Saturday, October 22, 2016

Sign Up Credit Cards, Get Free Money

I think y'all know me and y'all know my style. If it's not a REAL lobang, I don't anyhow say.

Last time got free house I really jio y'all. I don't think anyone took up that offer though. I don't see any of my web traffic coming from Italy.

Earlier this month I also let y'all in on the free credit report by CBS through SingSaver. I already had done it myself earlier this year and I am very pleased with my credit score.

Well the good folks at SingSaver actually are really nice and they notified me about their Shioktober credit card promotions that I might want to let readers know about. Unfortunately, I don't get anything mentioning it, but hey, it really looks like a good deal.

Personally, I have signed up for the SCB $138 cash rebate promotion just last month. I've already spent it! I'll be doing a follow up post on that in a while, but at least for SCB I can vouch that it is legit.

Actually what urged me to write about this even though the month is coming to the end is that I saw the upsized ANZ Optimum offering of $168 cash rebate (and a free luggage... but seriously, who cares about free luggages?). After tasting the forbidden fruit of the SCB $138 promotion, I myself am getting very, very tempted to sign up for the ANZ promotion. Maybe I can sign up to get back travel rebates and charge my travel expenses to it. I'd be looking at $168 + 5% off my travel expenses! Mmm... definitely something to consider, especially since I am contemplating another trip next year in March. Since the promotion is until then, I can just think about if I want to add an extra credit card into my life.

So when I thought about these cash rebates, I remembered about the SingSaver extra promotions. I actually have a friend who has been contemplating getting a more all-rounded credit card (she still uses NETS pin transactions, haha), the $100 Watsons voucher for the OCBC 365 card looked like it would be suited for her! I myself have switched to the OCBC 365 card after abandoning their Frank card.

Personally though, I would think that the "best" promotion (in the sense that the card would actually be useful, as opposed to hit-and-run promo grabbing) being offered is actually the AMEX True Cashback card. Even though I am very anal about getting my cash rebates, it actually isn't all too easy to ONLY spend in the category with good cashback. For a general purpose card, your expenses are all over the place in all different categories, The AMEX Cashback card gives 1.5% cashback with no minimum spending. Even with my Frank card, I only got 2.07% rebates and I had a minimum spending. In all FRANKNESS (ooo, a pun), I would imagine most people would be better off with the AMEX cashback card. No need to worry about minimum spendings or cashback category. The only problem is that I heard AMEX doesn't waive annual fees (just hearsay only) and that AMEX is honestly not that widely accepted.

However, the Frank card was in conjunction with my OCBC 360 account, so even though I only got a slightly better cashback than the 1.5%, I did get bonus interest on my entire bank balance and that is actually quite substantial. You really have to consider your own situation and what other products you have access to. Then you will be able to find a strategy that maximizes your cashback, bank interest and hopefully overall returns in regards to your current savings and monthly spending.

Don't be afraid to use credit cards. Credit cards can actually help you save money. Just look at how I saved $38 in July purely from taking advantage of promotions offered through my credit cards. If you count in the base cash rebates and also the bonus interest I get on my bank balances, you would be very surprised by how much money you are LOSING by not using credit cards.

I'm being really serious here. Banks are literally paying you to use credit cards. And as long as you use them smartly, you're going to end up paying less by using your credit cards. So why not?

There's only 1 golden rule to credit cards. Always, always pay off your balance due in full.

Wednesday, October 19, 2016

GMGH's DBS / POSB Cashback Bonus Review

After reading this post by Budget Babe, I decided to check out the DBS/POSB Cashback Bonus Programme.

Honestly, it looked promising at first, until I read the finer details and used the calculator to find out my estimated cashback. I was not impressed.

First off - eligibility.

The requirement of jumping through 3 out of 5 hoops is actually not as easy as one would like. Although Mothership and their sponsored post positioned this programme to be "since you're doing it anyway..." in reality, I would imagine that most people do not qualify naturally to be in their programme.

1.1 Salary Credit.
You need to credit a MINIMUM of $2,500 to your account. If you reverse engineer this amount and take into account CPF contributions, your gross salary has to be at least $3,125. Not something everyone can do. I know grads that don't touch the $3k level.

1.2 Credit Card Spending
Okay, the good thing is that they don't mention a specific minimum. This means that just charging $1 a month ought to qualify as a single transaction. The downside is that it has to be a credit card, and not the debit card that all of us have. That's 1 extra card to maintain in your life for no good reason, especially since the bank promotions extend to the debt cards as well.

1.3 Home Loans
Meh. DBS only has a market share of the loan market of about 25%. Good for you if you're that 1 in 4. If you're not, I don't think refinancing with DBS just for this cashback would be worth it, but do your math. Maybe it is.

1.4 Insurance
If you buy your insurance through the bank, you're already being screwed. There is no back-dating, so this only applies to new policies. And this is a key point: Only the premiums for the first 12 months will be recognized.

1.5 Investments.
Again, if you buy your unit trusts through the bank, you're already being screwed. Same thing, no back-dating of investments. Same thing, it's only recognized for the first 12 months. This is ONLY worth doing if you've been planning to start with POSB Invest Saver and have been lazy to begin. It's a good encouragement to get you to finally do something that you've been wanting to already do. However, for people who have no idea about investing and want to start just to chalk up a tick in this category, it is not advisable to buy something you don't know.

So, straight off the bat, qualifying for the insurance portion is out unless you're crazy. The investment portion through Invest Saver is only good for 12 months and if you haven't started and was already planning to. The loan portion excludes 75% of people. The salary is probably doable, but it should not be assumed that everyone can do it. The only really easy hoop to jump through is the credit card spending hoop, and that's a shitty hoop that just complicates your life.

Now, let's talk about the "Cashback".

If you're going to GIRO your salary into your account, getting a shitty 0.3% OF THE SALARY AMOUNT just doesn't cut it DBS/POSB.

OCBC gives 1.25% on balances up to $60,000 with $2,000 salary credit.
BOC gives 1.25% on balances up to $60,000 with $2,000 salary credit.
SCB gives 1% on balances up to $100,000 with $3,000 salary credit.
CIMB gives you 1% on balances up to $50,000 without doing anything at all.

I'm sorry DBS/POSB, but why the hell would anyone credit their salary to DBS/POSB for this shitty 0.3% on the salary amount? It is so much easier to open up an OCBC/BOC account and deposit your salary and get 1.25% on their whole balance (as opposed to only the salary amount), or have zero stress at all and just normal bank transfer to CIMB and get 1%.

The credit card 0.3% cashback is very lame. The normal DBS/POSB debit cards give you 0.3% cashback with no limits.

The 3% for home loans caps at $30, which means the optimum and maximum loan amount is $1000. Still, money is money and this is the only cashback reward that I actually like.

Insurance is bullshit and if you buy it, you cannot be saved. 10% cashback also not enough.

The 3% for the investments is all right, especially if like I said, you were already planning to do it from the start. It's a good cashback amount and you're probably making while the bank is losing money on this, but that's why its limited to just 12 months.

Review Summary

This cashback programme is shit.

Unless you already have a home loan with DBS and already credit more than $2,500 of your salary to your DBS/POSB account, you're not going to meet the eligibility. If you do, then spend on something once a month of your credit card and you're good to go.

You should not think of taking up insurance or investments through the bank. If you want to buy insurance, DPI is the cheaper way to go. The amount you save will be much much much much much much much much more than the shitty 3% premium rebate which you only get for 12 months. If you want to invest in unit trusts, do it through Phillips where the sales charge is either 0.75% or 0%. It's like having a permanent rebate from the banks' usual 3% charge.

In all honesty, if you qualify for this programme, it's most likely because of your $2,500 salary credit. In that case, you're an idiot for being in this programme instead of opening accounts with OCBC/BOC/CIMB and getting a higher interest on your entire balance instead of just a rebate on your salary.

The main beneficiaries of this programme are DBS/POSB staff who are forced to credit their salary into their accounts. LOL.

Much of the talk is about how this programme gives you cashback without you having to do much. However, if you're going to sign up for this programme and jump through some hoops, you're honestly MUCH better off going to other banks that will give you much better interest for your banking relationship with them.

Bottomline: this is a bullshit programme and it ticks me off that DBS/POSB thinks that pop-art graphics and a cheesy marketing campaign will make up for their crappy product offering. Attention to millennials being targetted: if you fall for this, you're beyond hope. This programme is actually almost insulting.

DBS/POSB is already behind the curve by having such a ridiculous Multiplier programme which close to no normal people can qualify for. Now they are trying to trick unsuspecting people with this cashback hocus-pocus to retain customers - who should by right, if they are smart, be migrating in droves to all the other much better product offerings by other banks.

Pull the plug on this shitty programme or beef it up so that it's actually something worth getting. Give interest on the whole balance if the salary credit requirement is hit. Give a proper cashback or rebate to actually encourage credit card usage, as opposed to cannibalizing on your own debit cards. Upsize your home loan rebates to get people with higher mortgages (and thus, higher opportunity cost) to refinance with you. Don't limit your insurance and investment rebates to just the first 12 month. Adjust your investment rebate because 3% for Invest Saver is just silly and loss making. No worries DBS team, all this consultation is on the house.

Personally, I think DBS/POSB is pretty shit. I only use them because of their ATM network and for random promotions that they sometimes have. I legit have less than $1,000 in my bank account with them, and even then I feel like I'm holding too much cash with them.

Honestly, I would love banks to come at me to publicize their new products. But with shit like this, no amount of shine will turn it to gold. I can't recommend this programme to anyone because it is not something that I think anyone should be participating in.

Please correct me if I'm wrong, but I haven't seen such a bad programme since the Multiplier Programme, which is coincidentally (or not) also by DBS.

Monday, October 17, 2016

Schoolber: School Kids' Uber?

Is this the best arguments against young parents who insist that THEY MUST HAVE A CAR?

This Today article is really quite informative about the services offered by Schoolber. (link to their website, not much info though)

In all honesty, the price and the value is very attractive. Let me just list the pros and cons that I can think off from the top of my head:

Don't need to own a car
Don't need to have a licence
Don't need to wake up
Don't need to drive to school and back
Driver is also a parent with their own kid in the vehicle (safety aspect)
Similar price to a school bus, but shorter travel time for your kid
Kid can make new friends

You don't get to have bonding time with your kid while they sleep in your vehicle

Honestly, the pros and cons are pretty obvious. On top of the convenience and affordability aspect of this service, they also have real-time tracking and pick-up / drop-off notifications for concerned (kaypoh) parents.

Prices are set between $100 to $200 a month, which I think is way, way, way more affordable than buying you own car and wasting time to be your kid's personal chauffeur. Of course, some parents think that this is the most important thing that they do for their kid (as opposed to guiding them through life and preparing them to be functional adults in our society) and will shun this idea of sticking their kids with other people.

In that case, those parents should be drivers, hahaha. Especially if the kids that you pick up happen to be in the same or nearby block, it's almost no extra hassle to ferry an extra body to school to defray your costs of car ownership a bit. If this was the situation and a parent did not do it, it's the same as throwing away free money.

Personally, I'm sold on this idea. I like it how that this app is a semi-clone. It's building up on an original idea, but adding specific essential features and reaching out to the right people. They've already got so many interested parties, so I really hope that they take off.

"GMGH Jr, you better wake up on time in the morning, get dressed and take your schoolber to school. If I wake up and I don't see a notification that you were picked up and dropped off at school, I'm going to cut off the 4G from your smartphone!"

Seriously, the reasons to own a car is dropping more and more, day by day. In today's world, you can already schedule trips in advance, summon vehicles on demand, get groceries delivered to you and now you can send your kid to school. Seriously, other than using it to attract gold diggers, what use for a car is there today that hasn't already been fulfilled?

Saturday, October 15, 2016

Some Bank Metrics

Was just thinking of comparing the local banks, but this time round it was just a quick one as opposed to a slightly more detailed one that I did 2 years ago.

DBS has the best CET 1 ratio, Basel III requires 7% by 2019, so no problem, all is good here. However, compared to some other banks that I happened to stumble upon, their CET 1 levels is nothing extraordinary.

Leverage Ratio (LERA) is pretty modest at between 7-8%, which implies a leverage of 12-14X. I think that this is actually pretty conservative, so that's a good thing to have.

Loan Coverage Ratio (LCR) for all banks are over 100%, but it's interesting to note that UOB is at 167%. Is this because they have a slightly higher NPL ratio?

CASA ratio is somewhat related to NIM because a higher CASA ratio usually means a higher NIM. It's not surprising that DBS has the highest CASA ratio by a stretch.

Notice how I left out any valuation metrics? There is nothing comparing to the current stock price! However, I think leaving out valuation metrics can be good for this phase because it helps you identify which company is the objectively better one. Of the 3, I have personal preference towards OCBC and then DBS.

Of course, once you add in the valuation element, you might find that the relatively higher or lower prices skew your decisions, which is because you are now having to decide how much certain factors are valued to you and if you are willing to pay for a better position, or are willing to be paid for a less favourable position.

Investors don't make money by choosing the best stocks with no regards for its price and valuation. They make money by weighing valuations against fundamentals and deciding if the risks are worth it - and that might be avoiding good, but expensive stocks, or that might be from buying bad, but cheap stocks.

Of course the idea situation is to buy a company with great fundamentals that is at cheap valuations, but... opportunities like that don't happen too often, I'd reckon.

Friday, October 14, 2016

Hyflux: The Morning After

You drank too much and got into bed with a pretty looking lady.

Now you have a hangover, your butt hurts and she kinds of looks like a he.

What the hell happened?

Back in May, the Hyflux 6% retail perp news came in hot and heavy. Retail investors immediately got wet hearing such a high coupon. What's better than a 6% coupon bond? A 6% coupon PERPETUAL bond! Yay! Buy all the bonds! So shiok and juicy, don't need to think twice.... right?

Well, it didn't smell too good to me, especially since I've noticed their previous pattern of issue perps. Chut pattern more than badminton. Minister Sim Ann would be shaking her head.

I did a post and I made a case against taking up this perpetual issue. One of the things that I did highlight is my strong speculation that this issue is merely to pay back another maturing perp bond. Fast forward 1 month from then, and looky looky. They did exactly just that and redeemed their 4.8% perp bond. It's like I can see the future.

Since then and now, there has been a few developments.

Share price has dropped 16% from $0.56 to $0.47 as of today.
Revenue is still stagnant, while profit has dropped even more.
Debt to asset has improved from 60% to 52%, but nothing is an indication that it is a new trend.

More importantly, bond prices have gone from 100 par to 96 in such a short time.

Honestly, that is not a very good indication at all. I think a lot of retail investors are feeling pissed. Let's assume that the 3% semi annual coupon is being valued at 100%, that means the actual bond price without the accrued interest is more along the lines of 93 once it pays out its coupon next month. A 4% loss for a 6 month investment is not very comforting, especially when people were expecting at least a 3% profit. That's an expectation gap of 7%!

Honestly, the better investment would actually be their 6% preference shares. While it has had a strong track record since it's 2011 listing, perhaps its investors are suddenly realizing that everything in Hyflux isn't all rainbows and unicorns anymore. From consistently maintaining value over 101, it has since plunged in August and it is pretty much trading at its low of 94.6. This translates to a yield of 6.325%, instead of the previous yield just 2 years ago at 5.6%! A bonus is that Hyflux has a time bomb on this preference share because it has until Apr 2018 to redeem it, if not it will step up to 8%.

Hyflux is playing a dangerous game of ring around the rosies with investors, using 1 issue to redeem another issue due for step-up. From the looks of it to me, this isn't a one-off occasion, it is their modus operandi.

It seems like the smart way to be playing this and not getting face-ripped like other investors is to choose issues based on their earliest redemption date. Of course comparing the 6% perp bond and the 6% pref shares, the perf shares are much much more attractive due to their lower price, higher yield and earlier call date. It's definitely worth a consideration if you're willing to take on the risks that Hyflux has and are looking for a decent short term flip. At least within 1.5 years you would know if your gamble was a fruitful one. Potential gain in 1.5 years is approximately 15% if it works out. Not too shabby actually.

The reward is there, but the risks has to be further analyzed before the conclusion can be made that this is a gamble worthwhile due to it's hopefully high probability of success. I will probably be doing some expanded research on this over the weekend or soon. There really isn't a rush. If I enter Hyflux, I'd definitely be posting about it.

As for now, all I can hope for is that Hyflux investors lose their nerves and force my hand by driving prices down to levels too attractive for me to resist, and for Hyflux to improve their fundamentals so that the risk of my possible investment failure gets lower. It doesn't seem like this kind of thing happens in tandem, but you never know.

But of all the unknowns out there, one thing is for sure - I'm happy I ain't an equity investor of Hyflux. If you still are, I congratulate you for having the stones to sit through a 67% stock price decline over the past 5 years.