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Thread: BOND THREAD

  1. #2551
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    Quote Originally Posted by DC33_2008 View Post
    Thanks. I bought at 100.9 last week.
    Most blue Stocks and Bonds , unit trusts & Derivatives Products (like accumulators , ELN , FCB etc) are doing well.


    My std chart 7.5% coco USD perp bond is also doing well (106.5). But I do not know whether it will last. VIX is at
    24 yrs low . So dont be too happy & be too complacent.Mkt can suddenly turn good to bad & then bad to worst within
    weeks or mths.

  2. #2552
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    Have been taken profit and too greedy.
    Quote Originally Posted by cbsh38584 View Post
    Most blue Stocks and Bonds , unit trusts & Derivatives Products (like accumulators , ELN , FCB etc) are doing well.


    My std chart 7.5% coco USD perp bond is also doing well (106.5). But I do not know whether it will last. VIX is at
    24 yrs low . So dont be too happy & be too complacent.Mkt can suddenly turn good to bad & then bad to worst within
    weeks or mths.

  3. #2553
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    Anyone bought Noble bonds? Huge risks and huge rewards

  4. #2554
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    Noble 3.62% USD bond due Mar 18 (min US$200k) . From low of 65 two days ago. Now at 68
    Another one more round right issue or share placement from potential investors should provide some hope on this short dated bond due Mar 2018.

    High gain (US$60k + gain - from 68 to 100) but very high risk.

  5. #2555
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    Bought Central China real estate (capland one of the substantial share holder) SGD 6.5% sgd bond on Feb 16 @97.7. Just matured on 26 May 17.

    China & Russia emerging bond is one of the best performing bond mkt in the last 5 yrs.

    Evergrande was downgraded to CCC+ by US rating agency last yr which did not affect their bond & stock price.
    Too bad I did not continue to buy their bond due to the "Fear" created by USD rating agency.
    Most of Evergrande bonds are above par. One of the Evergande 12% USD bond (due 2020) trading at 111.

  6. #2556
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    Hi Hi
    Did not visit here for a very long time as I am back to the job market.
    I have done a major change in my portfolio, liquidated a number of properties, as I do not see a real fundamental in the current property market with dropping yield, and higher financing cost and most important, cannot see good bright spots in the economy.

    My strategy now is to stay highly liquid and waiting for opportunity, mainly in European equities.

  7. #2557
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    What goes up. Eventually it will come down. Ones must have the patience to wait & wait & wait. Not to be bother by noises from friends / brokers etc that ones it losing
    out by holding more cash.

  8. #2558
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    Quote Originally Posted by cbsh38584 View Post
    Noble 3.62% USD bond due Mar 18 (min US$200k) . From low of 65 two days ago. Now at 68
    Another one more round right issue or share placement from potential investors should provide some hope on this short dated bond due Mar 2018.

    High gain (US$60k + gain - from 68 to 100) but very high risk.

    Do U believe ? If yes, then the shorter dated 3.625% bond due in 2018 maybe can consider.
    It was 49 last week. Now trading @ 59. Very high risk & will have many sleepless nite.


    From Biz times.
    NOBLE Group will be able to refinance its upcoming borrowing base facility in June, DBS analyst Mervin Song believes, contrary to the view of others.

  9. #2559
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    Surprise to see that Noble is only giving 3.625%. Were they investment grade during the IPO? It should be junk now right?

  10. #2560
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    I had a long talk with a Treasury guy today...and just getting very gloomy.

    I am now searching to buy...but finally decided to stay in cash

  11. #2561
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    Advice to this perp appreciated. Thanks

    HSBC debuts SGD bond market with bumper S$1 billon perpetual deal
    Thursday, June 1, 2017 - 18:15
    by
    SIOW LI SEN

    20a-42755661 - 31_05_2017 - CHINA-COLLATERAL_FAKE.jpg HSBC Holdings is making a debut in the local bond market with a bumper S$1 billion perpetual issue. PHOTO: REUTERS
    HSBC Holdings is making a debut in the local bond market with a bumper S$1 billion perpetual issue.

    At S$1 billion, it is the largest SGD bond transaction from a corporate or financial institution since 2012.

    Demand was hot with order books peaked at above S$7 billion.

    The strong demand led to final pricing at 4.7 per cent from initial price guidance of around 5 per cent.

  12. #2562
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    Quote Originally Posted by Fisherman View Post
    Advice to this perp appreciated. Thanks

    HSBC debuts SGD bond market with bumper S$1 billon perpetual deal
    Thursday, June 1, 2017 - 18:15
    by
    SIOW LI SEN

    20a-42755661 - 31_05_2017 - CHINA-COLLATERAL_FAKE.jpg HSBC Holdings is making a debut in the local bond market with a bumper S$1 billion perpetual issue. PHOTO: REUTERS
    HSBC Holdings is making a debut in the local bond market with a bumper S$1 billion perpetual issue.

    At S$1 billion, it is the largest SGD bond transaction from a corporate or financial institution since 2012.

    Demand was hot with order books peaked at above S$7 billion.

    The strong demand led to final pricing at 4.7 per cent from initial price guidance of around 5 per cent.

    This is under HIGH RISK rating 5 (1- lowest 5-highest). It can suffer losses if a bank runs into trouble, making them very risky for investors.
    It has a very complex term & condition like CET1 , Tier1, Tier2, loss abosrption, bond to equity conversion , perpetual etc.

    In early 2016, most of the bank (std chart , Deutsche , HSBC ,credit sui etc) coco bonds dropped to 65% to 90%. But it has recovered to 95-110. U only buy for tactical trade which mean buy low & sell high later + accured interest. But now, cannot buy now. Way too expensive.


    https://www.bondsupermart.com/main/b...t/XS1624509300

  13. #2563
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    On early 2016, Noble Group repurchases part of bonds due 2018 & 2020.

    The company had repurchased $31.6 million of its 6.75 percent U.S. dollar fixed rate senior notes due 2020, representing about 2.6 percent of the total principal amount outstanding immediately before the repurchase.

    Noble has also bought back $1 million of its 3.625 percent US dollar fixed rate notes due 2018, or 0.26 percent of the total principal outstanding.

    I do not know whether the purchase of their Noble bond is part of the plan to entice potential high risk investors to assure them that they are able to pay money back. But those who take the risk base on this assumption will be having many sleepless nite.


    I got 3 different banks to ask for the LTV given for this JUNK BOND in May17. So huge different. My banker cannot explain to me why such a high LTV of 70%. Did the bank themselves also have small minor stake? Nobody knows.

    CS - LTV 70%
    SC - LTV 0%
    DBS - LTV 0%

    Noble stock is finished. But there may be some hope for Noble bond holder. Waiting for potential investors. Still monitoring.

  14. #2564
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    Goldman Buys $2.8 Billion Worth of Venezuelan Bonds.

    Goldman Sachs and other investors are “betting that the government will use its dwindling supply of dollars to pay bondholders .
    The Venezuelan government knows that it will need to borrow again – and that will be impossible if it doesn’t pay bondholders.
    So Bond investors have calculated that the country will – at all costs – repay its bondholders.Goldman Sachs clearly thinks it will.

    https://www.bondsupermart.com/main/b...t/US922646AT10

  15. #2565
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    Quote Originally Posted by cbsh38584 View Post
    This is under HIGH RISK rating 5 (1- lowest 5-highest). It can suffer losses if a bank runs into trouble, making them very risky for investors.
    It has a very complex term & condition like CET1 , Tier1, Tier2, loss abosrption, bond to equity conversion , perpetual etc.

    In early 2016, most of the bank (std chart , Deutsche , HSBC ,credit sui etc) coco bonds dropped to 65% to 90%. But it has recovered to 95-110. U only buy for tactical trade which mean buy low & sell high later + accured interest. But now, cannot buy now. Way too expensive.


    https://www.bondsupermart.com/main/b...t/XS1624509300
    Thanks. In your opinion when would it be a good entry point? Coupon rate at 4.7 pct seems ok cutrrently.

  16. #2566
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    Quote Originally Posted by Fisherman View Post
    Thanks. In your opinion when would it be a good entry point? Coupon rate at 4.7 pct seems ok cutrrently.
    This is a COCO bond & it is of high risk. You need to understand many of the term like callable ,Tier1 , tier2 , CET , deferral of interest t payment , loss absorption etc. Before you buy any of the COCO bank bond, pls get your banker to come out a simple flow chart of condition that will trigger
    deferral of interest payment or back to interest payment later, loss absorption etc. Then u will understand better the risk you are getting into.


    I myself have Std chart 7.5% USD Coco bond. I got my banker to do a flow chart & also explain the meaning of tier1/2 , CET , equity conversion condition etc. I bought it for tactical trade & will not keep perpetually. If I will to sell now. profit >US$22k within 7 mths. Keep monitoring.

  17. #2567
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    Quote Originally Posted by cbsh38584 View Post
    This is a COCO bond & it is of high risk. You need to understand many of the term like callable ,Tier1 , tier2 , CET , deferral of interest t payment , loss absorption etc. Before you buy any of the COCO bank bond, pls get your banker to come out a simple flow chart of condition that will trigger
    deferral of interest payment or back to interest payment later, loss absorption etc. Then u will understand better the risk you are getting into.


    I myself have Std chart 7.5% USD Coco bond. I got my banker to do a flow chart & also explain the meaning of tier1/2 , CET , equity conversion condition etc. I bought it for tactical trade & will not keep perpetually. If I will to sell now. profit >US$22k within 7 mths. Keep monitoring.
    Thank you, once again. Advice very helpful. Spoken to my banker and was advised that they don't market this HSBC Perp as they deem the issue to be too risky as you had said. Non guaranteed coupon payment and erosion of principal should the bank suffers from a loss.

  18. #2568
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    Quote Originally Posted by cbsh38584 View Post
    Risk of investing in Bonds
    * Credit Risk * Interest rate risk * Liquidity risk * FX risk

    Credit risk is an investor's risk of loss arising from a borrower who does not make payments as promised

    Moody investment grade rating
    Aaa , Aa1 , Aa2 , Aa3 , A1 , A2 , A3 , Baa1 , Baa2 , Baa3

    Moddy Non-investment grade
    Ba1 Ba2 Na3 B1 B2 B3 Caa1 Caa2 Caa3 D

     
    S&P and Fitch investment grade rating
    AAA AA+ AA AA- A+ A- BBB+ BBB BBB-

    S&P and Fitch Non investment grading Rating
    BB+ BB BB- B+ B B- CCC+ CCC CCC- D

     

    Interest rate risk affects the value of bonds more directly than stocks, and it is a major risk to all bondholders. As interest rates rise, bond prices fall and vice versa. The rationale is that as interest rates increase, the opportunity cost of holding a bond decreases since investors are able to realize greater yields by switching to other investments that reflect the higher interest rate. For example, a 5% bond is worth more if interest rates decrease since the bondholder receives a fixed rate of return relative to the market, which is offering a lower rate of return as a result of the decrease in rates

    Liquidity Risk
    In an Liquid market, investors run the risk of either having to retain the bond till maturity or selling it before maturity at an unfavorable price
    Issue size = liquidity ? (>US$500m more liquid ?)
    Establishing a fair price & price comaprisons can be difficult or impossible as there are sometimes no Counterparties interested in the bond.


     
     
    FX risk
    Morgan Stanley 7.625% Aust dollar bond Due 2016
    Aud/SGD 1.33 (1st Feb12)
    Aud SGD 1.254(1st Jun12)
    Aud/SGD 1.285(12th Dec12)
    If U borrow (due to low rate 1.55%) SGD or USD to convert to Aust to buy Aust bond. There is a FX risk which may go against you


    Bond Types
    Fixed Rate bond (straight bond)
    Fixed maturity & fixed cash flow pattern (I.ecoupon)
    Eg NOL 4.25% due 2017
    Olam 4.07% due Feb 2013


    Callable bond
    Gives the issues the right to buy back all or some of the issues prior to maturity
    Call price : Specified price at which the bond may be repaid
    Eg Hyflux 4.25% 2018. (Callable on 7 Sep15 @ 102.13)


    Perpertual bond (some do come with callable term)

    Bond in which the issuer does not repay the principal. Rather, a perpetual bond pays the bondholder a fixed coupon as long as he/she holds it. Prices for perpetual bonds vary widely according to long-term interest rates. When interest rates rise, perpetual bonds fall and vice versa.

     
     
     
     
     
     
     
    Inflating-linked bond
    Pays a fixed coupon + an amt that is linked to a price index to compensate for inflation
    * S’pore’s central bank is studying the feasibility of selling
    Inflation-linked bonds to help citizens boost on savings amid low interest rate ( Bloomberg 9th Jul 2012)


    Convertible bond
    * Hybrid that combines both equity & debt features
    * Holders have the right to convert the bond into issers’s equity in a predominated ratio during a specified conversion period
    Eg Keppel land 1.875% due 2015 convertible bond
    Conversion price @ $6.72. ( Now trading @3.8)


     
    Bond structure
    Unsecured Bond that is not secured by a collateral.Most bond are unsecured

    Secured Bond.
    Bond is backed by a Collateral
    Eg OUE 3.36% due 2013.
    Back by Mandarin gallery & Mandarine Orchard.

     
     
    Bond seniority
    bondholders are credits & therefore have a higher priority calim than equity holders in a liqudation or restructuring scenario.

    Senior bond has a higher priority claim than other bonds on the assets issued by the same entity.



    Subordinated (junior) bond
    A class of bond that, in the event of liquidation, is prioritized lower than other classes of bonds. For example, a subordinate bond may be an unsecured bond, which has no collateral. Should the issuer be liquidated, all secured bonds and similar debts must be repaid before the subordinated bond is repaid. A subordinate bond carries higher risk, but also pays higher returns than other classes


    I am new in bond investing (started in 2010). I am no expert. Pls get your knowledgable relationship manager to explain to U on fixed income investment.
    COCOs bond ('Contingent Convertibles - CoCos') mostly issued by banks.
    Contingent convertibles (CoCos) are similar to traditional convertible bonds in that there is a strike price, which is the cost of the stock when the bond converts into stock. What differs is that there is another threshold in addition to the strike price, which triggers the conversion when certain capital conditions are met. Issuing contingent bonds is more advantageous to companies than issuing regular convertibles.

    High risk.
    http://www.euromoney.com/Article/353...ould-know.html

  19. #2569
    teddybear's Avatar
    teddybear is offline Global recession is coming....
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    Default If Noble has no white-knight, it probably can't survive beyond end of next year

    If Noble has no white-knight, it probably can't survive beyond end of next year (see S&P credit ratings). In that case, stock holders and bond holders all finished! Bond holders unlikely to have any recovery since Noble has little physical tangible assets of much value to liquidate to pay back bond holders.

    Quote Originally Posted by cbsh38584 View Post
    On early 2016, Noble Group repurchases part of bonds due 2018 & 2020.

    The company had repurchased $31.6 million of its 6.75 percent U.S. dollar fixed rate senior notes due 2020, representing about 2.6 percent of the total principal amount outstanding immediately before the repurchase.

    Noble has also bought back $1 million of its 3.625 percent US dollar fixed rate notes due 2018, or 0.26 percent of the total principal outstanding.

    I do not know whether the purchase of their Noble bond is part of the plan to entice potential high risk investors to assure them that they are able to pay money back. But those who take the risk base on this assumption will be having many sleepless nite.


    I got 3 different banks to ask for the LTV given for this JUNK BOND in May17. So huge different. My banker cannot explain to me why such a high LTV of 70%. Did the bank themselves also have small minor stake? Nobody knows.

    CS - LTV 70%
    SC - LTV 0%
    DBS - LTV 0%

    Noble stock is finished. But there may be some hope for Noble bond holder. Waiting for potential investors. Still monitoring.

  20. #2570
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    Bought EDF Perp 5.875% bond (Electricite de France ) on Apr 16 @ 87 (GBP$100k) during the mini crisis.
    Decided to take profit & sold @ 101 yesterday. Est GBP$20k.

  21. #2571
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    The page 34 (dated late 2012) which I highlighted why MARginal ppty investors should not go into ppty is gone.


    =============================================================================================
    I say that those MARGINAL ppty investors are those who own a HDB with min loan left or fully paid & have excess on 400k to 600k avail for a 2nd ppty investors to buy. I say those group of MARGINAL ppty investors will be better off invest into safe bond like Cheung Kong 5.125% or Singpost 4% SGD perp bond.

    Job securities will be a very big issues. When U reach 40+ to 50 yrs old, chances of being retrenched is very high possiblility & U are expected to living beyond 80 or even 90 if they did not plan for their retirement early.

    Inflation is a very big issues. KK hospital charges $70 then $90 then $98. I heard now $115 just within 6-7 yrs.
    Floss bread from 0.80 to $1.00 to 1.20 $ 1.50 . Now $1.70. etc etc. The cash of $400k to $600k is very precious to them. If those MARIGINAL ppty investors buy during the peak period (2011/201), they will be in real trouble if their job is not secured. Everyday, fired fighting to pay for the related ppty linvestment & may lead to husband /wife quarreling & affect the kids.

    If they will to buy Cheung kong 5.125% & pay full amt $250k (min $250 & LTV 50%). It take est 18-19 yrs to collect coupon close to $250k (not yet include your initial capital of $250k).

    I do not know whether these ppty investors who invest into 1-2 bedder (500k to 700k) during the peak period in 2011/2012. After 18-19 yrs, will it become from 500k to 1000k & 700k to 1.4m. Likely not

    My niece who invested in D16 condo in 1997 ($900psf during peak). It only break even (900psf) only After 15-18 yrs. I believe it will stay around $900osf for many yrs due to the excess supply & also not so good location. Maybe it will be better after the MRT is completed in 2020. By the time, the ppty is really old (23 yrs) & need more sinking fund. Bayshore park is one of the old condo now have problem.

    If I am them with 400k to 600k cash, I will invest into a safe fixed income like Cheung Kong 5.125% perp bond or other. The $12800 coupon received yearly, I will dump (1k cash contribution monthly through AXS atm) it into my CPF for wife/husband future retirement or buy into a tokio marine saving plan 12k/yr for 5 yrs & lock in for another 10 yrs (can be 15 yrs) . Return projected 4.2%-4.5%.

    50k to 80k emergency fund into Fixed deposit. Another 30k-40k liquidilty cash at POSB for daliy expenses. Bal buy into dividend or global fund during the bear mkt. If it is around peak period, just temporary buy into fullleration fixed income fund (est 3% rtn) 1st. When opportunities comes (mkt deep correction) switch to higher risk fund like 1st state dividend , Schroder Asian fund etc etc. If U have higher risk profile, buy into
    individual blue chip or reit or some US stock like Apple , starbuck etc.

    Must buy insurance early for their kids prefer TERM insurance or yourself. I bought CI term insurance very early for my 2 kids. Each pays $431/yr insure $171k. If I will to buy whole + CI, it will be >$1800. The return will depend on the participating fund performance. Liekly to be low 2% to 3.5%. In 1988, I bought a whole policy. Projected return low 5.12% & high 9% at that time (1988). After >$25 yrs, the return is only 1.88%. So I terminated it to put into my CPF (2.5% to 4%). My tgt for my CPF $ before age 60 is $1m.

    The rich (not MARIGINAL) ppty investors will not have any problem servicing the loan & can afford to hold 20-30 yrs. I still believe in ppty investment but max is only 1 HDB & 1 CONDO.

    =============================================================================================

  22. #2572
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    It's quite impossible to be marginal investor when the TDSR has raised the bar so much and the downpayment are at such high levels (20-50%). Plus ABSD to clear...

    It's either investor or not enough to be investor.
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  23. #2573
    teddybear's Avatar
    teddybear is offline Global recession is coming....
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    There is a new group of MARGINAL investors (as a result of TDSR and SSD) - those who satisfy TDSR, pay 40% down payment for their property purchase, and end up with little cash on hand, and cannot sell (have to maintain to be MARGINAL) because of SSD, they just need to lose their jobs and their properties will be force sold (and there are many such people now!)............

    Quote Originally Posted by Kelonguni View Post
    It's quite impossible to be marginal investor when the TDSR has raised the bar so much and the downpayment are at such high levels (20-50%). Plus ABSD to clear...

    It's either investor or not enough to be investor.

  24. #2574
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    Yah correct. Especially those who own multiple and all only paid up 40%. Sibei marginal...p

    Quote Originally Posted by teddybear View Post
    There is a new group of MARGINAL investors (as a result of TDSR and SSD) - those who satisfy TDSR, pay 40% down payment for their property purchase, and end up with little cash on hand, and cannot sell (have to maintain to be MARGINAL) because of SSD, they just need to lose their jobs and their properties will be force sold (and there are many such people now!)............
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  25. #2575
    teddybear's Avatar
    teddybear is offline Global recession is coming....
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    Marginal or not is not how much loan they take!
    Even if they can & MUST PAY UP 80% they are still marginal if they have NO CASH on hand and they are unable to sell their property fast enough when they need the cash!

    Such simple logic you also don't know? No wonder you can't be a successful investor!

    Quote Originally Posted by Kelonguni View Post
    Yah correct. Especially those who own multiple and all only paid up 40%. Sibei marginal...p

  26. #2576
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    Quote Originally Posted by cbsh38584 View Post
    The page 34 (dated late 2012) which I highlighted why MARginal ppty investors should not go into ppty is gone.


    =============================================================================================
    I say that those MARGINAL ppty investors are those who own a HDB with min loan left or fully paid & have excess on 400k to 600k avail for a 2nd ppty investors to buy. I say those group of MARGINAL ppty investors will be better off invest into safe bond like Cheung Kong 5.125% or Singpost 4% SGD perp bond.

    Job securities will be a very big issues. When U reach 40+ to 50 yrs old, chances of being retrenched is very high possiblility & U are expected to living beyond 80 or even 90 if they did not plan for their retirement early.

    Inflation is a very big issues. KK hospital charges $70 then $90 then $98. I heard now $115 just within 6-7 yrs.
    Floss bread from 0.80 to $1.00 to 1.20 $ 1.50 . Now $1.70. etc etc. The cash of $400k to $600k is very precious to them. If those MARIGINAL ppty investors buy during the peak period (2011/201), they will be in real trouble if their job is not secured. Everyday, fired fighting to pay for the related ppty linvestment & may lead to husband /wife quarreling & affect the kids.

    If they will to buy Cheung kong 5.125% & pay full amt $250k (min $250 & LTV 50%). It take est 18-19 yrs to collect coupon close to $250k (not yet include your initial capital of $250k).

    I do not know whether these ppty investors who invest into 1-2 bedder (500k to 700k) during the peak period in 2011/2012. After 18-19 yrs, will it become from 500k to 1000k & 700k to 1.4m. Likely not

    My niece who invested in D16 condo in 1997 ($900psf during peak). It only break even (900psf) only After 15-18 yrs. I believe it will stay around $900osf for many yrs due to the excess supply & also not so good location. Maybe it will be better after the MRT is completed in 2020. By the time, the ppty is really old (23 yrs) & need more sinking fund. Bayshore park is one of the old condo now have problem.

    If I am them with 400k to 600k cash, I will invest into a safe fixed income like Cheung Kong 5.125% perp bond or other. The $12800 coupon received yearly, I will dump (1k cash contribution monthly through AXS atm) it into my CPF for wife/husband future retirement or buy into a tokio marine saving plan 12k/yr for 5 yrs & lock in for another 10 yrs (can be 15 yrs) . Return projected 4.2%-4.5%.

    50k to 80k emergency fund into Fixed deposit. Another 30k-40k liquidilty cash at POSB for daliy expenses. Bal buy into dividend or global fund during the bear mkt. If it is around peak period, just temporary buy into fullleration fixed income fund (est 3% rtn) 1st. When opportunities comes (mkt deep correction) switch to higher risk fund like 1st state dividend , Schroder Asian fund etc etc. If U have higher risk profile, buy into
    individual blue chip or reit or some US stock like Apple , starbuck etc.

    Must buy insurance early for their kids prefer TERM insurance or yourself. I bought CI term insurance very early for my 2 kids. Each pays $431/yr insure $171k. If I will to buy whole + CI, it will be >$1800. The return will depend on the participating fund performance. Liekly to be low 2% to 3.5%. In 1988, I bought a whole policy. Projected return low 5.12% & high 9% at that time (1988). After >$25 yrs, the return is only 1.88%. So I terminated it to put into my CPF (2.5% to 4%). My tgt for my CPF $ before age 60 is $1m.

    The rich (not MARIGINAL) ppty investors will not have any problem servicing the loan & can afford to hold 20-30 yrs. I still believe in ppty investment but max is only 1 HDB & 1 CONDO.

    =============================================================================================
    Merci beaucoup, will take look time to unwind soon.

  27. #2577
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    Quote Originally Posted by cbsh38584 View Post
    The page 34 (dated late 2012) which I highlighted why MARginal ppty investors should not go into ppty is gone.


    =============================================================================================
    I say that those MARGINAL ppty investors are those who own a HDB with min loan left or fully paid & have excess on 400k to 600k avail for a 2nd ppty investors to buy. I say those group of MARGINAL ppty investors will be better off invest into safe bond like Cheung Kong 5.125% or Singpost 4% SGD perp bond.

    Job securities will be a very big issues. When U reach 40+ to 50 yrs old, chances of being retrenched is very high possiblility & U are expected to living beyond 80 or even 90 if they did not plan for their retirement early.

    Inflation is a very big issues. KK hospital charges $70 then $90 then $98. I heard now $115 just within 6-7 yrs.
    Floss bread from 0.80 to $1.00 to 1.20 $ 1.50 . Now $1.70. etc etc. The cash of $400k to $600k is very precious to them. If those MARIGINAL ppty investors buy during the peak period (2011/201), they will be in real trouble if their job is not secured. Everyday, fired fighting to pay for the related ppty linvestment & may lead to husband /wife quarreling & affect the kids.

    If they will to buy Cheung kong 5.125% & pay full amt $250k (min $250 & LTV 50%). It take est 18-19 yrs to collect coupon close to $250k (not yet include your initial capital of $250k).

    I do not know whether these ppty investors who invest into 1-2 bedder (500k to 700k) during the peak period in 2011/2012. After 18-19 yrs, will it become from 500k to 1000k & 700k to 1.4m. Likely not

    My niece who invested in D16 condo in 1997 ($900psf during peak). It only break even (900psf) only After 15-18 yrs. I believe it will stay around $900osf for many yrs due to the excess supply & also not so good location. Maybe it will be better after the MRT is completed in 2020. By the time, the ppty is really old (23 yrs) & need more sinking fund. Bayshore park is one of the old condo now have problem.

    If I am them with 400k to 600k cash, I will invest into a safe fixed income like Cheung Kong 5.125% perp bond or other. The $12800 coupon received yearly, I will dump (1k cash contribution monthly through AXS atm) it into my CPF for wife/husband future retirement or buy into a tokio marine saving plan 12k/yr for 5 yrs & lock in for another 10 yrs (can be 15 yrs) . Return projected 4.2%-4.5%.

    50k to 80k emergency fund into Fixed deposit. Another 30k-40k liquidilty cash at POSB for daliy expenses. Bal buy into dividend or global fund during the bear mkt. If it is around peak period, just temporary buy into fullleration fixed income fund (est 3% rtn) 1st. When opportunities comes (mkt deep correction) switch to higher risk fund like 1st state dividend , Schroder Asian fund etc etc. If U have higher risk profile, buy into
    individual blue chip or reit or some US stock like Apple , starbuck etc.

    Must buy insurance early for their kids prefer TERM insurance or yourself. I bought CI term insurance very early for my 2 kids. Each pays $431/yr insure $171k. If I will to buy whole + CI, it will be >$1800. The return will depend on the participating fund performance. Liekly to be low 2% to 3.5%. In 1988, I bought a whole policy. Projected return low 5.12% & high 9% at that time (1988). After >$25 yrs, the return is only 1.88%. So I terminated it to put into my CPF (2.5% to 4%). My tgt for my CPF $ before age 60 is $1m.

    The rich (not MARIGINAL) ppty investors will not have any problem servicing the loan & can afford to hold 20-30 yrs. I still believe in ppty investment but max is only 1 HDB & 1 CONDO.

    =============================================================================================
    With 400-600k cash, probably some pple will down 50% for 2 properties. And not all knows how to play your kind of bonds game, especially old uneducated folks. And for some buying props as gift to their kids in future, meanwhile to reduce mortgage loan for them too

  28. #2578
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    I am definitely not as successful as you with many 100 year old CCR FH properties that have declined 30% or more from 2013 with hordes of cash buffers to top up losses!

    Quote Originally Posted by teddybear View Post
    Marginal or not is not how much loan they take!
    Even if they can & MUST PAY UP 80% they are still marginal if they have NO CASH on hand and they are unable to sell their property fast enough when they need the cash!

    Such simple logic you also don't know? No wonder you can't be a successful investor!
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

  29. #2579
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    teddybear is offline Global recession is coming....
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    NO worry, because no banks, absolute ZERO, has ever ask me to top up paper losses on properties, and my cash liquidity is intact (and these liquid assets like stocks and bonds and futures etc are earning more money!), and I can sleep for 30 years without looking at property prices knowing my FH properties will never depreciate in value vs 99-years leasehold properties when 99-years leasehold property owners will be madly trying to flip to others and convincing others to buy their aging leasehold properties!

    Quote Originally Posted by Kelonguni View Post
    I am definitely not as successful as you with many 100 year old CCR FH properties that have declined 30% or more from 2013 with hordes of cash buffers to top up losses!

  30. #2580
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    Yah already depreciated 20-30%, quite impossible to depreciate further.


    Quote Originally Posted by teddybear View Post
    NO worry, because no banks, absolute ZERO, has ever ask me to top up paper losses on properties, and my cash liquidity is intact (and these liquid assets like stocks and bonds and futures etc are earning more money!), and I can sleep for 30 years without looking at property prices knowing my FH properties will never depreciate in value vs 99-years leasehold properties when 99-years leasehold property owners will be madly trying to flip to others and convincing others to buy their aging leasehold properties!
    The three laws of Kelonguni:

    Where there is kelong, there is guni.
    No kelong no guni.
    More kelong = more guni.

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