5 tips for investing in shops and shophouses
The total value of commercial units transacted was $976.9 million, 12% higher than in 2H 2009.
Fri, Jul 23, 2010
Knight Frank
By Mary Sai, Executive Director
Auctions (Commercial), Knight Frank
The number of commercial units, typically shophouses and strata units for office and shops, sold in 1H 2010 remained similar to that in 2H 2009. A total of 495 commercial units were transacted in 1H 2010, reflecting a 4 per cent decrease compared to that in 2H 2009.
Although economic conditions have tremendously improved in 1H 2010, the number of commercial properties transacted was subdued, underpinned by limited supply and a stalemate in sellers' asking prices and owners' offer prices.
The limited supply meant limited choices for potential buyers while for sellers, the limited supply of strata commercial properties meant that there would be no urgency to sell their properties in case prices appreciate with further economic recovery.
Nevertheless, the total value of commercial units transacted was $976.9 million, 12 per cent higher than that in 2H 2009. The encouraging value of commercial units transacted in 1H 2010 could be the result of a shift from an interest for units in the lower price-band, to units in the mid price-band.
In 2009, due to the adverse economic conditions, investors and buyers were cautious and preferred to purchase commercial units which were affordably priced in the lowest price band.
Most transaction activities of strata shops and shophouses still remain in the Central Region (planning areas like Outram, Rochor, Kallang, Geylang). Meanwhile, strata office investors are shifting their interest to fringe areas like Beach Road, Middle Road and East Coast vicinity.
Buying Shops & Shophouses - What should you look out for?
Financing
As with most property transactions, getting funding is pivotal to the buying decision. Since July 2006, CPF savings cannot be used to finance commercial purchase. As such, getting a bank loan is critical.
With most banks granting loans of 70 to 80 per cent of the purchase price or valuation (whichever is lower), prospective buyers must have cash upfront for the remaining 20 to 30 per cent.
Currently, many banks are offering commercial loan packages at promotional rate of about 2.3 per cent which is a booster for many investors who are considering buying commercial properties for investment or owner occupation.
Location
Location is one key consideration in the buying decision for any property, more so for shops and shophouses. As shops/shophouses are for retailing purposes, they should be in conspicuous locations and sited where human traffic is high.
In a shopping mall, one has to pay a premium for shops in the main shoppers' concourse and facing the escalator where most shoppers will pass by when shopping. In the case of shophouse, its visibility from the main road and easy access to carparks are essential factors for consideration.
Good locations of shops/shophouses generate better rentability and therefore higher rental yields if they are held as investment properties.
Tenure
Statistics in 2H2009 & 1H2010 have shown that most buyers for shophouses preferred freehold properties while about half of the strata shop transactions in the same period were 99-year leasehold strata shops.
Differences in values between the two tenures can be in the region of 15 per cent to 20 per cent depending on the balance years of lease and other factors.
In recent years, many buyers of commercial properties have embraced 99-year leasehold properties in their investment portfolios as they are more affordable and have higher rental yields because of their lower capital values.
Zoning
This is essential to note when buying shophouses. Shophouses are usually erected on land zoned "Commercial" or "Residential with Commercial on Groundfloor Only".
Shophouses sited on land zoned residential are essentially terrace buildings with "tolerated" commercial uses and the occupants have to pay Temporary Occupation Licence (TOL) fees to the relevant authority for the non-residential usage.
Buyers have to note that they cannot assume that the building erected on residential zoned land can continue to run as a shophouse when there is a transfer of ownership.
Road line
This must be factored in when buying shophouses. Shophouses that face the main road are often affected by road lines. If the property is adversely affected - say, by a major road line - it will be more difficult to get bank financing as there is the risk of government acquisition for road widening.
However, if the shophouses are conserved or located within a conservation area, they are generally safe buys as these are "protected" areas.
Outlook for commercial units
Strata Office
The commercial property sales market is expected to continue to improve in 2010, in tandem with an expected economic recovery. Sales activity for strata office units is likely to reflect moderate increase, as investor sentiments for strata office units improve.
Potential buyers of strata offices are likely to continue to remain less sensitive to the tenure of strata offices. About two-third of strata offices transacted in 2H 2009 and 1H 2010 were 99-year leasehold strata offices. This trend is likely to continue, given limited supply, lower capital outlay and attractive yields of leasehold strata offices.
Strata Shops
The number of shop units transacted is expected to remain similar to the current number. However, due to limited new supply of strata shops, transaction prices is expected to be stable and there is potential for some capital appreciation.
Additionally, while strata shops are generally older and may be thought to be losing their appeal, there are certain trades which can only be supported by strata shops. These include lower-cost retail services, offering personable and customized services for regular customers.
About half of strata shops transacted in 2H 2009 and 1H 2010 were 99-year leasehold strata shops. This is likely to continue in 2H 2010.
Shophouses
Shophouses are expected to remain favourable for buyers, underpinned by limited supply and unique design. Some potential buyers will also feel that owning shophouses will be more tangible than renting as the unique value can only be actualised through owning.
Buyers are expected to remain keen in freehold shophouses. Currently, only about a quarter of shophouse transactions are leasehold, reflecting buyers' strong desire to have a lasting interest in shophouses.
Post Date: 23 July 2010
Friday, July 23, 2010
Tuesday, July 06, 2010
Sell, Rent
Sell
No. 98 - BAD
You try to attempt something yet you fret and you fear you create trouble for yourself. You are a trapped bird. You will not succeed as you are not decisive. Best to stay where you are.
Interpretation - Wait till a Benefactor comes to assist you. In asking for things, be patient.
Rent
No. 81 - MEDIUM
Trees are barren of leaves in Autumn. Return journey always seems faster. Thanks to Heaven's grace. A ship sails faster with the wind blowing in the right direction.
Interpretation - Heaven will give you their blessing to what you seek. Proceed with what you are hoping to do.
Post Date: 6 Jul 10
No. 98 - BAD
You try to attempt something yet you fret and you fear you create trouble for yourself. You are a trapped bird. You will not succeed as you are not decisive. Best to stay where you are.
Interpretation - Wait till a Benefactor comes to assist you. In asking for things, be patient.
Rent
No. 81 - MEDIUM
Trees are barren of leaves in Autumn. Return journey always seems faster. Thanks to Heaven's grace. A ship sails faster with the wind blowing in the right direction.
Interpretation - Heaven will give you their blessing to what you seek. Proceed with what you are hoping to do.
Post Date: 6 Jul 10
Wednesday, June 30, 2010
Fresh coat of paint
- Added a 'good' to the blog header
- Changed to new design template 'Awesome Inc'
Post Date 6 Jul 10
- Changed to new design template 'Awesome Inc'
Post Date 6 Jul 10
Sunday, May 30, 2010
3rd Anniversary
Hi Father,
Wow, it's been 3 years. How have you been doing?
I am happy to report that you are now a grandfather! After 7 years of trying, our little girl was born early last month. Most people are saying the little girl takes after me, but I'm just thankful she has Mummy's big round eyes and cute button nose! I thought I had prepared myself psychologically for the hard work, but Wifey seemed to be handling it better. I'm so pleased that she's rising up and embracing her new role with such great aplomb.
We have also been making Mum busy. When Wifey was doing her confinement, Mum came once in a while just to see how everyone is doing. Now that confinement is over, Mum comes over every day (except weekends and public holidays) to look after the little Princess in the day while Wifey rests. She also cooks lunch and dinner, and sometimes helps with the laundry. On the whole, a great help to have around.
Work-wise, there's nothing to shout about. I have been real busy, being one of the many involved in a multi-million dollar deal. Have been coming back late because of that. While everybody else seemed to be a winner of sorts, I am the sorry one here - I may be losing my job in a few months' time. Sigh. I know I'm worrying in advance again, but I can't help it. I'll try not to think about it. Will try.
On top of my regular job, I'm also helping a friend with his project. What was scheduled to end by Mar is now still running. I'm so short of time that I can only spare this project time at the end of the day. My sense of responsibility to my friend is stopping me from handing the project back to him. But the truth is, I'm up to my eyeballs ...
Father, this morning I went to the temple and made a donation in your name. Just now, after dinner, I left the receipt on the table. And then, an insect landed on the receipt, and stayed there for quite a while. Father, was that ... you? Were you also the one that was flying around little Princess this afternoon?
I just hope that you are fine, or that you have moved to a better place.
Once again, I humbly ask that you bless Mum, Wifey and now our little Princess. Take care, Dad. Still miss you a lot.
Yours sincerely,
Son-in-law
Image credit here.
Post Date: 30 May 09
Friday, May 28, 2010
Vesak Day - a day of reflection
The last time I had an opportunity to do this was 3 years ago. I failed, because I ate meat at Dad's wake on the last day.
This year, there's a chance to do it again. For 3 days from today, Vesak Day, to Sunday, Dad's 3rd death anniversary, I will go vegetarian.
If there are merits, may they be transferred to my family.
Post Date: 30 May 09
This year, there's a chance to do it again. For 3 days from today, Vesak Day, to Sunday, Dad's 3rd death anniversary, I will go vegetarian.
If there are merits, may they be transferred to my family.
Post Date: 30 May 09
Thursday, May 27, 2010
Such irony
I looked around the boardroom - lawyers, agents, buyer and seller.
Everyone was shaking each other's hands, congratulating each other on a job well-done, for sealing the deal.
At the end of the day, the lawyers will get their fees, the agents will get their commission, the buyer will get what they paid for, and the seller will get the money.
And me? Huh. Huh huh. Not only did I miss 2 consecutive days' of talks by Ajahn Brahm, I may have just made myself redundant, happening in a few months' time. Bragging rights about being part of the multi-million-dollar deal? Forget it!
我何去何从？
Image credit here.
Post Date: 30 May 09
Tuesday, March 16, 2010
Asiaone.com - Homing in on your own business
Homing in on your own business
Find out how to run your own business from home.
Tue, Mar 16, 2010 my paper
By Koh Hui Theng
APPLE did it this way; so did homegrown cake-shop chain Bengawan Solo. They started out operating from home offices, paid zero rent and the rest is history.
As of the end of last year, 19,000 Housing Board flat owners were operating out of home offices. Most are information-technology and management consultancies, trading offices and design or advertising firms.
There's help available. The Home Office Scheme (HOS), created in 2003, allows budding entrepreneurs to conduct small-scale businesses from their homes.
Non-HDB residents who intend to hire staff or working partners need to register their businesses with the Urban Redevelopment Authority. They need to pay a non-refundable $20 administration fee for a licence, which is valid for five years.
A HDB spokesman told my paper: "Besides saving on office- space rental and enjoying lower start-up costs, HOS users also save on travelling time and expenses."
It was the cost savings that convinced Mr Paul Lim, 31, to open babywishes.com.sg in 2007. The baby-products online-store owner said: "I felt I had a good idea as the (e-shop) concept was still quite new in Singapore.
"It would have been tough maintaining the business as a brick-and-mortar model - the high overheads of having a physical shop space would have eaten into the profits but this (home business) is something that can make money."
All it took to set up shop was 10 minutes of his time - registering babywishes online as a partnership - and $10,000 of his savings.
"The entire process was quite easy. We (Mr Lim and a business partner) did some research and finished the necessary paperwork in 10 minutes," he said. The business has been in the black since day one, and he even got a bonus.
"I get to spend quality time with my son, Marc, now 2½ years old. I'm sure the Ministry of Community Development, Youth and Sports will be very happy with my fathering role," Mr Lim chuckled.
Mr Lim, however, cautioned that one still has to put in hard work when it comes to building contacts and sourcing for suppliers.
my paper did some research at HDB and Spring Singapore to help potential entrepreneurs.
What does a small-scale business mean and does it include any type of business?
Yes, as long as the business is done on a small scale. The level of business activity has to be kept low so the home remains mainly a place of residence.
For example, someone baking cakes for sale to friends cannot turn the home into a bakery.
Go to www.ura.gov.sg/dc/ dcu/HOflyer.pdf for a checklist of the types of businesses that are not allowed under HOS.
How do I go about getting my home office registered?
Owners, tenants, authorised occupiers and sub-tenants of HDB flats or private properties aged 21 years and above can apply under the HOS.
Register the company - as a sole proprietorship, private limited company or partnership - with the Accounting and Corporate Regulatory Authority. Go to the Online Business Licensing Service (OBLS) to obtain the required licence.
Log on to www.business.gov.sg/licences and follow the step-by-step guide to complete the online application.
Be prepared to pay the $20 administrative fee via eNETS or credit card. Upon successful registration, you will receive a letter of authorisation to start operations.
If you wish to continue using your residence as a home office after five years, re-register at OBLS.
Where can I find funding for my home business?
Home business owners below 26 years old can apply for funding under Spring Singapore's Young Entrepreneurs Scheme for Start-ups.
Launched in 2008 to develop young new entrepreneurs, it provides pre-seed funding.
The Media Development Authority has an iJam Microfunding scheme that gives up to $50,000 in grants to develop new ideas into an innovative product or service. Go to www.idm.sg/support/ijam/ for details.
For information on tax exemptions, visit the Inland Revenue Authority of Singapore website at www.iras.gov.sg/ irasHome/page04.aspx?id=414
THIS WEEK'S FOLIO: DOING BUSINESS FROM HOME
TO REGISTER your company, you first have to decide the type of business model you are helming.
SOLE PROPRIETORSHIP
Most small businesses are sole proprietorships since it is simple and inexpensive.
You can convert a sole proprietorship or partnership to a company or limited-liability partnership later if you wish, but not the other way around.
It costs $65 to register. This amount includes the nameapproval fee.
PARTNERSHIP
It is similar to a sole proprietorship and registration costs are the same.
There are two types - general partnership and limited liability partnership, which is a new vehicle for doing business in Singapore.
Like the sole proprietorship, the owners are taxed at the personal-income tax rate.
COMPANY
Registration costs $315. Profits are taxed at the corporate rate and audited accounts are required in the case of large companies.
Post Date: 16 Mar 10
Find out how to run your own business from home.
Tue, Mar 16, 2010 my paper
By Koh Hui Theng
APPLE did it this way; so did homegrown cake-shop chain Bengawan Solo. They started out operating from home offices, paid zero rent and the rest is history.
As of the end of last year, 19,000 Housing Board flat owners were operating out of home offices. Most are information-technology and management consultancies, trading offices and design or advertising firms.
There's help available. The Home Office Scheme (HOS), created in 2003, allows budding entrepreneurs to conduct small-scale businesses from their homes.
Non-HDB residents who intend to hire staff or working partners need to register their businesses with the Urban Redevelopment Authority. They need to pay a non-refundable $20 administration fee for a licence, which is valid for five years.
A HDB spokesman told my paper: "Besides saving on office- space rental and enjoying lower start-up costs, HOS users also save on travelling time and expenses."
It was the cost savings that convinced Mr Paul Lim, 31, to open babywishes.com.sg in 2007. The baby-products online-store owner said: "I felt I had a good idea as the (e-shop) concept was still quite new in Singapore.
"It would have been tough maintaining the business as a brick-and-mortar model - the high overheads of having a physical shop space would have eaten into the profits but this (home business) is something that can make money."
All it took to set up shop was 10 minutes of his time - registering babywishes online as a partnership - and $10,000 of his savings.
"The entire process was quite easy. We (Mr Lim and a business partner) did some research and finished the necessary paperwork in 10 minutes," he said. The business has been in the black since day one, and he even got a bonus.
"I get to spend quality time with my son, Marc, now 2½ years old. I'm sure the Ministry of Community Development, Youth and Sports will be very happy with my fathering role," Mr Lim chuckled.
Mr Lim, however, cautioned that one still has to put in hard work when it comes to building contacts and sourcing for suppliers.
my paper did some research at HDB and Spring Singapore to help potential entrepreneurs.
What does a small-scale business mean and does it include any type of business?
Yes, as long as the business is done on a small scale. The level of business activity has to be kept low so the home remains mainly a place of residence.
For example, someone baking cakes for sale to friends cannot turn the home into a bakery.
Go to www.ura.gov.sg/dc/ dcu/HOflyer.pdf for a checklist of the types of businesses that are not allowed under HOS.
How do I go about getting my home office registered?
Owners, tenants, authorised occupiers and sub-tenants of HDB flats or private properties aged 21 years and above can apply under the HOS.
Register the company - as a sole proprietorship, private limited company or partnership - with the Accounting and Corporate Regulatory Authority. Go to the Online Business Licensing Service (OBLS) to obtain the required licence.
Log on to www.business.gov.sg/licences and follow the step-by-step guide to complete the online application.
Be prepared to pay the $20 administrative fee via eNETS or credit card. Upon successful registration, you will receive a letter of authorisation to start operations.
If you wish to continue using your residence as a home office after five years, re-register at OBLS.
Where can I find funding for my home business?
Home business owners below 26 years old can apply for funding under Spring Singapore's Young Entrepreneurs Scheme for Start-ups.
Launched in 2008 to develop young new entrepreneurs, it provides pre-seed funding.
The Media Development Authority has an iJam Microfunding scheme that gives up to $50,000 in grants to develop new ideas into an innovative product or service. Go to www.idm.sg/support/ijam/ for details.
For information on tax exemptions, visit the Inland Revenue Authority of Singapore website at www.iras.gov.sg/ irasHome/page04.aspx?id=414
THIS WEEK'S FOLIO: DOING BUSINESS FROM HOME
TO REGISTER your company, you first have to decide the type of business model you are helming.
SOLE PROPRIETORSHIP
Most small businesses are sole proprietorships since it is simple and inexpensive.
You can convert a sole proprietorship or partnership to a company or limited-liability partnership later if you wish, but not the other way around.
It costs $65 to register. This amount includes the nameapproval fee.
PARTNERSHIP
It is similar to a sole proprietorship and registration costs are the same.
There are two types - general partnership and limited liability partnership, which is a new vehicle for doing business in Singapore.
Like the sole proprietorship, the owners are taxed at the personal-income tax rate.
COMPANY
Registration costs $315. Profits are taxed at the corporate rate and audited accounts are required in the case of large companies.
Post Date: 16 Mar 10
Monday, January 25, 2010
佛七 / 八关斋戒
This year is the second time 打佛七, but the first time taking the 八关斋戒.
Many positive vibes, learnt many things.
The positive take-aways:
- During one of the meditation sessions, I managed to stay very clear-headed, and seemed to establish a "connection" with 阿弥陀佛, and started rocking gently side to side. Sadly it was not repeated.
- 2 days of vegetarian food is almost like a detox programme
- 2 meals per day is do-able, with lots of water
- Strengthening of my belief that, sutras and ceremonies, not just the precepts, ARE a part of Buddhism
And now, my mistakes and wrongdoings:
- the lack of sleep did not allow me to fully appreciate and benefit from the event
- the lack of sleep led me to sleep drowsily at night, potentially missing out on post-event reflections
- I broke the 8th Precept: 不坐卧高广大床
- My biggest mistake: wearing my 海青to the toilet. I am so disturbed by this one that I suspect whatever merits I may have accumulated may not be enough to offset the "demerit" points. Sigh. It was a big boo boo.
This time next year little princess would be 9 months' old already. I really hope we would be able to participate again. If yes, I really have to learn not to repeat this year's mistakes.
This morning, when I was doing my morning chants, I heard birds chirping. I was distracted because the sound appeared quite near. My first thought was: hmmm, distractions! Before I knew it, 2 hummingbirds flew into the house and happily rested themselves on the pussywillow. Then 1 flew away, shortly followed by the 2nd. One flew back in, before flying off.
Wifey just told me she spotted one similar-looking bird at the temple yesterday. Hmmm : )
Post Date: 25 Jan 10
Many positive vibes, learnt many things.
The positive take-aways:
- During one of the meditation sessions, I managed to stay very clear-headed, and seemed to establish a "connection" with 阿弥陀佛, and started rocking gently side to side. Sadly it was not repeated.
- 2 days of vegetarian food is almost like a detox programme
- 2 meals per day is do-able, with lots of water
- Strengthening of my belief that, sutras and ceremonies, not just the precepts, ARE a part of Buddhism
And now, my mistakes and wrongdoings:
- the lack of sleep did not allow me to fully appreciate and benefit from the event
- the lack of sleep led me to sleep drowsily at night, potentially missing out on post-event reflections
- I broke the 8th Precept: 不坐卧高广大床
- My biggest mistake: wearing my 海青to the toilet. I am so disturbed by this one that I suspect whatever merits I may have accumulated may not be enough to offset the "demerit" points. Sigh. It was a big boo boo.
This time next year little princess would be 9 months' old already. I really hope we would be able to participate again. If yes, I really have to learn not to repeat this year's mistakes.
This morning, when I was doing my morning chants, I heard birds chirping. I was distracted because the sound appeared quite near. My first thought was: hmmm, distractions! Before I knew it, 2 hummingbirds flew into the house and happily rested themselves on the pussywillow. Then 1 flew away, shortly followed by the 2nd. One flew back in, before flying off.
Wifey just told me she spotted one similar-looking bird at the temple yesterday. Hmmm : )
Post Date: 25 Jan 10
Monday, January 18, 2010
Tuesday, January 05, 2010
Quotes for the day
Told to my face over coffee:
"If you need to SMS him at 2 in the morning, then he doesn't need you"
Conversation on 9pm show on Channel 8:
"命运是不能屈服的,命运是要征服的"
Super moody. More later.
Post Date: 6 Jan 10
"If you need to SMS him at 2 in the morning, then he doesn't need you"
Conversation on 9pm show on Channel 8:
"命运是不能屈服的,命运是要征服的"
Super moody. More later.
Post Date: 6 Jan 10
Monday, January 04, 2010
First work day of the year
If the start of the year is an indication of what the rest of the year will be like, then it's going to be a real busy one.
Checked mail, did some prep work, went for kick-off meeting, debrief over coffee, action items, emergency from customer, waited for contractor, site survey with contractor, reached home around 9.15pm.
Post Date: 6 Jan 10
Checked mail, did some prep work, went for kick-off meeting, debrief over coffee, action items, emergency from customer, waited for contractor, site survey with contractor, reached home around 9.15pm.
Post Date: 6 Jan 10
Saturday, January 02, 2010
ECA
Have been wanting to find something else to do to supplement the household income. Recently got approached to do some project management. I've not done it before, but that doesn't mean I'm not keen.
If people are willing to take a risk in engaging me, then I'm prepared to give it a shot.
Post Date: 7 Jan 10
If people are willing to take a risk in engaging me, then I'm prepared to give it a shot.
Post Date: 7 Jan 10
Friday, January 01, 2010
A New Year
Another new year. Another new beginning. Another list of resolutions.
1. Run the freaking Singapore Marathon, will ya? At least try the 10km run, you wimp!
2. Brush up on your photography, will ya? Your daughter is coming on board in 3 months' time!
3. Can you please be more focused and get your ass working on some residual income?
4. Please work on your self-pity. It's just sad (pun intended)
5. Do all of the above without compromising your care and concern for your family
Image credit here.
Post Date: 6 Jan 10
Thursday, December 17, 2009
Asiaone - Adding a shine to your holdings
Adding a shine to your holdings
There are a variety of ways you can give your portfolio a gilt edge.
Tue, Dec 15, 2009
The Straits Times
Bars and coins
United Overseas Bank (UOB) sells physical gold that can be bought from and sold back to the bank at its daily buy-sell market rate. Gold bars come in a range of sizes, from small wafers to cast kilobars. Coins range from one-twentieth of an ounce to one ounce.
'This is one of the best forms of gold investment as you can keep the coins and bars in safe deposit boxes, and there is a variety of sizes to choose from,' said IPP Financial Advisers investment director Albert Lam.
A cast gold bar is made when melted gold is poured into a mould to achieve the desired shape and weight.
Gold bars and coins are subject to goods and services tax (GST) so an investor will lose 7 per cent of his investment up front.
Certificates
At UOB, a gold certificate is sold in kilobars, which are kilogram bars of gold.
In a single certificate, you can buy up to 30 kilobars.
UOB sold one kilobar for $55,416 last week.
The certificates have no expiry date and can be exchanged for physical gold or cash whenever the need arises.
A flat $5 charge for each certificate and an administrative fee of $30 a kilobar per year apply.
Gold savings account
At UOB, consumers can, through a passbook, buy and sell gold at prevailing market prices and transact any time during banking hours.
Teacher Arfiah Arshad, 39, sank $5,000 into a UOB Gold savings account last December and $5,000 into UOB Gold and General unit trust in February.
Both accounts are up by 50 per cent.
She invested in gold after her adviser at Financial Alliance, Mr Sani Hamid, suggested she do so in order to diversify her portfolio.
'When I went to open a gold savings account at UOB, the relationship manager tried to persuade me to invest in an Asia infrastructure unit trust because she said few people were investing in gold then,' said Madam Arfiah, who did not heed the banker's advice.
'I'm glad I stuck to investing in gold,' she said.
Citibank also offers retail customers the chance to trade in gold via its Citibank Gold Account.
To establish this account, you just need to buy a minimum of 30 ounces of gold, said Mr Shrikant Bhat, Citibank Singapore's head of wealth management.
The price of gold hit a record of US$1,226.10 an ounce last week.
Gold jewellery
Perhaps the easiest way to buy physical gold is to walk into a goldsmith and buy 22-karat or 24-karat jewellery.
But Mr Lam cautioned: 'Design and workmanship costs are priced into the jewellery and hence if consumers are buying for investment purposes, they end up paying a premium.'
Funds and ETFs
One fund that gives exposure to gold is the Schroder Alternative Solutions Gold and Metals Fund.
The fund's gold exposure varies between 25 per cent and 75 per cent. The rest comprises industrial metals such as copper and aluminium.
Exchange traded funds (ETFs) are another alternative. They allow people to gain exposure to gold prices without taking delivery of the metal itself.
They trade like stocks on the exchange, so you can buy and sell them at market prices throughout the trading day.
Gold ETFs include SPDR gold shares, which are listed on the Singapore Exchange.
Post Date: 17 Dec 09
There are a variety of ways you can give your portfolio a gilt edge.
Tue, Dec 15, 2009
The Straits Times
Bars and coins
United Overseas Bank (UOB) sells physical gold that can be bought from and sold back to the bank at its daily buy-sell market rate. Gold bars come in a range of sizes, from small wafers to cast kilobars. Coins range from one-twentieth of an ounce to one ounce.
'This is one of the best forms of gold investment as you can keep the coins and bars in safe deposit boxes, and there is a variety of sizes to choose from,' said IPP Financial Advisers investment director Albert Lam.
A cast gold bar is made when melted gold is poured into a mould to achieve the desired shape and weight.
Gold bars and coins are subject to goods and services tax (GST) so an investor will lose 7 per cent of his investment up front.
Certificates
At UOB, a gold certificate is sold in kilobars, which are kilogram bars of gold.
In a single certificate, you can buy up to 30 kilobars.
UOB sold one kilobar for $55,416 last week.
The certificates have no expiry date and can be exchanged for physical gold or cash whenever the need arises.
A flat $5 charge for each certificate and an administrative fee of $30 a kilobar per year apply.
Gold savings account
At UOB, consumers can, through a passbook, buy and sell gold at prevailing market prices and transact any time during banking hours.
Teacher Arfiah Arshad, 39, sank $5,000 into a UOB Gold savings account last December and $5,000 into UOB Gold and General unit trust in February.
Both accounts are up by 50 per cent.
She invested in gold after her adviser at Financial Alliance, Mr Sani Hamid, suggested she do so in order to diversify her portfolio.
'When I went to open a gold savings account at UOB, the relationship manager tried to persuade me to invest in an Asia infrastructure unit trust because she said few people were investing in gold then,' said Madam Arfiah, who did not heed the banker's advice.
'I'm glad I stuck to investing in gold,' she said.
Citibank also offers retail customers the chance to trade in gold via its Citibank Gold Account.
To establish this account, you just need to buy a minimum of 30 ounces of gold, said Mr Shrikant Bhat, Citibank Singapore's head of wealth management.
The price of gold hit a record of US$1,226.10 an ounce last week.
Gold jewellery
Perhaps the easiest way to buy physical gold is to walk into a goldsmith and buy 22-karat or 24-karat jewellery.
But Mr Lam cautioned: 'Design and workmanship costs are priced into the jewellery and hence if consumers are buying for investment purposes, they end up paying a premium.'
Funds and ETFs
One fund that gives exposure to gold is the Schroder Alternative Solutions Gold and Metals Fund.
The fund's gold exposure varies between 25 per cent and 75 per cent. The rest comprises industrial metals such as copper and aluminium.
Exchange traded funds (ETFs) are another alternative. They allow people to gain exposure to gold prices without taking delivery of the metal itself.
They trade like stocks on the exchange, so you can buy and sell them at market prices throughout the trading day.
Gold ETFs include SPDR gold shares, which are listed on the Singapore Exchange.
Post Date: 17 Dec 09
Asiaone - Gold Rush
Gold Rush
As gold price hits never-seen-before levels, Gabriel Chen looks at why the precious metal can make a good investment and asks analysts about its prospects.
Tue, Dec 15, 2009
The Straits Times
By Gabriel Chen
If some pundits are right, gold is well on its way to a dazzling US$2,000 (S$2,780) or more an ounce in the next decade - heights never even hinted at before this financial crisis struck.
The old record of US$1,030 set in March last year was surpassed in early October and prices have continued to climb.
To put that in perspective, gold was just US$254 an ounce back in 1999, a 20-year low.
'Gold is going up,' said Singapore-based investor Jim Rogers, who tips the precious metal to top US$2,000 an ounce in the next decade. 'I'm bullish on all commodities until the bull market comes to an end,' he told The Sunday Times.
Mr Rogers, who predicted the rally in commodities back in 1999, is not the only bull out there.
Goldman Sachs raised its 12-month gold forecast to US$1,350 an ounce this month from a previous estimate of US$960, while Barclays Capital has said that 'prospects for a run at US$1,500 should not be underestimated' next year.
Gold's glister has been fuelled by the persistent weakness in the American dollar and news that central banks in India, Russia and elsewhere have increased their holdings of the metal.
Speculation that governments, the biggest bullion holders, will make even more purchases is merely adding to the mood music.
Can the trend go further? According to Channel Islands-based GoldMoney.com founder James Turk, 'gold is going to be at US$8,000 by 2013' due to the historical relationship between the metal and the Dow Jones Industrial Average.
He was quoted by Bloomberg as saying that gold and the Dow were at around the same level during the Great Depression and the early 1980s.
In January 1980, they were both slightly below the US$1,000 mark, but while the Dow is up 10-fold since then, gold's ascent has not been as spectacular, he argued.
But others in the industry do not expect gold to soar that high.
'US$2,000 or US$3,000 an ounce levels make sense only if the US dollar drops by another 30 per cent on a broad basis and United States inflation moves to 10 per cent, which we do not expect,' said UBS Wealth Management's head of commodities research, Mr Dominic Schnider.
However, should Mr Turk be correct, it will not be long before we all start melting down our wedding rings.
Why invest in gold?
There are fears that the massive monetary and fiscal policy stimulus plans that have been pumped into the global economy will generate inflation.
Gold acts as a hedge against such an eventuality.
Dr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, said gold is seen as a good alternative to paper money.
'While there are fears about the future of the US dollar, the outlook for other major currencies is not much better,' he said.
'Europe's economy looks worse than the US, the strong yen looks unsustainable given the damage it has already caused the Japanese economy and the (Chinese yuan) is not really an option as it's not convertible.'
A convertible currency is one that can be quickly and easily bought and sold for other currencies.
Diversification advantage
Many studies show that gold prices generally move in the opposite direction from stock prices: Gold soars when stocks tank.
'Portfolios that contain even a small allocation of gold are proven to be generally more robust and better able to cope with market uncertainties than those that do not, showing improved stability and predictability of returns,' said Mr Albert Cheng, managing director of World Gold Council for the Far East region.
He said the optimum investment in gold for any long- term institutional investment portfolio ranges from 4 per cent to 10 per cent.
Rarity factor
Governments can print as much money as they like - to pay off their debts - but they cannot create gold, which is limited in supply.
'In all of history, only 161,000 tonnes of gold have been mined. This is barely enough to fill two Olympic-sized swimming pools, and of this amount, more than half was extracted in the recent 50 years,' said IPP Financial Advisers investment director Albert Lam.
Outlook for gold
Despite the risk of prices reversing in the short term, financial experts say investors should add gold to their portfolios if they have not already done so.
'Worrying too much about a short-term pullback risks missing the bigger medium-term picture which remains very positive for gold,' Dr Oliver said.
One key reason for gold's rise is that central banks in emerging countries such as China and India are becoming buyers as part of a strategy to reduce the exposure of their foreign exchange reserves to paper currencies.
In the past, central banks focused on accumulating paper money such as the greenback, but they now want to hold more gold for diversification purposes.
'Over the past five years, central banks and governments have sold around 440 tonnes of gold every year,' Mr Schnider said.
'In the coming years, central bank gold sales should come to a halt. In fact, we actually foresee that central banks may become net buyers.'
But experts also caution that investing in gold is highly speculative and prices can be volatile. After rising to new highs in 1974, gold prices plunged, falling to about US$100 in mid-1976 from about US$200 at the start of 1975.
'Animal spirits can play a huge role in the determination of the gold price. This can make for a volatile ride over time and suggests that gold should not dominate an investor's portfolio,' Dr Oliver said.
Animal spirits - a term coined by the late British economist John Maynard Keynes - refers to a particular sort of confidence, or 'naive optimism'.
Rather than dabble in gold alone, Dr Oliver suggested that investors have exposure to a broad basket of commodities.
Mr Shrikant Bhat, Citibank Singapore's head of wealth management, urged investors to understand the factors driving the gold price movement and then take a view on whether those factors will continue to drive the demand.
Post Date: 17 Dec 09
As gold price hits never-seen-before levels, Gabriel Chen looks at why the precious metal can make a good investment and asks analysts about its prospects.
Tue, Dec 15, 2009
The Straits Times
By Gabriel Chen
If some pundits are right, gold is well on its way to a dazzling US$2,000 (S$2,780) or more an ounce in the next decade - heights never even hinted at before this financial crisis struck.
The old record of US$1,030 set in March last year was surpassed in early October and prices have continued to climb.
To put that in perspective, gold was just US$254 an ounce back in 1999, a 20-year low.
'Gold is going up,' said Singapore-based investor Jim Rogers, who tips the precious metal to top US$2,000 an ounce in the next decade. 'I'm bullish on all commodities until the bull market comes to an end,' he told The Sunday Times.
Mr Rogers, who predicted the rally in commodities back in 1999, is not the only bull out there.
Goldman Sachs raised its 12-month gold forecast to US$1,350 an ounce this month from a previous estimate of US$960, while Barclays Capital has said that 'prospects for a run at US$1,500 should not be underestimated' next year.
Gold's glister has been fuelled by the persistent weakness in the American dollar and news that central banks in India, Russia and elsewhere have increased their holdings of the metal.
Speculation that governments, the biggest bullion holders, will make even more purchases is merely adding to the mood music.
Can the trend go further? According to Channel Islands-based GoldMoney.com founder James Turk, 'gold is going to be at US$8,000 by 2013' due to the historical relationship between the metal and the Dow Jones Industrial Average.
He was quoted by Bloomberg as saying that gold and the Dow were at around the same level during the Great Depression and the early 1980s.
In January 1980, they were both slightly below the US$1,000 mark, but while the Dow is up 10-fold since then, gold's ascent has not been as spectacular, he argued.
But others in the industry do not expect gold to soar that high.
'US$2,000 or US$3,000 an ounce levels make sense only if the US dollar drops by another 30 per cent on a broad basis and United States inflation moves to 10 per cent, which we do not expect,' said UBS Wealth Management's head of commodities research, Mr Dominic Schnider.
However, should Mr Turk be correct, it will not be long before we all start melting down our wedding rings.
Why invest in gold?
There are fears that the massive monetary and fiscal policy stimulus plans that have been pumped into the global economy will generate inflation.
Gold acts as a hedge against such an eventuality.
Dr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, said gold is seen as a good alternative to paper money.
'While there are fears about the future of the US dollar, the outlook for other major currencies is not much better,' he said.
'Europe's economy looks worse than the US, the strong yen looks unsustainable given the damage it has already caused the Japanese economy and the (Chinese yuan) is not really an option as it's not convertible.'
A convertible currency is one that can be quickly and easily bought and sold for other currencies.
Diversification advantage
Many studies show that gold prices generally move in the opposite direction from stock prices: Gold soars when stocks tank.
'Portfolios that contain even a small allocation of gold are proven to be generally more robust and better able to cope with market uncertainties than those that do not, showing improved stability and predictability of returns,' said Mr Albert Cheng, managing director of World Gold Council for the Far East region.
He said the optimum investment in gold for any long- term institutional investment portfolio ranges from 4 per cent to 10 per cent.
Rarity factor
Governments can print as much money as they like - to pay off their debts - but they cannot create gold, which is limited in supply.
'In all of history, only 161,000 tonnes of gold have been mined. This is barely enough to fill two Olympic-sized swimming pools, and of this amount, more than half was extracted in the recent 50 years,' said IPP Financial Advisers investment director Albert Lam.
Outlook for gold
Despite the risk of prices reversing in the short term, financial experts say investors should add gold to their portfolios if they have not already done so.
'Worrying too much about a short-term pullback risks missing the bigger medium-term picture which remains very positive for gold,' Dr Oliver said.
One key reason for gold's rise is that central banks in emerging countries such as China and India are becoming buyers as part of a strategy to reduce the exposure of their foreign exchange reserves to paper currencies.
In the past, central banks focused on accumulating paper money such as the greenback, but they now want to hold more gold for diversification purposes.
'Over the past five years, central banks and governments have sold around 440 tonnes of gold every year,' Mr Schnider said.
'In the coming years, central bank gold sales should come to a halt. In fact, we actually foresee that central banks may become net buyers.'
But experts also caution that investing in gold is highly speculative and prices can be volatile. After rising to new highs in 1974, gold prices plunged, falling to about US$100 in mid-1976 from about US$200 at the start of 1975.
'Animal spirits can play a huge role in the determination of the gold price. This can make for a volatile ride over time and suggests that gold should not dominate an investor's portfolio,' Dr Oliver said.
Animal spirits - a term coined by the late British economist John Maynard Keynes - refers to a particular sort of confidence, or 'naive optimism'.
Rather than dabble in gold alone, Dr Oliver suggested that investors have exposure to a broad basket of commodities.
Mr Shrikant Bhat, Citibank Singapore's head of wealth management, urged investors to understand the factors driving the gold price movement and then take a view on whether those factors will continue to drive the demand.
Post Date: 17 Dec 09
Friday, December 11, 2009
Coincidence?
Did a lot of driving around today, to as far as Boon Lay.
As I was driving along PIE back to the office, a thought surfaced in my head:
Drive carefully. Danger ahead.
I'm not too sure if it was a self-reminder to be mindful of the traffic, as I have not been sleeping enough, or it was really a divine reminder.
True enough, on the lane I was on (lane 1), I saw the car in front of me suddenly break. I had a good safety distance from him, so I braked with relative ease. In front of him a few cars were involved in a chain collision.
Never did I guess that there was another incident a few kilometres down! This time, a lorry burst a tyre, and he was trying to filter left. I was a lot nearer to the vehicle in front, and I had to apply the brakes harder.
On both occasions, I was lucky that the vehicles behind me maintained their safety distance.
After witnessing the 2nd incident, a new thought entered my head: no more up ahead. You can relax now. Which I did.
Coincidence?
Post Date: 17 Dec 09
As I was driving along PIE back to the office, a thought surfaced in my head:
Drive carefully. Danger ahead.
I'm not too sure if it was a self-reminder to be mindful of the traffic, as I have not been sleeping enough, or it was really a divine reminder.
True enough, on the lane I was on (lane 1), I saw the car in front of me suddenly break. I had a good safety distance from him, so I braked with relative ease. In front of him a few cars were involved in a chain collision.
Never did I guess that there was another incident a few kilometres down! This time, a lorry burst a tyre, and he was trying to filter left. I was a lot nearer to the vehicle in front, and I had to apply the brakes harder.
On both occasions, I was lucky that the vehicles behind me maintained their safety distance.
After witnessing the 2nd incident, a new thought entered my head: no more up ahead. You can relax now. Which I did.
Coincidence?
Post Date: 17 Dec 09
Tuesday, December 01, 2009
Time flies when you are idling
So, it's December already.
I've stopped the business of new year resolutions for a while already, but still, I seemed to be repeating these to-do items in my head ad nauseam.
For example, I have yet to participate in the Singapore Marathon. And I think this is the 2nd year already. Or is it the 3rd?
I have yet to get into the habit of sleeping by 12.30am.
I still suck in photography.
I still don't have any residual income.
But what I've actually achieved, I am very proud of:
I'M GOING TO BE A FATHER!
I am also happy that I've started morning prayers.
Not by choice, but I've become more diligent with housework.
With little Princess coming on board, I had REALLY, BETTER sort out my photography.
And I can forget about sleeping early!
Image credit here.
Post Date: 1 Dec 09
Monday, November 30, 2009
Fear and hunger
Cowboy Caleb had an interesting piece today.
Life is a little like that. Most of the time, if you want something then you have to find something to motivate you to go and get it. 90% of the people never get what they really want, because they are too lazy or overconfident.
To succeed in life, you have to push yourself by finding something to motivate you. Fear seems to be good. Hunger also works. Fear of being poor all your life. Hungry for the better things in life that always seem out of your grasp. Anybody can do it. Few do.
So, so true. Guess I still have a lot of work cut out for me.
Post Date: 1 Dec 09
Life is a little like that. Most of the time, if you want something then you have to find something to motivate you to go and get it. 90% of the people never get what they really want, because they are too lazy or overconfident.
To succeed in life, you have to push yourself by finding something to motivate you. Fear seems to be good. Hunger also works. Fear of being poor all your life. Hungry for the better things in life that always seem out of your grasp. Anybody can do it. Few do.
So, so true. Guess I still have a lot of work cut out for me.
Post Date: 1 Dec 09
Thursday, November 26, 2009
Reminder to self ...
... don't lose the plot.
Wifey and I just came back from the temple. Since just now, my mind has been pre-occupied with what we have to do, following the procedures, how will things turn out, etc etc.
I can't seem to be able to relax, and in the process, am missing the point.
Didn't we go for consultation so that we can be instructed on what to do and what not to do? Didn't we go so that we can have the peace of mind? And didn't the lady say, "娘娘会保佑她"?
Chill, goondu, CHILL!
Image credit here.
Post Date: 26 Nov 09
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