Nera Tel and Nera Elec

I find these two counters are very suitable to my investment appetite.

(1) I like those companies who have had net profit for many years. This means in the following years they much probably continue to make money. Nera Tel had profit for at least five years from 2000 to 2004. Even during 911 and SARS period they still had done well.

(2) Nera Tel doesn't borrow money. Since they don't need to expand, owing money is nothing but lost interest. This feature may be not attractive to those investors who wish gain money from companies merge and takeover.

(3) They had history of paying dividend since listed. As an investor, all I want is return. Nera Elec raised dividend to 1cent last FY. Nera Tel paid special dividend in 2002 when they got Nera Elect listed on SGX. These mean the board is not stingy to minor shareholders.

(4) Last, the share prices are quite stable. The movement range is between 50%, yet you still have chance to have much capital appreciation.

Lasseters International

Lasseters is going to release its FY04/05 result soon. As the only casino concept stock that is listed at SGX, its price performance was not encouraging since its IPO last year. It moved within a thin range of 22c - 27c. While its financial result is not bad according to FY03/04 and 1H of FY04/05, will it report a glaring result and declare a good dividend?

(1) Firstly, we saw one of the directors was keeping buying its share. This shows they wish to boost its share price.

(2) Secondly, please read what they said in last FY annual report:

As a newly-listed company, we intend to utilise our
internal funds and IPO proceeds for further expansion
and investments through mergers and acquisitions. Hence,
the Directors have decided not to declared dividends for
the financial period just ended.
However, we are mindful that as a growing company, a
fine balance has to be struck between retaining funds
for expansion and cash for dividend payout, depending
on the situations and opportunities.

Lasseters has acquired some stakes in many projects. So i believe they will declare dividend this year.

(3) Besides the negative goodwill, last FY they gained 1Ac per share. This FY they will make at least 2.5Ac per share. Let's assume it will declare 1Ac dividend, the return/investment ratio is 5.2% already.

Low risk investments in Singapore

The US interest rate has been raised to 3.5%. But here in Singapore the rate is still the lowest when it dropped to as low as 0.7% P.A. in year 2003. Thanks to foreign banks who put some good stuff to this stagnant market.

(1) eSave in Standard Chartered Bank is my first choice. It doesn't require minimal deposit, doesn't require fixed term. The rate is 1.88% P.A. But it is a pity that it will be down to 1.28% since 1 Sept. Another inconvenience is that it requires internet banking or phone banking to transfer funds.

(2) CitiBank gives us another choice. With a 12-month term deposit, you can enjoy the rate of 2% P.A. What's more, you can withdraw partial saving while keep the rest intact. The drawback is that the minimal deposit is $50,000. If I had that money i will repay my home loan first.

(3) Maybank gave me a shock when I saw its ad in June. It offered 2.3% at 2-year term with minimal sum of $20,001. And it pays interest in advance. So its effective interest rate is 2.4%. Today when I visit its website the ad has gone. So it is a good idea to visit their website frequently to see if they have any promotions.

(4) The last one is not a bank deposit actually. NTUC income is offering a single premium insurance. It matures in 2 years. You get total 4% return if you invest at least $30,000. If you invest $10,000, the rate is 1.95% P.A. Because it is NOT a deposit, if you withdraw it before mature, you could lose some capital.

Best World prices

After its IPO at price of 30c, BWI was traded under water for almost one year. Until recently it went up like a rocket to 62c. If counting in bonus shares, the price actually reached 74c. What can we learn from it?

(1) Of course, firstly, the good financial results back it. It released 100% up net profit for 1H 2005 on July 28. But its price started to rise as early as June 15. So is there anything that hints us it will release good result?

(2) The board of directors is generous. Last year when issuing interim result, they didn't recommend dividend. But later they declared 0.625c interim dividend. Perhaps they wanted to boost share price by distribution. Good yield shares are always welcomed by investors.

(3) Another import event is that strategic investors, Dr Derek Goh and Mr. Goh Tiong Yong, had entered the game. Dr Tan & Dr. Hoan described them as friends.

(4) Last but not least, I think its share had peaked. I concluded this by: (1) Goh Bak Heng is selling his shares; (2) The Price Earning ratio is over 10 based on 62c; (3) The return is not attracting too, standing at 1c interim plus 2c final ( i guess ), that is 5% only.

Eu Yan Sang - hit record high price

I think it is much possible due to my experience:

(1) Last FY it added dividend from 0.6c to 1.25c. This shows that the board is not stingy to minor shareholders.

(2) It used optimal words in 2Q and 3Q unaudited financial results and press releases. Like "Eu Yan Sang On Track for Record Earnings in FY2005".

(3) A substantial shareholder is accumulating its shares in recently months. It is Aberdeen Asset Management Asia Ltd.

(4) Last but not least, its share price has gained from 40c to 45c in last month. It is usually a positive sign when a stock gains before it releases financial report.