Friday, December 30, 2011

Investment 2011: A Volatile Year for the Stock Market

On the last trading day of the year, the local stock market, STI, ended with a drop of 1%(-26pts). Volume was low,with 437 million shares traded. The anemic action showed that investors were staying on the sidelines on what was typically the lowest volume sessions of the year. This could be because many brokers were still away for the Christmas and New Year holidays. It could also be due to the fact that most investors are trading cautiously nowadays and adopted wait-and-see investment positions for the coming year. After all, 2011 had been such a incredibly volatile year and most investors can't wait for it to be over.

Due to the relative small market size, STI's performance has always been affected by global stock market's condition. As a result, there were much volatlity this year caused by the Europe debt crisis, upheaval in the Middle East (Arab Spring), a devastating Japanese earthquake and a struggling United States economy (high unemployment). Stock markets throughout the world were battered by negative news weeks after weeks and investors were made to seek safety in other forms od investments such as dividend stocks, blue chips, gold and Treasuries.

As we look back 2011, most of the problems seemed to be contained or resolved. However, there is a possibility that the Europe debt crisis might escalate into a Euro dollar crisis. Coupled with a potential hard economic landing in China, volatility in the stock markets might continue into 2012.

Be prepared for a roller coaster ride in 2012.

Wednesday, December 28, 2011

Ideas Inc. Business Challenge

Many aspiring entrepreneurs face challenges in finding helpful mentorship and the essential funding to support their venture. To address this problem, NTU’s Nanyang Technopreneurship Center has recently launched the Ideas Inc. Business Challenge
Ideas Inc.

Business Challenge is a competition by NTU’s Nanyang Technopreneurship Center to help budding entrepreneurs turn their business ideas into successful and sustainable start-ups. This competition is slightly different from typical business plan competitions as there are a series of workshops conducted by venture capitalists and industry experts. Applicants can find out how they can market their product, develop professional network and protect their ideas. Applicants can also pick up financial and administrative skills needed to make their ventures a success.

This challenge is sponsored by various government agencies, such as Spring Singapore and National Library Board and private companies like Microsoft and Canon. The aim of the game is to promote entrepreneurship in Singapore and assist them to become sustainable, create new jobs and increase the economic diversity.

To be eligible, you need to be a Singapore Citizen or PR, 26 years old or younger, a first time entrepreneur and holds majority stake in the company. To submit your application, log on to http://ideasincsg.com. Do check out the schedule and important dates in the website. Semi-finalists will be awarded $15,000 for completion of Proof of Concept and six Grand finalists will be awarded $50,000 each to grow their technology, begin early commercialization and gain market entry over the next three months.

Tuesday, December 27, 2011

Investment article: What you may not know about stocks?

Below is an investment article by Jeff Augen, extracted from my favorite blog "CreateWealth8888", dated 4 Feb 2011. I like the blog because many of the articles are sensible, informative and educational. Hope readers can benefit from the article:

" Most investors who buy a stock believe that they are investing in a company. That view, while technically correct, is also misleading. A stock investment is really nothing more than a bet on the direction that money will take as it flows through the financial markets. A stock can rise only if market forces align to aggressively drive up the bid price causing new money to flow into the stock.

Many different factors are involved including economic news, announcements from other companies in the same industry, political events, the actions of large institutional investors, analysts' forecast, and a variety of global economic forces such as changes to currency exchange rates and interest rates. the long-term performance of a stock represents nothing more than the compound effect of these forces over time.

It is important to recognize that the financial markets are zero sum game with competition at all levels. the stock market competes for money against the bond and currency markets; industries compete for money with each other; and money flows between stocks within a particular industry. An individual stock can fall because money is flowing into the bond market. It can also fall because money is flowing into another stock in the same industry. Conversely, the stock of a poorly performing company can rise if market forces are properly aligned. All factors considered, the price of a stock is often loosely connected to the performance of the underlying company.

There was a time, not long ago, when individual investors were the dominant force in the market. Buying a stock was equivalent to betting on the behaviour of other market participants. Those days have passed. Today's markets react to economic news in fraction of a second. Heavily traded stocks in the S&P 100 or DOW rise and fall for reasons that are nearly impossible to understand at the individual stock level.

Investors who recognise these complex dynamics can gain advantage because they have a balanced, realized view of the problem. They spend most of their time identifying the underlying forces driving the markets, and they always try to invest with those forces instead of against them. In this regard, the most important attribute an investor can have is humbleness because successful investing is a never-ending struggle"

Guide on starting up a business in Singapore

To help aspiring entrepreneurs up to speed on Singapore laws, regulations, taxes and government assistance schemes, Enterprise One (a government agency tasked to promote local business)has prepared a simple checklist:

1) Sign up for EnterpriseOne Digest, a monthly newsletter tracking the latest updates on the laws and regulations. You can log on to Enterprise One website to sign up.

2) Ensure your business premises (office, shop, factory) can be used to carry out your business. For example, applicants who wish to use their HDB residential flats for home office are required to seek prior approval from HDB.

3) Apply for all licenses and permits needed for your business.

4) Familiarize yourself with various tax incentives and Government assistance schemes.

5) Register your business with Central Provident Fund (CPF) before hiring your first worker.

6) Register your business with Accounting and Corporate Regulatory Authority (ACRA) and comply with post-registration requirements.

Business Proposals for Funding

One of the major obstacles faced by entrepreneurs is the lack of available funding in Singapore to help them kick-start or sustain their business ideas. Even if there are government schemes to provide grants or funds to assist business owners, many of them are clueless on how to obtain these grants. In many cases, investors and entrepreneurs found themselves having to navigate through layers of bureaucratic red tapes and micromanagement when seeking grants. That is probably why entrepreneurs are more attracted to venture capitalists and angel investors for business opportunities.

To obtain that all-important pot of gold, there are several fundamentals that business owners need to highlight or observe in their business proposals:

1) Financial factors: Track records speak a lot and obviously no one likes to invest in a sinking ship. In your plan, you have to be honest and state the financial health of your company. In addition, has your company allocated adequate manpower and equipment for the project?

2) Strategic Factors: Does the outcome of your project match the objectives of the organization providing the funding? You have to provide compelling reasons for the donors to support your cause.

3) Economic Factors: Highlight the differentiating factors and economic spin-off of your project. Mention the market demands and competing market threats in your report. Most importantly, highlight the scalability aspect of your project (the potential impact to the rest of the industry and whether it can be implemented across the sector.

4) Risk Factors: The plan should cover the risk management aspect, taking into account buffers for possible delays and points of failure. You should also provide strategies to mitigate potential failures.

5) Management Factors: Does your company have what it takes to successfully implement this project? Does your project teams and managers have the relevant expertise and experience?

Hope the above helps.
Good luck!

Magically Yours

Saturday, December 24, 2011

Online Karang Guni

In Singapore, "Karang Guni" is a Malay phrase for gunny sack, which was used in the past to hold stacks of newspaper. It is often used to refer to those who work in the rag-and-bone trade, visiting residents door-to-door to collect old newspapers and clothing to sell.

Karang Guni can be a lucrative and highly profitable business in Singapore, with reported stories of Karang Guni men becoming millionaires from their Karang Guni businesses. Yet most Singaporeans shunned this trade because they considered it unglamorous.

However, not many realized that Karang Guni is a business that doesn't require any start-up cost. You just need to have a van to ferry the unwanted goods from HDB flats to the vendors. A lot of residents would love to rid their unwanted stuff(newspapers, eletronic goods,etc) to you, sometimes for free. In turn, you can sell these unwanted products to flea market vendors, who would purchase the goods for recycling or shipment to other countries. You can even resell these unwanted items online through auctioning. Win-win situation.

In recent years, the Karang Guni trade has seen intense competition in Singapore. There are even online Karang Guni providing doorstep services collection of unwanted electronic products, metal recycling, clothing and newspapers.

Thursday, December 22, 2011

Funding opportunites for start-up enterprises

Innovative and small-medium enterprises (SMEs) have a key role in spurring Singapore's economic growth. Many of them are developing capabilities to create a competitive edge but very often, they lack funding to sustain. SPRING Singapore, a government agency set up to cater to the growth of local companies, has various funding schemes to help them grow faster.

1) Angel Investors Tax Deduction Scheme is a tax incentive for business angles to invest in local start-ups

2) Business Angel Funds co-invests with business angels in local early-stage companies with innovative products/or services for up to $1.5million

3) Incubator Development Fund co-funds incubators and venture accelerators to mentor and develop local start-ups.

4) Spring Start-up Enterprise Development Scheme co-invests with third party investors in local innovative start-ups for up to $1.5million.

5) Technology Enterprise Commercialization Scheme co-funds early stage companies to develop and commercialize innovative technology ideas.

6) Young Entrepreneurs Scheme for Start-ups co-funds youths under 26 to set up their first businesses for up to $50,000.

There are several factors that enterprises should highlight in their business proposals to Spring Singapore, namely financial factors, strategic factors, economic factors, risks factors and management factors. I would further elaborate the details in my next posting. Stay tune.

**Note: The above statements does not represent Spring Singapore's views and are solely based on my own opinions.

Magically yours

Wednesday, December 21, 2011

2011 In Review

The year 2011 is coming to an end. On reflection, I realized that I had deviated a lot from my resolution set earlier in the year and found that my savings is depleting fast. This is in part due to the fact that I got married, bought my 1st resale HDB flat, bought my 1st pre-owned car, sold my car and then bought my 2nd pre-owned car. All of these took a toll on my savings and affects my financial planning. My only consolation now is I am still holding on to my job. Not sure what 2012 may bring.

Magically Yours