you, you can like, comment or share the particular post. This essentially will increase the stickiness of the Moomoo. Take one minute to imagine if someone like Elon Musk post his investment thoughts (if he has any) on a platform like Moomoo. Tons of people will continue to be on this platform to see what he is doing.

As Moomoo is still new, up and coming financial influencers needs time to to post their views etc here and grow their following. I believe that this network effect will slowly but surely become more powerful in future.

You can choose to follow my investment thoughts here in Moomoo.

Moomoo FUTU Singapore Streams

Moomoo FUTU Singapore Streams

 

Final thoughts by Wealthdojo

Whether there is a market correction, Gamestop insane strike or a bullish run in the market, it is a basic to have a brokerage account to invest. Once again, if like this sharing, I would appreciate if you can use my referral link over here. There is currently a promotion when you enrolled with Moomoo.

Investment is not for everyone. Most of the time, the biggest enemy we are facing is often ourselves (just look at how many people who were spooked 2 days ago during the “tech” correction”. It would be best to work together with a trusted advisor who is able to create a certain asset allocation for your risk profile and purpose.

Wishing you the best.

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

Enduring The Correction 2021

Enduring The Correction

Enduring The Correction 2021

Enduring The Correction 2021

The last few days was beginning to spook investors. Global investors are concerned about rising inflation, coupled with raising 10 year Treasury Yield. This send the S&P500 down with growth stocks taking the lead. You might have the same concerns seeing your portfolio dipped. There were many people that reached out to me. Enough of them for me to put out a message in my telegram channel.

Enduring The Correction Advice

Enduring The Correction Advice

For those of you who started investing in March 2020, this might be your first major correction / bear market (if it is coming). If you feel uncomfortable to see losses, rest assured this is very normal. No one likes to lost money.

Instead of sharing logical data of how each correction ends up higher, I have consolidated a few great quotes from investors I respect. In your wealth management journey, investment is both logical and also an emotional experience.

Enjoy the ride. Hope you find strength in these quotes.

 

“Stock prices are not business prices. The company you have invested in will not stop/pause to sell their products just because their share price dropped by a few dollars. Whether there is a correction or not, invest in quality companies/portfolios that continue to grow” – Chengkok, Founder of Wealthdojo.

 

“Unless you buy a stock at the exact bottom (which is next to impossible), you will be down at some point after you make every investment. Your success entirely depends on how dispassionate you are towards short term stock price fluctuations. Behavior matters.” – Joel Greenblatt, American hedge fund manager.

 

“I deleted my (brokerage) app from phone yesterday so (that) I don’t see again and again. I will (continue to) add money every month and wouldn’t sell a share. I have quality in my portfolio and would evaluate things in 2021 Dec whether to sell anything.” – Rajeev, Singapore Investor.

 

“In times like these, the best thing to do is to research companies… and then come away with optimism that “wow… so much growth yet to happen!” – Ser Jing, Portfolio Manager of Compounder Fund.

 

“The principles have not changed. #1 Buy great companies #2 Buy them at fair value.” – Dr Daniel Kao.

 

“Rotation is the lifeblood of any bull market.” – Ralph Acampora, Director of Technical Analysis at Prudential Securities.

 

“Market is just price movement, it is never about the whole business. Where-else the underlying asset which the company that provide the goods and services is the real deal biz to the industry.” – Singapore Investor #2.

 

Final thoughts by Wealthdojo

Once again, I would like to thank all who have contributed to the above quotes. Enjoy the ride.

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

What To Do With Your Children's Hong Bao Money

What To Do With Your Children’s Hong Bao Money?

Happy Lunar New Year! Wishing everyone here good health and may your wealth multiply in the years to come. Hopefully, the last 4 days have been one where you have been giving/receiving or your child has been receiving hongbao. One common question that I go from parents with regards to financial planning is what they should do with the money. Most of them are keeping it for their children as emergency funds. This is a good initiative. That being said, is this an opportunity to share money lessons with your children?

What To Do With Your Children's Hong Bao Money

What To Do With Your Children’s Hong Bao Money (Source)

 

Your intention sets the tone

What do you want your child to learn from receiving the hongbao? Is it gratitude? Is it charity? Is it spending? Is it emergency funds? Your intention sets your child’s tone. By default, people will stick to the easiest thing of all: Not doing anything. This is precisely why most parents are keeping their children’s money as emergency funds. (PS: I’m not saying that emergency funds is a bad thing. It is also important.)

However, as the child do not have much ownership of the funds, they do not really learn from that concept. To them, it is their parents are keeping their money for them.

So what can you do this year to inspire your children to take charge of their money. This may or may not be applicable and felt by you depending on your relationship with money. Here are some suggestions.

 

Happiness of Spending Money

Wait a minute. A finance blog asking me to spend money? Yes. It came to my attention that “saving money” or “spending money” has became such a pain for people. As our education on money commonly involves parents screaming at us to save money (or that they don’t have money), it has become very hard for some people to spend mentality. Each time you spend, you will feel a pinch when you see your bank balance drop. That’s commonly known as the poverty or scarcity mindset. Eventually, you might grow up with enough money in your bank but feeling miserable that you don’t have enough.

What To Do With Your Children's Hong Bao Money Spend It

What To Do With Your Children’s Hong Bao Money Spend It

As parents, one of the best thing you can do for them is let them buy something that they have already wanted for a long time. Take 20%, $30 or whatever amount (be reasonable) in their hongbao money and bring them to the shopping center. Let them buy whatever they want. Let them feel the happiness of what money can buy. You will be surprised that some children will buy books, stationaries and of course toys. You can take this chance to introduce to them the 4 Quadrants Shopping Guide.

Let them take charge of their finances, the earlier they do, the more responsible they will become.

 

Delayed Gratification

To balance it up with spending, delayed gratification is next. A simple game you can play with your children is called The Marshmallow Test. I won’t explain too much here. Wait this hilarious video on how children wrestle with waiting to eat a marshmallow in hopes of a bigger prize (more marshmallows).

In finance, the timeline would be longer than this test. The intention is to get the children to save their hongbao money for a longer period of time so that they can get back more at a certain age. This could be done by a simple endowment plan or just Singapore Government Bonds that matures after a set period. When they receive the money after xx years, you can calculate with them (do it with them) how much they have put in and compare it to how much they have received. This can be done with your financial advisor.

 

Investing Lessons

This opens up many lessons for young children. You can share with them about volatility, about index (example if you invests in a Country ETF), about companies (example: when apple makes money, you “make” money too), about value or about growth.

One of the easiest way is to invest in companies that they already know. For illustration, my example will be SBS Transits.

Disclaimer: Not a buy/sell recommendation here.

For children, they probably will be familiar with certain products such as the IPhone, Bus services, Netflix etc. When you invest their money (they can only open a brokerage account when they are 18) for them, they get to see if their money grows in terms of capital appreciation or dividends. You can consider investing for them once a year as a dollar cost averaging approach for them to build up their portfolio.

For those of you would like to have something simpler, consider investing into country ETF like the STI Index, China ETF or S&P500. When the particular country does well, they are able to see the value of their investment grow as well. Similarly, do consider a dollar cost averaging approach for your children and invite them to ask questions. This is a great opportunity to for your children to learn about investing either with yourself or your trusted financial advisor.

What To Do With Your Children's Hong Bao Money Investing

What To Do With Your Children’s Hong Bao Money Investing (Source)

Final thoughts by Wealthdojo

I cannot imagine how much of a head start your children will have if they start learn these money lessons as some adults take decades to learn these. Let me know what you guys think in the comments below.

We wish you a Happy Lunar New Year!

 

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.