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Speaker 1: This is a C. N. A. Podcast.

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Speaker 2: Can

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Speaker 1: you give us your thoughts on the following? In just

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Speaker 1: a few words, Singapore's stock benchmark S. T. I.

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Speaker 2: A stable dividend paying $6,

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Speaker 1: Singapore reads

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Speaker 2: very strong flow of dividend green

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Speaker 1: bonds.

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Speaker 2: Very good for environment. So definitely is something that we

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Speaker 2: should all embrace.

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Speaker 1: Singapore savings bond.

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Speaker 2: Very good safe investment for retail investors and flexible

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Speaker 1: Singapore market versus U. S. Market.

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Speaker 2: Us market is where you go for growth. Singapore market

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Speaker 2: is where you go for stability.

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Speaker 1: Welcome to money talks. I'm your host Sarah Al Khaldi

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Speaker 1: ask investors and they'll say the world is full of

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Speaker 1: opportunities and when it comes to your money, there's no

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Speaker 1: shortage of financial products you could choose from. The U. S.

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Speaker 1: Has the world's largest stock exchange china is always on

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Speaker 1: the table. And there are other emerging markets such as

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Speaker 1: India and Southeast Asia. But what about

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Speaker 1: stop putting your money in? Singapore? Singapore savings bonds were oversubscribed.

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Speaker 1: Big names like capital, Land DBS and Singapore Airlines are

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Speaker 1: sought after shares. But what do we need to know

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Speaker 1: about investing? Local? Are they always safe bets And where

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Speaker 1: do you start? Al Fatiha is here to talk about this.

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Speaker 1: He's the ceo of financial advisory firm Sin Capital.

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Speaker 1: Thank you so much. Alfred for joining us today. It's

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Speaker 1: a pleasure having you on.

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Speaker 2: No, it's really my pleasure now.

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Speaker 1: I know you've done financial advisory for more than 30 years.

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Speaker 1: Is that right? I mean that's a lot of time?

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Speaker 2: Yes, sometimes

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Speaker 1: I

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Speaker 1: Over the 30 years, what has it been like and

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Speaker 1: what has changed you think, especially here in Singapore

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Speaker 2: Comparing to 30 years ago, definitely people are more mindful

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Speaker 2: about doing financial plans, how to manage their wealth better

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Speaker 2: and also to invest

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Speaker 2: accordingly.

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Speaker 1: Now before we go at the different options that are

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Speaker 1: available for us, do you think it's worth putting all

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Speaker 1: your investments just in Singapore, just in the country without

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Speaker 1: having to look at overseas assets overseas markets or do

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Speaker 1: you think you'll lose out by doing this?

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Speaker 2: Actually, we are in a very good spot because of

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Speaker 2: our financial hub. We actually have a lot of opportunities

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Speaker 2: and a lot of channels to invest overseas. Take for example,

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Speaker 2: you can use a unit trust

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Speaker 2: and you have immediate exposure to the global market depending

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Speaker 2: on what kind of investment combination you choose. And then

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Speaker 2: of course there's different investment platform where you can just

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Speaker 2: trade us shares over your mobile phone. So actually the

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Speaker 2: choices for Singaporeans who actually invest overseas, definitely there are

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Speaker 2: tremendous opportunities.

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Speaker 1: That's interesting because you mention

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Speaker 1: how we can invest overseas and here in the country,

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Speaker 1: we do have those options. But when we look at

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Speaker 1: Singapore stocks in particular and options that we have. Singapore

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Speaker 1: is so developed right now and I wonder if the

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Speaker 1: biggest jump in Singapore stocks have already been made because

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Speaker 1: we did go from third world to first, but where

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Speaker 1: do we go from here,

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Speaker 2: If you look at the straits time index as a reference,

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Speaker 2: it has actually not been doing that fantastically well over

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Speaker 2: the last 10 years. In fact some investors find that

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Speaker 2: Singapore market is really very boring right?

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Speaker 1: I've heard that

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Speaker 1: it doesn't really go too high or too low. It

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Speaker 1: just kind of stays around the same space.

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Speaker 2: Yeah so actually our market really is a lot more

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Speaker 2: on value investments because a lot of the blue chips counters,

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Speaker 2: they actually pay very good dividends. I mean of course

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Speaker 2: it may not give you that kind of capital gain

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Speaker 2: excitement like the U. S.

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Speaker 2: Stocks but definitely over a long period of time you

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Speaker 2: can actually learn from the dividends. But another thing that

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Speaker 2: actually attract investor to Singapore market is actually we are

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Speaker 2: based in sin dollars. So the currency strength actually give

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Speaker 2: us that edge. So for example this year, Singapore market

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Speaker 2: is actually one of the best performing market.

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Speaker 2: I think it's also because many investors are actually seeking

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Speaker 2: safe Heaven in terms of the same dollars. And because

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Speaker 2: of our listed companies a lot of the blue chips

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Speaker 2: are actually doing very well and they are continuing their

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Speaker 2: dividend paying policies.

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Speaker 1: So you mean in times of crisis like we are

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Speaker 1: in right now when a lot of international markets like

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Speaker 1: the U. S. And china even

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Speaker 1: are seeing their equities go down Singapore not so much

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Speaker 1: we're still able to keep our head above water despite

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Speaker 1: the rest of the world really struggling when it comes

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Speaker 1: to equities. Is that right?

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Speaker 2: Yes, because of the conventional business that our stock market

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Speaker 2: comprised of And also because of the currency.

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Speaker 1: The thing is the Singapore market doesn't really have a

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Speaker 1: lot of technology or

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Speaker 1: new economy companies, right? We have a lot of banks

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Speaker 1: and property companies. But are you missing out if you

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Speaker 1: don't put your money into these up and coming tech

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Speaker 1: names that are usually outside of Singapore,

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Speaker 2: That is the composition of the Singapore market. But I

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Speaker 2: mean if you look at it now from 2021 until now,

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Speaker 2: if you look at us now stock market, it was

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Speaker 2: in a free fall zone.

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Speaker 2: But comparing li if let's say you are looking into

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Speaker 2: a Singapore market, in fact, you can still actually see

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Speaker 2: certain positive capital appreciation. That is a reflection of the

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Speaker 2: shift in terms of the investor's appetite from high growth

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Speaker 2: to conventional value stocks

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Speaker 2: that look for dividends. So actually for investors is about

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Speaker 2: what all these investment instruments can serve your needs. But

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Speaker 2: for Singaporeans, there's another thing very important, we need to

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Speaker 2: factor because actually many Singaporeans travel around the world, whether

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Speaker 2: it's for leisure or for business, but at the same time,

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Speaker 2: don't forget we are holding on to a very strong

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Speaker 2: currency Sing dollars.

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Speaker 2: So if you want to invest in overseas, you also

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Speaker 2: have to ask yourself this question, what is the currency

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Speaker 2: risk if I invest, oversee five years, 10 years later,

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Speaker 2: even if let's say that investment appreciate, will it be

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Speaker 2: able to cover my currency changes

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Speaker 1: because you do have to sell your Singapore dollar and

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Speaker 1: by the way,

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Speaker 1: Whatever currency that is needed to buy that foreign stock

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Speaker 1: and in your experience over 30 years, what has that

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Speaker 1: currency risk been like for those who are trying to

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Speaker 1: prepare for retirement or prepare for financial needs that are

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Speaker 1: years or decades down the line?

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Speaker 2: Singapore, we are very unique, right? We are a small island.

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Speaker 2: Everything that we consume come from imports. So that's why

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Speaker 2: we have to maintain currency policies.

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Speaker 2: So because of these currency policies to combat inflations and

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Speaker 2: our government has the ability to maintain that kind of

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Speaker 2: strength in terms of currencies. So therefore you see that

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Speaker 2: our scene dollars generally appreciated against most currencies. One of

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Speaker 2: the very good example is our neighboring country Malaysia. If

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Speaker 2: you have invested, let's say property in Malaysia, the property

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Speaker 2: may have also appreciated over the last 10, 20 years,

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Speaker 2: but the currency exchanges may work in a negative way,

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Speaker 2: but for Malaysians to invest in Singapore stocks or even property,

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Speaker 2: not only they enjoy capital appreciation,

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Speaker 2: they also enjoy currency appreciation.

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Speaker 1: I see that's an interesting point to consider when you're

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Speaker 1: looking at different types of equities that you put your

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Speaker 1: money into. So

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Speaker 1: in life of that and the fact that Singapore's currency

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Speaker 1: has been strong and the Singapore market may not be

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Speaker 1: jumping up so high, but it is stable, especially in

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Speaker 1: times of crisis is it fair to say then that

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Speaker 1: Singapore stocks are particularly for the dividends and value and

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Speaker 1: not really for growth, basically don't expect that the stock

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Speaker 1: price will go up so much, but expect the dividends

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Speaker 1: to come your way.

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Speaker 2: Yeah, I mean of course for investors, if they are

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Speaker 2: trying to look for a Tesla

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Speaker 1: Singapore or facebook even right,

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Speaker 2: it may be difficult to find.

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Speaker 1: Even grab is not even listed here for

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Speaker 2: the companies that are here to investors, they may find

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Speaker 2: boring but actually

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Speaker 2: is stable. So it's all about what is the investor's choice,

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Speaker 2: especially if we are preparing for retirements and as we age,

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Speaker 2: not that older people, you cannot invest in stocks, but

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Speaker 2: then you have to be more selective what kind of

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Speaker 2: stocks you want to put in,

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Speaker 2: you want to actually put into equities that can pay

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Speaker 2: you very good dividends.

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Speaker 1: So that's the picture for Singapore stocks. But what Singapore

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Speaker 1: does have our rates, real estate investment trusts. And when

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Speaker 1: you buy a read, you basically put your money in

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Speaker 1: to a company that owns different types of properties and

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Speaker 1: then you get a part of the properties proceeds. Do

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Speaker 1: you think this is a must have for investors because

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Speaker 1: not every country has reads the same way Singapore does.

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Speaker 2: Yes, actually Singapore reads market is one of the more

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Speaker 2: advanced in the world and we have a lot of

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Speaker 2: choices from the hospitality data center. You have logistics, industrial medical.

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Speaker 2: So there are a lot of choices for investors to

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Speaker 2: actually choose.

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Speaker 2: So normally for investors who go for reads, they are

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Speaker 2: looking again for the stable dividend payout because by and

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Speaker 2: large most reads will invest in properties depending on the

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Speaker 2: different kind of sectors and they are expected to actually

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Speaker 2: generate rental income.

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Speaker 2: And because for Singapore, most of the readers have these

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Speaker 2: policies where they actually pay out 90%

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Speaker 2: of their income so that in order to actually enjoy

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Speaker 2: certain tax concessions. So that's why the reeds holder, the

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Speaker 2: rich investors generally can expect to receive all these income.

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Speaker 2: And of course over the long run, if the property

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Speaker 2: actually have capital appreciations, it will be reflected in the

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Speaker 2: reeds price, which they can always sell in the markets.

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Speaker 1: So it sounds like a good investment to you.

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Speaker 2: I think it's a very popular choice for many investors.

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Speaker 2: Of course every investment, there's always the risk, right? So

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Speaker 2: for reads actually the risk will be interest rate because

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Speaker 2: for reads when they buy a property, they will tend

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Speaker 2: to take on leverage

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Speaker 1: that basically.

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Speaker 2: Yes. So we take our loans in the rising interest

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Speaker 2: rate markets, then it will increase your cost, then you

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Speaker 2: affect your net income. So

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Speaker 1: you won't earn as much from them in that environment.

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Speaker 2: Yes.

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Speaker 1: Hi, I'm Stephen and I host the new season of

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Speaker 1: our podcast heart of the matter, join me in getting

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Speaker 1: right to the heart of the headlines as we speak

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Speaker 1: with experts and newsmakers to delve deep into the most

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Speaker 1: talked about news developments. Look out for our episodes wherever

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Speaker 1: you get your podcasts.

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Speaker 1: For those who say don't want to do a whole

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Speaker 1: lot of research when it comes to individual companies or

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Speaker 1: individual reads even they can't turn to exchange traded funds

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Speaker 1: or ETFS. You can put your money in a group

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Speaker 1: of companies when you buy an ETF. What's interesting is

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Speaker 1: while being in Singapore, we can in

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Speaker 1: invest in other countries through E. T. F. S that

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Speaker 1: are on the Singapore exchange. What's your sense of the

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Speaker 1: choices that we have for Singapore listed? E T F

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Speaker 2: E T F is a form of passive investments. So

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Speaker 2: it's for investors to actually, okay, take for example, let's

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Speaker 2: say you want to buy Singapore E T. F. Let's

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Speaker 2: say you have $10,000

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Speaker 2: so you're torn right, are you going to buy DBS

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Speaker 2: which you cannot even buy 1000 shares or you want

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Speaker 2: to buy some tell. So that as investors, you may say, okay,

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Speaker 2: I will go for E. T. F. Because it's a

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Speaker 2: combination of all these S. T. I index is, but

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Speaker 2: you are still actually doing a past investments in a

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Speaker 2: sense that the str

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Speaker 2: I must go up for your investments to appreciate compared

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Speaker 2: to a unit trust where there's a fund managers that

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Speaker 2: do in this thing called active management because they may

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Speaker 2: actually adjust allocations depending on the market outlook to increase

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Speaker 2: in certain sectors or reduce in certain sectors. But by

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Speaker 2: and large, there is also the cost that you need

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Speaker 2: to factor in

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Speaker 2: E. T. F. Generally have a low expense ratio compared

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Speaker 2: to a unit trust. So every investments there are pros

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Speaker 2: and cons, but you're right. Many investors don't spend enough

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Speaker 2: time to do homework.

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Speaker 1: That's why we try to figure out as fast as

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Speaker 1: we can what options are best for us. One popular

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Speaker 1: investment recently is the Singapore savings bond which basically you

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Speaker 1: lend money to the government for 10 years. You get

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Speaker 1: a fixed interest

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Speaker 1: trade and that goes up every year that you hold

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Speaker 1: this bond and returns for the august issue was at

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Speaker 1: an all time high. But that won't always be the case.

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Speaker 1: I would imagine. Do you think it is worth jumping

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Speaker 1: into Singapore savings bonds?

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Speaker 2: This is really meant for the retail investors because you

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Speaker 2: can start savings with as little as $500

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Speaker 2: And it's actually very flexible, you can withdraw it at

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Speaker 2: any time, but of course you have to keep it

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Speaker 2: for 10 years. The possible downside about it is that

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Speaker 2: you can't really put in as much as you like

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Speaker 2: first there is the 200,000 limits for each investors, but

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Speaker 2: every issue you also have to be.

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Speaker 2: So for example, the last issue was so overwhelmed. I

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Speaker 2: believe each investors could only get up to $9,000.

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Speaker 1: I see.

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Speaker 2: So as much as it's attractive safe car investments is

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Speaker 2: not that you want to put in 50,000 80,000. You

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Speaker 2: can do so because it also depends on the trench

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Speaker 2: that's being offered.

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Speaker 1: Yeah, but why put money in the Singapore savings bond

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Speaker 1: versus say equities or other financial

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Speaker 1: instruments that you can hold for the long term and

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Speaker 1: maybe you could see even bigger gains.

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Speaker 2: I think most of the investors are generally more reserve

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Speaker 2: verse risk conservative because investing in the equity market, you

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Speaker 2: actually need to have a lot of homework being done.

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Speaker 2: You also need to have the time durations and a

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Speaker 2: lot of time investors actually invest based on hearsay. So

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Speaker 2: when they have a negative experience in the equity my

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Speaker 2: market, they tend to shut off from that. But that

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Speaker 2: is also because the way the investment was being done

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Speaker 2: was not in the proper manner. So that's why for F. D.

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Speaker 2: For safe kind of bonds, investments has always been a

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Speaker 2: very strong attractions for many investors. But is it the

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Speaker 2: right type of investments over the long run that can

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Speaker 2: serve your financial goals. It may not really help for

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Speaker 2: people to do so.

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Speaker 2: So example, Singapore savings bonds has gotten a lot of

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Speaker 2: attractions because the average tenure you is about 2.8% which

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Speaker 2: is higher than a lot of the banks fixed deposit,

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Speaker 2: But based on the recent core inflation data of 4.4%,

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Speaker 2: you are actually not growing your money, the value of

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Speaker 2: the money is being eroded because of inflation. So in

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Speaker 2: order to grow your money you must at least invest

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Speaker 2: in investment combinations that can beat the inflation. So

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Speaker 1: it sounds like

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Speaker 1: you're not really too excited about Singapore savings bond despite

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Speaker 1: the hot receptiveness that it has had in the past

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Speaker 1: few months.

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Speaker 2: Oh no, actually I'm excited. I would like to also

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Speaker 2: put money in the S. S. B. But as part

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Speaker 2: of my investment combination because in a good investment combination

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Speaker 2: or investment portfolio, you need to have a combination allocation

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Speaker 2: of the safe and more volatile kind of investment so

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Speaker 2: that overall you can get a better investment written.

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Speaker 1: There are other government bonds as well. And we recently

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Speaker 1: saw Singapore's first Sovereign green bond where you lend money

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Speaker 1: to the government for green projects in particular. I know

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Speaker 1: there are more green bonds that

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Speaker 1: That are on the way. What's your take on this?

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Speaker 1: Because the most recent sovereign green bond is for 50 years,

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Speaker 1: isn't it? So how does that work and what's the

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Speaker 1: value in looking into something like this?

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Speaker 2: I think the green bond is an excellent idea, especially

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Speaker 2: for many of us very much want to protect the environments.

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Speaker 2: For example, my wife, she will make sure she recycled

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Speaker 2: many things

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Speaker 2: and she always remind the whole family off the electricity

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Speaker 2: were not in use. So I think resonate to many

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Speaker 2: people who are really trying to save the earth. But

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Speaker 2: I think maybe we take a step back actually. Government

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Speaker 2: has also been providing options for retail investor

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Speaker 2: In terms of the bond investments. So you have the

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Speaker 2: T view, which is a very short term kind of

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Speaker 2: Singapore government securities is about six months to one year.

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Speaker 2: Then you have the Singapore government securities bonds which range

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Speaker 2: from two years up to 50 years.

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Speaker 2: So the bonds itself will be actually put into things

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Speaker 2: like market developments or infrastructures and example the green bonds,

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Speaker 2: you can even say because it's issued by Singapore government

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Speaker 2: is really, really, really very low risk. And of course

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Speaker 2: the u averages about 3% if you factor in the

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Speaker 2: sink dollars kind of stability, which is actually a very

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Speaker 2: attractive investment. Plus,

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Speaker 2: you know, your money is actually lending to projects that

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Speaker 2: is doing good for the climate adaptations, things like that.

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Speaker 1: But the thing about green bonds that I would like

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Speaker 1: to understand is after they issue the screen bond, they

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Speaker 1: raise the money that they need for the projects, right.

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Speaker 1: And then these bonds can still be bought or sold

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Speaker 1: in the market. So if, let's say I come in

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Speaker 1: two months later or one month later trying to buy

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Speaker 1: this green bond. My money doesn't really go to the

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Speaker 1: green project. It just goes to another investor. So how

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Speaker 1: does my investment help the green project? Because in a sense,

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Speaker 1: they already got the money that they needed.

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Speaker 2: Singapore government securities bonds is from two years to 50

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Speaker 2: years is a very long time horizon. But what if

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Speaker 2: the investors need to actually cash out or need to

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Speaker 2: change for cash? So that is where the secondary market

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Speaker 2: comes into play so that it let the investors have

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Speaker 2: a platform to actually and cash their investment. So with

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Speaker 2: this kind of ecosystem

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Speaker 2: then the investors will be more willing to actually participate

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Speaker 2: in the primary market.

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Speaker 1: I see, I see because if they want their money back,

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Speaker 1: they can sell it to me and I can just

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Speaker 1: buy that bond from them, then it gives the first

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Speaker 1: batch of people more confidence to go in and put

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Speaker 1: money into the

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Speaker 1: screen projects.

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Speaker 2: Absolutely. But of course, do be mindful. There will always

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Speaker 2: be certain risks involved because if, let's say you need

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Speaker 2: to catch up in the wrong timing, you may actually

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Speaker 2: suffer certain financial losses

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Speaker 1: always comes to the risk, doesn't it?

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Speaker 1: Before we end this chat, Alfred, I really want to

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Speaker 1: know what's one thing that Singapore investors should keep in

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Speaker 1: mind as they start or as they continue in their

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Speaker 1: investment journey in the Singapore market,

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Speaker 2: I think it's important to recognize what is your financial goal.

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Speaker 2: It could be saving up the down payment for your property,

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Speaker 2: which is a very important thing for many of us

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Speaker 2: whether it's a HDB or private properties, then when you

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Speaker 2: identify the financial goal then there is where you will

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Speaker 2: be able to navigate how to actually get into that goal.

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Speaker 1: Well thanks so much for your insights. Alfred really appreciate it.

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Speaker 1: So good points there on how Singapore is

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Speaker 1: in a unique position when it comes to the local

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Speaker 1: market and that Singapore equity market in particular is quite

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Speaker 1: stable with good dividends and it provides value for investors

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Speaker 1: even though we don't have a whole lot of growth stocks.

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Speaker 1: But the Singapore dollar as well has an edge when

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Speaker 1: it comes to the strength of its currency. Thank you

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Speaker 1: so much. Alfred, thank

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Speaker 2: you very much. Thank you for the

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Speaker 1: opportunity.

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Speaker 1: We hope you enjoyed this episode of money talks the

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Speaker 1: team behind this podcast is Jacqueline chan Joanne chan Danieli

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00:21:47,090 --> 00:21:50,590
Speaker 1: and Christina robert. We've got a refreshed slate of audio

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Speaker 1: like to share. Please write to us, the details are

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Speaker 1: in our episode notes. Until next time. This is Sarah

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Speaker 1: al Khaldi