Raffles Medical granted in-principle approval for scrip dividend scheme

SINGAPORE: Raffles Medical Group has been granted in-principle approval for a proposed scrip dividend scheme.

The scheme will be subject to the approval of shareholders in a general meeting yet to be convened.

Raffles Medical said the scheme will provide the opportunity for shareholders to receive dividends in the form of shares instead of cash.

This will enable shareholders to participate in the equity capital of the company without incurring brokerage fees or stamp duty.

Raffles Medical said the company will also benefit as it will be able to retain cash that would otherwise have been spent in dividends.

It will use this cash to fund future growth. - CNA/vm

Financial crisis has set up investment opportunities in Asia: Henderson Funds

 

SINGAPORE: Henderson Global Investors said the global financial crisis may have been the best thing that has happened to Asia.

It believes the crisis has helped the region move away from being too export-dependent and develop its own economic drivers.

Henderson said it has already created investment opportunities in various sectors including property and financials especially in China.

Many Asian economies benefitted from an export boom in the few years before the global economic crisis in 2008.

But the crisis caused a sharp drop in exports as consumption in the West dropped and showed no signs of returning to the strong levels previously.

Henderson said there is a silver lining from the crisis for Asia because policy makers were forced to pump-prime their economies by spending on infrastructure and focus on potential growth areas.

Michael Kerley, director of Pan Asian Equities, Henderson Global Investors, said: “It's made Asian governments focus on other areas other than exports. Growth in Asia over the last 10 years has been export-led.

“Going forward we won't be able to rely on those exports as a region because US consumption and European consumption are unlikely to be as strong as we've seen. So the Asian governments need to focus on other areas.

“So focusing on investment and domestic consumption, I think ultimately gives us the goal of being more evenly balanced in terms of growth profile, more structural and less reliant on the global cycle and I think that should be welcomed."

In terms of Asian equities, Henderson is especially optimistic on sectors like property, financials, industrials, and telecoms.

And it has recently been positioning its funds towards these segments especially in Chinese properties and banks which it believes have been oversold.
Property and financials now make up about 38 per cent of its Asian Dividend Income Fund.

Mr Kerley said: “The real value opportunity at the moment is China. It's underperformed for eight to nine months. The market is roughly trading at 20 to 25 per cent discount and I think to its average and to the region as a whole.

“We've been adding Chinese properties. The banks and property have been quite weak. Considering that the markets have oversold these on worries of interest rates changes and policy initiatives, this is where the opportunities lie.”

Henderson also believes that Asian banking stocks are attractive because of their dividend outlook.

For example, it said that total dividends paid by banks in Asia last year were higher at around US$20 billion than banks in the US, Europe or UK.

And the dividend yield growth for Asia Pacific region ex-Japan for the past 10 years has been around seven per cent compared to the less than three per cent growth seen in the US, EU and UK. - CNA/vm

Chris Firth’s Strategies

SOURCE: The Straits Times

The 3 Phases of Life

 

Accumulation Phase

Individuals in the accumulation phase are those attempting to accumulate assets to satisfy fairly immediate needs, like down payment for a home, or longer-term goals like children’s education and retirement fund

Typically, individuals in the accumulation phase have a small net worth and heavy debts (car loans, college study loans).

Their investment horizon is long, 30 – 40 years, and can take higher risks in the hopes of making above-average returns over time through compounding.

These individuals will have a high need for Hospital & Surgical(H&S) and also Disability income insurance, as they are likely to have little savings due to their younger age & loans repayment.

 

Consolidation Phase

Individuals in the consolidation phase are typically past the midpoint of their careers, have paid off much or all of their outstanding debts, and are likely parents.

Earnings exceed expenses, so the excess can be channeled towards education & retirement needs.

Typical investment horizon for individuals in the consolidation phase is relatively long, 20 – 30 years, so they can take moderately risky investments, as they would not want to put their nest egg in jeopardy.

These individuals will have a high need for Hospital & Surgical(H&S) and also Whole Life or Term insurance, as they have children who are dependent on their income.

 

Spending Phase

This is when individuals retire, in Singapore the official retirement age is currently 62, according to statistics the reported life spans of Singaporean Male is 77 & Female 82.

That leaves an average of 15 years for a Male & 20 years for a Female in retirement.

Individuals in this phase would be reliant on their retirement funds accumulated from previous phases.

Let’s do a VERY SIMPLE estimation of how much a typical Singaporean would have in their CPF account retiring at age 62 living in a 4-room flat:

Assuming Income from age 25 to 62 is constant = $3500/month

Amount in CPF OA+SA accounts (including interest) at age 62 = S$673,864

Less housing payment assuming half of it is paid by spouse = S$673,864 – S$216,180 = S$457,684

Using the CPF LIFE payout estimator (high payout/lower amount for beneficiaries), the individual can get:

S$2204 - S$2372 per month

If you feel that amount isn’t enough for your retirement needs, maybe you can consider starting your own retirement fund to complement CPF LIFE.

Remember, for the older You to spend an extra dollar, the younger You would have to save an extra dollar.

Insurance needs at this phase of life would be the lowest as the children are grown-up and able to take care of themselves, but it would be good to have at least a Hospital & Surgical(H&S) plan to take care of excessive medical expenses.

 

 

CPF LIFE PAYOUT ESTIMATOR can be found here:

https://www.cpf.gov.sg/cpf_trans/ssl/financial_model/lifecal/index.html

Always have a good cash reserve on hand

Emergencies, job cuts and other unforeseen expenses happen, good investment opportunities may also present themselves at unexpected moments.

Having enough cash reserves reduces the likelihood of being forced to sell investments at inopportune times to pay for unexpected expenses.

Most experts recommend having at least 3-months salary OR 6-months living expenses in cash or cash equivalents.

Why is Life Insurance an important component of any financial plan?

Life insurance protects loved ones against financial hardship should death occur before our financial goals are achieved.

Death benefit paid by the insurance company can help pay medical bills, funeral expenses, provide cash that family members can use to maintain their lifestyle, service debt, or invest for future needs like education expenses.

Therefore, one of the first steps in developing a financial plan is to purchase adequate Life insurance coverage.

Although nobody ever expects to use his/her insurance coverage, a first step in a sound financial plan is to have adequate coverage “just in case”.

Lack of insurance coverage can ruin the best-planned investment program.

Types of Investments and their risk levels

 

Risks of losing capital invested in the respective instruments:

LOW RISK:

Money Market Securities (treasury bills, bank deposits)

Whole Life Insurance

Endowment

Annuities

 

MODERATE RISK:

Fixed Income Securities (bonds)

 

MODERATE TO HIGH RISK:

Unit Trust

Investment-Linked Products

 

HIGH RISK:

Equity Investments (shares)

Derivative Instruments

Property

 

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