Buckle Up Your Seatbelt!

Since the elevation of the US debt ceiling in Aug 1 which triggered worldwide financial storms, the largely-worried symptom of a global-scale economic depression is becoming a reality. Banks around the world are confirmed tightening up the credit. With tightened credit control, businesses will have difficulties borrowing moeny from banks to finance their operations. New businessnes can't survive without a decent amount of loan to feed their fragile cash flow foundation. Old businesses too, will run into problem trying to expand or even to sustain their current cash flow.

Singapore will not be spared this time. We are an open economy that relies pretty much on others to survive. With the fall outs of the Eurozone and US, one could probably say we still have China and India to lean on. But let's be realistic, the businesses that jacked China and India to their economic powerhouse position came from the Eurozone and US. Without these investments from the West, the two Asian beasts cannot achieve their prosperity today. In another word, negatively-speaking, if the West collapsed, China and India will bump into a recession.

Singapore depends heavily on these economic powerhouses and it seems that all of them might just fall sick next year and we will have a big problem. That implies mass unemployment, reduction of pay rolls, standards of living, collapse of the stock market, etc.

Personally, having predicted this scenerio many months back, I refrain from investing my money into the stock market. In fact, I am seeking to divest part of my riskier counter. With more divested funds returning back, I get to lower the risk on my portfolio and be ready once again to exploit the stock market. Remember - cash is king. If the economy depression arrives next year, we will see the stock market falls into the abyss. That is when many savvy investors and I shall exploit cheap shares and wait for the big bang once the economy recovers.

I may sound too pessimistic but I am always cautious of such economy earthquake. This is no joke to begin with. The 2008 economy downturn already wiped out many over-optimistic, naive people whom thought that the collapse of the US banking system was just a temporary effect of an overheated economy and remained positive that stocks were still heading north. Too bad for them, stocks headed straight south and never returned to the pre-2008 since. Many of them burnt their fingers.

But opportunists seized the chance and took cheap shares away. Many became rich in less than 3 years. Do you want to be the naive optimist or the smart opportunist?

Time to buckle up your seatbelt if you haven't!

3Q2011 Dividends Announcments

AIMSAMPI and Starhill Global have announced their 3Q2011 dividend payouts respectively.

AIMSAMPI, in its financial presentation ended Sep 2011, announced that it will pay a DPU of 2.50 cents or $0.0250 to its shareholders. AIMSAMPI's unit consolidation exercise didn't affect its DPU.

AIMSAMPI: 2QFY2012 Financial Presentation


Starhill Global, announced 1.00 cent or $0.01, slighly less than the DPU in 2Q but same as last year's 3Q.

Starhill Global: 3Q2011 Dividends

Overall, I am pleased with both REITs. However, I am waiting to divest Starhill Global in the future due to declining office property outlook, increasing volatility, and the desire to seek another REIT (preferbly industrial) that pays higher DPUs than office REITs. My choice would be either Sabana or Cache, depending on their stock performance.