reit Archives

Contrarian Investing for Singapore and Hong Kong Giant Dividend Stocks (独孤求败)

Posted on March 3, 2023 Written by Dr Tee (Ein55)

Contrarian investing is a unique stock strategy (eg. Buy Low Sell High) which goes against the majority or popular views as usually the big winner in an emotional stock market is minority. However, there are both hidden risks and opportunities of this strategy if not aligned properly with own personality, “honey” may become “poison” for an investor.

Let’s learn the 6 key factors of contrarian investing from Dr Tee, then applying in 2 Singapore and Hong Kong dividend giant stocks:
1) Singapore Dividend Giant Stock: Hongkong Land (SGX: H78)
2) Hong Kong Dividend Giant Reit: Link Reit (HKEX: 0823)

The best example of contrarian investor is probably Warren Buffett who believes in “Be Greedy when others are Fearful. Be Fearful when others are Greedy” (独孤求败). He has practiced this method for decades to “Buy Low Sell High” or “Buy Fair price and Hold”, proven to work for him. However, knowing does not mean the same strategy may be suitable for you.

Here are 6 key factors for contrarian investing to work:
1) Value of a company should come first before considering to buy at lower price with contrarian investing of any stock. In order to minimize the chances of “Buy Low get Lower”, a strong defensive and growing business with wide moat should be the core pillar, not just based on price alone.

2) Contrarian investing is more suitable for mid term and long term investor. As Warren Buffett said, “Stock behaves like a weighing machine in longer term”, meaning price eventually follows strength of business fundamental while “stock is like a voting machine in shorter term” (emotional prices regardless of business). It is possible (although rare) for short term investor to apply contrarian trading but this is mainly for those traders who are willing to integrate trading with long term investing, eg. when buying at 10% dip (near intermediate price support), willing to hold longer term if share price could not recover in short term with over 10% gains.

3) Timing of entry/exit for contrarian investors is usually against the majority (mass market, usually following price trends). For example, when a stock is bearish in share price (while business is intact), a contrarian investor would start to plan for entry. However, Buy Low may get lower (even for stocks with strong businesses) in a bearish market, therefore a contrarian investor may consider “Average Down” strategy, eg. entry with batches (5 x 20%) or (2 x 50%), etc. When Dr Tee Optimism strategies (Long Term / Mid Term) could be integrated, the positioning would be more systematic. Alternatively, a contrarian investor may wait for the bearish (downtrend) price to at least go sideways (eg. buying near or above strong price support) if not willing to wait for stronger price reversal to uptrend (trend-follower).

4) Alignment with Level Analysis, eg. Level 2 (Sector), Level 3 (Country) and Level 4 (World), is crucial for Contrarian Investor, eg. Buy Low during low Optimism (<25%) with Global Financial Crisis, Sell High during high Optimism (>75%) with historical best economic and stock performances. With such alignment, usually law makers of each country may provide additional support (eg. QE or printing money) during financial crisis, easier for stock to recover. Similarly, a government may cool down the stock market when economy is overheated, especially with high inflation (eg. interest rate hike).

5) Dividend giant stocks would help a contrarian investor to generate passive incomes (eg. >5-10+% dividend yield) during the difficulty time. Eg. over the past 1 year of global tech stocks correction, when growth stocks do not grow in share prices, an investor may suffer capital loss (if holding growth stocks with 0 dividend) or zero / little return (if holding cash).

6) Regardless how confident is an investor on any stock or business (including giant stock), there are always potential unsystematic risks which could be beyond the control, although it may be rare but it is never zero risk. Therefore, it is prudent to diversify over 10-20 giant stocks as a portfolio or through a giant index ETF. Even when a stock may fall to $0 or business goes bankrupt, the potential maximum capital loss of portfolio is limited to only 5-10%. Eg. if there is a portfolio of 20 dividend giant stocks with 5% dividend yield, it could generate $5 from every $100 investment yearly, therefore even if 1/20 stock may disappear ($5 loss) under very rare condition, the dividend yield ($5) could be sufficient to balance the risk of holding in long term.

Similarly, a contrarian investor would also Sell in an overheated stock market with over 75% Optimism while most trend-following traders would think this is the best time for trading. So, whether contrarian investing is “honey” (eg. Buy Low Sell High) or “poison” (eg. Buy Low Get Lower), it depends on how much integration of 6 factors above to own unique personality (eg. short term / medium term / long term). There is no best strategy in the world for stock investing but one has to find the most suitable one for own personality (eg. contrarian vs trend-following, long term investing vs short term trading, fundamental vs technical, etc).

Let’s apply contrarian investing on these 2 Singapore and Hong Kong dividend giant stocks:

1) Singapore Dividend Giant Stock: Hongkong Land (SGX: H78)

Hongkong Land has nearly 100 years of business record in property market, part of Jardine Group with about 200 years of history in China. Due to slowing Hong Kong economy and property market (especially during last 3 years of pandemic), Hongkong land share price has dropped by half over the past 5-7 years from peak price of $8+ to low prices of about $4+.

The share prices have even dropped below $4 during 2020 and 2022, the 2 worse times of pandemic in Hong Kong / China, recovering and supporting above $4 resistance (becoming support currently). A contrarian investor may consider Hongkong Land stock below $5, averaging down if needed if falling to $4.50, $4 or below. Assuming the stock may go bearish or sideways, an investor may collect about 5% dividend yield currently (higher yield if share price bought is lower), higher than Singapore Savings Bond of 3% interest (purely passive income, no potential capital gain).

More importantly, Hongkong Land has 2/3 investment properties (mostly collecting rental in Hong Kong / Singapore / China, behaving like a Reit with strong rental business) and 1/3 development properties (mostly in China, having a mega project with $4 Billions investment in West Bund of Shanghai). China / HK has ended zero COVID policy, Hongkong Land business is expected to recover strongly (especially for development projects in China) with this Level 3 (country) alignment of policy.

Hongkong Land is still at low Ein55 Optimism (<25%) but recovering well from correction in China pandemic 2022, aiming for Ein55 intrinsic value of about $8+/share or over $10/share when market emotion may be greedy again. The stock is well balanced, could be suitable for dividend investing (Buy & Hold for dividend), growth investing (Buy & Hold for capital gains), cyclic investing (Buy Low Sell High) but not for trading (downtrend for short term). Hongkong Land is not a Reit but having the stability as a Reit with strong business (value), therefore may be considered for contrarian investing by some investors.

For investors with limited capital, not able to diversify over 10-20 dividend giant stocks, Singapore STI index has 30 stocks (including Hongkong Land) with 4% dividend yield, may be considered for contrarian investing but not ideal at current near fair price (40+% Optimism), may need to wait till the next Global Financial Crisis to buy STI at low.

2) Hong Kong Dividend Giant Reit: Link Reit (HKEX: 0823)

Link Reit is the largest reit in Asia and Hong Kong. It has rental business in Hong Kong, China and overseas including Singapore (recently 5% portfolio with acquisition of Jurong Point and partial Thomson Plaza). Most of the properties (including carpark business) are defensive in nature with over 10% rental reversion (critical for dividend growth over time). Due to slowing Hong Kong economy and property market (especially during last 3 years of pandemic), Link Reit share price has dropped by half over the past few years from peak price of $80+ to low prices of about $40+.

The share prices have even dropped below $40 during 2022, second major wave of pandemic in Hong Kong / China, then recovering and supporting above $60 resistance (becoming support). However, recent rights issue has corrected the share price further with over 10% below TERP (theoretical ex-rights price) of $59.70. Rights issue is a positive move the raise fund for overseas expansion but it is viewed negatively by the market (some retail investors may not like to top up extra money to invest in stocks). A contrarian investor may consider Link Reit below $60 (considering rights as a gift with extra 30% discount while value or business remains intact), averaging down if needed if falling to $50, $40 or below. Assuming the stock may go bearish or sideways, an investor may collect about 5.7% dividend yield currently (higher yield if share price bought is lower).

The latest rights issue is considered Ver 3.0 expansion for Link Reit to global market (mainly asia pacific including Australia, Singapore, etc), in addition to Ver 1.0 expansion (locally in Hong Kong) and Ver 2.0 expansion (China). Each version of plan is about a decade plan, critical for Link Reit to remain competitive and growing in a sustainable way. The portfolio can be expanded further with more yield accretive assets globally, allowing dividend yield of entire Reit portfolio to grow further. However, it takes time for both business growth (Version 3.0) and share price growth.

Link Reit is still at low Ein55 Optimism (<25%) but recovering well from correction in China pandemic 2022 (but suffering from “normal” market fear of rights issues), aiming for Ein55 intrinsic value of about $100/share or over $120/share when market emotion may be greedy again. The stock is well balanced, may be suitable for dividend investing (Buy & Hold for dividend), growth investing (Buy & Hold for capital gains), cyclic investing (Buy Low Sell High) but not for trading (downtrend for short term).

For investors with limited capital, not able to diversify over 10-20 dividend giant stocks, Hong Kong HSI (Hang Seng index) has over 60 stocks (including Link Reit) with 3% dividend yield, may also be considered for contrarian investing as Optimism is also low (<25%), aligning with Link Reit.

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There are over 2000 giant stocks in the world based on Dr Tee criteria, choice of 10 Dream Team giant stocks have to align with one’s unique personality, eg. for shorter term trading (eg. momentum or swing trading) or longer term investing (cyclic investing, undervalue investing or growth investing). Readers should not just “copy and paste” any stock (What to Buy, When to Buy/Sell) as successful action taking requires deeper consideration (LOFTP strategies – Level / Optimism / Fundamental / Technical / Personal Analysis) which you could learn further from Dr Tee Free 4-hr Webinar.

Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar, you could ask on any global and local stocks including but not limited to 30 STI component stocks:

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Frasers Logistics & Commercial Trust (SGX: BUOU), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Integrated Commercial Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

View quick preview video below, Dr Tee will introduce 10 key stock investment strategies (股票投资十招) to be learned in 4hr free stock webinar:

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Fundamental Analysis, Market Cycle Investing, Stock Market Tagged: crisis stock, High Dividend Stocks, Hong Kong Market, reit

4 Singapore Defensive Dividend Stocks and REITs (稳如泰山)

Posted on August 12, 2022 Written by Dr Tee (Ein55)

In this Dr Tee 1hr video education (4 Singapore Defensive Dividend Stocks and REITs), you will learn:
1) Formation of Defensive Stock Portfolio

2) Singapore Stock Market Outlook
– Short term, medium term & long term

3) Singapore Dividend ETFs
– Singapore Index Fund: STI ETF (SGX: ES3 & G3B)
– Singapore REIT Fund: CSOP Singapore REITs ETF (SGX: SRT)

4) 4 Singapore Defensive Dividend Stocks and REITs:
– CapitaLand Integrated Commercial Trust / CICT (SGX: C38U)
– Mapletree Industrial Trust / MIT (SGX: ME8U)
– OCBC Bank (SGX: O39)
– Challenger Technologies (SGX: 573)

5) Defensive Investing Strategies with Low Optimism Giant Stocks
– Kiasu Personality (Average Down)
– Kiasi Personality (Average Up)

6) Bonus / Q&A
– Hong Kong Hang Seng Index vs China A50 / CSI 300 Index
– Bottom Fishing of Giant Stocks with Falling of Inflation from the Peak
– Impact of Interest Rate Hike on Bank Stocks

Here is Dr Tee Free 1-hr Video Course. Enjoy and give your comments for improvement. You may subscribe to Dr Tee Youtube channel (Ein Tee) for future Dr Tee video talks.

Dr Tee Video Course: https://youtu.be/szvE8t_rqs8

Past readers could have profited with over 50% rally in share price if have taken actions during pandemic on similar giant stocks at low optimism level. No one could change the past but you could still change the future if taking action to learn now!

Investing with 30 STI Index Stocks (including 3 dividend giant stocks of CICT, MIT and OCBC) is a defensive strategy, indirectly diversifying the risks among 30 large size businesses in Singapore.

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Fundamental Analysis, Market Cycle Investing, Stock Market, Technical Analysis Tagged: defensive stock, dividend stock, reit

4 Defensive Undervalue-Dividend-Stocks of Singapore and Hong Kong against Black Swans

Posted on July 6, 2022 Written by Dr Tee (Ein55)

In this Dr Tee 2hr video education (4 Defensive Undervalue Dividend Stocks), you will learn:
1) Interactive Impacts of 5 Potential Black Swans
– COVID19, High Inflation, Interest Rate Hike, Supply Chain Disruption, Russia-Ukraine War

2) Singapore and Hong Kong Stock Market Outlook
– Short term, medium term & long term

3) 4 Singapore and Hong Kong Defensive-Undervalue-Dividend Stocks:
– Singapore Index Fund: STI ETF (SGX: ES3 & G3B)
– Hong Kong Index Fund: HSI ETF (HKEX: 2800 & 2833)
– Singapore Property Giant Stock: Hongkong Land (SGX: H78)
– Hong Kong Giant Reit: Link Reit (HKEX: 0823)

4) Defensive Investing Strategies with Low Optimism Giant Stocks
– Kiasu Personality (Average Down)
– Kiasi Personality (Average Up)

5) Bonus / Q&A
– Jardine Cycle & Carriage (SGX: C07)
– Alibaba (HKEX: 9988 / NYSE: Baba)
– Impact of interest rates (HDB / Banks) on Property Market

Here is Dr Tee Free 2-hr Video Course. Enjoy and give your comments for improvement. You may subscribe to Dr Tee Youtube channel (Ein Tee) for future Dr Tee video talks.

Dr Tee Video Course: https://youtu.be/U2JPD68YR94

Past readers could have profited with over 50% rally in share price if have taken actions during pandemic on similar giant stocks at low optimism level. No one could change the past but you could still change the future if taking action to learn now!

Investing with 30 STI Index Stocks (including Hongkong Land) is a defensive strategy, indirectly diversifying the risks among 30 large size businesses in Singapore.

Similarly, investing with 66 HSI Index Stocks (including Link Reit) is a defensive strategy (with additional protection of low optimism Hang Seng Index, leveraging on pandemic recovery and stimulus plans in China), indirectly diversifying the risks among 66 large size businesses in China / Hong Kong:

CKH HOLDINGS (HKEX: 1), CLP HOLDINGS (HKEX: 2), HK & CHINA GAS (HKEX: 3), HSBC HOLDINGS (HKEX: 5), POWER ASSETS (HKEX: 6), HANG SENG BANK (HKEX: 11), HENDERSON LAND (HKEX: 12), SHK PPT (HKEX: 16), NEW WORLD DEV (HKEX: 17), GALAXY ENT (HKEX: 27), MTR CORPORATION (HKEX: 66), HANG LUNG PPT (HKEX: 101), GEELY AUTO (HKEX: 175), ALI HEALTH (HKEX: 241), CITIC (HKEX: 267), WH GROUP (HKEX: 288), CHINA RES BEER (HKEX: 291), OOIL (HKEX: 316), SINOPEC CORP (HKEX: 386), HKEX (HKEX: 388), TECHTRONIC IND (HKEX: 669), CHINA OVERSEAS (HKEX: 688), TENCENT (HKEX: 700), CHINA UNICOM (HKEX: 762), LINK REIT (HKEX: 823), PETROCHINA (HKEX: 857), XINYI GLASS (HKEX: 868), ZHONGSHENG HLDG (HKEX: 881), CNOOC (HKEX: 883), CCB (HKEX: 939), CHINA MOBILE (HKEX: 941), LONGFOR GROUP (HKEX: 960), XINYI SOLAR (HKEX: 968), SMIC (HKEX: 981), LENOVO GROUP (HKEX: 992), CKI HOLDINGS (HKEX: 1038), HENGAN INT’L (HKEX: 1044), CSPC PHARMA (HKEX: 1093), CHINA RES LAND (HKEX: 1109), CK ASSET (HKEX: 1113), SINO BIOPHARM (HKEX: 1177), BYD COMPANY (HKEX: 1211), AIA (HKEX: 1299), CHINAHONGQIAO (HKEX: 1378), ICBC (HKEX: 1398), XIAOMI – W (HKEX: 1810), BUD APAC (HKEX: 1876), SANDS CHINA LTD (HKEX: 1928), WHARF REIC (HKEX: 1997), COUNTRY GARDEN (HKEX: 2007), ANTA SPORTS (HKEX: 2020), WUXI BIO (HKEX: 2269), SHENZHOU INTL (HKEX: 2313), PING AN (HKEX: 2318), MENGNIU DAIRY (HKEX: 2319), LI NING (HKEX: 2331), SUNNY OPTICAL (HKEX: 2382), BOC HONG KONG (HKEX: 2388), CHINA LIFE (HKEX: 2628), ENN ENERGY (HKEX: 2688), MEITUAN – W (HKEX: 3690), CM BANK (HKEX: 3968), BANK OF CHINA (HKEX: 3988), CG SERVICES (HKEX: 6098), HAIDILAO (HKEX: 6862), JD – SW (HKEX: 9618), NONGFU SPRING (HKEX: 9633), BABA – SW (HKEX: 9988), NTES – S (HKEX: 9999).

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Fundamental Analysis, Macroeconomy, Market Cycle Investing, Stock Market, Technical Analysis Tagged: defensive stock, dividend stock, Hong Kong Market, reit, undervalue stock

4 Undervalue-Growth-Dividend Giant Stocks in Singapore and US (股海四宝)

Posted on December 15, 2021 Written by Dr Tee (Ein55)

It may be a dream for an investor to find an all-rounded stock with strong business fundamental and growing share prices with regular dividends as passive income (monthly / quarterly / half-yearly) for long term investing or short term trading. In this Dr Tee 2hr video education (4 Undervalue + Growth + Dividend Giant Stocks in Singapore and US), you will learn:

1) US and Singapore Stock Market Outlook
– Short term, medium term & long term

2) LOFTP Investing Strategies for Growth Investing and Momentum Trading
– Level Analysis (L1 Stock, L1 Sector, L3 Country, L4 World)
– Optimism Analysis (0-100%)
– Fundamental Analysis (Strong / Weak)
– Technical Analysis (Follow-trend / Counter-trend)
– Personal Analysis (Short Term Trading / Long Term Investing)

3) 4 US & Singapore Giant Stocks from 4 Promising Sectors with 3-in-1 strategies (Growth + Dividend + Undervalue)
– Singapore Giant Property Stock: Hongkong Land (SGX: H78)
– Singapore Giant F&B Stock: Thai Beverage (SGX: Y92)
– US Giant Oil & Gas Stock: Magellan Midstream Partners (NYSE: MMP) – quarterly dividend payment
– US Giant REIT Stock: Realty Income (NYSE: O) – monthly dividend payment!

4) Long Term Growth Investing vs Short Term Trading Strategies
– Growth Investing (Buy Low & Hold, Long Term)
– Dividend Investing (Buy Low & Hold, Long Term)
– Undervalue / Cyclic Investing (Buy Low Sell High, Long Term)
– Short Term Trading (Buy Low Sell High, Buy High Sell Higher, Short Term)

5) Bonus: Discussions on 5 stocks during Q&A (only for those who view entire 2hr video)
– US Technology Stock: Zoom Video Communications (NASDAQ: ZM)
– Malaysia / Singapore Glove Stock: Top Glove (SGX: BVA / Bursa: 7113)
– Singapore Insurance Stock: Great Eastern (SGX: G07)
– Singapore Transportation Stock: ComfortDelgro (SGX: C52)
– Singapore Dividend Stock: Vicom (SGX: WJP)

Here is Dr Tee Free 2-hr Video Course. Enjoy and give your comments for improvement. You may subscribe to Dr Tee Youtube channel (Ein Tee) for future Dr Tee video talks.

View Dr Tee Video Here (switch on FB sound before viewing):
https://www.facebook.com/ifastgm/videos/363185765575573

Past readers could have profited with over 50% rally in share price if have taken actions during pandemic on similar giant stocks. No one could change the past but you could still change the future if taking action to learn now!

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Market Cycle Investing, Stock Market, Technical Analysis, Trading Tagged: dividend stock, growth stock, reit, undervalue stock

Buy Low Hold Dividend with Global REITS (为善最乐)

Posted on November 16, 2021 Written by Dr Tee (Ein55)

In recent 12^thEin55 Charity Course on Global REITs, we have raised fund of $24,000 to help needy families in Singapore. Under the spirit of charity, Dr Tee decides to share 3 Global Giant REITs with opportunities to Buy Low in 3 countries with readers (detailed strategies including Ein55 Optimism levels, Ein55 intrinsic values and Dividend Yield will be shared):

1) Singapore Giant REIT – Keppel DC REIT (SGX: AJBU)

2) Malaysia Giant REIT – Pavilion REIT / PAVREIT (Bursa: 5212)

3) Hong Kong / China Giant REIT – Link REIT (HKEx: 823)

Dr Tee, Ein55 Mentors & Graduates have together organized 12 charity investment courses (REITs in Nov 2015, May 2017, May 2019 and Nov 2021, High Dividend Stocks in Mar 2016, Oct 2017 and Nov 2019, Global Growth Stocks in Apr 2018 and Nov 2020, and Discounted NAV Stocks in Sep 2016, Nov 2018 and May 2021) in the past 6 years, donating net income of around $246,000 to Tzu Chi 慈济 Singapore.

We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need. More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future.

Singapore and overseas REITs are popular investment for passive income through stable dividend stocks. By law, REITs have to redistribute 90% taxable income (from property rental income) back to shareholders in the form of dividend. Therefore, a retail investor could play the role of landlord of giant property (shopping malls, commercial buildings, hospitals, hotels, etc) with minimal capital (could be less than $1000), saving the hassle to buy/sell property (REIT manager would help), no need to deal with tenants or operations (property manager would help). Singapore REITs are exempted from corporate tax, therefore an Singapore investor could gain extra 1-2% rental or dividend yield compared with overseas REITs.

However, ordinary dividend investors (REIT / non-REIT) collect minimal passive incomes (eg. around 3-10% dividend yield) but long term growth may be limited (eg. Singtel (SGX: Z74) or SPH (SGX: T39)) and there could be high risk of capital loss with junk REIT (eg. Eagle Hospitality Trust (SGX: LIW) which has become bankrupt).

A smarter way of dividend investing is to wait patiently to Buy Low (low Ein55 Optimism during stock crisis) for a portfolio of 10 giant global REITs (or non-REIT dividend stocks) with reasonably strong business, waiting patiently (collecting consistent dividend during winter time of stock) for recovery of REIT with capital growth.

After the fear is fading, besides the minimal dividend yield (typically 3-10%), a smart dividend investor may choose to Sell High (cash out as opportunity fund to wait for next stock crisis to Buy Low again, especially for cyclic stocks including REITs) or hold long term for growth investing (for growth REIT), even possible for lifetime investing (selling one day only when need money or when it is no longer a giant stock based on Dr Tee criteria).

The best time to buy global giant REITs is always during global stock crisis (eg. Year 2020-2021 during pandemic, 2008—2009 during subprime crisis, etc), not only able to maximize the dividend yield (due to lower entry share price), also could have higher potential of capital gains (when market cycle moves from fear in low optimism to greed in high optimism). Global REITS investing is not based on dividend strategy (collect dividends as passive incomes) alone, may be integrated with cyclic investing (Buy Low Sell High), growth investing (Buy Low & Hold), swing trading, momentum trading, defensive investing and other Ein55 strategies.

There are thousands of global REITS (started in US a few decades ago, extending to the world, become popular in Asia). However, not all the global REITs listed are giant stocks. A growing business or consistent dividend payment in the past may not be sustainable during COVID-19 period and a REIT may remain lagging in share prices for many years, could end up as a crisis stock. Fundamental Analysis alone is not sufficient, a low PB or low PE or high dividend yield stock may be a value trap as this may be the result of lower share price with weakening businesses. Therefore, deeper analysis is required with LOFTP (Level, Optimism, Fundamental, Technical, Personal Analysis) Strategies.

Let’s learn these 3 global giant REITs in 3 countries (Singapore, Malaysia, Hong Kong), understanding the business nature, investment clock and unique strategy.

1) Singapore Giant REIT – Keppel DC REIT (SGX: AJBU)

In the internet era with more 5G applications, data usage will be enormous with explosive growth for next decade. So, Keppel DC Reit is positioned nicely to host data storage, collecting consistent growing rental as passive incomes. Keppel DC Reit has nearly 100% business in data center (recently extending to related business such as partnership with M1) while Mapletree Industrial Trust (SGX: ME8U) has about 1/3 businesses in this growing sector. Mapletree Industrial Trust is the largest Data Center REIT in Singapore but share price (near to fair value) currently is not as attractive as Keppel DC Reit, therefore not a focus in this article.

Over the past 5 years, Keppel DC Reit has experienced 3X in share prices from $1 to peak of $3 but the gains is not limited to share price appreciation. Its dividend is doubled every few years, therefore suitable to position as mid-fielder stock to have a balance of both growth (price appreciation) and dividend (passive income).

After reaching 100% Optimism level during peak of pandemic, Keppel DC Reit has experienced slower growth with sector rotation. The prices over the past 1 year has been bearish, declining by about 20%, falling to low optimism <25% currently, creating another rare opportunity for long term investor with dividend yield about 4%. However, due to bearish price trend, it is currently more suitable for contrarian investor who could apply Average Down strategy to minimize the risk of “Buy Low get lower”.

Therefore, similar to many other crisis giant stocks at low Ein55 Optimism level (eg. Top Glove (SGX: BVA / Bursa: 7113), Tencent (HKEX: 700) or Alibaba (HKEX: 9988 / NYSE: BABA)), an investor may need to “Wait” for “crisis” in prices (but strong in business) to Buy Low or entering in several batches, either Average Down or Average Up, eg. wait for next mini rally to Buy slightly Higher (only after uptrend is established for short term, eg when above $2.40-$2.50 resistance for Keppel DC Reit).

Due to defensive business nature of Keppel DC Reit, Ein55 intrinsic value is about $2.80, current price is only about 20% discount (despite low Ein55 Optimism level). It is more suitable for Buy Low and Hold Long Term, collecting 4% dividend yield (potentially doubled every few years). Keppel DC Reit has to grow bigger with more yield accretive acquisitions (eg. recent new REIT in Guangzhou of China) to sustain this high growth with many more global competitors (both demand and supply for data center increase at the same time).

2) Malaysia Giant REIT – Pavilion REIT / PAVREIT (Bursa: 5212)

PAVREIT is a young Malaysia Giant Reit, focusing in retail business. It has high concentration with 80% value in Pavilion KL Mall (second most expensive retail mall after KLCC (Bursa: 5235SS)), therefore business is affected during pandemic with lower property valuation and negative rental reversion.

Over the past 10 years, PAVREIT has doubled its share prices but behaving in a cyclical way, partly due to cyclical retail business and dynamic political economy (changes in regulations) in Malaysia. Its dividend is halved during pandemic, therefore more suitable for cyclic investing (Buy Low Sell High) while holding minimal 3% dividend yield.

After reaching high Optimism level before pandemic, PAVREIT has experienced weaker earnings and cashflow, especially after a few yield dilutive acquisition of smaller malls (eg. Damen Mall). The prices over the past 1 year has been bearish, declining by about 30%, falling to low optimism <25% currently, creating good opportunity for medium term investor with dividend yield about 3%. However, it is more suitable for cyclic investor or trader to apply Buy Low Sell High strategy. Average up strategy (need to overcome $1.45-$1.50 resistance to establish short term bullish trend) may be integrated as dividend yield is lower with weaker business (worst of pandemic likely is over), may not suitable to buy for long term (unlike Keppel DC Reit which is possible to average down with strong business).

Due to medium term cyclical business nature of PAVREIT, Ein55 intrinsic value is about $1.70, current price is only about 20% discount (despite low Ein55 Optimism level). It is more suitable for Buy Low Sell High in medium term (a few years), collecting 3% dividend yield while waiting for pandemic recovery in Malaysia for additional capital gains. Political instability and weak economy in Malaysia are potential threats for Bursa stocks, including but not limited to PAVREIT.

3) Hong Kong / China Giant REIT – Link REIT (HKEx: 823)

Link REIT is the largest REIT in Hong Kong and Asia, about 2 times bigger than CICT (SGX: C38U) which is the largest Singapore REIT). It is also the 3^rd largest retail REIT in the world, after Simon Property (NYSE: SPG) and Realty Income (NYSE: O) of US REITs. Link REIT has 80% value in Hong Kong (retail malls and carparks), 20% overseas.

Over the past 10+ years, Link REIT has grown its share prices by 10 times to peak of about $99 before pandemic with support of high growth businesses mainly in Hong Kong. Its dividend is stable during pandemic but high growth is slower (eg. rental reversion is reduced from 20+% in the past to 10+% in recent years), therefore still suitable for growth investing (Buy Low & Hold) while holding 4% dividend yield (would increase over the years with more expansion beyond Hong Kong, especially in mainland China).

After reaching high Optimism level before pandemic, Link REIT has experienced slower growth, price was corrected significantly by about 40% from $99 to about $57. The share price over the past 1 year has gradually recovered from low optimism <25%, despite uncertain political economy (eg. tighter market regulations by China authority) with bearish Hong Kong stock market, creating a rare opportunity for long term investor with dividend yield about 4%.

Link REIT is the most flexible among 3 global REITs discussed in this article, possible to apply either Average Down strategy (similar to Keppel DC Reit with strong business) or Average Up strategy (good price trend in short term). Its potential short term risk (or opportunity) is the bearish Hong Kong stock market which could slowdown its price growth (but little impact on business growth), share prices supported above $70 is a nice balance to consider as common entry point for both long term investors and short term traders, although each may have different price targets for exits.

Due to major correction during pandemic, Ein55 intrinsic value is about $100, current price is about 30% discount (still at low Ein55 Optimism level). Link REIT is an all rounded REIT, may be considered for dividend investing (Buy Low & Hold for dividend growth), cyclic investing (Buy Low Sell High), growth investing (Buy Low & Hold for capital gains) or even short term trading (Buy Low Sell high in short to medium terms). However, full mastery of each unique Ein55 investing or trading strategy is critical for ultimate success, especially on when to sell or how long to hold, not just on what to buy or when to buy.

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Readers may read earlier article by Dr Tee for more details on 100 Singapore Dividend Stocks (REIT / non-REIT):
https://www.ein55.com/2021/03/100-singapore-dividend-stocks-and-reits-for-retirement/

Not all global REITS are giant stocks, some could be junk stocks (eg. making losses or asking investors for reserved passive incomes through rights issues). Even for a giant stock, it requires at least yearly review with Dr Tee criteria to ensure it is still a giant stock or a change in strategy may be required (eg. crisis stock investing with Striker role if there is any potential high risk). Similarly, those stocks which are not highlighted in this article, some could be marginal giant stocks, may obtain the giant stock title one day, which worth longer term investing or trading.

Ideally, a smart investor should form a dream team stock portfolio (striker / mid-fielder / defender) with 10-20 giant stocks from over 3 sectors and 3 countries. REIT sector may contribute 1-2 stocks while it is important to diversify with more sectors (eg. Healthcare, Banking & Finance, F&B, Technology, Oil & Gas, Property / non-REIT, etc).

Since some REITs have overseas business, knowledge of Forex (eg. USD/SGD, SGD/HKD, SGD/MYR, etc) would be critical. A qualified REIT investor should also understand property market cycle, macroeconomy behavior, integrating with dividend investing or growth investing or cyclic / momentum trading.

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Market Outlook, Stock Market, Technical Analysis, Value Investing Tagged: Charity Course, dividend stock, reit

Stock Market Updates with Bank Stocks and REITs

Posted on July 31, 2020 Written by Dr Tee (Ein55)

Global stock markets (S&P500, STI, KLCI, HSI, SSEC, etc) have been bumpy over the past few months. US Covid-19 condition is still critical, affecting the confidence of V-shape recovery of stock market, as well as the coming US presidential election in Nov 2020. Some investors worry of possible double dip, dare not take any action now. Crisis is always opportunity but an investor has to apply the right stock investing strategy.

At the same time, Singapore stock market is lagging, major bank stocks, DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11) are under correction after MAS guidelines to cap the dividend payment of banks to 60% of last year (implying if dividend yield is 6%, would become 6×0.6 = 3.6%), disappointing many passive income investors. However, the impact is temporary, earnings of banks won’t be affected (stability is enhanced with more cash in reserve), the shareholders money are kept within the company first. Bank stocks are cyclic in nature, alignment with market cycle is crucial to maximize the potential gain.

This is similar to REITs withhold some dividends in Q1-Q2 / 2020 to preserve cash during the uncertain pandemic period, eg. CapitaLand Mall Trust (SGX: C38U), Frasers Centrepoint Trust (SGX: J69U), etc. Strong REIT such as First Reit (SGX: AW9U) has fallen to about 1/3 of peak share with price-to-book ratio nearly at 50% discount, mainly due to rental relief to tenant who is also weak sponsor (Lippo Karawaci) which may cut future dividend by half (new agreements with Rupiah exchange rate depreciating by 50%). Crisis is a good time to collect giant dividend stocks but certain risks should not be overlooked.

There are 30 STI index component stocks including most of giant stocks mentioned above (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

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Dr Tee has been very busy since Phase 2 is started, conducting many investment courses, therefore not able to update as frequent as last time (about 200 articles written during past 5 months of Covid-19 pandemic: www.ein55.com/blog)

I start to conduct some online courses which are proven to be effective, especially some students are still not comfortable to meet-up during pandemic. Personally I prefer meet-up workshop as it is more interactive in learning. However, I start to master different ways to engage the students in webinar setting.

This is the first time, 4hr bonus investment course by Dr Tee is conducted through Webinar (learning at comfort of home with Zoom), a rare opportunity to learn remotely, profiting from Covid-19 stock crisis.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar.

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

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Filed Under: Stock Market, Technical Analysis, Trading Tagged: bank stock, investment course, market outlook, reit

42 Singapore REITs & 16 Business Trusts (稳如泰山)

Posted on June 5, 2020 Written by Dr Tee (Ein55)

Singapore REITs, Business Trusts, Dividend Stocks

Singapore REITs are popular investment for passive income through stable dividend stocks. In this article, you will learn on how to invest in 21 giant stocks from 42 Singapore REITs and 16 Business Trusts with 3 key strategies (Striker / Mid-fielder / Defender) in 8 categories:

1) Retail REITs

2) Office REITs

3) Industrial REITs

4) Healthcare REITs

5) Diversified REITs

6) Data Center REIT

7) Hospitality REIT

8) Business Trusts

There are 6 Singapore REITs which are also Business Trusts, so total there are 42 + 16 – 6 = 52 Singapore REITs and Business Trusts as of current stock market. Currently, out of 30 STI Index stocks, 5 are REITs. Soon, SPH (SGX: T39) with declining trading market capitalization (lower share price and/or lower trading volume) will be replaced by Mapletree Industrial Trust (SGX: ME8U) as 6th REIT of STI. CapitaMall Trust (SGX: C38U) will be merged with CapitaCom Trust (SGX: C61U) to form new CapitaLand Integrated Commercial Trust (CICT) Reit, therefore free up 1 seat in 30 STI. In near future, 5 reserve list of STI are all REITs or Business Trust:

Keppel DC Reit (SGX: AJBU), Suntec Reit (SGX: T82U), NetLink NBN Trust (SGX: CJLU), Frasers Logistics & Industrial Trust (SGX: BUOU) and Keppel Reit (SGX: K71U).

It implies at least 10 out of future 30 STI components would be from REITs and Business Trust. Future STI ETF (SGX: ES3)/(SGX: G3B) would be a more defensive investing tool, more dividend income but growth could be limited due to nature of Singapore REITs.

Diversification through REITs ETF (SGX: FSTAS8670) may not be a good strategy as not all stocks selected by index or fund manager are considered giant REITs (based on Dr Tee criteria) and systematic risk such as global financial crisis could potentially correct the REITs prices by more than 50% (eg. 70% price drop in 2008-2009 subprime crisis and about 40% correction in 2020 Covid-19 crisis) if an investor simply buys and hold for long term.

By law, REITs have to redistribute 90% taxable income (from property rental income) back to shareholders in the form of dividend. Therefore, a retail investor could play the role of landlord of giant property (shopping malls, commercial buildings, hospitals, hotels, etc) with minimal capital (could be less than $1000), saving the hassle to buy/sell property (REIT manager would help), no need to deal with tenants or operations (property manager would help). Singapore REITs are exempted from corporate tax, therefore an Singapore investor could gain extra 1-2% rental or dividend yield compared with overseas REITs.

Business Trust is not limited to property rental, could be any form of business and even a company has good track record of dividend payment, it is not a legal obligation to do pay dividend in future, especially when there is a potential business crisis (eg. Covid-19) which needs more cash reserve. Therefore, from the perspective of a dividend stock investor, Singapore REITs are more preferred than Business Trusts for passive income generation.

However, a REIT investor has to buy the right REIT which could grow in rental business (most important action), aligning own personality with 3 possible strategies:

1) Striker – trading or crisis investing (Buy Low Sell High), mainly for capital gains

2) Mid-fielder – medium term investing, mainly for capital gains (dividend income as bonus)

3) Defender – long term investing, mainly for dividend income (capital gains as bonus)

After confirming a REIT / Business Trust is a giant, then investor has to master the investment clock (When to Buy / Sell), depending on type of REITs. The best time to invest in a defensive REIT is usually during global stock crisis (with condition that the rental business is not significantly affected) which could maximize both the dividend yield and also higher upside for capital gains.

Below are all the 52 Singapore REITs and Business Trusts based on the last price traded (4 June 2020), sorted by type of REITs with details of 3 key strategies (Striker / Mid-fielder / Defender) and 3 critical Fundamental Criteria:
1) ROE (a basic criteria for REIT, eg. ROE > 0% to ensure business not losing money),
2) Dividend Yield, DY (a criteria for dividend stocks, eg. DY > 3 – 5%, depending on strategy),
3) Price-to-Book (PB) ratio, Price/NAV (a bonus for REIT is undervalue, eg. PB < 1).

No	Ticker	ROE	Dividend Yield (%)	PB = Price /NAV	Type	Strategy
1	BHG Retail Reit (SGX: BMGU)	11.4	6.4	0.7	Retail
2	CapitaLand Mall Trust (SGX: C38U)	9.0	5.7	1.0	Retail	Defender
3	CapitaLand Retail China Trust (SGX: AU8U)	8.8	7.3	0.9	Retail	Defender
4	Frasers Centrepoint Trust (SGX: J69U)	8.3	4.7	1.2	Retail	Defender
5	Lippo Malls Trust (SGX: D5IU)	-0.7	15.4	0.7	Retail
6	Sasseur Reit (SGX: CRPU)	11.8	8.4	0.8	Retail
7	SPH REIT (SGX: SK6U)	6.1	5.9	0.9	Retail
8	Starhill Global Reit (SGX: P40U)	3.4	8.2	0.6	Retail	Defender
9	United Hampshire US Reit (SGX: ODBU)	4.1	–	0.789	Retail
10	CapitaLand Commercial Trust (SGX: C61U)	6.0	5.0	1.0	Office	Defender
11	Elite Commercial REIT GBP (SGX: MXNU)	–	–	1.2	Office
12	IREIT Global (SGX: UD1U)	19.4	7.7	0.9	Office	Mid-fielder
13	Keppel Pacific Oak US REIT (SGX: CMOU)	9.3	8.4	0.9	Office
14	Keppel Reit (SGX: K71U)	2.6	4.8	0.9	Office	Defender
15	ManulifeReit USD (SGX: BTOU)	3.8	7.2	1.0	Office	Mid-fielder
16	OUE Commercial Reit (SGX: TS0U)	3.5	8.0	0.7	Office
17	Prime US ReitUSD (SGX: OXMU)	4.1	3.5	1.0	Office
18	AIMS APAC Reit (SGX: O5RU)	9.0	7.6	0.9	Industrial
19	ARA LOGOS Logistics Trust (SGX: K2LU)	-2.1	9.8	1.0	Industrial
20	Ascendas Reit (SGX: A17U)	7.4	4.4	1.5	Industrial	Defender
21	EC World Reit (SGX: BWCU)	9.5	8.4	0.8	Industrial
22	ESR-REIT (SGX: J91U)	-0.1	9.7	1.0	Industrial
23	Mapletree Industrial Trust (SGX: ME8U)	10.3	4.6	1.6	Industrial	Mid-fielder
24	Mapletree Logistics Trust (SGX: M44U)	8.2	4.2	1.5	Industrial	Defender
25	Sabana Reit (SGX: M1GU)	3.5	7.8	0.7	Industrial
26	ARA Hospitality Trust USD (SGX: XZL)	2.2	10.1	0.5	Hospitality
27	Ascott Trust (SGX: HMN)	5.1	7.2	0.8	Hospitality	Striker
28	CDL Hospitality Trust (SGX: J85)	6.1	8.2	0.7	Hospitality	Striker
29	Eagle Hospitality Trust USD (SGX: LIW)	18.2	25.3	0.2	Hospitality
30	Far East Hospitality Trust (SGX: Q5T)	3.6	7.2	0.6	Hospitality
31	Frasers Hospitality Trust (SGX: ACV)	3.4	8.9	0.7	Hospitalit
32	First Reit (SGX: AW9U)	5.7	12.1	0.7	Healthcare	Striker
33	ParkwayLife Reit (SGX: C2PU)	10.4	3.8	1.8	Healthcare	Mid-fielder
34	Cromwell Reit EUR (SGX: CNNU)	8.3	8.9	0.9	Diversified
35	Cromwell Reit SGD (SGX: CSFU)	8.3	8.5	0.9	Diversified
36	Frasers Logistics & Commercial Trust (SGX: BUOU)	9.8	3.9	1.9	Diversified	Mid-fielder
37	Lendlease Reit (SGX: JYEU)	–	–	0.9	Diversified
38	Mapletree Commercial Trust (SGX: N2IU)	9.4	3.8	1.2	Diversified	Mid-fielder
39	Mapletree North Asia Commercial Trust (SGX: RW0U)	2.6	7.7	0.7	Diversified	Defender
40	Soilbuild Business Space Reit (SGX: SV3U)	4.0	10.2	0.7	Diversified
41	Suntec Reit (SGX: T82U)	6.5	6.0	0.7	Diversified
42	Keppel DC Reit (SGX: AJBU)	5.7	3.1	2.2	Data Center	Mid-fielder
43	Accordia Golf Trust (SGX: ADQU)	-17.0	6.4	0.8	Business Trust
44	Ascendas India Trust (SGX: CY6U)	18.2	4.6	1.3	Business Trust	Defender
45	Asian Pay Tv Trust (SGX: S7OU)	1.8	7.4	0.2	Business Trust
46	Dasin Retail Trust (SGX: CEDU)	-1.9	8.2	0.6	Business Trust
47	FSL Trust (SGX: D8DU)	5.0	29.3	0.5	Business Trust
48	HPH Trust SGD (SGX: P7VU)	2.0	11.9	0.3	Business Trust
49	HPH Trust USD (SGX: NS8U)	2.0	12.6	0.3	Business Trust
50	Keppel Infrastructure Trust (SGX: A7RU)	2.9	7.0	2.1	Business Trust
51	NetLink NBN Trust (SGX: CJLU)	2.7	5.0	1.4	Business Trust	Mid-fielder
52	RHT HealthTrust (SGX: RF1U)	–	145.5	0.9	Business Trust

The risk (and also opportunity) of REITs are cyclic stock prices, therefore each global stock crisis could be good opportunity to Buy Low for giant Defender REITs, maximizing dividend yields with multiple entries if diversification is needed during uncertain Global Financial Crisis. For Mid-fielder stocks, alignment with price trends are important for trading (momentum and cyclic / swing trading). Covid-19 pandemic would disrupt the stable distribution of rental income for some REITs (eg. Retail, Office, Industrial, Hospitality) with reduced or delayed dividend for 6-12 months but it has less impact on longer term investors who could hold longer than 1 year.

We may group 52 Singapore REITs and Business Trusts in the following 8 categories with 21 selected giant stocks in 3 main roles (Striker / Mid-fielder / Defender).

1) Retail REITs

There are 9 Retail REITs listed in Singapore (some with overseas business, eg. in China, Hong Kong and US):

BHG Retail Reit (SGX: BMGU), CapitaLand Mall Trust (SGX: C38U), CapitaLand Retail China Trust (SGX: AU8U), Frasers Centrepoint Trust (SGX: J69U), Lippo Malls Trust (SGX: D5IU), Sasseur Reit (SGX: CRPU), SPHREIT (SGX: SK6U), Starhill Global Reit (SGX: P40U), United Hampshire US Reit (SGX: ODBU).

Retail REITs are usually cyclic in nature, tenants occupancy rate and rental rate mainly follow economic cycles and strength of local economy. 4 Giant Retail REITs are good choices as Defenders to collect dividend income: CapitaLand Mall Trust (SGX: C38U), CapitaLand Retail China (SGX: AU8U), Frasers Centrepoint Trust (SGX: J69U), Starhill Global Reit (SGX: P40U).

2) Office REITs

There are 8 Office or Commercial REITs listed in Singapore (some with overseas business, eg. in US, UK and Europe):

CapitaLand Commercial Trust (SGX: C61U), Elite Commercial REIT (SGX: MXNU), IREIT Global (SGX: UD1U), Keppel Pacific Oak US REIT (SGX: CMOU), Keppel Reit (SGX: K71U), Manulife Reit (SGX: BTOU), OUE Commercial Reit (SGX: TS0U), Prime US Reit (SGX: OXMU).

Office REITs are usually cyclic in nature, tenants occupancy rate and rental rate mainly follow economic cycles and strength of local economy. 4 Giant Office REITs are good choices, 2 as Defenders to collect dividend income: CapitaLand Commercial Trust (SGX: C61U) and Keppel Reit (SGX: K71U) and 2 as Mid-fielders (both capital gains and dividend income in medium term trading): Manulife Reit (SGX: BTOU) and IREIT Global (SGX: UD1U).

3) Industrial REITs

There are 8 Industrial REITs listed in Singapore (some with overseas business, eg. in China and Asia Pacific):

AIMS APAC Reit (SGX: O5RU), ARA LOGOS Logistics Trust (SGX: K2LU), Ascendas Reit (SGX: A17U), EC World Reit (SGX: BWCU), ESR-REIT (SGX: J91U), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), Sabana Reit (SGX: M1GU).

Industrial REITs are usually cyclic in nature, tenants occupancy rate and rental rate mainly follow economic cycles and strength of local economy. 3 Giant Industrial REITs are good choices, 2 as Defenders to collect dividend income: Ascendas Reit (SGX: A17U) and Mapletree Logistics Trust (SGX: M44U) and 1 as Mid-fielder (both capital gains and dividend income in medium term): Mapletree Industrial Trust (SGX: ME8U).

4) Healthcare REITs

There are only 2 Healthcare REITs listed in Singapore (with local and overseas business, eg. in Indonesia, South Korea, Malaysia, Japan and), both are giant stocks:

First Reit (SGX: AW9U) as striker and ParkwayLife Reit (SGX: C2PU) as Mid-fielder.

Healthcare REITs are usually more defensive in rental business due to very long term agreement signed with tenants (hospitals which need stability in operation). First Reit used to be a Mid-fielder with strong growth but investors confidence are affected with bearish outlook of sponsor, Lippo Group, therefore new role as a Striker could be more suitable for crisis stock investing. Parkwaylife REIT is much more stable with support of strong sponsor, IHH Healthcare (SGX: Q0F) but dividend yield is limited, therefore more suitable as a Mid-fielder.

5) Diversified REITs

There are 8 Diversified REITs listed in Singapore (some with overseas business, eg. in China, Asia Pacific and Europe):

Cromwell Reit EUR (SGX: CNNU) / Cromwell Reit SGD (SGX: CSFU), Frasers Logistics & Commercial Trust (SGX: BUOU), Lendlease Reit (SGX: JYEU), Mapletree Commercial Trust (SGX: N2IU), Mapletree North Asia Commercial Trust (SGX: RW0U), Soilbuild Business Space REIT (SGX: SV3U), Suntec Reit (SGX: T82U).

Diversified REITs have different types of REITs within the REIT portfolio (eg. Office / industrial / retail, some are integrated of smaller REITs, eg. Frasers REITs, through Merging & Acquisition), therefore usually cyclic in nature, tenants occupancy rate and rental rate mainly follow economic cycles and strength of local economy. 3 Giant Industrial REITs are good choices, 1 as defender to collect dividend income: Mapletree NAC Trust (SGX: RW0U) and 2 as Mid-fielders (both capital gains and dividend income in medium term): Frasers L&C Trust (SGX: BUOU) and Mapletree Commercial Trust (SGX: N2IU.

6) Data Center REIT

There is only 1 Data Center REIT in Singapore (with business locally and globally), also a Mid-fielder Giant Stock: Keppel DC Reit (SGX: AJBU).

Technically, Mapletree Industrial Trust, MIT (SGX: ME8U) has partial business in Data Center as MIT has 40% ownership (another 60% by parent company, Mapletree Investment) of Mapletree Redwood Data Centre Trust (MRDCT) which has 14 data centers in US since 2017. So far, Mapletree group (Temasek as sponsor) has 4 REITs listed sequentially over the past decade. So, there is no surprise if MRDCT may be listed in future when business is more stable one day. Currently, an investor may invest indirectly through MIT, which is an Industrial REIT including partial business in Data Centers.

Data Center REITs are usually more defensive due to longer term agreement signed with tenants (could be local government and big companies with confidential customer identities due to sensitive nature of database) which may view stability and security as more important factors than cost of rental. With popularity in internet (driven further by 5G) and tremendous growth in database required globally, demand for data centers at safer locations / countries would be increasing. Both Keppel DC Reit and MIT are younger REITs, more suitable to position as Mid-fielders, aiming mainly for capital gains (dividend is only a bonus), may evolve into growth investing in future.

7) Hospitality REIT

There are 6 Hospitality REITs (some with business overseas, eg. global hotels chain) which also have Business Trust to form Stapled Securities due to requirement of business model:

ARA Hospitality Trust USD (SGX: XZL), Ascott Trust (SGX: HMN), CDL Hospitality Trust (SGX: J85), Eagle Hospitality Trust USD (SGX: LIW), Far East Hospitality Trust (SGX: Q5T), Frasers Hospitality Trust (SGX: ACV)

Hospitality REITs are mostly considered as crisis sector (especially for hotel / resort business) due to Covid-19 pandemic, few international visitors during this period. Without strong sponsor, a REIT could be in trouble. Eagle HTrust is a good example, stock is suspended after less than 1 year of IPO (about 80% capital loss for a stock investor), with big losses in business, default of loan and additional sell down during Covid-19 crisis as last straw which breaks the camel’s back. Usually for a young IPO stock without stable business record, there is always a risk that business may not be sustainable. So, a proven REIT with higher price could be more valuable than a young REIT with lower price.

2 Giant Hospitality REITs may be considered, both as Strikers (crisis investing stocks) as they are supported by strong sponsors despite weak business during Covid-19: Ascott Trust (SGX: HMN) is supported by CapitaLand (SGX: C31), while CDL HTrust (SGX: J85) is supported by City Development (SGX: C09). An investor may need to wait for quarterly or semi-annual financial report to understand the real impact of Covid-19 during Q1-Q2/2020 on Hospitality REITs. There are other non-crisis REITs (or limited impact of Covid-19) which an investor may consider, there is no need to take risk on Striker stocks if it goes against the personality of investors who may aim for defensive investing with stable dividend income.

8) Business Trusts

There are 10 pure Business Trusts listed in Singapore which dividend payments are not protected by law:

Accordia Golf Trust (SGX: ADQU), Ascendas India Trust (SGX: CY6U), Asian Pay Tv Trust (SGX: S7OU), Dasin Retail Trust (SGX: CEDU), FSL Trust (SGX: D8DU), HPH Trust SGD (SGX: P7VU), HPH Trust USD (SGX: NS8U), Keppel Infrastructure Trust (SGX: A7RU), NetLink NBN Trust (SGX: CJLU), RHT Health Trust (SGX: RF1U).

There are a few weak Business Trusts with very high dividend yield which are potential value traps, eg. FSL Trust (29% dividend yield). Dividend yield is always computed based on past dividend record and a high number could be derived due to weak business with very bearish share price. Buy Low may not able to Sell High for a junk stock as share prices would become lower. So, high dividend yield has to combine with a giant dividend stock or giant REIT (either Mid-fielder or Defender strategy), following Dr Tee criteria.

2 Giant Business Trusts with strong sponsors may be considered: Ascendas India Trust (SGX: CY6U) as a Defender (property trust in India) is supported by CapitaLand (SGX: C31), while NetLink NBN Trust (SGX: CJLU) as a Mid-fielder is supported by Singtel (SGX: Z74). Ascendas-iTrust is still property related, therefore even it is a Business Trust, asset quality is high. However for NetLink Trust, it is based on owner and operator of Singapore Fiber Network (prices regulated by authority, a form of monopoly) which technology may evolve in future, eg, towards 5G. So, close review of future technology and monitoring of financial performance are required. Therefore, young technology Business Trust of NetLink Trust, is more suitable for role as a Mid-fielder.

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There are 140 Property Stocks in Singapore excluding 52 REITs and Business Trusts (investor has to focus only on giant stocks for investing):
3Cnergy (SGX: 502), A-Smart (SGX: BQC), AEI^ (SGX: AWG), AIMS Property (SGX: BVP), APAC Realty (SGX: CLN), Abterra (SGX: L5I), Acromec (SGX: 43F), Amara (SGX: A34), Amcorp Global (SGX: S9B), AnnAik (SGX: A52), Astaka (SGX: 42S), BBR (SGX: KJ5), BRC Asia (SGX: BEC), BlackGoldNatural (SGX: 41H), Boldtek (SGX: 5VI), Bonvests (SGX: B28), Boustead (SGX: F9D), Boustead Projects (SGX: AVM), Bukit Sembawang (SGX: B61), Bund Center (SGX: BTE), CSC (SGX: C06), CapitaLand (SGX: C31), Casa (SGX: C04), Chemical Industries (SGX: C05), China Great Land (SGX: D50), China International (SGX: BEH), China Real Estate (SGX: 5RA), China Yuanbang (SGX: BCD), Chip Eng Seng (SGX: C29), City Development (SGX: C09), DISA (SGX: 532), Debao Property (SGX: BTF), ETC Singapore (SGX: 1C0), Edition (SGX: 5HG), EnGro Corporation (SGX: S44), Fraser and Neave F&N (SGX: F99), Far East Orchard (SGX: O10), Figtree (SGX: 5F4), First Sponsor (SGX: ADN), Fragrance (SGX: F31), Frasers Property (SGX: TQ5), GYP Properties (SGX: AWS), Gallant Venture (SGX: 5IG), Golden Energy (SGX: AUE), Goodland (SGX: 5PC), GuocoLand (SGX: F17), HL Global Enterprises (SGX: AVX), Hatten Land (SGX: PH0), Heeton (SGX: 5DP), Hiap Hoe (SGX: 5JK), Hiap Seng (SGX: 510), Ho Bee Land (SGX: H13), Hock Lian Seng (SGX: J2T), Hong Fok (SGX: H30), Hong Lai Huat (SGX: CTO), Hong Leong Asia (SGX: H22), Hongkong Land USD (SGX: H78), Hor Kew (SGX: BBP), Huationg Global (SGX: 41B), Hwa Hong (SGX: H19), IPC Corp (SGX: AZA), ISOTeam (SGX: 5WF), Imperium Crown (SGX: 5HT), Jasper Investments (SGX: FQ7), KOP (SGX: 5I1), KSH (SGX: ER0), Keong Hong (SGX: 5TT), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), King Wan (SGX: 554), Koh Brothers (SGX: K75), Koon (SGX: 5DL), Kori (SGX: 5VC), LHN (SGX: 41O), Ley Choon (SGX: Q0X), Lian Beng (SGX: L03), Low Keng Huat (SGX: F1E), Lum Chang (SGX: L19), MMP Resources (SGX: F3V), MYP (SGX: F86), Metro (SGX: M01), OIO (SGX: KUX), OKH Global (SGX: S3N), OKP (SGX: 5CF), OneApex (SGX: 5SY), Oxley (SGX: 5UX), PSL (SGX: BLL), Pacific Century (SGX: P15), Pacific Star Development (SGX: 1C5), Pan Hong (SGX: P36), Pavillon (SGX: 596), Perennial Holdings (SGX: 40S), Pollux Properties (SGX: 5AE), PropNex (SGX: OYY), Raffles Infrastructure (SGX: LUY), Regal International (SGX: UV1), Renaissance United (SGX: I11), Rich Capital (SGX: 5G4), Roxy-Pacific (SGX: E8Z), Ryobi Kiso (SGX: BDN), SHS (SGX: 566), SLB Development (SGX: 1J0), SP Corporation (SGX: AWE), Sasseur Reit (SGX: CRPU), Second Chance (SGX: 528), Sin Heng Mach (SGX: BKA), Sinarmas Land (SGX: A26), SingHaiyi (SGX: 5H0), SingHoldings (SGX: 5IC), Singapore-eDev (SGX: 40V), Sinjia Land (SGX: 5HH), Soilbuild Construction Group (SGX: S7P), Starland (SGX: 5UA), Straits Trading (SGX: S20), Swee Hong (SGX: QF6), Sysma (SGX: 5UO), TA (SGX: PA3), TTJ (SGX: K1Q), Tai Sin Electric (SGX: 500), Thakral (SGX: AWI), Thomson Medical Group (SGX: A50), Tiong Seng (SGX: BFI), Top Global (SGX: BHO), Tosei (SGX: S2D), Transcorp (SGX: T19), Tritech (SGX: 5G9), UIC (SGX: U06), UOA (SGX: EH5), UOL (SGX: U14), USP Group (SGX: BRS), Vibrant Group (SGX: BIP), Wee Hur (SGX: E3B), Wing Tai (SGX: W05), Yanlord Land (SGX: Z25), Yeo Hiap Seng (SGX: Y03), Ying Li International (SGX: 5DM), Yoma Strategic (SGX: Z59), Yongmao (SGX: BKX), Yongnam (SGX: AXB), Yorkshine (SGX: MR8).

Not all Singapore REITs or Business Trusts are giant stocks, some could be junk stocks (eg. making losses or asking investors for reserved passive incomes through rights issues). Even for a giant stock, it requires at least yearly review with Dr Tee criteria to ensure it is still a giant stock or a change in strategy may be required (eg. crisis stock investing with Striker role if there is any potential high risk). Similarly, those stocks which are not highlighted in this article, some could be marginal giant stocks, may obtain the giant stock title one day, which worth longer term investing or trading.

Although there are 21 giant REITs and Business Trusts listed in this article (3 roles of Striker / Mid-fielder / Defender), not all stocks are suitable for everyone. A REIT investor has to further select the right type of giant stock to align with own personality to be successful in short trading, medium term investing or long term investing, knowing What to Buy, When to Buy / Sell.

Since some REITs have overseas business, knowledge of Forex (eg. USD/SGD, SGD/IDR, etc) would be critical. A qualified REIT investor should also understand property market cycle, macroeconomy behavior, integrating with dividend investing or growth investing or cyclic / momentum trading.

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)

Filed Under: Forex, Fundamental Analysis, Macroeconomy, Market Cycle Investing, Market Outlook, Stock Market, Technical Analysis, Trading, Value Investing Tagged: Business Trusts, dividend stock, passive income, reit, Singapore REITs

25 MSCI Singapore & 30 STI Stocks (仙人指路)

Posted on May 30, 2020 Written by Dr Tee (Ein55)

30 STI Index Component Stocks New MSCI Singapore

Both MSCI Singapore Index (SiMSCI, 25 stocks) and Straits Times Index (STI, 30 stocks) are important guidance for Singapore stock investors on “Good” stocks for investing. In this article, you will learn on how to invest in index stocks in a right way. MSCI Singapore Index has recently removed 4 blue chip stocks (which are also 30 STI component stocks) from the list:

1) ComfortDelGro (SGX: C52)

2) SATS (SGX: S58)

3) Sembcorp Industries (SGX: U96)

4) Singapore Press Holdings, SPH (SGX: T39)

and adding only 1 stock as replacement: Mapletree Logistics Trust, MLT (SGX: M44U), a giant Singapore REIT, which is also 30 STI component stock.

MSCI Singapore Index component stock selection criteria is stricter than STI index (only based on trading market capitalization, a weaker blue chip stock with high trading volume may still stay) although most of the component stocks of both indices are similar.

Comfortdelgro (taxi business) and SATS (airlines sector) are affected by recent Covid-19 crisis, having good chance to come back again to MSCI Singapore when sector crisis is over, business could recover to support reversal of share prices with higher trading volume.

Sembcorp Industries (utility sector) has weaker business, especially in Oil & Gas sector with subsidiary stock, Sembcorp Marine (SGX: S51) which has losing business due to bearish crude oil market. Similarly, SPH (newspaper/media & property businesses) has declining press business over the past decade, supported mainly by property business (including subsidiary SPH Reit, SGX: SK6U). For both Sembcorp Industries and SPH, they are harder to come back again to MSCI Singapore Index as it would take a long term for overall business to recover again.

These 4 blue chip stocks delisted from MSCI Singapore Index may not be delisted from 30 STI in near future as they still have high trading volume, despite bearish share prices. CapitaCom Trust – CCT (SGX: C61U) will be the next to be delisted from 30 STI when it is merged with CapitaMall Trust – CMT (SGX: C38U) around June 2020. If so, the 5 reserve stocks of STI in waiting list are:

1) Mapletree Industrial Trust (SGX: ME8U)

2) Suntec REIT (SGX: T82U)

3) Keppel REIT (SGX: K71U)

4) Keppel DC REIT (SGX: AJBU)

5) Netlink NBN Trust (SGX: CJLU)

These 5 emerging STI stocks (dividend-based stocks, all are REITs / Business Trust) are selected purely based on trading market capitalization (trading price x trading volume). Therefore, not all are giant REITs (based on Dr Tee giant criteria). Stock investors who follow either 30 STI or 25 MSCI Singapore Index component stocks may not invest in high quality stocks.

Below are the 30 STI component stocks based on the last price traded (29 May 2020), sorted by trading market cap (share price x volume) from low to high (selection criteria for 30 STI is the Top 30 stocks with the highest values).

Despite DairyFarm and ThaiBev have stronger business fundamental than most 30 STI stocks, they have the lowest trading market cap, therefore having higher risk of being delisted in future. The earlier 4 blue chip stocks which are delisted from MSCI Singapore Index are relatively “safe” in 30 STI due to high trading volume, despite weaker business with bearish share prices. From stock investing perspective, it does not make sense at all but this is the rule of the game.

No	Name	Ticker	Last $	Volume	Trading Market Cap
1	Dairy Farm International	(SGX: D01)	4.22	1,963	8,282
2	Thai Beverage	(SGX: Y92)	0.63	18,774	11,827
3	Hongkong Land	(SGX: H78)	3.76	5,770	21,694
4	Jardine Strategic Holdings JSH	(SGX: J37)	19.95	1,089	21,730
5	UOL	(SGX: U14)	6.84	4,218	28,850
6	Venture Corporation	(SGX: V03)	15.3	1,968	30,105
7	Genting Singapore	(SGX: G13)	0.785	41,441	32,531
8	City Development	(SGX: C09)	7.69	4,424	34,018
9	Jardine Cycle & Carriage	(SGX: C07)	21.86	1,575	34,427
10	YZJ Shipbldg SGD	(SGX: BS6)	0.94	39,560	37,187
11	ST Engineering	(SGX: S63)	3.19	12,029	38,373
12	Wilmar International	(SGX: F34)	3.98	12,231	48,681
13	CapitaLand Commercial Trust	(SGX: C61U)	1.75	28,113	49,197
14	CapitaLand	(SGX: C31)	2.89	17,751	51,301
15	Keppel Corp	(SGX: BN4)	5.91	10,231	60,466
16	Singapore Airlines	(SGX: C6L)	3.82	16,551	63,225
17	Jardine Matheson Holdings JMH	(SGX: J36)	40.15	1,586	63,697
18	Mapletree Commercial Trust	(SGX: N2IU)	2	43,283	86,567
19	CapitaLand Mall Trust	(SGX: C38U)	2.03	55,627	112,924
20	OCBC Bank	(SGX: O39)	8.55	13,772	117,751
21	Ascendas Reit	(SGX: A17U)	3.13	38,228	119,653
22	Singapore Exchange	(SGX: S68)	8.28	15,306	126,734
23	DBS Bank	(SGX: D05)	19.47	7,941	154,613
24	Sembcorp Industries	(SGX: U96)	1.36	115,462	157,028
25	Singtel	(SGX: Z74)	2.49	71,375	177,724
26	SPH	(SGX: T39)	1.28	205,814	263,442
27	UOB Bank	(SGX: U11)	19.5	13,724	267,622
28	SATS	(SGX: S58)	2.66	102,907	273,732
29	ComfortDelGro	(SGX: C52)	1.44	255,744	368,272
30	Mapletree Logistics Trust	(SGX: M44U)	2.05	314,294	644,303

Since trading market capitalization is insufficient, a stock investor should include minimum 3 key Fundamental Criteria for 3 types of stocks: Growth / Dividend / Undervalue:
1) ROE (a criteria for growth stocks, eg. ROE > 5%),
2) Dividend Yield, DY (a criteria for dividend stocks, eg. DY > 5%),
3) Price-to-Book (PB) ratio, Price/NAV (a criteria for undervalue stocks, eg. PB < 1).

In each of the category, additional stock criteria has to be included to ensure they are giant stocks (based on Dr Tee criteria). For example, SPH has 8.6% dividend yield, it does not mean it is a good dividend stock as this high yield is generated with declining dividend and low share prices, driven by weaker business fundamental which is a value trap.

No) Stock (Ticker): ROE (Div Yield %) PB = Price/NAV
1) Ascendas Reit (SGX: A17U) 7.4% (4.4%) 1.5
2) CapitaLand Commercial Trust (SGX: C61U) 6.0% (5.1%) 1.0
3) CapitaLand (SGX: C31) 8.8% (4.1%) 0.6
4) CapitaLand Mall Trust (SGX: C38U) 9.0% (5.9%) 1.0
5) City Development (SGX: C09) 5.2% (1.0%) 0.7
6) ComfortDelGro (SGX: C52) 10.2% (6.8%) 1.2
7) Dairy Farm International (SGX: D01) 26.8% (5.0%) 4.7
8) DBS Bank (SGX: D05) 12.3% (6.4%) 1.0
9) Genting Singapore (SGX: G13) 8.5% (5.1%) 1.2
10) Hongkong Land (SGX: H78) 0.5% (5.9%) 0.2
11) Jardine Cycle & Carriage (SGX: C07) 12.8% (5.4%) 0.9
12) Jardine Matheson Holdings JMH (SGX: J36) 9.4% (4.3%) 1.0
13) Jardine Strategic Holdings JSH (SGX: J37) 6.1% (1.8%) 0.6
14) Keppel Corp (SGX: BN4) 6.3% (3.4%) 1.0
15) Mapletree Commercial Trust (SGX: N2IU) 9.4% (4.0%) 1.1
16) Mapletree Logistics Trust (SGX: M44U) 8.2% (4.0%) 1.6
17) OCBC Bank (SGX: O39) 10.3% (6.2%) 0.8
18) SATS (SGX: S58) 15.1% (7.1%) 1.8
19) Sembcorp Industries (SGX: U96) 3.1% (3.7%) 0.4
20) Singapore Exchange (SGX: S68) 35.9% (3.6%) 8.2
21) Singapore Airlines (SGX: C6L) -1.4% (0.8%) 0.8
22) Singtel (SGX: Z74) 4.0% (4.9%) 1.5
23) SPH (SGX: T39) 5.8% (8.6%) 0.6
24) ST Engineering (SGX: S63) 26.0% (4.7%) 4.5
25) Thai Beverage (SGX: Y92) 20.1% (3.4%) 2.7
26) UOB Bank (SGX: U11) 11.0% (5.6%) 0.9
27) UOL (SGX: U14) 4.8% (2.6%) 0.6
28) Venture Corporation (SGX: V03) 14.5% (4.6%) 1.8
29) Wilmar International (SGX: F34) 7.7% (3.1%) 1.1
30) Yangzijiang (SGX: BS6) 10.0% (4.8%) 0.6

For a stock to be listed in 30 STI or even 25 MSCI Singapore Index (to be reviewed quarterly), it implies more support from global investors, especially for institutional investors who view index as key guidance (仙人指路). However, the stock selection criteria based on trading market cap is insufficient, therefore a smart investor should select 10-20 global giant stocks over 3 sectors and 3 countries (eg. Singapore, US, Hong Kong or any country with growing economy), forming own fund (no management fee is needed).

Choice of global stock market is important on type of giant stocks (Defenders / Mid-fielders / Strikers), as well as personality of investor (eg. long term investing or short term trading). Defender stocks aim for dividend collection, Striker stocks are more for quicker return (eg. trading momentum stocks) while Mid-fielder stocks is a well-balance between capital gains and moderate dividends.

1) Singapore stock market is more suitable for dividend stocks (eg. Singapore REITs) but growth is limited with defensive strategy alone. Global stock crisis is a good opportunity to pick up some strong giant dividend stocks with high dividend yield. High dividend yield

2) US stock market is more suitable for growth stocks (investing) or momentum stocks (trading) but minimal dividend to protect investors during correction. An investor may focus on stocks with strong business fundamental as a form of protection. A trader may need to monitor the price trends, following S.E.T. (Stop Loss / Entry / Target Prices) trading plan.

3) Hong Kong stock market has a good mix of dividend and growth stocks but become center of political power fighting between US and China, therefore prices are more volatile which may be suitable for those higher risk tolerance investors and traders.

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“Sell in May and Go Away” happen again for Singapore (STI Index) and Hong Kong (HSI) Index stock markets for Year 2020. A reason for month of May (Q2) to be bearish could be due to final dividend given in Q2, some investors start to sell after the harvest or the share prices drop after significant dividends are given out, especially when there are news of uncertain financial markets.

Singapore and Hong Kong have many good dividend giant stocks. Price correction after Ex-Dividend is common, especially when combine with this psychological barrier in May. Dividend is just a bonus, more important is Capital Gains for a giant dividend stock.

For US and other global stock markets (eg. Malaysia, Germany, Japan, Taiwan, etc.), mostly have positive gains in May 2020. In fact, US S&P 500 Index is recovering above critical resistance of 3000 points again, an important milestone to support short term trading, especially with Buy High Sell Higher trading strategy. US Nasdaq Index is above 9000 points, challenging the new historical of 10000 points, supported by bullish technology sector of stocks.

Therefore, a stock investor or trader needs to equip with more skills to profit in current global stock market. Start learning 5 essential LOFTP Strategies (Level / Optimism / Fundamental / Technical / Personal Analysis).

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

Filed Under: Fundamental Analysis, Market Outlook, Stock Market, Technical Analysis, Value Investing Tagged: dividend stock, growth stock, market outlook, MSCI, reit, STI Index Stock, undervalue stock

4 Mapletree / Temasek Giant REITs (一叶知秋)

Posted on May 10, 2020 Written by Dr Tee (Ein55)

Mapletree Trust, MCT, MIT, MLT, MNACT, Temasek, REIT

Mapletree Investment is 100% owned by Temasek, a company with strength in private property funds and managing 4 Singapore giant REITs:

1) Mapletree Logistics Trust, MLT (SGX: M44U) – Giant Logistic REIT

2) Mapletree Industrial Trust, MIT (SGX: ME8U) – Giant Industrial REIT

3) Mapletree Commercial Trust, MCT (SGX: N2IU) – Giant Commercial REIT

4) Mapletree North Asia Commercial Trust, MNACT (SGX: RW0U) – Giant Commercial REIT

Learn further on how to position in these 4 Singapore REITs after cross comparison. MLT and MCT are 30 STI component stocks while MIT is the next to consider in reserve list for STI.

1) History & Sponsor

Among the 4 Mapletree REITs, MLT is the longest history in stock market (listed in year 2005), following by IPOs of MIT (Year 2010), MCT (Year 2011) and MNACT (Year 2013). Despites all the 4 REITs are giant stocks (according to Dr Tee criteria) but 3 of them are relatively young giant stocks, only MLT has experienced the last Global Financial Crisis in Year 2008-2009 with share prices dropped by over 70%. Mapletree has 6 other private property funds which may be listed as well in future, following similar REIT model.

In the recent global stock crisis in Mar 2020, all these 4 REITs are corrected by about 40% (MNACT is even cut by half for share price due to additional fear when Coronavirus was first started in China in Jan 2020). Nevertheless, the scale of recent stock price correction is still not comparable with 2008-2009 subprime crisis. During a global financial crisis, it is important to have a strong sponsor, which 4 REITs have: Mapletree Investment which is 100% owned and supported by Temasek.

In short, the main risk of 4 REITs is with cyclical stock prices due to economic cycle (i.e. potential capital loss, especially during global financial crisis), not so much on business risks. When Coronavirus crisis is over or fading away, tenants would resume the business, continue to pay for the committed rentals.

2) Type of REITs

All the 4 REITs have different focuses of industries and countries, eg. MLT is on logistic REIT (Singapore / global), MIT is on industrial REIT (Singapore / global), MCT is on commercial / retail REIT (Singapore) and MNACT is on commercial REIT in North Asia (Hong Kong, China, Japan).

Geographically, each country has different economic performance but most of the REITs portfolios are in Singapore and Asia which have been growing over the past decades. REITs focus on rental collection, therefore tenant stability (ability to pay rental with agreements) are related to economic cycles of each country. REITs usually are diversified over a portfolio of clients, tenants from different industries, therefore risk is relatively lower.

The current Coronavirus crisis has limited impact, even during lockdown period, property owner (REITs) can still collect most of the rental (partially supported by local government) but distribution of dividend may not be on time for Q1/Q2 2020 as REITs may reserve some cash for planning during the uncertain Year of 2020. For longer term investor who could hold more than 1 year, this should not be an issue as dividend kept (if any) would be distributed back to shareholders at later time.

3) Business

Fundamentally, all these 4 REITs are strong, disruption of Coronavirus crisis has limited impact. The dividend yields are currently around 4+% for MLT, MIT and MCT, below the minimum expectation of 5% for dividend investing (which is achievable if an investor could take action in Mar or Apr 2020 when share prices were under 30-40% correction, this window of opportunity is closed when over half of the correction is recovered with V-shape recovery in share prices). MNACT still has 8+% dividend yield, mainly due to heavy correction in share prices (50%), recovering slower (less than 30% of total correction) than the other 3 REITs.

Mapletree REITs are more suitable for positioning as midfielders, both capital gains (mainly for trading when stock market trend is more bullish in short term to medium term) and moderate dividend yield as bonus (about 3-4% is fine). For long term investing, entry of Mapletree REITs or any giant dividend stock has to be aligned with STI or world stock market at low optimism, usually during a Global Financial Crisis.

Since Mapletree Investment strength is in property development and management, a good REIT manager would help to improve dividend yield with new property into REIT portfolio. These 4 REITs have gearing ratio less than 40%, still having potential to grow bigger, especially for MCT (only 33% gearing ratio, far below 45% maximum gearing ratio allowed by current law). MCT is more concentrated in Singapore, benefiting from government plan on “Greater Southern Waterfront”, Vivo City contributing to about 1/3 of revenue. Concentration could be viewed as a risk or an opportunity, depending on whether the focused properties are higher or lower quality.

Interestingly, 3 out of 4 REITs CEOs are female for MLT, MCT and MNACT. REITs are relatively stable businesses, delivery of committed goals are key for any CEO, whether male or female management. The best judgement of a new management performance is through positive financial report of at least 3 years.

4) Timing & Return

The best time to buy a giant REIT is usually during crisis. The only question is how low is low to buy a stock. Therefore, dividend yield >5% is a reasonable criteria for dividend stock investor. A giant REIT or dividend stock investor may also consider entry in batches (if afraid of buy low get lower in share price), entering for every 10% or X% lower in share prices.

In fact, an investor of REIT is similar to a REIT manager who consistently looks for better properties at lower prices to maximize the passive income with higher yield. It is much easier for a stock investor, just need to click a button to buy a stock to invest. However, since it is so easy, some investors may not consider properly: What to Buy, When to Buy/Sell.

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There are at least 26 Temasek / GLC stocks in Singapore including these 4 Mapletree stocks, controlling shareholder with 15% or more ownership directly or indirectly (investor has to focus only on giant Temasek stocks):
Singtel (SGX: Z74), DBS Bank (SGX: D05), ST Engineering (SGX: S63), Singapore Airlines (SGX: C6L), SIA Engineering (SGX: S59), Singapore Exchange (SGX: S68), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Sembcorp Marine (SGX: S51), Olam (SGX: O32), CapitaLand (SGX: C31), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Ascendas Reit (SGX: A17U), Ascott Hospitality Trust (SGX: HMN), Ascendas Hospitality Trust (SGX: Q1P), CapitaLand Retail China Trust (SGX: AU8U), Ascendas-iTrust (SGX: CY6U), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), Keppel DC Reit (SGX: AJBU), Keppel Infrastructure Trust (SGX: A7RU), Mapletree Logistics Trust (SGX: M44U), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree NAC Trust (SGX: RW0U).

Temasek stocks portfolio also affect about 15% of STI index stocks, which has strong impact on Singapore stock market. Here are 30 STI component stocks:
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), HongkongLand (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

Dr Tee likes leaves of maple trees, still remember the first leaf collected about 3 decades ago in fall season when studying in US. When the maple tree leaves turn into red color, it is a spectacular view, making fall or autumn as the most beautiful season (northeast of US near Canada and also Japan have nice views of maple trees during the fall). Change in leaves colors (一叶知秋) is similar to stock investment, showing the investment clock with 4 seasons, an important skill to master on how to take 4 actions: Buy, Hold, Sell, Wait. When an investor knows What Giant Stocks to buy, the remaining questions are simply When to Buy/Sell and How Much to Buy/Sell (position sizing, entry/exit in batches).

There are other giant REITs in Singapore and globally which an investor may consider beyond these 4 Mapletree REITs. Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

Filed Under: Fundamental Analysis, Market Cycle Investing, Stock Market, Value Investing Tagged: dividend stock, Mapletree Trust, MCT, MIT, MLT, MNACT, reit, temasek

9 Stocks of Frasers Property & Thai Beverage (醉翁之意不在酒)

Posted on May 5, 2020 Written by Dr Tee (Ein55)

FCT Frasers Centrepoint Trust Thai Beverage Frasers Property Stock Market

Behind each giant stock, there is usually a giant businessman. In this article, you will learn the business empire of the third richest person in Thailand, Charoen Sirivadhanabhakdi with not 1 but 9 F&B and property stocks (6 Singapore stocks & 3 Thailand stocks):

1) Thai Beverage (SGX: Y92) – Singapore Giant F&B Stock

2) F&N (SGX: F99) – Singapore F&B Stock

3) Frasers Property (SGX: TQ5) – Singapore Property Stock

4) Frasers Centrepoint Trust, FCT (SGX: J69U) – Singapore Giant Retail REIT

5) Frasers Logistics & Commercial Trust (SGX: BUOU) – Singapore Commercial REIT

6) Frasers Hospitality Trust (SGX: ACV) – Singapore Hospitality REIT

7) Frasers Property Thailand (SET: FPT) – Thailand Property Stock

8) Frasers Property Thailand Industrial REIT (SET: FTREIT) – Thailand Industrial REIT

9) Golden Ventures REIT (SET: GVREIT) – Thailand Commercial / Hospitality REIT

These 9 stocks are in common as they all owned by Charoen Sirivadhanabhakdi (苏旭明), a Chinese Thai whose Thai surname is granted by King of Thailand, showing strong reputation in Thailand. He started business originally in F&B sector (the largest alcoholic drinks producer in Thailand, eg. whiskey, beer, etc), then diversifying into property (the largest landlord in Thailand, owning with the most areas of land), becoming 2 main business pillars of his business.

Charoen took a major action in Year 2012 to acquire F&N, which is later reorganized into “new” F&N (mainly non-alcoholic drinks business in Singapore, familiar brands such as 100plus, Fruit Tree, Seasons, NutriSoy, etc) and Frasers Property (property segment). The new F&N after the reorganization, is no longer a giant stock, just a normal F&B company (non-alcoholic drinks usually have lower profit margin with more competition).

Frasers Property is the parent stock of property segment, including other 6 subsidiary property stocks / REITs, 3 in Singapore and 3 in Thailand. All 7 Frasers group of property stocks have reasonably good business due to stable property business but there is only 1 giant stock, Frasers Centrepoint Trust (FCT).

In this article, out of 9 stocks of Charoen, we will focus only in his 2 giant stocks, ThaiBev and FCT.

1) Thai Beverage (SGX: Y92) – Singapore Giant F&B Stock

Charoen expanded his empire further over the past decades with aggressive Merging & Acquisitions, into F&B of regional countries (Vietnam, Myanmar, Singapore, etc).

Initially, he planned to list ThaiBev in Thailand Stock Exchange (SET) but encountering opposing voices (alcoholic drinks) as Thailand is a Buddhism country. Eventually, ThaiBev is listed in Singapore Stock Exchange, so Singapore investors has a local giant F&B stock to consider, leveraging on growing alcoholic drinks business in Thailand and regional countries. ThaiBev is 1 of the 30 STI component stocks, proving its strength in stock and business.

ThaiBev is a growth stock, strong in business fundamental with growing business and solid cash flow. However, debt level is high, especially in acquisition of Sabeco beer business in Vietnam. The share prices over the past decade has gone up 5 times, facing 2 times of major price corrections of nearly 50% during high debt period and again over the past few months of global stock crisis. Currently, the stock price has gradually recovered together with global stock markets. Unlike other sectors of business which may be affected by black swan such as Coronavirus pandemic, ThaiBev is defensive in F&B business (during the last Global Financial Crisis of 2008-2009, business was stable). Perhaps during crisis, people may consume more alcoholic drinks to forget the pains? Besides 5 times capital gains in stocks, ThaiBev gives consistent dividend with about 3% yield currently. It is a good midfielder stock for both capital gains and passive income.

There are 30 STI index component stocks including Thai Beverage (investor has to focus only on giant stocks for investing): DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

2) Frasers Centrepoint Trust, FCT (SGX: J69U) – Singapore Giant Retail REIT

Besides Capitamall Trust, CMT (SGX: C38U), Frasers Centrepoint Trust is another giant retail REIT, both control most of the shopping malls in Singapore. FCT has 7 shopping malls (Causeway Point, Waterway Point, Northpoint City, Bedok Point, Changi City Point, Anchorpoint, YewTee Point) but about half of rental revenue is from Causeway Point, having portfolio concentration risk but tenants distribution are diversified with over 99% occupancy rate for Causeway Point.

Besides consistent growing dividend payout record (average 5% dividend yield, it was over 7% dividend yield when share prices dropped nearly to half over the past few months of global stock crisis), FCT has attracted long term investors to support the share prices by about 5 times with growing business. FCT is a cyclic REIT, following economic cycles in stock performance, therefore more suitable to Buy Low Sell High with mega economic cycle, buying low during low optimism in global financial crisis, holding for 5 to 10+ years until high optimism, selling for capital gains.

Despite Coronavirus would affect the income distribute for the next 1-2 quarters due to possible cash reserve and also delay in rental payment by tenants, it won’t affect longer term investor with a few years of holding power, collecting over 5% dividend yield (even if DPU may be cut by 50%, still more than bank interest rate of 1%) during crisis, enjoying capital gains when crisis is over one day.

There are 52 REITs and Business Trusts Stocks in Singapore including Frasers Centerpoint Trust (investor has to focus only on giant stocks for investing):
AIMS APAC Reit (SGX: O5RU), ARA Hospitality Trust USD (SGX: XZL), ARA LOGOS Logistics Trust (SGX: K2LU), Ascendas Reit (SGX: A17U), Ascendas India Trust (SGX: CY6U), Ascott Trust (SGX: HMN), Asian Pay Tv Trust (SGX: S7OU), BHG Retail Reit (SGX: BMGU), CapitaLand Commercial Trust (SGX: C61U), CapitaLand Mall Trust (SGX: C38U), CapitaLand Retail China Tr (SGX: AU8U), CDL Hospitality Trust (SGX: J85), Cromwell Reit EUR (SGX: CNNU), Cromwell Reit SGD (SGX: CSFU), Dasin Retail Trust (SGX: CEDU), Eagle Hospitality Trust USD (SGX: LIW), EC World Reit (SGX: BWCU), Elite Commercial Reit (SGX: MXNU), ESR-REIT (SGX: J91U), Far East Hospitality Trust (SGX: Q5T), First Reit (SGX: AW9U), Frasers Centrepoint Trust (SGX: J69U), Frasers Hospitality Trust (SGX: ACV), Frasers Logistics & Commercial Trust (SGX: BUOU), FSL Trust (SGX: D8DU), HPH Trust SGD (SGX: P7VU), HPH Trust USD (SGX: NS8U), IREIT Global (SGX: UD1U), Keppel Infrastructure Trust (SGX: A7RU), Keppel Pacific Oak US REIT (SGX: CMOU), Keppel DC Reit (SGX: AJBU), Keppel Reit (SGX: K71U), Lendlease Reit (SGX: JYEU), Lippo Malls Trust (SGX: D5IU), Manulife Reit (SGX: BTOU), Mapletree Commmercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), Mapletree North Asia Commercial Trust (SGX: RW0U), NetLink NBN Trust (SGX: CJLU), OUE Commercial Reit (SGX: TS0U), ParkwayLife Reit (SGX: C2PU), Prime US Reit (SGX: OXMU), RHT HealthTrust (SGX: RF1U), Sabana Reit (SGX: M1GU), Sasseur Reit (SGX: CRPU), Soilbuild Business Space Reit (SGX: SV3U), SPH Reit (SGX: SK6U), Starhill Global Reit (SGX: P40U), Suntec Reit (SGX: T82U), United Hampshire US Reit (SGX: ODBU).

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宋·欧阳修《醉翁亭记》：“醉翁之意不在酒，在乎山水之间也”。

A stock investor may not need to be an alcoholic to invest in F&B giant stock such as ThaiBev. Similarly, Charoen is smart to hide his fortune in property (a way of diversification), one could outsmart him by investing in his best giant REIT, FCT. The higher level of investing is to leverage on Top 10 richest persons in each country or even in the world as your defender, investing in their best giant stocks at lousy prices during low optimism period, eg Global Financial Crisis when others are fearful.

There are 30 STI index component stocks including Thai Beverage (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

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Filed Under: Market Outlook, Stock Market Tagged: Charoen Sirivadhanabhakdi, coronavirus, F&N, Frasers Centrepoint Trust, Frasers Hospitality Trust, Frasers Logistics & Commercial Trust, Frasers Property, global financial crisis, global stock crisis, growth stock, Property Stocks, reit, Thai Beverage, Thailand Stock

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