Analysis – Brokers’ Take – 1 Jul 2017


The online version of this news section is shorter slightly shorter than the print version. With the revamped new freesheet – thenewpaper (tnp), this section has an archive of 136 issues (latest: 7 Jul 2017). This was also compiled by Cai Haoxiang, who I believe works for The Business Times (email: The first issue on tnp¬†was “Compiled by Kenneth Lim, The Business Times” – dated 6 Dec 2016.

Their disclaimer [I have put some words in bold type.] – All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

Focus/Breakdown (with comments in brackets and in bold/italicised):

Keppel REIT (Buy recommendation) – office space REIT

It ended trading at $1.145 per unit (interesting… 3 decimal digits). The forecasted price was $1.23 (Target Price).

  • The REIT is taking a 50% stake (seller recorded as Australian Post) ‘in a premium office tower’ to be built in Australia at 311 Spencer Street, Melbourne.
  • Favourable view towards medium term (how long is this duration?) a distribution per unit (DPU) uptick owing to 30 year lease and (I infer contractually) inherent rental escalations (But what of the Australian taxes?)
  • Predicted immediate/short term DPU ‘dilution’ (decline in unit prices?) and gearing (leveraging) forecasted to rise to 40% which would result in investor ‘pushback’ (what does this mean?)
  • This is surmounted by “…capital values in Singapore should remain steady on the back of recent market transactions and strong interest from investors looking to buy office buildings in Singapore.” (What does ‘capital values’ mean?)
  • Target Price is dependent on Keppel REIT’s Q2 2017 figures
  • The REIT has a 0.8 price to book ratio which to the “brokers” was “attractive”

History – Why bother?

History was the theme for the comprehension passages in the 2008 Cambridge GCE ‘A’ Level Examinations (Singapore).

It was more than a little disheartening to observe the arguments of Lee Min Yen (Passage 2). I once argued that World War Two was not my fight. The Japan that once invaded Singapore and much of Southeast Asia is not the Japan I know today (nor for that matter what most of my peers know). In that respect I agree with Lee and how we frequent Japan as a favoured tourist destination. This speaks volumes. Japan’s influence in post 1965 Singapore extends much more than mere tourism though. Yet in itself, Lee self-contradicts. Since it is ‘dangerous’ when ‘distorted and partial history’ is used to flame ‘nationalist or religious hatreds’, is not history relevant?

Therein lies the crux. One needs to ‘know’ history to discern the facts, and the stories.

And that (human) history keeps repeating itself is revealing. The greed; the malice; the extremism; and perhaps even apathy; and dare I say goodness… These attest to the features of mankind. Correspondingly, democratic structures should become the mainstay of human society. Why? Human nature is immensely corruptible. As it is said ‘power corrupts and absolute power corrupts absolutely’. Democratic structures offer the ‘checks and balances’, institutionally, to prevent the rot.

And there too comes forth another maxim. If you invest in the stock market, expect ups (sky heights too) and also deep (deeeeep) downs. For it is a crucible of greed and emotional volatility. All directions toward human rationality are greatly suspect. From the audiobook entitled ‘Win Your Case: How to Present, Persuade, and Prevail-Every Place, Every Time’ (2006); Gerry Spence, a lawyer who had not lost a case since 1969 argued that emotion was the driver of so called logical decisions. He is hardly the only one of this opinion. I have made the point before – flip open the news today and check out how many crimes of passions took place over the past week.

To end though, I wonder whether history should be valorised. As you saw in my first post, it was mere curiosity that sparked my relationship with history (no, I no longer call it love). Now I just want to read some history because I want to…