Wednesday, October 31, 2012

Net Worth Update (October 2012)


Net worth for October increased by a mere 0.15% due to the fall in my commodities fund and the unexplained selldown in Biosensors. I believe the sound management and good fundamentals of Biosensors are making current prices look attractive. Biosensors is currently on a short term downtrend and the next important event will be the release of its financial results on 7 November 2012.

Cash/cash equivalents decreased by $2927.68 due to the purchase of 3 lots of Biosensors. Stock holdings increased by $3420 for the same reason.

The Economic Wasteland That Is The Eurozone

The September unemployment figures for the Eurozone make grim reading, for the Eurozone as whole the unemployment rate hit a record high of 11.6%.

That is a figure that is both shameful and dangerous.

However, dig deeper and it can be seen that Spain and Greece are suffering even more with rates of 25.8% and 25.1% respectively.

To add to the woes of the Greek people Greek finance Minister, Yiannis Stournaras, has submitted the 2013 budget to parliament. If the current policies of austerity, being imposed to assuage the Troika, are maintained/pursued:

-Public debt to GDP will hit 189.1%
-There will be a general government deficit of 5.2%
-There will be an economic contraction of 4.5%

It is clear that with rates of unemployment and debt at these levels democracy will be hard pressed to survive, as people will reach out for any ideology other than Eurozone austerity to save them.

Yet what does the European Commission do?

It asks for a budget increase of 5% to feed its bloated bureaucracy and those that serve it, whilst forcing the people of Greece and other Southern European states into penury.

This is a recipe for revolution.

Tuesday, October 30, 2012

UBS Redundancies Smokescreen

Whilst UBS is enveloped by the smokescreen of publicity derived from its mass culling (and handling of that mass culling) of staff today, it seems to have been a "good" day for it to also let the world know that it is under investigation in Singapore, along with other banks, for possible manipulation of Libor and other benchmark rates.

As per Reuters:
"These investigations focus on whether there were improper attempts by UBS (among others), either acting on our own or together with others, to manipulate LIBOR and other benchmark rates at certain times."

UBS - U've Been Sacked

UBS may well regret how it has handled informing its staff about their redundancies today.

The FT reports that UBS was one of the most popular trends on twitter, as the blogosphere flooded with comments describing the shock and resentment of staff.

According to the PR bullshit being spouted by UBS the redundancies are a ‘strategic acceleration from position of strength.

Who hires these people, and why are they still in their jobs?

UBS Redundancies Update

Ralph Sinclair has tweeted the follwoing:
"From inside 100 Liverpool Street: "Whole desks are gone and there are people stood outside without access to the building."

UBS Redundancies

It seems that UBS is making some people redundant today and over the next three years (10,000 in total).

Sadly, as per Owen Callan, UBS is using the "old school" method of informing them.

People arrive at work, if their passes don't work they are ushered into a special room where they are told that they are on special leave.

Monday, October 29, 2012

Greece Riskier Than Syria

The Washington Post reports that an annual survey of finance directors by BDO has found that Greece is considered a riskier place to invest and set up business in than Syria.

Only Iran and Iraq are considered more risky than Greece.

Sunday, October 28, 2012

Telephone Interview Update

I think I did quite well for the telephone interview as I was quite well prepared. Here are the questions posed to me :

Tell me about yourself 
Why are you suitable for this role?
Describe an event where you showcased your integrity
Describe an event where you encountered a communication conflict and how did you resolve it?
What is the most challenging task that you have done to date?
What is the most challenging module that you have done? Why is it challenging? Did you like this module?
Do you work well in a team? How do you usually contribute to your team? Give an example where you contributed to your team and what did you learn from it?

As you can see, the telephone interview made up of mostly competency questions. It took about 25 minutes in total and the outcome of the interview will be released by the end of next week. 

Meanwhile, another bank has invited me to take their psychometric test.

We have reviewed your details against our recruitment criteria and would like to invite you to participate in the next stage of our selection process, which will be a psychometric test designed to look for key behaviours essential to the position that you have applied for.    

I was pleasantly surprised that I managed to advance to the next stage of the selection process as my friend who has a higher GPA than me got rejected by this same bank.

This coming week will be extremely hectic and I might not have the time to apply for more jobs. By the end of this year, I aim to secure a full time job and reach the $60,000 mark for my net worth.

Friday, October 26, 2012



Sukuk literally means “pieces of paper” or “documents that acknowledge something.” In a commercial sense it refers to instruments used in Islamic finance to allow one party to raise capital or funds in the capital market with the issuance of sukuk papers that list the rights and obligations of all parties involved in a transaction. Even though sukuk are sometimes referred to as Islamic bonds, they are not bonds in the conventional sense as holders of the former are not supposed to expect a fixed rate of returns from their purchase of these securities, as is the case with conventional bond holders. In the case of sukuk, what is important is that holders of the certificates must own the underlying assets to justify returns which are not fixed but are tied to actual returns/incomes generated by the assets owned. Hence, in the case of sukuk musharakah, for example, investors are sold portions of assets to be used in business. Returns to holders are in fact income or profit earned from the use of the assets in a manner specified in the sukuk contracts.

The class of assets that has been used for the purpose of issuing sukuk is fast developing, ranging from mere tangible properties to include rights and claims or receivables. However, the latter classifications have been the subject of discussion by Shariah scholars in terms of their status with regard to securitization or sukuk issuance.

The emergence of sukuk in the market and their wide approval by international Islamic investors stems initially from the fact that they are supposed to be asset-backed. The underlying assets are normally in the form of real tangible assets, a portion of which are sold to investors as previously stated. But in the beginning what the investors own are basically proportionate interest or ownership of the capital provided/money price when they purchase the sukuk as a result of which they are given the necessary certificates/sukuk.

Therefore, sukuk are different from Islamic debt securities which have been widely used in Malaysia for quite sometimes even though they have been described as sukuk as well of late. Islamic debt securities consider outstanding debts to be the subject matters of the transactions that lead to the issuance of securities and as such these certificates may be properly known in fact as debt certificates rather than sukuk that are basically investment certificates whose returns are tied up to the real performance of the relevant assets that back up these papers.

The debts in Islamic debt securities (IDS) are normally debts that have originated from the sale and purchase of tangible assets by way of installments or deferred price the process of which ends up with the debtor/purchaser in the BBA/credit sale issuing certificates of indebtedness in favor of the seller the same to be made tradable in the financial or capital market. What happen in the case of Islamic debt securities is that in order for the certificates to be made tradable the concept used is what is known as sale of debt or bai al-dayn as understood in Islamic law whose permissibility has been debated by Muslim jurist since ancient time

On the other hand, in the case of sukuk, the subject matters represented by the certificates are tangible assets that have been purchased with the use of the fund contributed by the investors when they purchase the sukuk. Given that these assets are held in common by all the relevant investors, each of them is considered to have owned a proportionate interest in the asset commensurate with their respective amount of investment the ownership of which will allow him to get the anticipated return if any and at the same time to assume ownership risk as well throughout the duration.

For those who do not approve a sale of debt in the form of certain sum of money owed (the majority), their concern arises from the act of selling the debt to a third party for more or less than its value that will according to them result in riba'. Apart from this, they also insist that other conditions need to be fulfilled first before debts can be sold particularly to third parties. This is done to safeguard the interests of all parties involved and to avoid triggering Shariah restrictions related to riba' and gharar.

However, when the issued securities represent mixed assets comprising real tangible assets and debts, the trading of these securities can be allowed according to some opinions provided that the value or proportion of real tangible assets surpasses that of the debts or at least 51% or more of the combination of the two.

Greece Fails To Meet Targets

Unsurprisingly Greece is failing to meet its debt targets.

Reuters reports:
"Greek debt will be above the target of 120 percent of GDP in 2020, a preliminary report by the IMF showed on Thursday, and Athens will need more reforms before emergency credit from international lenders can start flowing again."
What now then?

Exit or political fudge?

Cynthia Carroll To Leave Anglo American

Anglo American, the mining giant, has announced that Cynthia Carroll will step down as chief executive after six years at the helm, once a replacement has been found.

She has come under increasing pressure from investors over Anglo's deteriorating share price and the company's industrial relations at its platinum operations in South Africa. Earlier this year shareholders asked the chairman to look for a new chief executive. 

Wednesday, October 24, 2012

Pensioners To Work For Pensions

In an admission as to how parlous the finances of the UK are, especially wrt funding pensions, Lord Bichard a former benefits chief has suggested that retired people should be encouraged to do community work such as caring for the "very old" or face losing some of their pension.

He is right to prompt a discussion about how pensions can be funded. However, I am not so sure that this is a viable solution.

Aside from the obvious political difficulties of "selling" it to the public, a good many fit retired people play an active role in their local communities already. As such, it is unlikely that even if this idea ever came to fruition it would achieve any measurable financial benefits.

Legs Kicked From Under Property Market

New rules to be announced tomorrow by the FSA wrt conditions on which mortgages can be granted will kick the legs out from under the struggling property market and, by definition (since the British economy is underpinned by the property market), the economy.

The new rules will make it much harder for the following to take out a mortgage:

- those over 50
- the self employed
- those wishing to use an interest only mortgage

Thus, at a stroke, the tenuous recovery that might be occurring within the economy has been stymied.

Tuesday, October 23, 2012

Das Rheingold - The Funeral of Siegfried?

Germany, the economic "powerhouse" of Europe, is experiencing a crisis of confidence; so much so that in order to assuage some of the more extreme doubters, the Bundesbank audited its gold held in Frankfurt (lest people doubt that it had been sold off) and even allowed MPs to visit it to check for themselves.

So far so wunderbar!

Unfortunately, Germany also holds gold deposits abroad. The FT reports that Suddeutsche estimates about 1500 tonnes are held by the Fed, and about 800 tonnes by the central banks of England and France. The total value being approximately €133BN.

The German court of auditors has, not unreasonably, demanded regular audits of Germany's gold reserves abroad.

Fair enough, and perfectly reasonable, were it not for one "small" problem.

The last audits in New York were in 1979/80, and since then whilst the Bundesbank has been allowed into vault it has not been allowed to open the boxes in which the gold is allegedly stored.

As we all know markets are driven sentiment, and sentiment is affected by fear and doubt. Unless a full audit is conducted in the near future, the fear and doubt will grow to a critical mass and Siegfried may well meet his end.

Rumour has it that the US gold reserves in Fort Knox haven't been audited either, maybe the US needs to do the same as Germany and lance the boil of doubt?

Saturday, October 20, 2012

Telephone Interview Invitation

"We are pleased to inform you that we have reviewed your application and numerical test results and would like to invite you to a telephone interview"

After a month of gruelling wait, I finally received a phone interview invitation from an international bank. The position that I applied for is a Graduate Program at the Corporate and Investment Banking department. I shall not reveal the bank's name to avoid unnecessary attention and any possible repercussion. 

Just to sidetrack for a moment, my previous post 'Wedding Cost in Singapore' had stirred much attention at TR EMERITUS aka 'Temasek Review' and I was rather amused to see such critical and judgmental comments about my post. However, there were some sincere comments that were really helpful and I truly appreciate it. I was simply trying to come up with a rough estimate of my wedding cost and it generated more than 50 fiery naysay comments in Temasek Review. To my delight, it generated more than 3500 page views on that day which translated into $3.21 of Google Adsense earnings. Contrary to what many other bloggers claimed, my Nuffnang ads did not generate as much earnings for me.

Back to the main topic, an interviewer from UK will be calling me to conduct the phone interview. If I were the bank, I would have saved some cost by appointing the HR from Singapore to conduct the phone interview instead. Assuming a phone interview takes 20 minutes and there are 100 phone interviews to be conducted, a total of 2000 minutes of costly international calls would be made. An alternative is a 'skype' interview, which is less costly and more effective as you can examine the expression and body language of the interviewee. Anyway, this is just my opinion and there might be other reasons for them to conduct the phone interview in this manner.

From what I have been told, there are a few rounds of interview in the selection process. If I meet their requirements for the phone interview, I will be invited to their office for a group interview before finally meeting the HR/Manager for a face to face interview.

The phone interview is scheduled on this coming Wednesday. In the meantime, I will read up about the bank and prepare for the interview as much as I can.  I shall update the outcome of my interview by the end of next week.

Friday, October 19, 2012

Greece Runs Out of Cash

Greek Prime Minister Samaras has warned that Greece will run out of cash on November 16 unless it receives additional funds before then.

Thursday, October 18, 2012

Nokia Rumours

Unsubstantiated rumours are going around that Nokia is to file a chapter 11 in the face of Q3 losses of €576 million.

Merkel Frets About Greece's Schneckentempo

Chancellor Merkel is, not unsurprisingly, becoming a tad peeved at the schneckentempo (snail's pace) of economic reforms in Greece. So peeved in fact that she told the German Lower House of Parliament so this morning, ahead of today's EU summit on the ongoing Eurocrisis.

Sadly, the only ones who will benefit from today's summit are the caterers!

Wednesday, October 17, 2012

Heil Our EU Overlords!

Germany has demanded an EU “currency commissioner” with sweeping powers to strike down national budgets; a “large step towards fiscal union”; and yet another EU treaty.

Crisis? What Crisis?

Those of you who are worried about the Eurozone crisis, and the increasing levels of unemployment and poverty within that blighted region should worry no longer.

The beleaguered and embattled President of France, Francois Hollande, has told the world that the Eurozone is "close, very close" to exiting its self inflicted financial crisis.

So that's alright then!

Apparently this close exit from financial Armageddon is all thanks to the decisions made at June's EU summit. One might care to remind Hollande that June was 5 months ago, and since then the situation has in fact worsened.

Tuesday, October 16, 2012

Consequences Of Giving Up Your HDB BTO Flat

I had a long conversation with my sister regarding HDB BTO flats today. To my surprise, she revealed to me that she is intending to apply for a flat at either Queenstown or Toa Payoh in the upcoming November 2012 HDB Build-To-Order exercise with her boyfriend of 7 months. In my opinion, 7 months of relationship is far from stable and absolutely not enough to determine if her current boyfriend is 'the one' for her. Furthermore, she is only 21 this year and there is no need to rush into things, especially when stakes are high.

Several thoughts ran through my mind immediately:

What if they managed to get the flat but break up afterwards?
What are the penalties for giving up a HDB BTO flat halfway?
Will the downpayment and grant be forfeited?
Do they have to pay back the Additional Housing Grant in cash?
Will the first timer privilege be affected?

I kept these thoughts to myself in order not to dash her hopes. As an elder brother, I am naturally protective of my sister and hope that every choice she makes is the perfect one. This led to a two hour research on the penalties and forfeitures for giving up a HDB BTO flat.

Here are my findings regarding the consequences of giving up your BTO flat in the event of a break up:

Giving up your BTO flat after the online application

At this stage of the application, monetary stakes are still low and the only thing you forfeit is the administrative fee of $10 should you decide to give up. However, do note that if your queue number is within range (queue number less than the number of units offered), or in the case where you are invited to select a flat even if your queue number is out of range(due to applicants before you giving up their chances), HDB considers a cancellation as a rejection to select unit. Also, you will lose your first timer priority after two rejections.*

So if you have previously rejected a chance to select your flat, stakes are higher as this means you will be stripped of your first timer privilege for a year if you reject the chance to select a flat for the second time. In addition, any additional chances accumulated from the previous unsuccessful applications will be set to zero if you reject to select a flat.

*From HDB Website : "To manage the growing trend of repeated non-selection of flat by First-timers, First-Timer applicants who reject 2 chances to select a flat will have their First-Timer priorities removed for a period of one year. If they apply for a flat in any HDB sales exercise within that one-year period, they would no longer enjoy the above priorities for First-Timers."

Giving up your BTO flat after unit selection but before signing Sales Agreement for Lease

By this stage, you would have already paid the option fee and selected your desired unit. Stakes are higher now. By giving up your BTO flat after booking a unit, the option fee* that you paid during flat selection day will be forfeited. Also, according to a new HDB regulation, buyers who cancel their bookings after putting down an option fee will now be barred from buying BTO (Build-to-Order) and resale flats with housing grants for a period of one year.

*Option fee for 4/5 room : $2000
 Option fee for 3 room : $1500
 Option fee for 2 room : $500
 Option fee for studio apartment : $250

Giving up your BTO flat after signing Sales Agreement for Lease

Now, things are turning ugly and stakes are getting higher. By now, you would have already paid the stamp fees and downpayment through your CPF/Cash/Additional Housing Grant (AHG).

5% of the flat purchase price and expended legal and stamp fees will be forfeited should you give up your BTO flat at this stage.

So if you are eligible for the Staggered Downpayment Scheme and paid 5% of the purchase price as downpayment, nothing will be refunded. If you paid 10% of the purchase price as downpayment, half of it (5% of purchase price) and the expended stamp and legal fees will be forfeited.

Also, if you were granted the Additional Housing Grant, you have to pay back the disbursed grant with interest in cash

Similarly, you will be barred from buying BTO (Build-to-Order) and resale flats with housing grants for a period of one year.

In conclusion, be sure that your partner is 'the one' for you before applying a HDB flat with him/her. Stakes are high and giving up your HDB flat halfway can have a huge impact on your finances. I guess I will have to talk to my sister about this someday.

Troika Greece Talks Breakdown

The Troika have walked out of talks with Greek Labour Minister Yiannis Vroutsis this afternoon, after reaching deadlock for the second time today.

Hollande Leads Eurozone Breakaway Movement

For reasons that are unclear President Francois Hollande appears intent on destroying the French economy.

Why does he want to do that?

Could it be that he wants to lock in France's fate fully with Greece, Portugal, Spain et al thereby creating a level of economic failure so great (a form of critical mass) that the Eurozone cannot afford to expel these countries without an economic implosion, and using this as an opportunity to lead a breakaway movement from German dominance of the Eurozone?

Monday, October 15, 2012

The Eurozone Readies Its Big Bazooka

Spain appears ready to ask for a bailout next month, as the eye of the financial storm engulfing the Eurozone moves from Greece to Spain.

According to Eurozone insiders, quoted by the Telegraph, the bailout will be bundled together with a revised loan programme for Greece and a bailout for Cyprus.

Maybe this is the big bazooka that the politicians have been blathering about for the last two years?

Sunday, October 14, 2012

CPF Not Enough for HDB Downpayment?

My girlfriend and I are eligible for the HDB staggered downpayment scheme where we pay the 10% downpayment as follows:

  • 5% of the purchase price at the time of signing of the Agreement for Lease 
  • Balance 5% at the time of keys collection which will be in 2016.

Signing of the Agreement for Lease is supposed to happen this month(October 2012) and our CPF savings are still insufficient to pay for the first 5% downpayment. HDB requires us to pay the balance in cash, which amounts to about $4000. A way to circumvent this problem is to delay the signing of the Agreement For Lease. By delaying the signing of the Agreement For Lease, our CPF will accumulate more money and this reduces the cash balance we have to pay. I am still a full time student and my girlfriend is the only person contributing to CPF. Given that her monthly salary is $2,400, contribution to the CPF Ordinary Account is approximately $550 every month. This means that for every month we delay, we will be able to reduce our cash payment by $550. To not pay single cent in cash for the downpayment, we will have to delay the signing of the Agreement for Lease by about 7 to 8 months.

So how to delay the signing of the Agreement for Lease?

As HDB will invite us to sign the agreement for lease only after our Additional Housing Grant(AHG) and HDB Loan Eligibility(HLE) are being approved, I decided to delay the application process of AHG and HLE by:

1)  Exceeding the submission deadline for the required documents
2)  Submitting an incomplete set of documents

This resulted in HDB sending us another letter requesting for the missing documents with a new submission deadline. Once again, I exceeded the new deadline and submitted an incomplete set of documents which resulted in HDB sending us another letter with a new deadline. This went on and on until HDB sent us a letter stating "If we do not receive the documents by the due date, we take it that you are no longer interested in applying for the HDB Loan Eligibility Letter." It is only after this letter that I finally gave in and sent them everything they needed before the deadline. By doing this, I managed to delay the whole application process by about 2-3 months.

Now, my HLE is approved and AHG is still pending for approval. However, I still need to delay the signing of agreement for lease by another 4-5 months in order to not pay a single cent in cash. This is when I called up my HDB officer and our conversation is as follows:

Me: Hi officer, my name is XXXXX and my reference number is XXXXX. I am calling to enquire about the status of my AHG application

HDB Officer: Oh it should be approved in a month's time. Just wait for the letter to be sent to you.

Me: May I know when is the signing of Agreement for Lease?

HDB Officer: It will be within a month after your AHG is approved.

Me: Oh, actually there is a slight problem here. My girlfriend is currently overseas on a work assignment and will only be back next year February. May I know if both parties have to be present for the signing of Agreement for Lease?

HDB Officer: Yes of course! (sounding slightly irritated) Did your girlfriend sign any documents to appoint an attorney to act on her behalf?

Me: No. What's that?

HDB Officer: Ok never mind. Just call me again to reschedule the date when u receive the invitation to sign the Agreement for Lease.

By the end of the conversation, I could sense that the HDB officer was rather pissed off. Anyway, it was still quite helpful of her to allow us to postpone the signing of Agreement for Lease.

As my girlfriend will be receiving her bonus in December 2012 and January 2013, our CPF savings should have accumulated enough to pay the full 5% downpayment by February 2013.

Saturday, October 13, 2012

Wedding Cost in Singapore

I was quite overwhelmed by the wedding cost in Singapore after doing some research on it. Firstly, I have to clarify that I am not planning a cheap wedding that will shortchange my girlfriend in any way. Instead, I intend to be more cost efficient and try to find 'undervalued' wedding packages without compromising on the quality. There is still much research to be done on this.

After doing some research, I managed to get the cost breakdown of a 'normal' wedding in Singapore :

1) Wedding Package - $4000 and below - Wedding gowns, evening gowns, photo album, etc

2) Wedding Bands - $3000 and below - From Love & Co

3) Proposal ring - $5,000 and below

4) Solemnization - $1,500 and below - book a venue specially for solemnization

5) Videographer and Photographer - $3500 and below - semiprofessional to professional

6) Wedding banquet - $1200 per table - including 2 nights hotel stay, alcohol, miscellaneous, etc

7) Honeymoon - $6,000 - a trip to Japan or Maldives?

Total Wedding Cost (excluding banquet cost) : About $ 23,000 

Given that my wedding banquet costs around $1,200 per table, I have to receive $120 of 'ang pow' from each person in order to break even.  Assuming each person gives an 'ang pow' of $100 on average , I will be incurring a loss of $20 per person. For 35 tables(350 guests), I will incur a loss of $7,000.

Adding in to the $23,000 calculated above,

Total Cost of Wedding : $30,000

"If you can’t afford a proper wedding then you shouldn’t be getting married. Full stop."  Sounds familiar? The definition of a proper wedding is really subjective. To me, solemnization at a cozy place with a few friends and relatives followed by a simple buffet is already a proper wedding.  Is a traditional Chinese wedding banquet really necessary? At the end of the day, my girlfriend and I might not even be able to recognize some of the guests being invited to the wedding. This is just my point of view. After all, we live in a collectivistic society and some traditions will have to be followed.

Friday, October 12, 2012

British Gas Raises Prices

As we face another winter, British Gas has announced that it will raise the prices that it charges for gas and electricity by 6% as from 16 November.

Npower are expected to announce its price rises (rumoured to be higher than 6%) this afternoon.

Thursday, October 11, 2012

Greece's Coke Crash

Sadly for Greece, its love affair with coke (it's largest company) is to come to an abrupt end as Coke moves its listing from Athens to London.

As per Reuters:
"Coca Cola Hellenic, Greece's biggest company by market value, said on Thursday it would switch its main bourse listing to London, where it hopes to tap more liquidity from investors.
Coca Cola Hellenic said in a bourse filing that shareholders would exchange all their stock into shares of Coca Cola HBC AG, a Swiss-based firm.

"The purpose of the public share exchange offer ... is to facilitate the listing of Coca Cola Hellenic into the premium category of the London Stock Exchange and the introduction to the New York Stock Exchange." 
The party's over!

Scam PPI Claim Company

Beware calls from this number 02392997556, according to this thread it is a scam designed to acquire your bank details.

Wednesday, October 10, 2012

3 lots of Biosensors @ $1.19

Bought 3 lots of Biosensors at $1.19 today.

Here's a brief summary of the reasons for purchasing Biosensors:
  1. High growth potential  
  2. Licensing agreement with Terumo Corporation extended till Dec 2014
  3. Potential M&A target
  4. Impending SFDA approval on Biosenors' flagship product, BioMatrix (end of 2012?)
  5. Shandong Weigao taking on a more active role in its capacity as Biosensors' majority shareholder
  6. First mover advantage and strong positive clinical data as its key competitive advantage
  7. Strong technical support at $1.20
  8. Potential price cuts of drug-eluting stents in China and Japan might have been priced in already.      Furthermore, volume growth could mitigate price decline
  9. Acquisition of JWMS, one of the top three Drug Eluting Stent(DES) players in China with a strong distribution network nationwide with around 25% share in the domestic medical equipment market
  10. Analysts' top pick in the healthcare sector
  11. Relatively low gearing, high ROIC and earnings growth(>20%) and attractive multiples such as P/E, P/B, P/CF, etc

Here are my concerns about the purchase:
  1. Biosensors is a non-dividend paying stock
  2. Uncertainty in global economy - Middle East Tensions, Europe crisis and China's slowdown
  3. Magnitude of price reduction in China still unknown
  4. Long-overdue SFDA approval on Biosensors' flagship product, BioMatrix
  5. High competitive rivalry from bigger players in the DES market (Boston Scientific, Medtronic, etc)

Based on past experience, I became aware of the fact that I will never be able to catch the bottom when purchasing stocks and prices almost certainly go below my purchase price after I bought it. Since Biosensors' stock price has retraced back to its strong support line of $1.20, I decided to test it out by purchasing 3 lots. 

Although this stock does not meet my selection criteria of being a stable or dividend paying blue chip, I feel that its potential growth is worth a bet. The good track record of the company, coupled with an experienced management team that is capable of achieving targets for Biosensors and its investors, prove that Biosensors has the ability to carry out future growth plans. Personally, I feel that this stock is worth a look for long term investors who are interested in a growing industry. 

It is indeed difficult to keep emotions out of the picture. I am keeping my fingers crossed.

IMF Loses Patience With Eurozone

The IMF has warned that the Eurozone still poses the greatest threat to global financial stability, and has urged the Eurozone to "do whatever it takes" to protect the Euro.

All very nice, maybe, but experience has shown that the politicians and bureaucrats of the Eurozone are not capable of decisive action. Hence the fact that the IMF in the report issued the warning that the lack of decisive action by European governments and institutions risked tearing the Eurozone apart:
"Incremental policy making has been insufficient to fully allay market tensions, despite the recent market rally since end July.

Merely muddling through imposes increasingly higher costs, as the unchecked forces of fragmentation continue to gather speed and undermine the very foundations of the union – a common monetary policy, and economic and financial integration....

The existing strains in the markets require a leap to better policies if the euro area is to stabilise funding markets and reduce spreads, arrest capital flight, and begin to reintegrate financially."
The advice is sound, and the warning valid. However, the leaders and bureaucrats of the Eurozone are simply not up to the job; as the millions who are unemployed and living in poverty in the Eurozone can attest to.

Tuesday, October 9, 2012

Update On My Job Applications

As mentioned in my previous post, application windows for graduate programs in 2013 are now open and I completed another 2 applications today. There are so many graduate programs out there and I am determined to find and apply for every one of them. Countless years of education and hard work all boil down to this crucial period. My aim is to complete at least 50 applications by the end of this month.

So far, these are the companies that I have applied for:

Also, one effective way of searching for graduate programs is through Linkedin. I can simply google 'Graduate Program Linkedin' and a list of Linkedin users with the term 'Graduate Program' in their profile will appear in the search results. I will then screen through the different graduate programs, compile them into a list and start applying. I will apply for another 2 positions tomorrow and update my status again next week.

Frau Merkel Goes To Athens

German Chancellor Angela Merkel has arrived in Athens, this is her first visit there since the Eurozone crisis began.

Monday, October 8, 2012

HDB Property Bubble In Singapore

MAS has just warned of a new property bubble in Singapore due to the prevailing and problematic low interest rates. Despite the ramp up of HDB flat supply, resale prices rose 2% as compared to 0.5% for private home prices. This worries me slightly as I just got a flat from one of the HDB Build-To-Order exercises.

To have a better understanding of a possible HDB property bubble in Singapore, I will first have to find out the demand for HDB BTO flats. For that reason, I went to the HDB website and compiled the total number of units and applications for September 2012 BTO and Sale of Balance exercise as shown below:

Examination on the HDB property bubble in Singapore - Demand

Since each household can submit only one application for either the BTO or SBF Exercise, I am able to compute the overall number of units and applicants. From the table above, we can see that after this round of HDB sales launch, there are still 18614 households who have not secured a flat. This number of 'homeless' households/couples is still significantly higher than the 6400 new flats to be launched in November 2012 and we are only talking about the 'leftovers' from the September's sales launch here. With that, we can safely say that the demand for HDB BTO is still strong. A significant portion of resale HDB flats buyers is the Permanent Residents(PR) as they are ineligible to apply for BTO flats. With the ever increasing number of PRs in Singapore coupled with 'downgraders' and desperate 2nd timers, demand for resale flats is likely to remain strong as well.

Examination on the HDB property bubble in Singapore - Supply
However, what concerns me is not the demand, but rather the ever increasing supply in both HDB flats and  private property which might soon burst the property bubble in Singapore. With the increasing number of both public and private homes, will there be an oversupply a few years down the road? I believe it will depend on Singapore’s economy and the global situations at that time.

Increasing supply, over-speculation and unjustified optimism might be some of the causes of a possible property bubble in Singapore. There is a certain element of investment demand among private home buyers as not everyone is buying for owner occupation. The potential risk is that a few years down the road, when these projects in the pipeline are physically completed, accompanied by higher interest rates and an economic downturn, demand for private homes will come off. Owners of these properties will then try to rent or sell them which consequently put pressure on rents and prices. HDB resale prices might be affected by the spillover effects of the bursting private property bubble in Singapore but then again, the 2008 crisis proved otherwise.

The Empty Vessel That Is The ESM

In case you didn't realise it, today is the official launch of the European Stability Mechanism (ESM), allegedly this is the permanent bailout fund which offers a pot of cash that can be used to bailout troubled nations.

Eurozone finance ministers, who form the ESM's board of governors, will hold the inaugural meeting in Luxembourg today, two years after the idea of setting up such a fund was endorsed.

Who says that EU politicians don't move "quickly" when there is a crisis?

Reuters reports that the fund's lending capacity will be:
"based on 80 billion euros of paid-in capital and 620 billion of callable capital, against which the ESM will borrow money on the market to lend it on to governments cut off from sustainable market funding".
Oh, and it won't reach its full capacity gradually by 2014.

What does that mean?

It means that even "fully funded" at Euro620BN it hasn't enough money to staunch the tsunami ripping through the Eurozone's finances.

Oh, but as already noted, it hasn't got Euro620BN anyway; ie it is an empty vessel!

Sunday, October 7, 2012

Commission Structure of Insurance Agents REVEALED

I managed to get a copy of the Agency Schedule Of Commissions from my insurance agent friend working at one of the insurance companies in Singapore. This schedule of commissions describes the commission structure and rates for the different types of insurance policy plans. I summarized and inputted the information onto a spreadsheet(as attached below). The names of the products are intentionally left out in order to conceal the identity of the insurance company. 

As we can see from the table above, whole life and investment link insurance policies have the highest commission rates. In addition, an insurance agent would receive renewal commission for the next 5 years after he closes a sale. This means that as long as the policy is being renewed, the insurance agent will be able to get additional commissions for the next 5 years (albeit at a lower rate). For accident products, the commission rate is a flat rate of up to 30% and is payable throughout the premium-paying term. If I were an insurance agent, I will definitely put my focus on accident products.

Assuming a person buys an accident insurance policy with annual premium of $300. The insurance agent will receive $90 (30% of annual premium) as commission. As long as his client renews the policy every year, the insurance agent will get $90 yearly without even doing anything. This is their form of 'passive income' in the insurance world.

Let's now assume the insurance agent sells 2 accident policies with annual premium of $300 every week. After 3 years, he would have sold 312 accident policies. The renewal commissions from these 312 accident policies he sold in the past 3 years would amount to $28,080 per year or $2,340 per month. This means that the monthly 'passive income' for the insurance agent is $2,340 after 3 years and this is based on the assumption of selling just 2 accident products per week.

Despite the high commission rates of insurance policies, I will still need insurance to protect the financial well-being of my family and myself. In my opinion, a person should have at least an upgraded Medishield plan which covers 100% of the medical bills(including co-insurance and deductible) and an income replacement insurance which provides a regular stream of income during the period of disability. Having said that, the type of insurance a person needs really depends on his/her preference and family situation.

Friday, October 5, 2012

Fresh Graduates Starting Pay

Application windows for full time programs in 2013 are now open and I have completed 12 applications in the past four few weeks. It is quite disheartening that some of my schoolmates have already received interview invitations while I have not received a single response yet. Based on the information I gathered from recruitment events and my schoolmates, I managed to get a sense of the starting pay for fresh graduates.

Here is what I have so far:

Auditor at Big Four accounting firms - $2,700 - $2,900
Corporate finance at Big Four accounting firms - $2800 - $3200
Operations at Credit Suisse, Goldman Sachs, Bank Of America, etc - $3,750
Personal Financial Consultant at Standard Chartered Bank - $3000 (excluding commissions if any)
Singapore Management Trainee Program at Standard Chartered Bank - $3,800
Personal Banker at UOB - $2,700-$3000
Operations at UOB/DBS/OCBC - $3000-$3,500
Management Associate Program at HSBC/UOB/DBS/OCBC - $4000 - $4500
Sales and Trading at Goldman Sachs - >$8000
General Education Officer aka Teacher - $3,200
Graduate Officer at Monetary Authority of Singapore - $4,000-$4,500
Graduate Program at Bank of Tokyo Mitsubishi - $2500-$3000
Trade Support Operations at Morgan Stanley (Contract Position) - $2800
Commercial Affairs Department (CAD) Officer - $4000 (for 1:1 and 2:1)

The above list of starting pay is only based on what I know and might not be 100% accurate. However, I think it should be at least 80% correct as the salary figures are told by my friends/schoolmates who have done an internship with the organization or existing employees at recruitment events.

The application process is quite tedious and an online application form will take me approximately 30 mins to an hour as there is usually a section where I have to answer questions such as "Why did you apply to our organization" or "How is our bank different from others?" The most tedious one was the MAS application where I have to answer 8 questions. I can still remember the last question was something like "How will you spend/invest a million dollars?" Also, some applications require a pattern test or numerical reasoning test where I have to do some math questions in a short period of time.

From today onwards, I will complete 2 applications per day and hopefully my cellphone will start ringing soon. Also, I have always been curious about how much people earn and what they do. If you would like to share information regarding the salary of any position (including middle or top management) in any industry, please comment on this post :)

NatWest Systems Upgrades

As per the NatWest site, there will be some systems upgrades this weekend:
"We have some planned system upgrades happening over the weekend which means some of our services will be unavailable for short time periods.

- On Saturday 6th October, our Mobile Banking apps will be unavailable between 2am and 6am.
- On Sunday 7th October, our Online and Telephone banking services will be unavailable between 1am and 7am.

We're sorry for any trouble that this may cause you. You can still withdraw cash from an ATM and point of sale transactions are also unaffected.

Please remember it's vital to keep your personal details safe. Never reveal your personal information, including online and card security details to anyone. You should also never respond to any unsolicited or suspicious emails, phone calls or text messages or click on any attach ments [sic] that might be included in these
Good luck everyone!

Samaras Likens Greece To Weimer Republic

In February I wrote the following:
"Let us be clear that the 50 page "agreement" (written in English) that the Greek political establishment has to agree, in order to receive Euro 130BN, will (if it is accepted) have the same consequences for Greece as the Treaty of Versailles did for the Weimer Republic."
Today, Greek Prime Minister Antonis Samaras told Handelsblatt:
"The cohesion of Greek society was the "endangered rising unemployment, as towards the end of the Weimar Republic in Germany was".
Evidently he has been reading this site!

Thursday, October 4, 2012

Buy ex-dividend or cum-dividend?

Should an investor buy a stock on the cum-dividend or ex-dividend day?

Will the stock price fall more than or less than the dividend amount on the ex-dividend day?

According to the Federal Reserve Bank of Minnepolis Research Department Staff Report 229, the stock price will fall by an amount less than expected on the ex-dividend day due to the behavior of investors. Under certain conditions, rational investors who have decided to buy would prefer to do so on the ex-dividend day instead of on the cum dividend day. They would rather postpone their trade by a day. Those who have decided to sell, on the other hand, would prefer to advance their sale and do so on the cum-day. Hence, on the ex-day the stock price would rise by a small amount relative to what would otherwise have been expected, ceteris paribus.

This indeed reflect my personal behavior when buying stocks as I would prefer buying on the ex-dividend date. However, we have to take note that there are many other variables and this model of investor behavior does not take into account of the general market sentiment and stock market trend.

Banks Issue Threat

Sky reports that Britain's banks have issued a thinly disguised threat to the FSA and other regulatory agencies, that if they are continually fined their lending capacity and ability to rebuild their capital bases will be severely jeopardised.

The warning was given at a meeting between bank CEO's and officials from the Financial Services Authority (FSA) last week.

Bank of England Holds Rates

The Bank of England has held interest rates at 0.5%, as expected.

Wednesday, October 3, 2012

Greece Being Destroyed By The Eurozone

Despite the fact that the Greek economy will contract by 6.1% this year and 3.8% next year, and that youth unemployment in Greece in August was 55.4%, the Troika are demanding the imposition of even tougher austerity measures above and beyond Antonio Samara’s Euro13.5BN package of cuts.

The Troika wants Greece to make deeper cuts to the minimum wage and pensions, while imposing longer working hours.

Until an "agreement" is reached, or imposed, the next tranche of bailout money will not be released and Greece will be starved of liquidity.

As I noted on Monday, the people of Greece, if they have any sense, should flee the Eurozone as fast as their legs will carry them.

Tuesday, October 2, 2012

The Collapse of The Rial - A Warning To The Eurozone

Iran's rial is collapsing, following an "innovation" last week by the Iranian government to supply importers with dollars via an "exchange centre".

Unsurprisingly, people have scrambled to exchange rials for dollars.

Reuters reports that the rial fell by at least 9% today:
"The rial was trading at about 37,500 to the dollar, down from around 34,200 at the close of business on Monday, a foreign exchange trader in Tehran told Reuters. Other Tehran traders said the rial had dropped even further, to 38,000 or 40,000."
The Iranian industry minister, demonstrating a typical politician's lack of understanding of how markets work, said that he hoped security services would root out speculators whom he blamed for the drop.

It would be ironic if the downfall of the Iranian government was brought about, not directly by sanctions or war, but by their lack of understanding of how markets work; ie their own hand.

The bureaucrats of the Eurozone should take note, markets are driven by fear and greed; ill advised attempts to control and manipulate them always end in tears!

Monday, October 1, 2012

25 Million Europeans Unemployed

As at August (as per Eurostat) a staggering 25.466 million Europeans were unemployed, with 18 million of them residing in the Eurozone. As if these figures were not bad enough, youth unemployment in Greece in August was 55.4%, and in Spain the rate was 52.9%.

Rest assured that the unemployment rates have worsened since then!

This is a situation that must not be allowed to continue, as the social consequences in those countries where their democracies are being undermined by the economic doctrines of Eurozone bureaucrats will be unimaginable.

As if things were not already bad in Greece, it appears that they will become worse. Greece's Net TV has obtained a draft budget that shows that the Greek economy will contract by 6.1% this year and 3.8% next year.

This is in stark contrast to the view of the European Commission, which expects the Greek economy to display "an insignificant improvement in activity in 2013" (European Economic Forecast Spring 2012 page 71).

The people of Greece, if they have any sense, should flee the Eurozone as fast as their legs will carry them.