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Goh Eng Yeow
Markets Correspondent
Investing in STI index fund
October 14, 2009 Wednesday, 11:48 AM
Goh Eng Yeow clears the air on trading the STI ETF.
I GOT several inquiries from readers on exchange traded funds, following my small change column last Sunday. This is my reply. Exchange traded funds (ETF) – the vanilla type at least – are made up of baskets of stocks which closely mirror widely-watched stock indexes such as Singapore's Straits Times Index and Hong Kong's Hang Seng benchmark. Many readers want to know where they can buy the STI ETF which tracks the STI. Well, it is listed on the Singapore Exchange. As I write, it is up two cents at $2.75 with 472,000 shares traded. STI is up 5.74 points at 2,674.3. This means that the STI ETF is traded at a small premium to the index. I've mentioned the volume traded so far to dispel any misconception that the STI ETF is thinly traded. For retail investors, there should be a sufficient number of shares traded each day to ensure that they can easily get in and out of the counter. One thing good about the STI ETF is the low management fee involved - about 0.2 per cent of the value of the assets in the funds. In contrast, a conventional unit trust will charge you anywhere between 1 per cent and 5 per cent of the value of the assets for the pleasure of managing them on your behalf. Some readers confuse the STI ETF with the multitude of STI warrants displayed on the screen. With the STI ETF, you actually get to “own” a basket of blue-chips such as SIA, DBS and UOB. You will also get an annual dividend payout. The latest dividend yield works out to 4.4 per cent – far higher than what banks are paying. You can also use CPF or SRS monies to buy into the STI ETF. However, with STI warrants, what you get is an option contract. An option does not confer ownership on the underlying assets. Instead, what it offers is a bet on whether the price of the asset goes up or down. If it goes up, you walk away with a prize, but if it goes down, you may end up losing everything. I hope this article helps to clear the air on STI ETF. Enclosed below is a page from Shareinvestor.com which gives salient features on STI ETF:
Tags: fund, index, invest, sti
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Maybe the Spore Democrats should show two fingers to the pro-government media by repeating these well known words: You can fool some of the people some of the time. But you can't fool all the people all the time.
The majority of Singaporeans have not experienced the"shiok" of exercising their democratic right in a ballot box. However, more and more people are deemed do so in the next election.
Meantime, here is mud in the eye to the lap-dog ST.
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The Singapore Democrats have been censored again by the mass media. The Today newspaper ran a story about opposition parties and their views on the upcoming general elections. It completely left out the SDP even though we had replied to the reporter's questions.
Unfortunately, this is not an isolated occurence as far as the local press is concerned. The Singapore Press Holdings and Mediacorps seem to have an understanding that news about the Singapore Democrats must be blacked out.
For example, Channel News Asia did a report earlier this year on how political parties were using the Internet to spread their messages. The story mentioned only the PAP and Workers' Party (WP), completely ignoring the SDP even though we have been at the forefront of using the new media. (See here)
Not to be outdone, the Straits Times published a report about the Reform Party's first anniversary dinner held in September this year. It mentioned the attendance of other opposition parties but left out the Singapore Democrats.
And when it does mention the SDP it publishes falsehoods. For example, Lianhe Zaobao in 2008 reported that this website was losing readers because of the extremist views that the party had taken when in fact the opposite was true. (See here)
In July this year Ms Mavis Toh from the Straits Times emailed the party and submitted questions about the SDP's Young Democrats because she was "working on an article regarding youth wings in singapore's political parties." As far as we know, the story never appeared.
A month later another Straits Times journalist, Mr Cai Haoxiang, emailed the SDP and again wanted to do "a story on what youth wings of political parties in Singapore are doing for National Day."
Again the SDP emailed the reporter the information and again no story appeared.
The latest incident happened when Mr Zul Othman of Today emailed the SDP a set of questions about the party's plans for the GE. We replied to the email and alerted the reporter to our response on this website. But nothing appeared in the newspaper's report about the SDP's comments. (See here)
If it happens once, it is very possible that events had overtaken or that the story had to be killed for some legitimate reason other than censorship. But when it happens repeatedly where information is sought but not published, is it not reasonable to suspect that the state media may be just fishing for information?
None of the journalists mentioned above got back to the SDP to explain why the information were not used.
Even though party members have been hard at work on the ground visiting estates in Toa Payoh, Bishan, Bukit Panjang and other vicinity, there is precious little coverage of what we do. When we achieve pioneering political work in cyberspace, the media refuses to report them.
In contrast when the PAP gets in on the online action a few years late, announcing last week that it would use new media tools in its campaign, it gets front page headlines.
The question that must be asked is: Why is the PAP-media bent on blacking out news about the Singapore Democrats? Is there something that the SDP is doing that is threatening the PAP's hold on power?
But the funny thing is that despite the media blackout, or maybe because of it, more people are joining the Singapore Democrats. This is due to our use of the Internet to reach out to Singaporeans. We are determined to bypass the state-controlled media and reach out directly to the people via the new media.
Does STI ETF requires the 0.3% brokerage fees? How abt the 0.04% clearance fee? Does this add up to almost 0.6% points in fees. I feel investors may be better off buying individual shares of companies that they feel confident with. Anyway we can't find out abt all the underlying shares in the STI ETF thus we may end up buying some junk shares. I feel that there is a need to clear the air with more info.
I wonder what this "market"analyst thnks of this.
After all, not everyone has a job for life, CPF to boot and lots of spare cash to invest..like some we won't mention.hor!
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Buyers feeling the squeeze
INSIGHT DOWN SOUTH
By SEAH CHIANG NEE
As foreigners with PR status compete with young Singaporeans for public housing, impacting also on private development projects, prices rise and the government limits the entry of foreign arrivals.
SINGAPORE’S public housing, which has gained world acclaim for creating a nation of homeowners, is sagging under the weight of a wave of foreign arrivals.
In recent weeks, the government has been peppered with complaints from Singaporeans — some of them newlywed graduates — about insufficient new subsidised flats despite repeated applications.
One claimed he had failed 11 times while others talked of two or three failed attempts.
The latest public offer of 2,132 new flats for sale drew 20,394 applicants, which means that nine in 10 will be disappointed.
Another 5,000 units will be launched before the end of the year.
The rejected Singaporeans who cannot wait any longer will have to turn to the dearer resale market, where they will face stiff competition from rich foreigners holding permanent residency (PR) status.
PRs made up 40% of buyers in the open market during the past five years, resulting in prices rising by 40%.
One local benefit, however, is that a newly married Singaporean couple is given a S$40,000 (RM97,121) grant to buy a HDB resale unit.
The squeeze is due to two factors: firstly, a PR population hike of 51% to 553,000 since 2004, and secondly, more citizens demanding central or mature areas.
Today’s inadequacy is a far cry from the previous generation’s when the Housing Development Board (HDB) successfully mass-built cheap homes for hundreds of thousands.
One of the earliest stories I wrote as a reporter was about the HDB’s world record of building one housing unit every 45 minutes.
The question of subsidised housing is of crucial importance to Singaporeans who are trying to cope with one of the highest costs of living in Asia.
The passion Singaporeans have for property can only be understood by people living in land-squeezed cities.
After independence in 1965, then Prime Minister Lee Kuan Yew announced the objective of creating a home-owning society.
“If every family owned its home, the country would be more stable … I believe this sense of ownership was vital for our new society,” Lee said later.
Today, 86% of Singaporeans live in HDB flats and more than 90% own their home.
It was Lee’s housing programme that endeared his party to the old generation of squatter-living Singaporeans.
Now, the HDB is facing a strong challenge, catering to a new generation with higher expectations than their parents.
“Its achievement made the PAP (People’s Action Party) one of the most successful parties in Asia; it can also bring it down if it stumbles,” said a professional, who is still paying off a 30-year HDB loan.
Critics have accused the HDB of trying to replace the social task of providing cheap public housing with one dictated more by market forces.
Government officials say the HDB is building enough flats for local needs, and applicants failed to get one — even repeatedly — because they were too choosy, not because of inadequate supply.
“We promise every eligible citizen an affordable flat, nothing about meeting his choice location,” one official added.
There are regulations against speculating on HDB flats but there is no ban on it.
As a result, many Singaporeans and PRs — including those from Malaysia and Hong Kong — have made profits buying and selling resale apartments after a few years.
No foreigner may buy HDB flats but may rent them, also indirectly pressuring supply.
However, PRs are allowed to buy resale units.
Several years ago, there were stories of Hong Kong businessmen settling here as new PRs and making a killing selling their HDB units (the second time entailing a levy on the profits).
The slow building rate is not entirely due to poor anticipation of demand — but also to shrinking living space, particularly in choice areas where prices rose the sharpest.
The older generation was happy to accept any home offered to it, but not today’s.
“Now, people want only new units in a mature estate,” an official said. “Unfortunately, such places are becoming fewer.”
The foreign influx is, of course, the biggest cause of recent price increases.
With Singapore out of recession, financial consultant Leong Sze Hian has predicted another 10% hike in resale HDB prices.
Minister for National Development Mah Bow Tan insists there are sufficient public flats for Singaporeans and prices “remain very affordable”.
Eight out of every 10 first-time applicants of HDB flats would succeed in getting one on their first try, the board said.
In a recent online poll, however, 65% of Singaporeans described HDB prices as totally or slightly unaffordable.
Three out of 10 said they were “barely” so while 5.19% found them comfortable.
The sharp price rise in public flats is generally good news for the vast majority of existing owners, allowing many to sell out and upgrade to private properties.
In a speech during the generation change, Lee likened life in Singapore to a marathon race in which the second lap was about to begin.
For all who finish this race (not merely the “winners”), Lee said one possible reward was to provide everyone a second property.
That was, of course, before the massive arrival of immigrants.
Prime Minister Lee Hsien Loong, whose priority is to contain the problem, has announced that the intake of foreigners will be slowed down.
As Singapore’s population hits five million, the space squeeze is also being felt in the private market.
In the past year, developers have been selling tiny flats of less than 46.45 sq m — the latest on offer being a 26.48 sq m “Mickey Mouse” flat.
We can also trade EWS on NYSE. It closed at US$11.18 (+3.14%) with a volume of 5.7M shares.