(Post 32/week 24)Investment project updates:My first funding societies campaign experience/breakdown part 2

7. My first funding societies campaign part 2(continuation from last two-week post)

Read Part 1 here:https://sonicericsg.blogspot.com/2018/05/post-29week-22investment-project.html

Borrower summary

Incorporation: Incorporated in Jun 1980 (~38 years in business till-date) with an existing paid-up capital ("PUC") of S$53,322,732.54.

Business Nature:
The Borrowing Company is engaged in civil engineering and tunneling works in Singapore, and are listed on SGX. They provide a wide range of civil
engineering works such as road and drain construction, road maintenance, sewerage rehabilitation, soil improvement, excavation, laying of water
pipes, and other infrastructural works. Notable and award-winning civil engineering projects which they have completed include Gardens by the Bay,
Changi Ferry Terminal project, Alexandra Canal project and Seletar Aero Drive project. Existing projects which they are engaged in include the construction of a new road between Mariachi Viaduct & Adam Flyover (together with other related, ancillary projects) and sewerage scheme to phase out Nee Soon pumping station. The existing management team was appointed to the board in the second half of 2016.

• As the borrowing company is engaged in many of the civil engineerings works such as road and drain construction and many another award-winning civil engineering project, this could be a sign that it has built on a good credible company and would probably be engaged to do another civil engineering project in Singapore in the future.
• You can see that I actually love to invest in SME that are listed on the SGX, as being listed as a public is a step up from being a private companies and would thus provide more awareness of the company,you can read about listing on catalist at this link(i am assuming that this company is listed on the catalist board of the sgx:http://www.legalbusinessonline.com/news/sponsored-listing-singapore-stock-exchange-mainboard-vs-catalist-part-2/72106)

Summary from the link

• A catalist listing does not have a quantitative requirement but need to appoint a sponsor, who will access its suitability to list and will advise and guide the company through the listing process, The company must maintain the sponsor at all times after listing
• A catalist listing is supervised and approved by its appointed sponsor, once the prospectus(details of a share offer for the benefit of investors) for lodgement(the action of depositing or lodging something), the catalist listing application will lodge its prospectus with the sgx
• The catalist listing has a less stringent listing requirement as companies need not meet any minimum earning, operational track record or market capitalization requirements. It appears to be a viable option for small but fast-growing companies to list and issues shares to the public for fundraising purpose
• So from a normal person point of view, if the business is not good, would you be the sponsor for that business? I think not, hence I think this is another factor to consider

Ave no. of days taken to pay their creditors: Slightly longer than the industry average

• In my opinion, It is ok to be longer than the industry average after all late payment is better than never!

Employees: 400 plus

Link 2:http://sdh.edu.sg/wp-content/uploads/2016/11/Embracing-Structured-Internship-1.pdf

• Ok, From the link above it seem that the definition of SME companies in Singapore have a group employment size of not more than 200 workers so the company may be actually instead an even bigger company than I thought and could maybe be even listed on the mainboard(which has even more stringent criteria),but lets assume the worse case scenario of it listed on the catalist board instead

Charges: 3 charges filed for loan and trade facilities

Link 3:https://sbr.com.sg/professional-serviceslegal/commentary/charges-how-register-loan-secured-business-1

• Damn all this financial jargon, haha!, initially when I read through the report months ago, I thought this means that the company was being charged, guess its probably because of being a SAF soldier for too long(probably only Ns man that served in the army will understand the joke of "charge")
• Anyway, charge in this context(refer to link 3) basically mean the extent of rights a lender will have on the company assets. It is just security given (in writing) to the lender for the loan amount secured, you can think as an iou(informal document acknowledging debt)

Litigation: 20 past and 5 pending litigation (mostly negligence related)
Litigation

Link:www.businessdictionary.com/definition/litigation.html

• Okay,this definitely mean charged or lawsuit in court, litigation as inferred from the above link is the Ultimate legal method for settling controversies or dispute between people, organizations and the states, 20 past and 5 pending litigation (mostly negligence related),it is probably due to safety concern which results in workers accident which is common in industry like construction and civil engineering,this definitely get a -1 from me

Negative / Black List: Nil

Payment Behaviour: Mainly paid after terms

• Better late than never

Next up on my first funding societies campaign breakdown part 3, which will be written anytime soon will touch about the financial statement in detail.

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(Post 31/Week 23)Investment project updates:Moolahsense(My first campaign back in 2017)

6.Moolahsense(My first campaign with Moolahsense)

Note*the company name will not be revealed as my money are still inside moolahsense, haha(this is not a sponsored post by the way)

Issuer summary

Date of listing: September 2017
Amount:$1,000,000
Tenor:24 month
Repayment type: Equal installment

Quoting from the moolahsense website

• Equal installment:A promissory note by which an installment of the principal subscription amoung and/or interest accrued and due up to the date of payment shall be payable on such dates as set out in a repayment schedule specified in the promissory note, and on the maturity date, the principal subscription amount would have been paid in full

Repayment term: Monthly

• Repayment term: Will be paid monthly

Target interest rate:10% per annum

Quoting from Moolahsense website

• Target interest rate: The maximum rate the issuer is willing to provide the interest on the principal subscription amount which the issuer wished to obtain, as notified in writing by the issue to Moolahsese

Purpose: Working capital

Quote from valuepenguin:https://www.valuepenguin.sg/what-is-working-capital

• Working capital: It is a concept to describe a business ability to cover its short-term operating costs
• Ok, this is a little bit hard to take it all in so I will give an example...For this campaign, I have funded $1000 into it(which is the amount I actually funded, which is the minimum sum that moolahsense accept for the campaign at that time)
• As the target interest rate is 10%, this means that at the end of the tenor, which is 24month I will expect to receive $1200
• 100%=$1000
• 20%(Interest for the two years)=$200
• 120%(The Principal + the interest for the two years=$1000+$200=$1200
• Since the tenor is 24 months, each month I will receive $50(inclusive of interest) in payment/equal installment
• 1month=$1200/24=$50

Summary company profile

The company has been around since 2015 and is listed on the Catalist board of SGX since 2016 and is in the hot dip galvanizing industry. Hot dip galvanization is the coating of steel and iron with zinc to create galvanized steel and iron, which is used in a product where corrosion resistance is needed. Its customers come from a broad range of industries including construction, telecommunications, aerospace, public transportation, and utilities. More than half its business comes from repeat customers.

Detail of purpose

The issuer seek fund to provide working capital for its new contract secured since the beginning of 2017

Financial statement

Will only reveal a part of the financial statement due to confidentiality. As I have mentioned two weeks ago in my post, that I only mainly use this three ratio: current ratio, quick ratio and debt to equity ratio to decide in investing in a campaign, hence I will be showing its ratio below

The ratio is as follow(left side of the column is for the year 2016/right side of the column is for the year 2015)

Year 2016

Current ratio:0.8(this is less than 1)

• If a company has a current ratio less then 1.0, do not invest in it
• If a company has a current ratio more then 2.0, May consider investing in it
• The higher the current ratio, the better

Quick ratio:0.65(this is below 0.75)

• The quick ratio is almost similar to current ratio except that it is assumed that the company does not sell its inventories(e.g Toyota inventory is its car) or stock, it is still able to fulfill its debt
• If the company has a quick ratio of 0.75 and below, do not invest in it
• If the company has a quick ratio of 1.25 and above, May consider investing in it
• The higher the quick ratio the better

Leverage 

Total liabilities/equity:1.78(About debt ratio of 1.5)

• The debt ratio is calculated by total liabilities divided by the equity
• If the company has a debt ratio of 1.5 and above, do not invest in it
• The company should essentially have a debt ratio of 1.0, if the debt ratio is below 0.75, do consider investing in it
• The lower the debt to equity ratio the better

At this point, you may be thinking"soniceric is full of crap and doesn't practice what he preaches since all the ratio are wrong and yet he still invests in it anyway", Don't worry I will explain below my reason for investing it

Year 2015

Current ratio:1.12(More than 1) 

Quick ratio:0.83(Still below 1.25) 

Leverage 

Total liabilities/equity:1.4(still not the ideal debt ratio of 1.0)

So what is the reason for investing in this campaign? (You may be actually disappointed with my answer)

It is purely because I thought I would like to try out moolahsense platform using money that I am ok with losing. Also because it has a website and is listed on the SGX which indicates it is a step up from the local SME.So in summary, it was just purely blind and instinct investment.

But luckily, this campaign turns out alright and so far there hasn't been any late payment(this campaign has been going on for about 10 months?). Ironically, some of my future campaign in my moolahsense(which I will reveal in due time) even using the ratio and fundamental and technical analysis has not been making payment promptly and has been late in payment.

Ultimately, I think the best strategy for peer to peer lending such as moolahsense and funding societies is to understand the fundamental and technical analysis of the campaign and to invest in the most minimum sum possible(Even if you think this campaign is a sure win as there is never anything in the market that is sure win!)

Do stay tuned for the continuation of my last week post of funding societies(my first campaign)!

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(Post 29/week 22)Investment project updates:Posb invest saver,Moolahsense and Funding societies(First campaign experience)

6.Posb invest saver

Regular saving plan updates for ABF Singapore Bond Index Fund(A35)

For my regular saving updates for the month of May 2018 was written last week, see my last week post here

As of now (23 MAY 2018), I am currently holding 1641 unit/shares. This week has been a pretty normal week for A35 with it hanging around the range of 1.11 to 1.12

Honestly, I regretted a little for having missed the boat at last Friday where A35 was hanging around at 1.108 but nevertheless will still continue to wait out and see before putting in a lump sum

Regular saving plan updates for Nikko AM Singapore STI ETF(G3B)

As I have just started a new regular saving plan for STI ETF via posb just this month, I am currently holding only 27 units so far. As to why I started a new regular saving plan, it was because I found myself monitoring the share price of the STI ETF(in this case i am also monitoring the ES3, which is basically also another STI ETF but is managed by different companies) too often ever since I sold off my entire STI ETF that I have accumulated from 2016, read more about it here

Nevertheless, STI ETF(G3B) doesn't seem to make a huge drop yet despite much negative news like trade wars, the month of may etc. Will continue to wait out and see how it goes.

7.Moolahsense

As I have mentioned in my moolahsense post last week, read here. I will not be venturing into anymore Peer to peer lending platform anytime soon unless my delinquent investments in moolahsense will start paying back. Hence, no further comment. Will reveal more of the funding campaign I have taken part in moolahsense probably in the next few posts

8.Funding societies

So far, I have only one campaign with Funding societies, with a delinquent campaign in moolahsense(see above), I will not be venturing into Funding societies anymore until the delinquent payment in moolahsense start to pay back

My first campaign with Funding societies

Funding societies have already omitted the name of the company in the first place as i mention in my last post. Here is some detail from my first campaign(and maybe last) with funding societies which have just completed paying back the principal and the interest

Loan details

Loan recommended amount:$1,000,000

Tenure(No of months):3

Simple interest rate P/A:9.00%

Effective interest rate P/A:9.38%

Industry: Construction

Dp credit payment grade: N/A

Dp expected default probability: N/A

Security: Related company corporate guarantee

Purpose: Working capital

Documents receive: Last 9-month bank statements, FY 2015, 2016 & 2017 Audited Financials, 1H FY2018 Unaudited Financials Directors' Questnet Search, Borrowing Company's Questnet Search, FY2015, 2016 & 2017 Audited Financials for Corporate Guarantor, Corporate Guarantor's Questnet Search

After 18% service fee of loan interest

Monthly net return amount:$6150.00

Net return amount:$1018,480.00

Net simple interest rate %:1.85%

Simple interest rate %:7.38%

Effective interest rate%:7.64%

Investor repayment schedule

Month 1

Principal:$0.00

Interest:$7500.00

Fee:$1350.00

Total:$6180.00

Month 2

Principal:$0.00

Interest:$7500.00

Fee:$1350.00

Total:$6180.00

Month 3

Principal:$1,000,000

Interest:$7500.00

Fee:$1350.00

Total:$1,006,180.00

Will continue more about my first campaign with funding societies post this week!

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(Post 26/week 21)Investment project part 2:How to read financial statement for moolahsense and summary of my moolahsense journey so far

8.How to read financial statements

Link:https://www.investingnote.com/posts/537794?utm_source=InvestingNote+Registered+Users&utm_campaign=1cdc8ba6d2-EMAIL_CAMPAIGN_2018_02_09&utm_medium=email&utm_term=0_e0c90c76bb-1cdc8ba6d2-379335261

The above link is one of the initial websites where I learn how to read financial statements, below is a summary of the link details

Summary

1. There are three type of financial statements, balance sheet, income statements and cash flow statements

2.Some important ratio in the balance sheet to understand the financial health of the company before investing: Current ratio, quick ratio, cash ratio, debt ratio, debt to equity ratio, net asset value per share.

3. As moolahsense only provide the current ratio, quick ratio and debt to equity ratio in its financial statements and what I used to gauge the SME companies financial health is just these three ratios, so  I am only going to focus on this three ratio

(one part of the moolahsense financial sheet)

Current ratio(simplified version)

• A simple ratio of current asset divide by current liabilities
• Current liabilities are debt that need to clear in the short term(in a year)
• If a company has a current ratio less then 1.0, do not invest in it
• If a company has a current ratio more then 2.0, May consider investing in it
• The higher the current ratio, the better

Quick ratio(simplified version)

• The quick ratio is almost similar to current ratio except that it is assumed that the company does not sell its inventories(e.g Toyota inventory is its car) or stock, it is still able to fulfill its debt
• If the company has a quick ratio of 0.75 and below, do not invest in it
• If the company has a quick ratio of 1.25 and above, May consider investing in it
• The higher the quick ratio the better

Debt to equity ratio(simplified version)

• The debt ratio is calculated by total liabilities divided by the equity
• If the company has a debt ratio of 1.5 and above, do not invest in it
• The company should essentially have a debt ratio of 1.0, if the debt ratio is below 0.75, do consider investing in it
• The lower the debt to equity ratio the better

The above three ratios are what I used to gauge the SME companies on whether or not to fund its loan campaign, there are other factors I take into consideration before I fund a campaign but first...let me summarize my moolahsense journey so far...

9.A summary of my moolahsense journey

By now if you had read through my various post in the blog, you would have known that I dislike complex jargon and try to simplify my blog post as much as possible(also, I do not really like to write a very long post)

So with that said, let's jump straight to the bullet!

(The above picture is my personal moolahsense dashboard)

My moolahsense account breakdown as follows

• Total amount value:$3372.28
• Total principal+interest received:$2442.56
• Total interest received:$260.21(around 7.71% after doing the math, I started around July 2017)

        (3372.28/100)*260.21=7.71%

• Annualized risk adj return:16.45%(god knows where they pluck the number from?)
• Your portfolio is performing better than 69.00% of all investor(yeah right, again god knows where they get the number from?)
• Total funded campaign:13
• Current ongoing campaign:10
• Fully paid campaign:2
• Delinquent campaign:1

The auto-allocation is definitely a bad idea(for me at least) as I always feel that one should do their own research and not entrust it with the computer(which is why I am not so hype on robo-advisor), most importantly, remember to always dyodd! (do your own due diligence!)

Conclusion: Due to a delinquent campaign, I have decided not to invest in moolahsense in the meantime and instead focus on stocks

Lastly, If you are would like to know more about crowdfunding do check out this blog which provides much interesting insight into the crowdfunding societies. Good luck with your crowdfunding endeavor!

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(Post 25/week 21)Investment project updates:Posb invest saver MAY 2018 summary and choosing a peer to peer lending platform

6.Posb invest saver

This week, my monthly regular saving plan letter has arrived!

Regular saving plan updates for ABF Singapore Bond Index Fund(A35)

Breakdown of my regular saving plan(A35) this month(May 2018)
Total amount(regular saving plan)A35:$100
Price per share:$1.112400
Gross sales charge:0.5%
Net sales charge amount:0.5% of 100=$0.50
Net amount invested: Total amount-net sales charge amount=$100-$0.50=$99.50
Units issued: Net amount invested/price per share=$99.50/$1.12400=89.446242359=89 units

Summary: As of 18 May 2018, the share price of A35 is going down. At 6 May the share price was at 1.117(See the previous post). Will be watching it for any further movement before purchasing it in a lump sum, could also be a warning sign that economy is slowing down.

Regular saving plan updates for Nikko AM Singapore STI ETF(G3B)

Breakdown of my regular saving plan(G3B) for this month(May 2018)
Total amount(regular saving plan)A35:$100
Price per share:$3.662300
Gross sales charge:0.82%
Net sales charge amount:0.82% of $100=$0.82
Net amount invested: Total amount-Net sales charge amount=$100-$0.82=99.18
Units issued: Net amount invested/price per share=$99.18/$3.662300=27.081342326=27 units

Summary: As of 18 may 2018 market closing time, the share price of G3B is at 3.66. At 6 may, the share price was at 3.73(See the previous post) so it seems like the share price may be going down. Will be watching it along with A35 for any further movement before purchasing it in a lump sum.

(Current regular saving plan portfolio)

7.Choosing a peer to peer lending

The research link below from seedly is a very good comparison on the peer to peer platform in Singapore

Link:https://blog.seedly.sg/p2p-comparison/

Summary

1. Require only minimally $100 for investing
2. High-interest rates (this mean that it comes with higher risk as...
3. The loans are for SME companies in Singapore which may default on payment(this is true as I already have one of my SME loan in the delinquent status)
4. The platform all charge an investor service fee
5. Always invest in the minimal amount(money that you can lose)
6. Funding societies have a default rate of 1.48% and moolahsense has a default rate of 3.48%

However, The #1 Reason on why I used moolahsense more frequently than funding societies...

Because funding societies do not reveal the name of the companies that you can invest in compare to moolahsense(I am unable to provide a picture for proof due to confidentiality of the companies but you can see the review below)

(picture from this link)

But!funding societies loan campaign is definitely filling up faster than moolahsense and it's often hard to invest in a funding societies campaign as they are often fill up quickly and because its default rate is lower compared to moolahsense, so I would say both platforms are good to try out

(picture from this link)

Anyway, if you would like to know more about my moolahsense and funding societies journey do stay tuned for part 3(I don't really like writing a long post)on learning how to read financial statements and a summary of my Moolahsense loan!

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(Post 23/week 20)Investment project:Posb invest saver and why i choose Posb invest saver

6.Posb invest saver

This week, I have started a new posb invest saver for g3b. This may sound stupid but ever since I sold my g3b via my old posb invest saver, I found myself constantly monitoring the market like every 30 min to check whether the STI ETF has dropped so I can buy it in a large lump sum at once. With a new posb invest saver, I have limited myself to checking the price of the STI ETF once per month and it was a lot less stressful for me

As of 9 may, the STI ETF is slowly decreasing(or maybe increasing, who knows?) but not as fast as the rate I am hoping(oh well, nothing is perfect in life like I always say)

7.Choosing a posb invest saver plan

Before I reveal about my journey so far with peer to peer lending(moolahsense and funding societies), here is an explanation/research on how I chose my regular saving plan

The shiny thing thread in hardwarezone forum contains useful advice from shiny thing, a very experienced financial advisor, you can read about it here(Warning: its 700+ pages long and has a part 2!)

Summary:
1.investing $100-$500 per month use posb and Maybank
2.investing $500-$1000 per month use OCBC @3%,min $5 or Maybank @1%,min $5
3.investing $1000-$3332 per month use OCBC @0.3% ,min $5
4.investing $1000-$5000 per month
Use standard chartered,@0.2, min 10

For monthly purchase of A35, there are only two options, standard chartered and posb

1.below 1k,use posb invest saver
2.above 1k,use standard chartered @0.2%,min $10

How to calculate the minimum sum to invest in a broker?(just to let you guys know that I am not plucking the number from the sky)

For e.g standard chartered trading rates is 0.20%, min $10 per transaction

We take:0.20%/100=0.002

$10/0.002=$5000(this is a minimum amount you need to invest to ensure that your transaction is worth it)

Due to me serving in national service with a paltry pay of $800, allocating $100 to Singapore bond index fund and $100 to STI ETF(g3b) is just right manageable hence I choose POSB invest saver. Besides, I am pretty sure everyone owns a Posb account from the first day you were born, hence convenient is also a huge factor here

Next week, I will reveal a little more about my peer to peer lending(moolahsense and funding societies) journey so far, stay tuned!

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(Post 21/week 19)Investment project:My POSB invest saver journey so far...

5.POSB invest saver

*Note:I am not affiliated to any of the companies mention below

POSB invest saver has been a long time component in my portfolio,I bought the STI ETF(G3B) at the price of 2.90 around April 2016(see picture 1 below),it was pure luck at that time as I didn't know much about investing and wanted a saving plan but not with an insurance agent due to a bad experience with my father insurance saving plan payout hence post invest saver.However not long ago I sold my STI ETF(G3B) at 3.50(see picture 2) at April 2018 because I thought at that time that STI ETF(G3B) has reached it's peak 3.65 a few weeks before and was starting to drop

But however, the current price today(as of 1st may 2018)at 3.78(see picture 3 below) thought me something that is very important

(picture 1)

          

 (picture 2)

  (picture 3)

and that is the market index will always go up in the long run(only apply for a market index like ETF!, as an individual stock price may drop continuously)

Currently, I still hold ABF Singapore Bond Index Fund(A35)because it is still in the red, I bought it alongside with STI ETF(G3b) at NOV 2016 at its about 1.14(see picture 4 below) as of 30 April it is currently at the price of 1.12(see picture 5 below) and I have decided to continue to ride it out by buying it via the dollar cost averaging method at the current price

(picture 4)

(picture 5)

At that time, my mantra was starting investing young and early(I was 20 at that time) and nevertheless to say I think it turns out pretty good as I saw the money in my portfolio(STI ETF, G3B) increasing gradually and started to get more and more interested in the investing world.

I feel a little regret cashing out too early for STI ETF(G3B) but one must be content and satisfied with earning money no matter how small it is.Still, it is a very important lesson learned.

Currently, I am looking at adding even more ABF Singapore Bond Index Fund(A35) to my portfolio by investing in a large lump at once, about 5k maybe as it is currently at an attractive price of 1.12, the lowest in the whole history of A35 is 1.10. Also, DBS Vickers is currently having a promotion on its cash upfront account until 30 June

*Cash Upfront: 0.18% min SGD18

0.12%, min SGD10 plus get S$5 rebate for all online trades

That's all for this week, will continue to update more about my POSB invest saver next week!

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