China Minzhong acquired by PT Indofood. Share price shoots up by 112%

China Minzhong has gotten out of its pit. Its trading halt was lifted today and from a low of 0.53, it shot up to 1.12. Reason was because it got an offer from PT Indofood to acquired its shares at 1.12. China Minzhong has offered its shareholders a mandatory cash offer at an offer price of 1.12.

Previously, a negative report by Glaucus Research caused it share price to drop by more than 50%. This caused fear to investors who own China Minzhong shares as they see their portfolio value plummet. There were rumours that China Minzhong could be forever suspended and shareholders could never get back their money. There were many S-chips or so called china stocks which suffered that fate so its understandable that a fear is there.

So what does a mandatory cash offer means? It means all shareholders have to sell their shares and the company will buy it at a price of 1.12. You can sell it now or wait for the mandatory cash offer letter to be mailed to you and accept the offer.

I've received one mandatory cash offer before and it was by the company sakari. It was known as straits asia trading beforehand. It does feel good to see your stocks jump up in value. How to know if a company will be acquired? I have to say there is no sure way to tell but investing in undervalued companies increases the probability by a lot.

Learning how to pick stocks is the best knowledge that you can acquire. In fact, by learning how to analyze a company, i've picked up skills in business management and economics. I've also learnt the skills of accounting. There is so much to learn in the investing world. One can never get bored of learning and lifelong learning is one of the keys to success. It is not just about making money but its about a journey towards financial freedom.

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What is happening to the market?

I'm back from my holidays and time for me to start writing again. It has been a good trip and Taiwan was really fun. Every country i go to, i'll notice that each has its own culture and national identity. You could recognise who are the resident people there. Apparently, it is most obvious from the way they talk. Taiwan people have their own style and tone of chinese. China people have their own different set of style and tone of chinese. Even Singaporeans have their own style of chinese. One common language but different identity.

Just only one week of my holidays and the stock market has declined so much. Today the STI is dropping more than 50 points. Am i worried about my current stocks position? I would say i am not. I could still enjoy my holidays even though i saw the markets declining (well, i still checked the stock market when i'm overseas). This year, i've not invested a lot of my capital in the markets. I still have money to buy in when the opportunity arise. Thus, if it keeps on dropping, i can still accumulate more.

Yesterday, the most talked about stock was china minzhong. It dropped 50% and caused trading to halt on the counter itself. What is happening to this stock? There is a report by Glaucus Research accusing china minzhong of financial irregularities. How true is this report? I have no idea and i'm sure every investor will be clueless as well. We'll have to wait for the official explanation by china minzhong themselves. I do not have any shares in china minzhong as of now. Will i risk to accumulate shares of it? If i calculate my risk appetite, it could be worth it to risk a small amount of money to buy into it. This is money that i would be willing to lose. China Minzhong has been a good company thus far so if the report is not true, the stock price will recover quickly.

The current weakness in the stock market presents an opportunity to buy good companies at lower prices. Value investors do like the stock market to decline. When is a good time to buy? As an investor, i would say there is no perfect time to buy. Nobody can predict the bottom perfectly. You could learn some technical analysis which is chart reading to determine better entry points. But however, technical analysis has its shortfalls too. Losing money is part of investing. But you have to know why you're losing money. If you don't know why, then most likely you're investing blindly.

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Replica of Paris in China becomes ghost town

China property prices have skyrocket in the past few years. Developers who want a part of this action build up massive towns with impressive buildings in china hoping to earn some profits. However, it looks like the towns that are built are becoming vacant and now known as ghost towns. Is this the start of a property market crash?

One example is this impressive town developed by Zhejiang Guangsha Co. Ltd. It was started in 2007 and one of the major construction is a replica of the Eiffel Tower and parisan houses. It is designed to accommodate at least 10000 people but remains sparsely populated until now. (Source: Yahoo news sg)

*Photos by Reuters

Rising household debts in Singapore worrying

The monetary authority of Singapore(MAS) has released statistics which shows a worrying trend of household debts in Singapore. There is also a separate report released by the ASEAN property pulse which showed that up to 9000 Singapore property owners could be forced to sell their homes if interest rates rise.

Here are some of the statistics from the reports:

1) 5%-10% of borrowers in Singapore has loans more than 60% of their income

2) A majority of mortgage loans are on floating rate packages which means households will face higher monthly repayments when interest rates goes up

3) Only 70% of the existing loans are for owner occupied homes meaning investor demand for private homes is running quite high.

Once interest rates rise, some owners will have problems paying their mortgages and will have to sell their house. Coupled with the bump up of new housing units in the market expected to be completed within the next 3 years, this will cause imbalances in the economy where supply is more than demand. We should expect a correction in property prices within the next 2 years.

The government has sounded warning signals over the past 1 year. MAS has stepped in to impose stricter rules on loans. All these are signs that we should take note and not ignore.

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NTU graduates in demand - Finding job so easy?

Read the news today and saw this news about NTU graduates in demand. 7 in 10 secured a job before graduation. It was stated some were SPOILT for choice as they had multiple jobs offer. 

Now the job market so good? Finding job so easy?

Another thing is the top 10% of these students drew an average monthly salary of $8000. Really amazing!!!

Some work so hard to climb the corporate ladder and never reach $8000/mth. Fresh graduates so good life now. Haha

Read it here: http://www.channelnewsasia.com/news/singapore/ntu-graduates-in-demand/756470.html

Volatile shipping market shows signs of recovery

It was reported in channel news asia today that the shipping market is showing signs of recovery. However, China's economy is still showing signs of slow growth therefore the recovery should be more gradual instead of a sharp recovery.

The Baltic Dry index is an indicator of the state of the shipping industry.  

Investopedia explains Baltic Dry index as:

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed). 

The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) - Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index's composite measurement.

It is also known as the "Dry Bulk Index".


The index has jumped 68% during the first half of the year. This will benefit dry bulk shippers as they see an increase rate for each trip. 

Select Group secures land to accommodate food business expansion

Saw this news on the straits times. Looks like this company is expanding. Building a new HQ with its central kitchen and R&D centres under one roof just like breadtalk.

Qutoed from the straits times on July 12, 2013:

"Select Group has accepted an offer of direct land allocation from Jurong Town Corporation of a piece of vacant leasehold site of about 64,434 square feet at Senoko South Road.

The company said it would need more space to accommodate its increased production capacity, logistic and office support functions, in anticipation of future business expansion.

Select intends to build a multi-storey building on the site, which will house its central kitchen facility, together with a research and development centre, training test kitchens, storage facilities, cold room facilities and the company's operations and corporate headquarters.

The cost of construction will be financed through internal resources and bank borrowings."

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