My last visit to Singapore

11 June 2018

Dear Fellow Investor,

On the ground research

We just returned from a 3 day visit to Singapore. Our visit included a company visit to IFast, who provide platform services to the financial service industry. They maintain the Fund Supermarket service which offers a wide range of ETFs, unit trusts, research and a discount share brokerage.

Their numbers are impressive and show consistent revenue and earnings growth. I am not buying this for our managed accounts until we complete our due diligence. 

We also attended a Motley Fool briefing on the US Dollar outlook by David Kuo, CEO of Motley Fool.

This was important as the trend of the US Dollar will affect our investments, especially those who earn revenues in USD.

His view on the USD is bullish because:

Rising interest rates:

Only the US can raise rates compared to the UK, Japan, EU, Switzerland and Australia. These economies are all slowing and only the US economy is booming while  US unemployment is at a 30 year low so interest rates will rise to keep a lid on inflation

Reserve status of the USD:

 2/3rd of central bank reserves are in USD . As other countries accumulate trade surpluses they have no other way to go but the USD. Even China is forced to accumulate USD.

The dollar index chart ($USD)

 

$USD weekly chart

If the 94.89 resistance breaks expect a push to the old high at 103. The underlying fundamentals and dollar demand favor a price break to new highs. The trend seems unstoppable.

I asked David the risks to this scenario. He said about 10 % .

The Singapore economy seems to be picking up. We went to Orchard Road and there were crowds of shoppers. We went to the Kinokuniya book shop and there were long lines of buyers waiting to pay. The same was true for cloths buyers at Parksons. The Lucky complex on Orchid Road was filled with Filipinos buying gifts for family and sending funds back to their relatives.

Singaporians are generally happy with the Malaysian election results and tell me they hope the same thing happens in Singapore.

The government intends to raise the GST  and the people are not happy with the GST policy -  just like in Malaysia. There could be a change of government in Singapore because the self serving politicians jack up the GST. That is what a taxi man told me

Singapore investors are cautious so our policy of picking up quality value companies such as Hong Kong Land which is priced in USD and assets in HK/ Sing  dollars should pay off. David mentioned to me that in his recent visit to Hong Kong, they own prime central business district properties with rental reversion contracts. The tenants pay up the higher rents because there is a waiting list for new tenants.

The generous dividend helps.

Invest well and grow your wealth

Bill

Todays critter is a black-crowned night heron -- and it stands a bit over 0.60 meters/24 inches tall.  This is the male -- and it certainly appeared that he was checking the tree out as a possible nesting site.  It will be interesting to see if he's still there -- and with a mate -- when I go back