Caveat Emptor

Personal notes on banking industry After allocating a substantial amount of war-chest into equity markets, it is time to stand down and observe the macro-economic events (trade war) that may affect the financial performance of underlying real businesses. The Federal Reserve is yet again doing a fine job of managing expectations of global participants by engaging in double speak . As the saying goes, if you can't convince, confuse. As I have no crystal ball to foresee the future, I shall consolidate my notes on the banking sector so that I will be prepared to capitalize on any opportunities that may materialize based on the latest Fed moves. Richard Tay Jun Hao had recently provided an useful web seminar on the banking sector and I shall amalgamate the lessons I learnt from his sharing with my personal knowledge base to better identify the better performing local and foreign banks. 1) Business Model Net Interest Income = Interest income – interest expense Net interest mar...

Thesis : Asset play on an illiquid Net cash company with no gearing. Essentially, I have access to numerous property with an absence of gearing, which acts as a debt Free REIT to earn rental income as well as potential divestment to unlock cash flow. Its holdings of prime property makes the holdings a relatively safe assurance of value, and there is no risk of fire sale (No gearing and healthy liquidity ratio) as I can wait patiently for the market to realize its value. Sentiment on stock greatly battered by poor corporate governance (Minority shareholder oppression). Issue has been amiably resolved and there is reshuffling of independent directors in a bid to improve corporate governance. The collapse in profits is only temporary and has largely recovered. There is shareholder friendly actions of continual share buyback instead of mandatory dividends to return capital to investors, which are ac-creative as company is trading below its Net Asset Value.  There is manager-shareh...