Tuesday, December 30, 2014

Greece Crisis Revisted?

Remember GREXIT in 2011?It was the only country in the PIIGS to have its debt restructured.Now, on 29th Dec this year, the Greek Parliament failed to elect a new President thus forcing a snap elections next Jan 25th.Is the memory receding Euro Crisis entering a new phase after having been in the lull for quite a while?Right now, the Athens stock market is hit by the news but the rest of Europe and the world remain pretty much nonchalant about events unfolding in the birthplace of modern democratic ideals.Polls point to a victory for the populist far-left Syriza, the party headed by Alexis Tsipras who want to keep Greece in the Euro but dump most of the conditions tied to the bail-outs - ending austerity, reversing cuts in the minimum wage and in public spending, scrapping assets sales and to repudiate much debt.Expect a game of chicken to be played out between Alexis and his party vs the European troika if Syriza win next month.More volatility ahead, I think.

Friday, December 19, 2014

My Portfolio 2014

The following is my portfolio as at 2014 (not in any order). I do not expect any more changes till next year when I come back from my holidays to review again.

Edited in the prices as at Dec 31 (after trading).

DBS  ($20.60)
SPH   ($4.21)
SingTel ($3.90)
StarHub ($4.15)
CityDev ($10.27)
SP Ausnet ($1.42)
Cityspring ($0.53)
Keppel Infra Trust ($1.065)
Olam ($2.02)
Wilmar ($3.24)
SIA ($11.60)
Keppelcorp ($8.85)
SembCorp ($4.45)
CMPacific ($0.975)
CroesusRetail ($0.925)
CDL Trust ($1.74)
AsiaPay TV Trust ($0.86)
Capital China Trust ($1.615)
Ascendas India Trust ($0.82)
Lippo Malls Trust ($0.34)
SuntecReit ($1.96)
StarHillGlobal Reit ($0.80)
SATs ($3.05)
SingPost ($1.92)
First Reit ($1.255)
KReit ($1.22)
Accordia Golf Trust ($0.75)
SoilBuild Trust ($0.79)
HPH Trust ($0.915)
OCC 5.1%NCPS 100 ($105.22)
DBS$800M4.7%NCPS ($105.50)
Olam B180129 (US$1.07)

Wednesday, December 17, 2014

Overhype Xiaomi?

Recently, I came across a report that says that Xiaomi net profit for 2013 is $56m on sales of $4.6b.This is a razor thin margin of 1.8% compared to APPLE (28.7%) and Samsung (18.7%).This probably explain why Xiaomi is able to price their phones so low in the market.

Recently Xiaomi expansion into its second most important market (India) stalled only after starting in July. Complaint by Ericsson that Xiaomi had infringed on its set of wireless patents which will see hearing in Feb 2015.Meanwhile, sales activity in India has to be halted until the outcome become clearer. Xiaomi had only a handful of patents (as it is a startup) compared to the likes of Apple, Samsung,Ericsson and even locals rivals like Huawei, Lenovo etc.I do not forsee how Xiaomi is going to be able to sell in Europe and US. Even its foray into markets like India and Indonesia will prove to be difficult (due to patents suits being lodge by competitors) despite the attractiveness of its price points.I was in Indonesia recently and was surprised to see OPPO quite visible in the local market.In India, there is also the local version of Xiaomi in the form of Micromax.

Founder, Lei Jun is in the midst of trying to raise funds for the company at a valuation of $40b based on his vision of a digital ecosystem.

I am of the opinion that Xiaomi is more hype than substance till this point.

Monday, December 15, 2014

Olam - ADM Worldwide Cocoa Business Acquisition

Olam International to acquire ADM worldwide cocoa business for US$1.3b to create a worldwide platform for leading global integrated cocoa business.

Establishes Olam as one of the top 3 worldwide cocoa processors as well as the
deZaan® ,Joanes® and UNICAO® brands adding on top a strong franchise of 2150 customers globally.The expected synergies from the economies of scale is about US$35m-US$40m.

The transaction is expected to be earnings, returns and free cash flow accretive in the first full year closing (FY2016). It is also expected to have a substantial financial impact going forward with segmental EBITDA growth of between 86%-95%, overall company EBITDA growth of between 20%-22% and Net Income and EPS growth of between 25%-30% by FY2018 compared to FY2014.

The purchase consideration of US$1.3 billion will be financed through a combination of cash and existing debt facilities.



Wednesday, December 10, 2014

Some Weath Statistics in Singapore

Came across an article recently that states that 1395 super rich  individuals own about 17% of the country wealth which equate to be about US$180b. Do not know how accurate is the info but it surely tell a distinct story.Inequality is not between the top 10% and the rest but more about a small percentage of the top 1% versus the rest.Ditto with the US, based on what I know too.

Wednesday, December 3, 2014

Intuitive Explanation for Black-Scholes Pricing Formula.

Below is a link to a reasonable good, intuitive and easy to understand explanation of the Black-Scholes Pricing Formula for a European Call Option  that I come across. Enjoy!

Black-Scholes Call on European Stock
Black-Scholes d1 d2

Tuesday, December 2, 2014

SGX 24X7 Availability????

I am not a trader so it does not really bother me whether SGX delay trading today to 1230 hours or not. However, I am very puzzled that in these days of cheap availability of hardware redundancy, sophisticated software availability capabilities, SGX is still CONFRONTED WITH THE NEED to issue an unexpected outage of half a working day. This clearly is UNACCEPTABLE in my view.Remember, running an operation 24X7 is not a new concept or requirement. Already more than 25 years ago, it is already a key requirements in most major data centers.

If I am in charge of SGX, I would have fired the CIO on the spot.