Top News this Week (21 March)


Rounding up top investing articles from around the web, including articles shared by fellow investors in the Financial Horse Facebook Group.

‘I don’t have a car or house’: Singapore-based technopreneur who bought $93m digital art (Straits Times)

Metakovan, the alter ego of Vignesh Sundaresan, caused a stir in the art world when he bought Everydays: The First 5,000 Days at a Christie’s auction.

He may have spent a record US$69 million (S$93 million) worth of cryptocurrency on a piece of digital art, but entrepreneur Vignesh Sundaresan insists he is just an “ordinary” man with no real estate to his name – at least not in the “real world”.

“I don’t have a car, I don’t have a house. I am a minimalist,” says the 32-year-old, whom The Sunday Times met on Saturday (March 20) for dinner at his favourite restaurant in Little India. The bachelor rents a condominium nearby.

Indonesian tourism minister says preparations can begin for ‘safe travel corridor’ between Singapore, Batam and Bintan (CNA)

In a meeting with officials in Batam, the minister proposed that the travel corridor begin on Apr 21, especially for Nongsa in Batam and Lagoi in Bintan which, prior to the COVID-19 pandemic, were destinations frequented by Singapore residents.

Mr Uno said there is a direct route that connects Singapore’s ferry terminal with Nongsapura ferry terminal in Batam as well as Bandar Bintan Telani ferry terminal in Bintan.

Disney+ Turns Singapore Flyer Into Captain America’s Shield For Falcon And Winter Soldier Launch (Today)

Singapore’s high real yields seen drawing buyers after sell-off (Business Times)

Singapore’s bonds were sold off in mid-February after the government announced plans to sell additional debt to finance infrastructure projects in the city state. The nation’s inflation-adjusted 10-year yield now offers a 62 basis points upside, compared to negative spreads for most other AAA-rated countries.

The new debt will be called Singapore Government Securities (Infrastructure) and the existing bonds will be renamed to SGS (Market Development), according Ministry of Finance and Monetary Authority of Singapore spokespersons.

Count On Me, Singapore copyright saga: Jeremy Monteiro was in recording studio when song was written (Straits Times)

The song was composed by Canadian Hugh Harrison and arranged by Monteiro in 1986, but Indian composer Joseph Mendoza, who has been accused of copying it, claims he wrote his version, We Can Achieve, three years before in 1983.

The songs are near identical, with the lyrics to Count On Me, Singapore changed to “India” or “Mother India” instead of “Singapore” on We Can Achieve.

Fairfax Asia making cash offer of S$0.3535 a share for Singapore Reinsurance with a view of delisting (Business Times)

FAIRFAX Asia is making a cash offer for Singapore Reinsurance’s 71.82 per cent stakes that it and its concert party do not own, at S$0.3535 Singapore cents a share, conditional on them garnering more than 50 per cent stakes.

It said the offer price represents a premium of 20.6 per cent over the volume-weighted average price per share for both the one-month and three-month periods, and a premium of 21.9 per cent and 27.6 per cent over that for the six-month and 12-month periods respectively up to and including March 18, when the counter closed at 29.5 cents.

The offer price is at a price-to-book ratio of 0.79 time. The counter has traded below the offer price for the past 10 years up to March 18, Fairfax Asia added in the offer announcement filed to the Singapore Exchange late on Friday.

Investors to cash out as Singapore TikTok-rival Lomotif sold for US$125m (Garage)

SINGAPOREAN Paul Yang spent three and a half years sleeping on strangers’ couches in the US as he scrimped to build his video-sharing app, used today by millions. Now, his company Lomotif is getting acquired by a US-based group in a deal that could see significant returns for his handful of early backers. The TikTok-rival’s investors include Golden Gate Ventures, Koh Boon Hwee and Kuok family-linked K3 Ventures. The app is popular among urban youth in the United States and Brazil, and registered 14 million monthly active users in February, according to mobile app data firm SensorTower.

Crypto Mining Stocks Could Keep Beating Bitcoin in ‘Modern-Age Digital Gold Rush’ (Coin Desk)

  • “Bitcoin and the wider crypto market are the modern-age digital gold rush,” wrote FundStrat, which means crypto mining stocks could see further upside.
  • Because “miners play such a critical role in ensuring the Bitcoin network functions properly, investors have sought opportunities to gain exposure to mining companies,” which generate revenue in the form of mined bitcoin.
  • The largest publicly listed mining companies include Riot Blockchain (NASDAQ: RIOT), Hive Blockchain (OTCMKTS: HVBTF), and Marathon Patent Group (NASDAQ: MARA).
  • As the bitcoin price increases, miners spin up new rigs or upgrade hardware in pursuit of higher block rewards. And FundStrat expects more-efficient mining machines will help some firms remain competitive, which could boost profit margins.
  • But buyer beware: “Mining company equities may serve as a high-beta play on bitcoin … [and when the cryptocurrency] enters a bear cycle, we would expect mining equities to have greater downside volatility than bitcoin,” according to FundStrat.

Wealth managers frustrated over bitcoin, anxious for piece of the action (CNA)

Yet Paulsen, chief investment officer for Leuthold Group, which manages US$1 billion, cannot own bitcoin in client portfolios due to regulatory constraints. This has left him on the sidelines watching the world’s most popular cryptocurrency surge more than 900 per cent since its March lows in volatile trading that also saw bitcoin lose more than 20 per cent in the span of a few days. “What I like about bitcoin is … its correlation to stocks and other assets is extraordinarily independent,” said Paulsen, who remains frustrated that he cannot own it for clients.

The promise of an asset class that behaves differently than stocks or bonds is leaving portfolio and wealth managers scrambling own cryptocurrencies if they can.

Many view bitcoin as a good inflation hedge. Nearly 20 per cent of advisors are contemplating investing in cyryptocurrencies this year due to concerns about inflation, up from 6.3 per cent in 2019, according to a report from Citi. Still, a number of advisors say they are unable to own bitcoin for their clients until they can hold it in an exchange-traded fund or mutual fund that clears legal hurdles common for any investment.

Stilettos, sneakers and Doc Martens are creating ultra wealth (Business Times)

Exor, the holding company of Italy’s Ferrari-owning billionaire clan, the Agnellis, announced last week it’s buying almost a quarter of Christian Louboutin in a deal that will give its eponymous figurehead a net worth of at least US$1.2 billion, according to data compiled by Bloomberg.

The deal follows two other recent transactions involving owners of revered shoe brands: the sale of Birkenstock to L Catterton at a valuation of about four billion euros (US$6.4 billion) and the US$1.8 billion initial public offering of Dr Martens. The former made billionaires of brothers Christian and Alex Birkenstock (a third brother, Stephan, sold his stake in 2013), while the latter has given the founding family, the Griggs, a fortune valued at more than US$500 million.

Meanwhile, rapper Kanye West’s sneaker and apparel business, Yeezy, is valued from US$3.2 billion to US$4.7 billion by UBS Group. Sales for Yeezy’s Adidas sneakers grew 31 per cent to nearly US$1.7 billion in annual revenue last year, netting Yeezy US$191 million in royalties, according to a UBS document reviewed by Bloomberg.

Despite the pandemic’s crushing blow to the economy – particularly the retail sector – luxury fortunes have soared in the past year. Europe’s richest person and backer of Birkenstock-owner L Catterton, Bernard Arnault, has added US$69 billion in wealth, according to the Bloomberg Billionaires Index, as shares of his LVMH have almost doubled. His rival, Kering founder Francois Pinault, is up by more than US$20 billion.

Musk tells China data gathered by Teslas remain secret: Report (CNA)

Tesla boss Elon Musk strongly denied on Saturday (Mar 20) that his cars, which gather large amounts of data, could ever be used to spy on China despite fears raised by Beijing, the Wall Street Journal reported.

The assertion from the head of the electric car maker followed a decision by the Chinese government to bar members of its military or employees of some state-owned companies from using Teslas.

U.S.-China trade relations remain strained as Biden team takes tough stance similar to Trump (CNBC)

  • U.S.-China trade relations are likely to remain challenged after this week’s diplomatic talks showed that the Biden team will retain a tough tone with Beijing.
  • “I had low expectations for Alaska and those expectations have been met,” said attorney Clete Willems, who served as a trade advisor to President Trump.
  • At stake is one of the most valuable relationships in the world. China was the United States’ third-largest goods trading partner in 2019 with $558.1 billion in total trade.
  • “The Biden Administration has signaled that trade at all cost is not their position,” added Dewardric McNeal, an Obama-era policy analyst at the Defense Department.

Charts show that Europe’s third coronavirus wave has begun (CNBC)

  • The French capital and parts of the north of the country will enter a new lockdown Friday, although schools and essential shops will stay open. 
  • In Germany, Chancellor Angela Merkel had announced an easing of lockdowns in March.
  • But German Health Minister Jens Spahn told a news conference Friday that the easing may have to be reversed.

Bigger is the enemy of better investing (Business Times)

Over many flips, the difference between betting the optimal 10 per cent to 20 per cent of wealth and the overly aggressive 50 per cent bet is the difference between growing wealth and heading towards bankruptcy.

The crux of the sizing decision is this: the bigger you bet on a series of favourable gambles, the higher your expected gain on each event. But if you bet too big, your most likely outcome over the series is to lose money.

Investors can skip all the elaborate math and still avoid the pitfalls of taking too much risk by following a few simple rules: avoid a concentrated portfolio and shun leverage. In short, diversify and don’t borrow.

The ‘tiger mum’ who makes HP roar (Straits Times)

Ms Chua did not have a degree when she joined HP as a sales representative more than two decades ago. But she more than found her feet in the multinational, taking on various roles in business development, channel marketing and consumer personal systems, both locally and regionally.

Today, she is the cluster head of HP in both Singapore and Malaysia, enlarging the company’s footprint in computing, print and other emerging technologies including 3D printing. Her beginnings were humble. The second of five children of a taxi driver and a housewife, she grew up in a one-room rental flat near Beach Road.

In the line of duty: On wealth taxes, Singapore must decide what it most wants to achieve; and know what it could cost (Business Times)

a swell in Singapore’s super-rich ranks has not escaped notice. Knight Frank’s Wealth Report 2021 suggests the number of ultra-high-net-worth individuals (UHNWIs) in Singapore – those with at least US$30 million in net assets – rose 10 per cent last year to over 3,700. That is the third-highest growth recorded globally, and has proven a boon for the wealth management business.

Some see this as an opportunity – even a moral imperative – to extract more dollars from the rich. “We take pride, as we say in our pledge, to build a society based on justice and equality,” says Christopher Gee, a senior research fellow at the Institute of Policy Studies who is upfront about his support for wealth taxes. “If we hold to that, then we need to put the prevention of inequality as a goal.”

Parliamentarians are also weighing in. Last year, Foo Mee Har of West Coast Group Representation Constituency (GRC) mooted reinstating estate duty; this year, she suggested a one-off tax.

SPACs break 2020 record in just 3 months, but the red-hot industry faces challenges ahead (CNBC)

  • SPACs in the U.S. have raised $87.9 billion so far in 2021, already exceeding the total issuance in all of last year, according to data from SPAC Research.
  • The red-hot industry is facing a multitude of challenges in keeping up with the meteoric rise.
  • Higher interest rates make these growth companies — oftentimes pre-revenue and pre-cash flow — much less appealing.
  • Many SPAC IPO stocks have proven to be vulnerable to overall market volatility and wiped out 2021 gains.

Looking for a comprehensive guide to investing? Check out the FH Complete Guide to Investing and FH REITs Masterclass for Singapore investors.

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