With the negative momentum from 2018, the STI could remain under pressure despite the strong performance in January 2019, according to RHB. While the valuation and dividend yield of STI makes it compelling for long-term investments, RHB thinks that investors should continue to stay selective in navigating the market in 2019. RHB recommends four investment strategies that focus on stocks with stable earnings, strong balance sheets and sustainable dividends. Investors Takeaway: 4 Investment Strategies To Navigate Singapore’s Stock Market By RHB Rotate Into Defensive Sectors While RHB notes that the markets could move sideways for now, RHB believes that now is not the time to abandon risk assets, especially for long-term investors. RHB highlights that the current sell-off in the market is

Most investors may not bother much about the definition of the word “returns”, as this implies profits and is something which is always welcome. However, if we break down the word “returns” into separate components, we find that there is a capital gains/losses component to it and also a dividends component, both of which make up the total return for a stock. I had discussed dividends extensively in previous articles (see here and here), so let us focus on the capital gains aspect in this article. Investment Return And Speculative Return The total capital gain or loss can be further sub-divided into two distinct categories known as the “investment return” and the “speculative return”. The investment return refers to the returns investors enjoy

With the news and media outlets constantly blaring out bad news on lingering uncertainties and financial turmoil, investors would probably be filled with a dark sense of foreboding as we enter 2019. It’s important to emphasise here that while it is crucial to keep up with business news to understand what’s going on in the world around us, it’s also equally important to insulate ourselves from negative emotions. Pessimism is a condition which makes valuations attractive, but it may have a harmful effect on an investor’s psychology and cause him to make unwanted errors. In this article, I will look at two common emotions which afflict investors – fear and uncertainty. Fear – Of Losses And Of Losing Out Fear is a very common emotion when it comes to investi

CDL Hospitality Trust‘s (SGX: J85) distribution per stapled security (DPS) fell 2.1% in the fourth quarter of 2018. The absence of revenue contribution from three properties — two divested and one being renovated — were to blame for the lower distributions this quarter. However, the new year could potentially lead to a turnaround with the full-year contribution from its acquisition of an Italian hotel and the reopening of its resort in the Maldives. Here are the key takeaways to note from its earnings scorecard. Fourth-quarter 2018: Revenue decreased by 5.4% to S$52.3 million Net property income declined 5.4% to S$38.4 million DPS slid 2.1% to 2.77 Singapore cents Full-year 2018: Revenue dipped 1.2% to S$201.8 million Net property income declined 3.8% to S$146.0 mill

The third part of this series looks into a somewhat confusing and contentious accounting issue – that of mark-to-market accounting. Readers can access the first two sections here and here, on accounts receivable and revenue recognition respectively. Mark-to-market (“MTM”) accounting refers to the practice of pegging market values to various items within the balance sheet in order to recognise its most recent market value. This article will discuss the basis for such treatment as well as some pros and cons. MTM Accounting – An Example MTM accounting was introduced after 2000 to account for changes in the market values of certain assets and/or liabilities on the balance sheet. A common example would be shares and securities held in an investment portfolio of a company

There’s nothing which graces the headlines and makes business news more exciting than mergers and acquisition (M&A) announcements. With the desire to grow larger and get better, more and more companies are on an acquisition spree to turbo-charge their growth and to create more “shareholder value”. Investors who are on the receiving end of such announcements from the companies within their portfolio should carefully scrutinise the deals as M&A do not always turn out well. The devil, as they say, is in the details and this article attempts to explain the good and the bad when it comes to M&A. The Lowdown On M&A Companies undertake M&A for a variety of reasons, from the need to integrate a new product line or lines (buying instead of building one shortens

In 2018, investors witnessed extreme market volatility due to higher interest rates, trade tensions between China and the United States, and geopolitical uncertainties such as Brexit. But savvy investors know that it is at such times that the stock market can present opportunities to buy stocks at discounted prices. If you’re looking for bargains, here are two stocks ideas for you. The HR experts First on the list is HRnetGroup Ltd (SGX: CHZ). The recruitment company has demonstrated steady growth in its short history as a listed company. Its revenue increased by 2.5% and 7.4% in 2016 and 2017, respectively. Profits increased at an even faster pace, at 6.3% and 15.4%. Growth has even accelerated in 2018, as shown below. Source: HRnetGroup Ltd 2018 Q3 Earnings Presentation The pace

https://www.fool.sg/2019/01/22/a-dive-into-frasers-hospitality-trusts-different-geographical-markets/Earnings season is upon us.  This week, no fewer than 13 real estate investment trusts (REITs) will be releasing their earnings update for the final quarter of 2018. Among them, are three hospitality REITs — Frasers Hospitality Trust (SGX: ACV), OUE Hospitality Trust (SGX: SK7) and CDL Hospitality Trusts (SGX: J85). Despite the strength of the Singapore dollar, arrivals in Singapore increased by 7.5% in the first eight months of 2018. Higher arrivals from the United States (+13.6%), China (+9.4%) and India (+16.3%) were the biggest contributors to the larger visitor numbers. With the bullish trends of the hospitality sector in Singapore, investors might have their eyes peeled on the

In this article, we continue to highlight some of CIMB’s top alpha picks for the New Year. For investors who are seeking to outperform the market, here are four large cap stocks that CIMB thinks will fit your investment goal in 2019. Investors Takeaway: Kick Off 2019 With These 4 Alpha Large Caps By CIMB CapitaLand According to CIMB, CapitaLand managed to put in a strong performance in 2018, achieving a 9M18 return-on-equity (ROE) of 6.9 percent. This puts it well on track to hit its annual ROE eight percent target and positions CapitaLand for a strong year in 2019. Heading into 2019, CIMB notes that strong capital deployment following the divestment of $4 billion of assets and $6.1 billion of new investments announced to-date should continue to drive forward ROE expansion. In 2019, Ca

In today’s connected markets, macro events in one market can have rippling impact on the world. For example, the trade war spat between the two largest economies in the world has created uncertainty over global economic growth in 2019. The stock market was starting to find its footing until the unthinkable trade war took place. According to CIMB, here are some things investors should be looking out for in the market that would determine the market outlook in 2019. Trade War Is Here To Stay For investors who are looking for a cease fire to the trade war to re-lift market spirits, you might have to wait further. CIMB notes that the trade war spatter is likely to continue in 2019 and is not going to cease fire anytime soon (despite recent optimism of a deal). While it is clear that business

Going into 2019, there are a couple of real estate investment trusts (REITs) I’m eyeing. The reasons I’m interested in them range from improving business prospects to poor unit price performance of late. In this article, let’s look at three of those REITs. REIT #1: CapitaLand Mall Trust (SGX: C38U) CapitaLand Mall Trust is the largest REIT by market capitalisation in Singapore’s stock market. The REIT owns 15 shopping malls in Singapore, including Tampines Mall, Junction 8, and Plaza Singapura. 2019 would be an interesting year for CapitaLand Mall Trust. Funan, Singapore’s shopping centre first online-and-offline shopping centre, is expected to open in the second quarter of 2019, instead of the projected 2019 third-quarter. The earlier opening could see Funan contributing to Capi

CDL Hospitality Trusts (SGX: J85) is a stapled trust that consists of a real estate investment trust (REIT) and a business trust. It has a focus on hospitality assets, and as of 30 September 2018, owned a total of 15 hotels and two resorts. There are two things to know about the REIT right now: its latest financial performance and valuation. Financial performance Here is a table showing important items from CDL Hospitality Trusts’ financial performance for the third quarter of financial year ending 31 December 2018. Source: CDL Hospitality Trusts Results Presentation Revenue and net property income (NPI) fell by 8.8% and 10.2% respectively. The year-on-year decline in NPI was due to closure of three properties for renovation and lower contribution from Singapore, the UK, and New Zealan

Hospitality, industrial and retail REITs have been facing pressure over the last few quarters due to influx of supply or threat from e-commerce. As the oversupply starts to clear, analysts believe that REITs in these three sub-sectors will recover. Among the retail, hospitality and industrial REITs, CDL Hospitality Trust, Cache Logistics Trust and Fraser Centrepoint Trust have been identified as REITs that are on the cusp of recovery in their respective subsectors. Investors Takeaway: 3 Turnaround REITs With Improving Fundamentals CDL Hospitality Trusts Although CDL Hospitality Trust’s results disappointed over the last two quarters, DBS believes that it is on the cusp of a recovery. The projected recovery in the overall Singapore hospitality market shown in revenue per available roo

Against the backdrop of a rising interest rate environment, REITs seem to be one of the obvious losers. This is because REITs are asset-heavy investments that require high levels of leverage, borrowing substantial amounts of money to purchase properties that they subsequently rent out. Read Also: Increasing Interest Rates In 2018: Here Are 4 Ways Singaporeans Will Be Affected In Singapore, there are currently 39 listed REITs and a further nine business trusts (of which six are property related). On average, they have a debt to asset ratio of just under 35%. With rising interest rates, REITs will have to fork out more in interest payment, potentially reducing the distributions they can pay to investors. How REITs Have Performed In YTD 2018 To gauge the performance of REITs in 2018, we can l

Following the first part of this two-part series where we discussed about RHB’s outlook on the REIT sector and how to adopt a defensive portfolio positioning with REITs, we continue with a deeper dive into RHB’s top five REIT picks and why they deserve a place in investors’ portfolio. Investors Takeaway: Top 5 REIT Picks And Why They Deserve A Place In Your Portfolio Ascendas REIT (A-REIT) A-REIT has been identified as RHB’s preferred industrial pick among the SG REITs. According to RHB, A-REIT offers the best exposure to favourable business park and hi-tech industrial segment in Singapore. A-REIT has been actively expanding its geographical focus over the past three quarters. It made its maiden foray into the UK market this year with the acquisition of 12 logistics properties.

Tides seemed to have turned and the market appears to be on the verge of a correction. The outlook for December is getting ominous and investors should be prepared. According to RHB, it is now time to start getting defensive with REITs as the macroeconomic environment becomes more volatile amidst the threat of faster rate hikes from the Fed. RHB: REIT Outlook By Sub-Sector Hospitality Hospitality REITs have been underperforming over the last two years due to a steady decline in hotel revenue per available room (RevPAR) post the 2012 peak. RHB notes that this decline was mainly driven by high hotel supply growth. For the last four years, hotel supply in Singapore has been growing at 4-5 percent per annum, which exceeds the 1-3 percent demand growth. However, going forward, RHB believes t

CDL Hospitality Trust (CDL-HT) (SGX: J85) reported lower distributions per unit (DPU) yesterday evening. The lower distribution was due to multiple reasons, ranging from divestments and a drop in contribution due to ongoing renovations. The latest report was for the stapled trust’s third-quarter earnings results for the year ending 31 December 2018. CDL-HT is one of Asia’s leading hospitality trusts with a portfolio of 15 hotels and two resorts comprising a total of 5,002 rooms and a retail mall. These properties are geographically spread across the world, from Singapore to Australia, Japan, New Zealand, United Kingdom, Germany, and the Maldives. Let’s take a quick look at the quarter’s results. Gross revenue dropped by 8.8% year-on-year to S$50.0 million while net propert

Consensus seems to agree that the investment climate is shifting. Stepping into the 3Q18 earnings season, analysts are turning marginally cautious as earnings revisions have turned negative. Amidst a myriad of economic and geopolitical uncertainties, market watchers are on the lookout for the first signs of economic recession as the International Monetary Fund also fuelled uneasiness when it warned of institutions struggling to find the next battle plan. Despite Singapore’s robust fundamentals and healthy corporate earnings performance in first half of 2018, management commentary coincided with a less upbeat outlook for the coming quarters. Many has cited global trade tensions and the surprise tightening of property cooling measures as primary concerns that have caused the level of optim