Hedge on ABSD removal?

Signs of cracking in the developers market is slowly, but surely, beginning to show. This has appeared few times in the various papers and media in the past few weeks. And, goes to show how aggressive they are trying to push units out. As I have mentioned in my previous posts here and here. I kinda expected them to come up with ways to increase sales, and  I believe there will be more of such moves by other developers.

Below shows the strategy adopted by OUE to move units at their Twinpeaks. It is essentially the Deferred Payment Scheme from years ago: pay 20% upfront, and then worry about the 80% years later.

As you can see, in the below graphics, if the ABSD indeed gets removed with the 24/36mths, the owner will save easily a few hundred grand (depending on the size and what number of property he/she already holds)

Apparently, according to reports, after they launched this scheme, they managed to sell a few units based on this new strategy. Though it doesn’t say, whether the new buyers are buying for their own stay or renting it out.

so, are you actually tempted by this, and would you utilize this scheme to move into your “dream home”?


Decoupling loophole; plugged.

Chances are, if you know what “decoupling” is, you are  either a property agent or above a certain, ahem, middle age. =)

To put it very  simply, married couple (husband + wife) of HDB will have one spouse transfer the co-ownership to the other spouse. The spouse who transferred it, will have the his/her name “cleared”, and eligible to buy a private property under his/her own name. There will be no ABSD, since it is technically your first property. Hence a married couple can still own their HDB + private  property. (without paying ABSD)

Of course, you are solely dependent on each other’s trust,  don’t  end up in  divorce, and complicate the entire situation when time comes to splitting up the asset.  Personally, I don’t think couples who just got married, should consider this . (moot point now anyway, since the rule has changed)

I am not advocating any moves here. The purpose of the post is just to show how creative we , Singaporeans, are to able look for loopholes, and the Govt’s proactive approach to plug any loopholes that may benefit any particular group of people.

The above rules don’t apply to me, as  I am going down the same route as SMOL here =) hopefully, the oversupply of ECs will cause the Govt to open up the net and cater to the single citizens. ( doesn’t hurt to dream, isn’t it)


Ah, the move that I was finally waiting for. But, reading from the news, it seems like it took some people by surprise though. I did mention it a few weeks ago here, and that i am long on the USD.

(*off topic: watching CNBC while typing this, and they are interviewing the famous Mark Mobius, talking about oil prices etc etc.. Been watching this channel since I came back this week, personally, I think CNBC is freaking awesome. Not sure why I didn’t find out about this channel earlier! )

Back to the topic,  yesterday early morning (14/4), the USDSGD gap up , as you can see from the chart below,  I took the chance to sell part of my USD stash @1.35xx. For now, its good enough, so i can use the funds for other stuff. It was languishing in the 1.33~1.34 a few weeks ago.. will continue to do so as the SGD weakens against the greenback.

Reading the news/reports/ blogs, it seems that after this “surprise” move, all the economist and experts are hyping about doom and gloom, and saying we are heading into a recession, the sky is falling, etc etc…. huh, duh,  i thought that’s something we already know, since, erm what, last year (?)… Anyway,  i am still sitting infront my computer, sipping my kopi-o-kosong, so it can’t be the end of the world, yet.

The second figure below shows a good summary of the monetary policy of Singapore – it uses a policy band rather than interest rates.

Privatisation, Mergers & Accquistions

Recently, we have seen/heard/felt plenty of privatisation M&A activities. There are a lot of buzz surrounding  quite a few companies. ie Sunningdale , Saizen, Tat Hong, Osim, etc just to name a few.

I came across a few tables from an OIR article  which I thought should share to readers below. It shows a pretty good summary of the various companies that MIGHT have corporate action in the near future, if not, by this year. (don’t take my word for it)

I have set aside a small percentage of my funds to be vested in some of these potential companies. These are so-called more on the “speculative” side, but of course , i will not be buying them blindly.

Those especially, related to the O&G industry have been beaten down, and has attractive valuations. Specifically looking for those with net cash, and may have been attempted before to be bought over or privatised, single entity with a majority stake, relatively sound fundamentals and management.

How about you guys….anyone looking to jump in? 


OSIM: Privatision error

For those holding OSIM, you must be happy that the final price increase by $0.02 to $1.37.However, there is story behind this.

What makes the entire saga so interesting (and hilarious) is that the firm doing the privatisation, bought the shares from the open market than the original offer price of $1.37.  SIC stepped in and ordered OSIM to offer $0.02 more.  How much more does this cost? a whopping $4.7m !

Basically, OSIM scored own goal. who would have thought such an execution error could have occurred by a professional firm. I can imagine some of those involved will have their commission cut. haha.

This only goes to show that even the best can make mistakes. One can do tonnes of research and fancy excel, but if your execution is sub par, then you will end up like OSIM.

See original article from ST below.




No prizes for guessing what YOLO stands for.

Seriously, when i first saw the card, i was like, geez,…UOB credit department must be really desperate to think of a catchy name. And to be frank (no pun intended), i thought the OCBC Frank card was bad enough, but UOB YOLO is taking it to a another level.

Design is kinda funky too – the card numbers are on the side, rather than the usual bottom.

Anyway, not to sidetrack from the purpose of this post. I am sure most of you have the OCBC 365 or the likes for cash rebate. It may appeal to some, but not to others, depending in your spending pattern and the banking relationship with the bank (what accounts you have, etc etc)

I spend quite a fair bit on dining (especially overseas, since I don’t cook), hence the 8% (weekend) and 3% (weekday) is quite attractive,  The max rebate per month is $60, which is $750 spending on dining/entertainment, and min of $600 to qualify for the higher tier. Of course, please dont’ go all the way out to spend that amount just to get the rebate on the card.

The rebates on the other stuff, like online travel and stuff, seems quite standard. I think there are other cards like the OCBC 365 which may give better deals. The down side is there is no groceries rebate. So this card is purely for a night out and those weekend extended family makan session.

Also, there is also a $50 cash rebate, but the TnC is that you are not a prior UOB principle card holder upon application.

*from FAQ:

Do I earn any cash rebate for overseas Dining & Entertainment transactions?Yes definitely!
Be it enjoying a unique dining experience, partying at the most exciting clubs & bars or relaxing at the coolest cafés, enjoy up to 8% rebate locally or around the world. Remember to bring your card along wherever you are!

What defines Weekend?
“Weekend” means 0000 Hour on Saturday to 2359 Hour on Sunday (based on the local time of the country you are in).

** the 8% cash rebate is only valid until the end of 30 September 2016 – it will go down to 6% 

The card link is below to subscribe if anyone is interested.

UOB YOLO card link

oh oh! time of the year (deductibles you may not know about)

“there are only two things in life that are certain – death and taxes”                                                           – unknown

Time of the year to file your taxes! I usually just claim the usually stuff, NSman, SRS, blah blah. Then, I came across this article by Ryan Ong:regarding income tax deductibles that you may not know about. I just regurgitate the article below,  in block quotes. Read below to find out more.

Personally, i found point #2 quite intriguing. I didn’t realise that you can claim rental income and stuff such as: Utility expenses that the tenants didn’t reimburse you for, including Internet access., fees paid to the property manager, if there is one (this includes property agents) – **ps: not sure if this include the one/half month commission to the agent? 

For those with a second property, depending on how much your property is being rented out for,15%  seems quite a hefty deduction, it should at least bring you to the next lower tax bracket? saving you a couple hundreds, perhaps.

For those who have actually done it in the previous years, if you don’t mind sharing with us, if it actually is true?


by Ryan Ong

INCOME tax in Singapore is straightforward. Most of the time, we fill in a form (or the boss does it for us), and pay whatever number the Inland Revenue Authority of Singapore (IRAS) comes up with. If IRAS inserted a clause that signing off also means we agree to hand-scrub their toilets, we’d probably be cursing and scrubbing at tiles right now. My point: we don’t really pay attention. Here are some deductibles we often ignore:

1. Some of the expenses you incur from work can be deductible

If you need to spend money for work reasons – and your company doesn’t compensate you – you may be able to deduct this expenditure from your employment income. These are “allowable expenses”, and you should check with IRAS to see whether yours count.

There are three conditions that make something an allowable expense:

  • The expense was incurred while carrying out your official duties (e.g. a secretary paying a courier to deliver something for her boss)
  • The expense was not reimbursed by the employer
  • The expense was not capital or private in nature (If you treat your colleagues to lunch, that’s not claimable; if you had to treat a client to lunch, it may be.)

Remember that you can also make a claim if you weren’t fully reimbursed. For example: if you spent $800 on catering for an office function but you were reimbursed only $700, you can claim the remaining $100.

For travel expenses, you can make a claim for public transport only. However, you cannot make a claim for travelling expenses between home and work; only for the extra trips your employer requires you to make.

You need to make the claim under “Employment Expenses”, and you need to keep the receipts for five years.

No, that’s not as inconvenient as people seem to think. Just staple or glue your receipts into an exercise book; it takes five seconds. I’m as organised as a last minute hurricane evacuation, but I still have most of my receipts going back seven or eight years this way.

2. You can make claims for rental income

If you have a property that you rent out, your rental income is taxable. But there are costs you can claim for tax deductions. Some of the often overlooked ones include:

  • The premiums for fire insurance
  • Utility expenses that the tenants didn’t reimburse you for, including Internet access
  • Fees paid to the property manager, if there is one (this includes property agents)
  • Repair costs that occur while the property is rented

Note that, if you have a friend or relative paid to act as the property manager, you can still make a claim. However, IRAS will decide if you are declaring a fair amount based on the market rate. For example, you can’t claim that you pay your uncle $25,000 a month to manage the other tenants, in order to get a massive tax deduction.

You also need to have the proper paperwork, which shows you engaged the property manager. No verbal agreements, vague emails or scribbles on the back of a 4D ticket.

For repair costs, these cannot cover improvements. So if a tenant puts a hole in a partition wall, and you get an interior designer to re-do it as a $5,000 feature wall with hidden cabinets, it may no longer be claimable.

Alternatively, use a flat 15 per cent

You can now claim a flat 15 per cent of your rental income, plus loan interest, instead of making claims for all the individual costs (wi-fi, repairs, fees for the manager, etc.)

So say your rental income for the year is $50,000, and your loan interest is $8,000. You can claim a tax deduction of $7,500 (15 per cent of the rental income), plus $8,000 for the loan interest. That would give you a total tax deduction of $15,500.

The problem is that sometimes, your costs incurred can go above the 15 per cent. In the above example, if a tenant blows up your kitchen and causes $20,000 worth of damages, you obviously wouldn’t want to use the flat 15 per cent.

You’ll have to do some maths to see if it’s worth using the flat rate.

3. Tax deductions for charity donations have gone up

I bet you thought tax deductions for donations are dollar-for-dollar. You give $50, you get a $50 tax deduction right? It’s actually better than that.

In 2009, tax deductions for charity donations were raised to 250 per cent. It was meant to be temporary, but later the policy was extended to 2015, and then extended again to December 2018.

So for every dollar you donate to charity, you get a $2.50 tax deduction.

For 2015 (the year of SG50 celebrations), tax deductions for charity donations were 300 per cent instead of 250 per cent. This is valid for all donations made between January 1 and December 31 of last year.

You can check the Charity portal to see which charities qualify.

1Q’16 ending; what’s next?

As we come to a close for the 1Q ’16, perhaps it is time to take check and see where we stand. The three months flew past quite quick for me, and it has been quite  a volatile , yet interesting first quarter. I did not buy as much as I would love to due to other priorities and opportunities that came up.

I am sure most of the people can still recall in the beginning of the year. At the point of writing, things seem to have pick up a bit, relatively.  But no one has a crystal ball, we can only the benefit of 20/20 hindsight to decide if we have made the right choices.

My earlier posts  have mentioned that I am slowing shifting a percentage of my portfolio into bonds/ETF. I am done on the local portion, but still researching on the international portion. So far, it has been quite interesting, and have been communication with some of the more experienced bloggers. Will update again when that is completed.

For me, the upcoming key events:

  •  MAS monetary policy statement (exact date unconfirmed)
  • outcome of the FOMC meeting on 26-27 April.

I am watching closely on the movement of the USD as I have vested interest in the USD. I believe, it is a matter of time before FED increase the rates again, and the SIBOR will go up. Those with existing home mortgage, should consider switching to the FHR.

I am long on the USD, and waiting for it to hit 1.4+ again. (sorry folks, who are fervent amazon buyers, your purchases might get a bit more expensive in time to come)

The outcome of both events will affect the direction of the Singapore Dollar. This in turn influences the flow of funds into or away from risky assets including equities. The decline in the USDSGD from a high of 1.44 in January to as low as 1.35 recently helped fuel a flow of funds to Singapore equities.
With inflation in Singapore likely to remain negative for most of 2016 and with downside risks to growth, our economist expects MAS to ease the exchange rate policy by shifting to a zero (from gradual) appreciation path for the Sing NEER policy
band. If true, investors’ anticipation ahead of the event should result in a rebound in the USDSGD from its recent low of 1.35. This in turn could halt or reverse the funds inflow into Singapore equities.
The outcome of the 2-day FOMC meeting on 26-27 April will be the other event to watch. Our economist sticks to his view for 3 rate hikes this year. Core CPI inflation is back at pre-crisis level and well above the Fed’s 2% target. We expect the FED to hike
rates once in 2Q that will lift the FED funds rate to 0.75%. This should occur either at the April or June FOMC meeting

*as quoted by DBS Vickers

ABSD and QC charges (again?)

Updates from the previous post here.

What was interesting from the tables below was that the smaller property developers ie Hock Lian Seng (HLS) and KSH are in net cash for their debt-to-equity ratio (HLS was recently came under my watchlist. There was a bit of buzz around it but I will leave that for another post later)

Singapore Land (SL) has  two projects – Pollen & Bleu and Mon Jervois. These are in good districts aka atas area (CCR and OCR), hence selling price is beyond the reach of the masses. SL will take a ABSD hit in 2017 of 75% and 12% respectively of their revenue. (fyi, SL belongs to UIC)

Wheelock (WL) also has a few atas projects under its belt, Le Nouvel (dont understand why all these atas project need to have Le this or Le that. ), Ardmore 3, The crest.

Furthermore, the budget last week, did not have any goodies for the property developers, which they were, somewhat, hoping for.

So what does all these mean? For myself, I will be looking closely at the smaller cap property developers. I believe, some of the property plays have been beaten down and worth to take a look, although there are also some of them which actually did run up abit but whether they have more legs to run, will depend  in the coming weeks/months, and see what unravels.