Recommended Investment Management Companies

Recommended by my Prof for their low fees:
1) Vanguard
2) Fidelity
3) Schwab

The context of his recommendations is a discussion on diversification using plain vanilla index ETFs. He had been using these 3 investment houses for decades (yes, he is an old man).

Although not discussed, I think liquidity of the sponsored ETFs, as well low tracking errors played a part in his preference.

Equity Shortlists

Given that equity prices had gone up substantially, it is time to prepare ourselves for the next downturn by shortlisting some counters with good potential.

Mining Equipment Makers
- Caterpillar Inc.
- Bucyrus International
- Joy Global

Medical
- Medtronic

Indices
- Vanguard FTSE All-World ex-US ETF

World Earthquake and Tsunami zones

In view of Japan 2011's major earthquake, I'm curious about the earthquake zones around the world. In areas where earthquakes are prone, damages to properties and economies could be substantial. We may need to keep this in view when we go about our investment decisions.

Source: http://geology.about.com/library/bl/maps/blworldindex.htm

Hutchison Port Trust IPO - Updates

Some key figures:
- Indicative pricing = US0.91 to US 1.08

- 2010 profit margin = 26.46%. Proforma for unitholders around 18.8%

- 2010 EPS = US$0.0315. Thus PE Ratio (using US1.08) = 34.29. 2011

- Current Asset = US 937M. Current Liability = US 1447. Net current liability.

- Total Debt = US 5469M. Total unitholders = Us 9405M

- Expected payout ratio for 2012 about 150% of profits

- Total TEU handled by listed entities = 21.174M

- Base Fee is a fixed fee of US$2.5 million per annum, which is subject to increase each year by such percentage representing the percentage increase (if any) in the Hong Kong Composite Consumer Price Index. This is about 3.6%. The Trustee-Manager has elected to receive 100.0% of the Base Fee in cash for the Forecast Period 2011 and the Projection Year 2012

- The Trustee-Manager is entitled to receive a Performance Fee in relation to the Forecast Period 2011 and the Projection Year 2012 as follows when the DPU of HPH Trust exceeds the seasonally annualised 20111 forecast DPU of HK45.88 cents (the “Base DPU”):
a) a fee of 3.0% of the first 25.0% of excess DPU as compared to the Base DPU;
b) an additional fee of 6.0% of the next 25.0% of excess DPU as compared to the Base DPU (i.e. excess DPU above 25.0% and up to 50.0% of the Base DPU);
c) a further fee of 12.0% of the next 25.0% of excess DPU as compared to the Base DPU (i.e. excess DPU above 50.0% and up to 75.0% of the Base DPU); and
d) an additional further fee of 18.0% of any excess DPU above 75.0% of the Base DPU.



Previous post:
http://sgretailinvestor.blogspot.com/2011/02/hutchison-port-trust-ipo.html

Hutchison Port Trust IPO

For Hutchison Port Holding's listing of the Trust, it seems that only
the 2 highlighted ports will be included in the trust. This is about
18M TEU (27.6%) out of its 65.3M TEU (based on 2009 data listed on its website).

Port / Business Unit

Throughput (thousands of TEU)

	Hong Kong and Yantian
	China - Yantian		8,579
	Hong Kong - Kwai Tsing		9,505
	Hong Kong - Tuen Mun		1,701
	The Mainland
	Shanghai		8,238
	Ningbo		1,773
	Pearl River Delta in Southern China - Jiuzhou, Gaolan, Nanhai, Jiangmen, Huizhou & Shantou		1,151
	Xiamen		930
	North and South Asia
	Malaysia		4,452
	South Korea		2,903
	Indonesia		2,296
	Thailand		1,102
	Pakistan		724
	Vietnam		N/A
	Australia		N/A
	Middle East and Africa
	Saudi Arabia		1,254
	Egypt		482
	Tanzania		327
	Oman		99
	Europe
	The Netherlands		7,871
	United Kingdom		3,534
	Spain		908
	Poland		149
	Italy		745
	Sweden		23
	The Americas and The Caribbean
	Panama		2,367
	The Bahamas		1,323
	Mexico		1,416
	Argentina		278

Singapore Budget 2011

Budget 2011 for Individiuals

1. CPF: Raise the employer contribution rate by another 0.5 percentage points, from 15.5%  to 16%, which will restore the total contribution rate to 36%. The additional 0.5% will go into the Special Account. Revise the CPF Salary Ceiling from $4,500 to $5,000 per month. To take effect in September 2011.
2. Income Tax Reduction for 2011: Personal income tax rebate of 20% for individual resident taxpayers for YA 2011. The rebate will be capped at $2,000
3. Income Tax Reduction for 2012 (see table 1) 
4. Growth Dividends (see table 2) by 1st May 2011
5. Household rebates (see table 3)
6. SRS: Raise the contribution cap within the Supplementary Retirement Scheme. 
7. Child Development Credit scheme ($300-$400) for all Singaporean children aged six and below. The Child Development Credit can be used to pay for their children’s preschool, childcare, and medical expenses. The Child Development Credit will be paid into the Children Development Accounts (CDAs), which most children already have.
8. Top-up each primary and secondary school student’s Edusave account by $130
9. Top-up CPF Medisave Accounts of Singaporeans aged 45 and above. Those aged 45 to 49 will receive up to $300, while those aged 50 to 59 will get a top-up of up to $400. Older Singaporeans will receive more, with those 80 and above getting up to $700
10. Remove radio ($27) and television ($110) licence fees permanently

Table 1

Table 2

 Table 3

Industries that will benefit from Budget 2011

1. Banks: Exempt all interest payments made by banks and similar financial institutions from withholding tax.
2. Maritime (shipping, ports, ship builders): Withholding tax exemption for interest payments on loans to build or buy ships. GST zero-rating for repair and maintenance services performed on ship parts and components.
3. Biomedical: GST relief for imported clinical trial materials, as well as enhance the Approved Contract Manufacturer and Trader Scheme
4. Commodities:  Enhance the Global Trader Programme to qualify all derivative trades under the scheme
5. Green Vehicles: Extend the Green Vehicle Rebate scheme for another year till 31 December 2012. In the meantime, we will undertake a comprehensive review on the measures to promote the adoption of green vehicles, as part of our overall efforts to promote sustainable development
6. IT and Machinery Suppliers: Allow businesses to deduct from their taxable income 400% of their expenditures in any of the six broad categories of investment under the scheme, for example, training or investment in automation equipment
7. Construction:  Spend $10 billion to upgrade homes and rejuvenate estates over the next 10 years
8. Specialised storage facilities that store high-value collectibles such as art and antiques: GST zero-rating for specified services supplied to overseas persons, if they are performed on goods kept in qualifying specialised warehouses and eventually sent overseas

Industries to look out

Some industries that are worth looking out for potential companies with great future:

1. Telco - The trend of channels providing retail shopping might change the way people buy and sell stuff
2. Battery - With mobility the norm, alot hinges on good battery to support the life of devices
3. High speed train providers - Time will come where high speed train will be the norm. With air security getting tighter and more inconvenient, the preferred mode of transportation might switch. 
1. Csr Corp Ltd. Previously China South Locomotive & Rolling Stock Corporation Limited.  world's largest manufacturer of electric locomotives. In 2002 the group manufactured the 270 km/h (170 mph) China Star high speed EMU
4. Ports - With global trade ever increasing, this is one big cash cow.