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Wilmar: A rebound or something more?

Saturday, October 13, 2012

Wilmar is up 3.9% at $3.18 as players await further details from the Malaysian government on a CPO export-tax cut. "It's one of the better companies in terms of having feet in both Indonesia and Malaysia and (being) able to trade around any opportunities from that" on the potential tax change, an analyst says.

He adds, the slightly improved soybean supply-side numbers from the U.S. were also positive for the stock as soybean availability is key for Wilmar. He notes the stock is starting from an overly depressed position and a number of players are "relooking" it after its selloff.

Dow Jones & Co, Inc, Friday, 12 October 2012.

I don't like to sell as share prices form new lows. It just doesn't make sense to me. If I want to reduce exposure in downtrends, I would wait for rebounds as prices test resistance. After all, prices go down a river of hope.

I do not know if Wilmar's share price would continue to strengthen or how much it would rise if it should happen, of course. I just have to do what I plan to do if it happens.


I like to potter around a bit with charts and using the Fibo fan, the chart shows that price broke resistance in the last session but mostly retreated to close just slightly above resistance. A continuing rise in share price next week looks rather iffy. If it should happen, next target is $3.28

Of course, we can also say the the confluence of the 20d and 50d MAs at $3.20 is a formidable barrier. This could be the case but in a situation where price is no longer trending, MAs are weaker tools. I would turn to momentum oscillators in such instances for clues.

For anyone who thinks that Wilmar's share price is experiencing a blip in positive movement and that it is on its way lower, I won't be too sure. Look at the MACD which is a price momentum oscillator. It just formed another higher low. It shows that negative momentum is continuing to weaken.

The ADX shows that there is no trend per se and if there is any, it is a weak one.

What I can say for sure is that Wilmar's share price is going through a long drawn basing process. When is it ending? It will end when it ends.

Related post:
Wilmar: Is the tide turning as buying pressure returns?

Tea with AK71: Maison Ikkoku.

Recently, a friend whom I have known for more than 20 years asked me out to have tea. We met at Maison Ikkoku which is owned by a friend of his.

I am not much of a food blogger but here are photos of what I had for tea that day:



Yummylicious ice lemon tea!


Melts instantly in your mouth tiramisu!



This was a total surprise. Kong Bah Pao!


It was so good! You simply have to try this.


I didn't bring my IXUS out with me and these photos were taken with my trusty Samsung mobile phone. Can do lah.

In case you would like to visit Maison Ikkoku (and you really should),

Address:
20 Kandahar Street, Singapore 198885.

Tel:
6294 0078

I am doing this blog post without any monetary reward. I do this because I want to share with you a wonderful discovery I made: a beautiful cafe with good food and drinks. I think you will enjoy the place as much as I did.

Oh, did I mention the interior decoration? I promise you that it would be an eye opener. I am not putting up any photo of the cafe's interior here (really because I didn't take any). You will have to visit Maison Ikkoku to take it all in. ;)

Bon appetit!

LMIR: More benefits from acquiring 4 malls?

Thursday, October 11, 2012

Since its rights issue last year in December, expectation was for LMIR to acquire more shopping malls to improve its DPU which has been rather disappointing, being much lower, post rights issue, than initially expected. With my investment in LMIR some 200% bigger than it was, pre rights issue, I am naturally concerned with its underperformance.



Finally, an announcement to acquire 4 malls at a discount to their respective valuations. The 4 malls are:

1. Palembang Square for S$ 74.8m
(19.9% discount to valuation)

2. Palembang Square Extension for S$ 29.8m
(4.5% discount to valuation)

3. Tamini Square for S$ 30.1m
(23.4% discount to valuation)

4. Kramat Jadi Indah Plaza for S$70.8m
(2.2% discount to valuation)

The acquisitions will be funded fully by debt. Weighted average interest rate: 5.079% per annum. See note at the end of this blog post.

One question now on unit holders' minds is probably how much more are we going to get in DPU, post acquisitions. After all, we are investing for income.

1Q 2012, we received a DPU of 0.69c.
2Q 2012, we received a DPU of 0.79c.

Both distributions were lower than the estimation of 0.815c per quarter, post rights. They were definitely lower than the DPU of approximately 1c per quarter, pre rights.

So, will DPU improve after these latest acquisitions?

Net Property Income (NPI) yields for the 4 properties are: 4.41%, 1.00%, 8.637% and 7.2%. Collectively, the NPI yield of these 4 acquisitions is less than 6.00%.

If I remember correctly, LMIR's portfolio's NPI yield is about 7.5%.  So, these acquisitions are not NPI yield accretive. They are, in fact, regressive.

However, the management of LMIR is going to get a performance fee because in terms of absolute NPI, there will be additional NPI after the acquisitions. Fee? Some 613,158 new units in LMIR will be issued for this purpose. This fee is payable even though the pro forma numbers show that the distributable income will suffer a decline, post acquisitions.

Of the 4 malls being acquired, 2 malls have occupancy rates of under 90%. If the management is able to boost occupancy to above 90% over time, it could make a marginal improvement to the pro forma numbers. It wouldn't be anything to shout about.

It should, therefore, come as no surprise that in the five benefits of the acquisitions listed by the management, none refers to any improvement in income distribution which, probably, matters most to ordinary unit holders like me investing for income.

See announcement: here.

Note: The Manager proposes to finance the Acquisitions from the proceeds raised from the issuance of the S$200,000,000 4.88% Notes due 2015 and S$50,000,000 5.875% Notes due 2017.

Win $1,000 cash with Marigold HL Milk!

Wednesday, October 10, 2012



Do you drink Marigold HL Milk?

Take part in a contest and stand a chance to win $1,000 cash.

Prizes: 5x  S$1,000 each.

Closing date: 8 November 2012.

Find out more: Marigold HL Milk.

Tea with AK71: Vandals and selfish cyclists.

Tuesday, October 9, 2012

A few days ago, I was taking an evening walk after dinner and took these photos at an underpass:

Cyclists, get off your bicycles.
Vandals trying to be smart.

Shortly after, a motorised bicyle and three regular bicyles went by me. None of the cyclists got off their bikes as they went through the underpass. These people were being selfish and irresponsible.

The relevant authorities should do more than just put up signs (which are vandalised anyway).

Taken in one of the many public parks in Singapore on a pedestrian walkway. How many cyclists heed the advice?

This world would be a much better place if people all behave more responsibly and show more consideration for others. Is it too much to ask for? I wonder.

Related posts:
1. A moving bathtub and fridge.
2. McDonald's shows us how.

Win Eu Yan Sang goodie packs!

Monday, October 8, 2012

In 2002, Eu Yan Sang's first clinic at South Bridge Road opened.

Today, Eu Yan Sang has 21 clinics conveniently located island wide to offer a comprehensive range of Traditional Chinese Medicine (TCM) therapies for your health and well-being.



In conjunction with 10 years of providing quality TCM healthcare, Eu Yan Sang is running a series of activities.

Find out how they have modernized TCM and you stand to win goodie packs at: Eu Yan Sang is 10!

Seven of my money habits.

Sunday, October 7, 2012

This blog post is mainly inspired by a conversation with my mother on some of my habits. 

Recalling a popular book titled "Seven habits of highly effective people", I came up with "Seven money habits of AK's". ;p





Habit No. 1:
I never order canned or bottled drinks when dining out. 

Fresh food needs on site preparation but I can walk to a nearby supermarket to buy the same canned or bottled drink for a much lower price. 

Some might say it is convenient that we buy drinks from the eateries but the premium paid for this convenience is way too high. 

A can of Jia Jia herbal tea costs $0.60 in NTUC Fairprice but could cost $1.50 at a kopitiam! 

A can of Coke could cost $0.55 in NTUC Fairprice but could cost $4.00 (before taxes) in a restaurant!






Habit No. 2:
I always check my bills.

Huh? Can we really save money this way? 

You bet. 

I have lost count of the number of times I have been overcharged by pharmacies, supermarkets and restaurants. 

Very often, the larger bills are the ones we have to be more careful with as overcharging even a few dollars could be hard to spot. 

It is because of this habit that I have avoided being overcharged for many years now. 

Oh, check the receipt just outside the shop, not after getting home!






Habit No. 3
I always compare products on offer between shops.

For the same product, two shops which are side by side could have very different prices. 

Guardian and Watsons are very often found in close proximity to one another. 

Many times, I saved quite a bit of money comparing their prices before deciding who to buy from.






Habit No. 4
I never take for granted that buying more is definitely buying cheaper.

Many times, I stopped friends and family from buying bulk packed products as they actually cost more than buying loose! Huh? 

Of course, they cost more since we are buying more, you might say. 

No, no, that is not what I mean. 

I mean we should check to see how much is the per unit price in bulk packed offers. 

Don't assume that bulk packed products are always cheaper.






Habit No. 5
I always try to get discounts off my bills.

I always get a discount off my bills at Kopitiam and Food Junction. 

Yes, go get the discount cards if you have not done so. 

If I should be in an unfamiliar establishment, I would ask the service staff if they had discount agreements with credit card companies.



Habit No. 6
I never pay in cash.

Well, unless that is the only mode of payment acceptable. 

Often, I see people before me in a queue choosing to pay in cash. 

Some transactions were rather high in value too. 

Imagine the number of reward points they could have accumulated if they had used a credit card, if they had one, or the amount of cash they could have received in rebates!





Habit No. 7
I bring my own food to work.

I always bring some food prepared at home to work and I save quite a bit of money this way. 

Anyway, I enjoy oatmeal regularly and I don't think they sell oatmeal in the coffee shops or food courts.

If we work to increase our income and reduce our expenses, our financial health will improve over time. 






As the saying goes, it is easier to spend money than to make money.

So, if we just put in a little effort, we could be saving some money as we spend money. 

Sounds good, doesn't it?



When I was in primary school, the POSB bank squirrel came to us and taught us how by saving just a little every time, we could have a meaningful sum of money stashed away over time. :)

Related posts:
1. Save money with low prices and free shipping globally.
2. Money management: Needs and wants.
3. Queue for $1 parking fee redemption.
4. A common piece of advice on saving.
5. Inflation hits fried bee hoon.


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