Invest in Asia? It’s a good bet

Sunday Times Singapore, Novemember 29, 2009, Sunday

If you have the risk appetite and are prepared to take a view of five to 10 years, your own backyard is an attractive option

By Vasu Menon

Overseas markets and exotic investments may sound much more exciting than the tried and true financial environment of home that you are familiar with.

But plonking your money in your own backyard may not be a dull option at all.

 In fact, the Asian region – excluding Japan, which is regarded as a developed market like the United States – should be one of the first areas where Asians in search of investment opportunities should look.

Emerging Asia is enjoying much better growth prospects than the West and Japan.

This is something that international portfolio managers have started cottoning on to, and they have begun allocating more funds to the region.

 Seven years ago, the Asia ex-Japan region accounted for barely 3 per cent of the widely followed MSCI World Index – or to give it its full name, the Morgan Stanley Capital International index, which is a global stock market index – but today, that share has nearly tripled. But even this proportion is small, given Asia’s superior growth potential compared to other regions and its significant share of the world economy.

Today’s Asia is not what it was two decades ago. Thanks in part to the 1997/98 Asian financial crisis, the region has gone through drastic changes – and for the better.

Many governments and corporations were brought to their knees , leading to significant restructuring and belt-tightening. This has bolstered reserves and strengthened Asia’s financial position, allowing it to weather the current global financial crisis better than the West.

 Corporate governance in Asia has also improved markedly. Companies recognise the importance of greater balance-sheet transparency and safeguarding shareholders’ interests, and have done a lot to promote investor relations.

Ironically, the current financial crisis has been another blessing in disguise for Asia, as it has highlighted the region’s strengths to international investors, resulting in a significant flow of money into Asian bourses this year.

 The net inflow in Asia ex-Japan funds so far this year already stands at more than US$15 billion (S$20.8 billion), and may even exceed the US$16.8 billion that poured in during the 2007 bull run.

 This flood of funds into Asia has helped markets in the region outperform their developed peers by a wide margin this year. In the year-to-date, they have soared by 40 per cent to 90 per cent, compared to only about 10 per cent to 20 per cent for developed markets.

 Asia’s policy response to the present crisis has also been impressive, and this has helped the region recover faster from the global downturn than developed economies.

 The International Monetary Fund (IMF) expects developing Asia to grow by 6.2 per cent this year, compared to a 1.1 per cent decline for the world economy. Next year, growth in developing Asia is expected to gain pace to hit an impressive 7.3 per cent, double the IMF’s 3.1 per cent growth projection for the world economy. And Asia’s economic prosperity looks set to continue for several years.

The gross domestic product of China is expected to equal that of the United States by 2030, said Minister Mentor Lee Kuan Yew, who spoke at a National University of Singapore forum last month.

And US Federal Reserve chairman Ben Bernanke told a conference in California recently that ‘Asia appears to be leading the global recovery. Recent data from the region suggests that a strong rebound is, in fact, under way’.

Asia is clearly not facing the same hang-ups as the West and this crisis has boosted its worldwide profile and appeal among global fund managers.

Asia ex-Japan may make up only a small proportion of global fund managers’ portofolios, but its weighting in the world economy is significant – close to 25 per cent.

Its share in global funds will increase significantly over the next decade or more as more global fund managers shift money from the West to the East. This will underpin regional markets and help Asia to outperform its Western peers in the medium to long term.

In terms of valuations, many Asian markets may seem fairly valued at the moment, based on current year earnings. However, if investors take a three- to five-year timeframe, bourses in the region are still attractively priced for the medium-term investor relative to growth prospects.

However, this does not mean that Asian markets come with no risk. On the contrary, Asian equities are more suitable for those with a strong risk appetite.

Markets in the region are prone to speculative inflows and outflows as they still do not have the same depth as developed markets. Consequently, big movements of capital in and out of bourses can cause Asian markets to whipsaw.

But if you are able to withstand such volatility, Asia is an attractive proposition. There is a lot going for the region – the banking sector is in a better shape than that in the West, its consumers are under-leveraged and have excessive savings, companies are lowly geared and resilient to a downturn, and governments have the means to launch further stimulus packages, if need be.

So, if you have the risk appetite and are prepared to take a view of five to 10 years, there is no need to look further afield.

Asia will no longer play second fiddle to developed markets. It is emerging rapidly from the shadows of the West and will take the lead in the coming century. The sooner investors realise this, the better.

The writer is the vice-president and head of content and research at OCBC Bank’s wealth management Singapore unit. He can be contacted at VasuMenon@ocbc.com

Favourable

Asia is clearly not facing the same hang-ups as the West and this crisis has boosted its worldwide profile and appeal among global fund managers.

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Skybridges not deemed part of condo’s gross floor area

Sunday Times Singapore, Novemember 29, 2009, Sunday

We refer to last Sunday’s article, ‘More condos let you walk on air’, which reported that fully covered skybridges are considered part of a condominium’s gross floor area, which is pre-determined by the Urban Redevelopment Authority (URA).

The report elaborated that this means the floor area occupied by a skybridge could have been used for another apartment unit, giving developers additional income.

The article made reference to Lincoln Suites, that the space taken up by the skybridge could have been used for a $700,000 studio apartment.

Skybridges are not considered part of a condominium’s gross floor area (GFA).

A covered skybridge that connects communal areas between two or more blocks, and serves as a communal passageway to facilitate the residents’ movement at the upper levels is exempted from the GFA calculation of the development.

In the case of Lincoln Suites, the design of the skybridge includes both a passageway as well as an indoor gym.

As the gym functions more like a clubhouse facility and does not serve as a passageway to facilitate the movement of residents between the two blocks, it does not qualify for GFA exemption.

The remaining area of the skybridge is exempted from GFA just like other covered skybridges.

Han Yong Hoe
Group Director (Development Control)
Urban Redevelopment Authority

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S’porean in Malaysian car crash sues for $9.2m

Sunday Times Singapore, Novemember 29, 2009, Sunday

By K. C. Vijayan, Law Correspondent

THE Singapore couple left their Marsiling home at 4am and headed for Cameron Highlands during a heavy downpour.

But a horrific car accident some three hours later along the North-South Highway in Malaysia has left the woman wheelchair-bound since April 2005.

Madam Christina Lau, 36, sued her husband and the car insurers in Malaysia for a total of $9.2 million.

The civil suit, originally set for three days in a Seremban Sessions court last week but adjourned to early next year, is believed to be one of the largest claims for a personal injury suit in Malaysia.

Insurers for the car driven by Madam Lau’s husband, Mr Foo Chee Kean, 36, are disputing the claims and argue that a second Malaysian car involved in the collision was to blame.

In the mishap, which occurred at about 6.45am near Seremban, Mr Foo is said to have lost control of the car, which spun around and hit a metal road railing.

He had apparently driven over a pothole covered by a puddle of water in the heavy rain, which caused the car to skid.

Another car rammed into the rear of the car and his wife, who was in the back seat, sustained injuries to her neck, leg and hand.

Madam Lau also suffered a spine fracture and was treated at Seremban Hospital before being transferred to the Singapore General Hospital for further care a week later. She remained hospitalised for about two months.

She lost the use of her lower limbs and fingers, became wheelchair-bound and now needs the help of a maid for her daily living activities.

Madam Lau, then a civil servant, is seeking some $500,000 in loss of earnings and has factored in another $2.1 million to hire a maid to tend to her for the next 43 years, according to new submissions filed last year by her Johor Baru-based lawyer M. Kumar.

Other items include past and future medical costs which add up to more than $4 million, based on specialist reports to support her case.

The initial suit filed earlier by another lawyer had sought some $1.5 million but left several items like cost of future medical expenses to be assessed by the court.

But Singapore-based lawyer Liew Teck Huat from Global Law Alliance, who practises on both sides of the Causeway and represents Mr Foo’s insurers, is disputing the suit and denies that the injuries were caused by his client’s negligence.

He claims in defence statements that Madam Lau was not injured when the car came to a stop after it had spun out of control. Instead it was the second car and its driver who was negligent, Mr Liew said. It was this second accident that caused the severe injuries to Madam Lau, and not the first.

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Stellar 3rd quarter for CPF-approved funds

Sunday Times Singapore, Novemember 29, 2009, Sunday

Buoyant stock market helps push CPFIS funds’ growth to 12.1% and unit trusts to 12.8%

By Jonathan Kwok

THE stock market rally has helped funds in the Central Provident Fund Investment Scheme (CPFIS) recoup all their losses over the past year and even add some gains.

The third quarter was a stellar one with funds recording an average growth of 12.1 per cent while CPF-approved unit trusts rose 12.8 per cent, compared with the second quarter.

In the same three months to Sept 30, investment-linked insurance products in the CPFIS gained 11.4 per cent, according to data released last week from fund intelligence firm Lipper, the Investment Management Association of Singapore and the Life Insurance Association.

The bumper quarter means that average returns on CPF-approved unit trusts over the past 12 months are now in positive territory, with expansion of 9.06 per cent since Sept 30 last year. Similarly, returns on investment-linked plans are at 9.34 per cent.

This translates into average returns of 9.28 per cent for all CPFIS-included fund products over the period.

Improving market conditions were behind the funds rally.

Sentiment was bullish in July with signs of slowing unemployment and more buoyant business and consumer confidence. There was a dip in August with a brief correction in some Asian emerging markets but healthy gains returned in September.

The MSCI World Index, which tracks stocks across 23 developed markets, rose 14.5 per cent in the quarter. The MSCI Emerging Markets Index – it monitors indices in 22 emerging economies – grew 15.3 per cent in the third quarter compared with 28.4 per cent in the second. The August correction was the key factor in the relatively muted showing.

European emerging markets did well in the third quarter for the CPF-approved unit trusts, with an average increase of 26.22 per cent.

Unit trusts in the Asian emerging markets fared less well, with the China and Far Eastern emerging markets categories registering gains of 5.98 per cent and 13.14 per cent respectively.

The Far Eastern emerging markets category refers to funds with investments across different countries mainly in South-east Asia.

Among investment-linked products, the European emerging markets category performed the best with a 27.82 per cent gain in the quarter.

Lipper’s senior research analyst for the Asean region, Mr Rajeev Baddepudi, said: ‘The main drivers of demand, globally speaking, are more in the emerging markets than the developed markets. These drive the equity values in emerging markets up.

‘The correction seen in Asia this August put some downward pressure on Asia, which means that the European emerging markets performed better this quarter.’

Mr Baddepudi pointed out that the sharpest correction in August occurred among China stocks, down 21.81 per cent amid speculation that the government might stem inflows into the stock market.

The correction had a ripple effect on the equity markets in Hong Kong, Singapore and Taiwan, he added.

jonkwok@sph.com.sg

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Stranded without luggage, but insurer cites fine print to reject claim

Sunday Times Singapore, Novemember 29, 2009, Sunday

THINKING of buying travel insurance for your holiday? I recently found to my consternation that some travel policies are useless in an emergency. The sticky web of fine print fails to give customers protection even in common emergencies.

Consider my experience with AIG Assist Global Travel insurance.

On June 4, I was stranded in a big city in a foreign land during a business trip, with only the clothes on my back. All my baggage, including my laptop computer with crucial business data inside, had been stolen in Beijing by a taxi driver.

Being a regular customer of AIG Assist, I had bought a Classic policy. I made a police report and the Beijing police began to track the cabby down. I immediately informed AIG’s emergency hotline of the theft. I even renewed my policy for three more days, as I had to delay my departure to search for the luggage.

My hotel graciously extended its service to help me scour security cameras for footage of the taxi. I had to stay in the hotel, buy basic toiletries and clothes and travel to the police station. I had to make roaming mobile phone calls and send text messages to liaise with the police and taxi companies. I even placed a radio advertisement offering a reward for the luggage.

Fortunately, the police located the taxi driver and my luggage was recovered. After three days of stressful and desperate search, I had incurred heavy expenses.

On my return to Singapore, I made a claim for the costs of being stranded without luggage.� Immediately AIG sent my e-mail message directly to its claims adjuster, Crawford. Crawford’s reply was simply that it was not covered. Its purpose appears to be to enforce the fine print without care for consumers. After repeated e-mail messages over two months, Crawford replied that under section 26 of its contract, only if luggage is stolen after airport check-in, or if a passport is stolen, is it required to reimburse a single cent.

Where is the recourse for consumers whose luggage is stolen? Does travel insurance really protect one during travel?

I urge readers to learn from my experience and be careful when choosing travel insurance policies.

Leong Zuan Yi (Ms)

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Income up by just 0.5 per cent last year

Straits Times Singapore, December 1, 2009, Tuesday

 

THE income of Singapore workers has hardly moved, climbing a paltry $10 in one year to $2,600 this June. This rise in the median monthly income of full-time workers works out to a mere 0.5 per cent.

In contrast, their income last year soared by 11 per cent and in 2007, by 7.7 per cent.

Latest official figures also showed that part-timers did not fare much better.

Their increase was 3.33 per cent, from $600 last June to $620, said a Manpower Ministry survey released yesterday.

Despite the increases, the overall median income of resident workers, including permanent residents, went down.

The reason is the bigger pool of part-timers in the workforce, caused partly by a change in definition by the ministry, which conducts the survey annually in June.

Now, those who work fewer than 35 hours a week are classified as part-timers. Previously, it was below 30 hours.

As a result, the median income for all employed residents declined by 1.2 per cent to $2,420 a month compared to $2,450 a year ago.

The drop can also be traced to companies battling the recession with such cost-cutting measures as freezing salaries and reducing pay, said the president of the Singapore Chinese Chamber of Commerce and Industry, Mr Teo Siong Seng.

But Nanyang Technological University economist Randolph Tan argued that the very fact that income for full-timers rose reflects Singapore’s relatively robust labour market compared with the United States and Europe.

However, the number of full-time, low-wage workers continues to decline for the third year in a row. This year, these workers who earn a maximum of $1,200 a month, totalled 275,000 and form 16.5 per cent of the total workforce.

Last June, the corresponding figures were 292,800 or 17.4 per cent.

Dr Tan believes skills training played a key role in elevating these workers, into a higher income bracket.

CASSANDRA CHEW

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Asset bubbles all over Asia: UN economist

Straits Times Singapore, December 1, 2009, Tuesday

They may burst if short-term capital flowing in pulls out

By Fiona Chan

GOVERNMENTS have been urged by a top United Nations economist to keep an eye on asset bubbles, which he says are appearing all over Asia as investors pour money into the rapidly recovering region.UN Assistant Secretary-General Ajay Chhibber also cited the woes faced by Dubai, in the Middle East, as an example of how the underlying issues of the financial crisis had not been solved.

‘I see bubbles in many, many Asian countries,’ he said during a visit to Singapore yesterday.

He was speaking to reporters at a press conference at the Institute of Southeast Asian Studies after releasing a UN Development Programme (UNDP) report on how the global financial crisis has affected the Asia- Pacific.

‘The strengthening of the equity markets in most Asian countries is clearly a signal of fairly substantial inflow of capital coming in,’ said Mr Chhibber, a former World Bank senior economist. ‘It’s Asia-wide, with some exceptions.’

While it is fine if the capital is used for long-term investments, the worrying thing is that some of the inflows are short term and volatile, he said.

Developed countries have relaxed their monetary policies in response to the recession, making liquidity readily available, but this means the money will quickly flow out again when these policies are eventually reversed.

Once the liquidity is withdrawn, the bubble may burst – similar to the situation in Dubai, where one of the government’s flagship entities is threatening to default on US$59 billion (S$81 billion) of debt, Mr Chhibber said.

While the size of Dubai World’s debt is ‘not significant enough to have a major impact’, the default is a signal that the underlying factors that caused the financial crisis have not been solved.

These problems have been temporarily papered over by the huge stimulus spending rolled out by governments, but how long that can continue is a question mark, he noted.

‘The balance sheets are still heavily debt-laden, and therefore a small shift in expectations or investor sentiment can really turn things,’ he said.

‘When the tide starts to go out again, you will see where the rocks are.’

For Asia to remove those rocks and embark on a sustainable growth path, the region must undergo fundamental changes, said Mr Chhibber, who is also the director of the UNDP’s regional bureau for Asia and the Pacific.

‘If Asia wants this to be its century, it must more vigorously find an alternate development path away from its old export-led growth model.’

In introducing the UNDP report, which he co-authored with UNDP senior policy adviser T. Palanivel and Professor Jayati Ghosh of India’s Jawaharlal Nehru University, Mr Chhibber laid out six areas where he said governments have to do more.

To tackle asset bubbles, they must put in place better tools to manage capital flows, he said. ‘Property markets are also extremely frothy all across Asia but with capital which could easily reverse.’

Second, they have to rely less on export demand and develop greater domestic demand by spending more and encouraging households and businesses to do the same.

Governments should also invest more to make sure that poorer members of the population benefit from economic growth as well, so as to minimise the effects of income inequality, he said.

This ties in with the fourth aim of providing better social protection for the needy, with more government spending on health care and more extensive social insurance programmes, including pensions and unemployment insurance.

Cleaner and greener growth is a fifth area of focus. Even as developing countries power ahead, there needs to be a shift from heavy coal and oil usage to solar, nuclear and renewable energy, he added.

Lastly, intra-regional trade in Asia should be expanded, which would help smaller economies especially.

In Singapore, for instance, domestic demand can never hope to substitute for external markets, but Asean can provide a bigger market and a stronger economic base to help buffer external shocks.

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Er, what is a CDP account?

Sunday Times Singapore, Novemember 29, 2009, Sunday 

FINANCIAL QUOTIENT

Where do you see this?

In articles and websites that refer to the stock market in Singapore.

What does it mean?

You need to open an account with the Central Depository (CDP) – a subsidiary of the Singapore Exchange – if you wish to invest in the Singapore stock market. You must be at least 18 years old and not an undischarged bankrupt.

The account is maintained with CDP, and it will track your entire shareholdings portfolio. All shares you have bought and sold through your broker from the Singapore market will be credited and debited to this account. You need only one CDP account. CDP does not levy any fee for opening an account.

Why is it important?

With a CDP account, you will receive contract statements that list your stock transactions, confirmation notes informing you that your account has been credited or debited, as well as half-yearly and yearly statements of your shares. Those who are Internet savvy can view their dividend payments for the current and previous months via the CDP Internet access service.

So you want to use the term. Just say…

‘I have opened a CDP account so I can start trading stocks now.’

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Calmer home sales pace likely in 2010

Sunday Times Singapore, Novemember 29, 2009, Sunday 

Lull likely before sector picks up from late Feb; more high-end homes expected next year

By Joyce Teo

The unusual frenzy in private home sales till September this year is fast winding down, as launches slow.

It should be a short lull before new launches kick in from late February, after Chinese New Year. Next year, however, is expected to see a steadier and calmer pace.

And, unlike this year, more high-end launches are expected next year, experts said.

DTZ head of South-east Asia research Chua Chor Hoon expects sales activity to remain low for next month and early next year.

This is because there are few mass market projects being launched in the next few months.

Recent government cooling measures seem to have had an effect too, making home hunters and speculators more wary about wading in, she said.

The property market will likely pick up only after Chinese New Year in mid-February next year, said Knight Frank’s executive director (residential) Peter Ow.

Apart from the high-end launches next year, home hunters can expect several large projects including those on sites that were sold en bloc during the previous boom, experts said.

These include the site of Minton Rise condo in Hougang; a site in Dakota Crescent, near Old Airport Road; and a project in Yishun.

The 99-year Minton Rise project will have at least 1,000 units of various sizes while the Dakota Crescent site, also a 99-year project, may have around 600 units.

In Yishun, MCL Land has a launch-ready 608-unit project a 10-minute walk from the Khatib MRT station.

Prices for this 99-year condo, which offers a view of Lower Seletar Reservoir, could well be above $700 per sq ft (psf), an industry source estimated.

Other likely non-prime projects in the first half of next year include the collective sale sites of Flamingo Valley in Siglap and Rainbow Gardens in Toh Tuck Road.

But one industry source said it is the high-end market that will be interesting to watch.

Next year, developers are expected to start pushing out their high-end projects for sale, after a year with no major luxury launches. ‘Buyers will have a lot of choices so they should be selective,’ the industry source said.

Possible new prime launches include the condo on the former Parisian site in Orchard; The Laurels as well as Urban Resort in Cairnhill; Ardmore III and the new condos on Pin Tjoe Court and Anderson 18 sites in Ardmore Park.

Some of these en bloc sites were kept for lease as the developers rode out the downturn.

While mass market home prices have since peaked, high-end prices have not reached the previous high of $4,000 psf to $5,000 psf.

Today, there is still little demand for homes priced beyond $3,000 psf, sources said.

Affordability has been a key issue in the past year, such that many developers reconfigured their projects to have smaller units in general in order to keep absolute prices low.

MCL Land, for instance, reconfigured its Yishun project to allow for more small units.

Most new launches next year would still have small units in general, said Mr Ow.

Third-quarter data shows that these small units of 500 sq ft and below remained popular, with sales totalling 253 units, up from 102 units in the same period a year ago, according to data from DTZ.

They form about 2.7 per cent of total transactions this year, compared to 3 per cent last year, and just under 1 per cent in 2007.

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Investment strategy pays dividends

Sunday Times Singapore, Novemember 29, 2009, Sunday 

Savvy investor gets $24,000 a year in dividends and that covers his basic needs

By Lorna Tan, Senior Correspondent

Imagine having a payout from your investments that more than covers your monthly expenses.

Canny investor Ng Wai Chung is in this happy position at the age of 34.

Mr Ng, a senior IT manager – and an author of investment books – achieved this a year ago. But rather than retire, he stays in full-time employment.

His investment income stream is the result of a plan he set in motion three years ago. That was when he decided to sell his investments in unit trusts and buy stocks that pay high dividends.

‘Today, I am able to yield about $24,000 a year on my investment portfolio, enough to cover my expenses in most months,” he said.

This enviable portfolio consists of real estate investment trusts (Reits) and shares that yield high dividends, such as mainboard-listed Singapore Press Holdings (SPH). Dividends are the portions of profits which a company distributes to shareholders.

Mr Ng has an engineering degree and a master’s in Applied Finance from the National University of Singapore (NUS). He obtained the latter part-time while working.

The senior associate in IT governance at commodity and futures exchange Singapore Mercantile Exchange has published three books on finance: Growing Your Tree Of Prosperity (2005), followed by Harvesting The Fruits Of Prosperity (2007), and this year, Sowing The Seeds Of Prosperity. They are available in bookshops.

Mr Ng is married to quantity surveyor Pang Yoke Loo, 31. They have no children.

Q: Are you a spender or saver?

Very much a saver. In most months, my expenses are paid fully from my investment income, which arrives every quarter in the form of dividends. However, I dip into my work income for discretionary expenses, such as a trip to Korea. I can save up to 100 per cent of my salary in some months.

Q: How much do you charge to your credit cards every month?

I have only one credit card. I use it to save money by making purchases over the Internet. Normally, my credit card charges do not exceed $500 monthly. I try and pay the bill even before I receive the statement. I withdraw about $400 from the ATM about twice or three times a month.

Q: What financial planning have you done for yourself?

I invest 80 per cent to 100 per cent of my take-home pay directly in the stock market.

I had about $130,000 in my stock portfolio early this year; this has grown to $250,000 from capital gains as well as monthly cash injections from my savings. I have about 20 counters.

About half my portfolio consists of business trusts like Cityspring Infrastructure and Hyflux Water, or shipping trusts such as First Shipping and Pacific Shipping which, on average, give dividend yields of about 10 per cent. The rest are Reits like Suntec and Cambridge, which give me similar yields.

With the economic recovery, I’m focused on channelling my income into income stocks like SPH and Singapore Post, which will give me about 7 per cent yields. I have also invested about $30,000 of my Central Provident Fund savings in stocks such as M1, StarHub, Lippo Mapletree Reit and Cambridge Reit.

Q: Moneywise, what were your growing-up years like?

My financial habits were shaped mostly by my years as a kid hanging out in my parents’ pet shop at Shaw Centre in the 1980s. Life was hard. My parents were at the mercy of the landlord and the consumer. As an adult, I crave job and income security. I am very averse to debt.

Q: How did you get interested in investing?

In my final year at NUS, I picked up Robert Kiyosaki’s book Rich Dad, Poor Dad. This spurred me to pursue financial programmes like the Chartered Financial Analyst. Armed with investment know-ledge, I took to writing books to present my financial ideas from the perspective of a non-commission agent.

When I stock-pick, I find out first how much in dividends have been paid out over the past year. I used to aim for 10 per cent but have now lowered this to 6 per cent to 8 per cent. I check if there are any red flags raised by auditors. The free cashflow (operating cashflow minus capital expenditure) must exceed dividends declared. This ensures a company can sustain the dividends. Once the yield drops to, say, 4 per cent, I switch to a better counter. I monitor my portfolio daily.

Q: What property do you own?

I am an only child; I live with my parents in Woodlands – my dad picked up a single-storey semi-detached house in the early 1970s for $70,000. The current value is estimated to be $1.6 million. I do not own any property.

Q: What’s the most extravagant thing you have bought?

My iRex Digital Reader 1000S which allows me to download electronic books for easy storage and reading. It cost $1,400. I save 60 per cent to 70 per cent compared to buying the actual books.

Q: What’s your retirement plan?

None, if I can help it. Work is a function of ability, and not one’s state of financial independence. My personal expectation is to increase my investment income by about $6,000 a year for each year of gainful employment. The rest largely depends on whether I can continue to remain employed and whether my health will allow it.

Q: Home is now…

The semi-detached house in Woodlands.

Q: I drive…

Sometimes I drive my wife’s recently purchased weekend car, a white Hyundai Avante.

WORST AND BEST BETS

Q: What has been your worst investment to date?

I had a very painful experience investing in McArthurcook Properties Securities Fund. I accumulated about 108,000 shares through 2007 and last year, and its yield was initially about 30 per cent. The price plummeted to 16 cents, from $1, when the recession hit. And last year, it stopped declaring dividends altogether. I exited in October last year at a loss of about $40,000.

Greed and my obsession for yields created an aversion to letting go of this. I learnt that I should not let my stubbornness get the better of me.

Q: And your best investment?

At the bottom of the market some time last year, I invested about $5,000 in Capital Retail China Trust at 60 cents per share. It had a dividend yield approaching 15 per cent. I have since doubled my money as the price is now $1.18. Most of my high-yielding counters have been doing well since December last year. My entire portfolio has almost doubled in size since early this year.

Book spurred interest in money management

‘In my final year at NUS, I picked up Robert Kiyosaki’s book Rich Dad, Poor Dad. This spurred me to pursue financial programmes like the Chartered Financial Analyst. Armed with investment knowledge, I took to writing books to present my financial ideas from the perspective of a non-commission agent.’

MR NG WAI CHUNG

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