Perhaps you might even think about selling. The market have been up for almost 15 days! In this sense, i don’t fault you if you favor a downside trade rather than an upside trade.

The big volume action seem to be on Ascendas REIT. I haven’t heard any bad news yet but it cut through all its supporting moving average with a high volume move today. Really bad deal if you are anticipating for a nice channel trade.

Disclosure: Vested in Starhub not in AREIT.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. Do follow my Dividend Stock Tracker which is updated nightly  here.

It so happened that at the height of the financial crisis, the restroom nearby the private equity guys at a top firm was shockingly clean. The private equity guys just weren’t working. They weren’t taking clients out to dinner at night. Sometimes they did not come into the office at all. The toilet was “pristine,” according to our source

But in February of last year, the situation changed. The restroom got gross again. The facilities became stained from overuse.

So what did our source do? He decided to to accelerate his investments in the market.

The condition of the restroom “made me think the private equity guys were starting to work again,” he said. Of course, this was shortly before the rally of 2009 got started.

[From the business insider >>]

The Coming oil and water shortage >>

While i wouldn’t say i will invest in this, it doesn’t hurt to spend some time to evaluate about the flaws of investing in a shipping trust. If all the flaws proved unfounded, then it might be a truely good investment opportunity.

I urge those who would like to invest in Shipping Trust to join the discussion here >> Channel News Asia Market Talk FSL trsut topic.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. Do follow my Dividend Stock Tracker which is updated nightly  here.

With immediate effect, Pay TV providers which acquire exclusive broadcast rights to any programme, must cross-carry each other’s content.

This applies to any contract signed or renewed from March 12. It does not affect existing contracts.

The fierce bidding over rights to broadcast the upcoming World Cup matches raised concerns over the issue of ‘exclusive’ rights, which has affected consumers in the Pay TV market.

To lock out competitors, Acting Minister for Information, Communications and the Arts Lui Tuck Yew said on Friday said Pay TV operators are willing to fork out substantial amounts for exclusive rights.

This has led consumers to cry foul, especially since they have to subscribe to both SingTel and StarHub – rivals in Singapore’s PayTV market – for example, to catch their favourite football teams in action.

This practice of holding on to exclusive content though is rare in international markets.

Mr Lui said: “Content costs now constitute a significant percentage of pay TV operators’ revenue, compared to international benchmarks. For example, SCV’s content costs to revenue ratio has risen from 40 per cent prior to 2007 to close to 70 per cent today. This is much higher than the average 40 per cent for Pay TV operators in most other countries, including US, UK and Hong Kong.

“Secondly, Singapore suffers from a high degree of content fragmentation compared to other countries. Out of 179 channels today, only seven channels are common to both SCV and SingTel. An international benchmarking exercise using a group of 16 popular channels showed that Singapore was the only country with exclusive arrangements for all 16 channels.

“MDA’s (Media Development Authority) review has concluded that this situation is unlikely to self-correct in the near future, and steps need to be taken to address this market failure”.

So under the new Media Market Conduct Code, there will be a Public Interest Obligation. This means Pay TV providers must cross-carry each other’s exclusive content.

For example, if SingTel acquires a new channel exclusively, it must make this channel available to StarHub.

StarHub must carry this programme at the same time SingTel is airing it – and vice versa.

StarHub also cannot make any modifications to the content.

This includes all the advertisements and branding SingTel may have embedded into the programme.

And SingTel will have to pay StarHub to carry its exclusive content.

It will be left to the telcos to work out a cost for this.

For consumers, it means that they can watch an exclusive channel through just one Pay TV retailer.

Consumers, regardless of which Pay TV service provider they belong to, will be charged the rate that has been stipulated by the original content provider. In the case of the example, whatever SingTel charges its customers for the exclusive content, StarHub customers will pay the same rate.

Mr Lui elaborated: “Consumers would no longer require multiple set-top boxes or switch retailers each time the rights of exclusive content changes hands. This will facilitate greater consumer access to pay-TV content, and re-focus competition to other aspects, such as service differentiation and competitive packaging”.

For the industry, it means opening up the market to new players.

The rights holder will be able to brand the exclusive content, market it and monetise it as it wishes.

While the law takes immediate effect, the actually sharing of content is likely only to take place from September. For now, MDA will consult industry players, and sort out the details, like how consumers’ bills will look like, and whether the review will affect new media platforms.

As for how this will impact the broadcast of World Cup matches in Singapore, it is status quo for now, as SingTel and StarHub have submitted a joint bid and are waiting for FIFA’s reply.

Mr Lui said: “Let me just say that I am very happy that World Cup comes around only once every four years. We understand that SingTel and StarHub have recently made a new offer and negotiations with FIFA are still on-going. This is a commercial matter that is best left to the two pay-TV retailers and FIFA to settle.

“I know time is running short; we are well into the second half, we are approaching injury time, but we remain hopeful that the negotiations will reach a sensible outcome.”

Meanwhile, Pay TV operators SingTel and StarHub have responded to the government’s announcement on content exclusivity.

SingTel said it will review the details and actively engage the MDA through the industry consultation process.

StarHub said it fully supports the government’s efforts to ensure fair and reasonable content costs. It also added that it supports the idea of a common set-top box for consumers.

MediaCorp also spoke to Singaporeans for their views.

One person said: “If a particular coverage has got wide appeal, like it is a national event or an international event, I think this should be made readily available, preferably free, if not, (at) a very reasonable rate to the consumers.”

Another commented: “If this new initiative comes up, there is no edge by one service provider over another.”

Analysts have said consumers will benefit from the move requiring Pay TV operators with exclusive content to allow such programming to be carried by other operators.

Kenneth Liew, senior market analyst, IDC Financial Insights, said: “In terms of pricing, in future bidding, both companies are likely to not bid so much on exclusive content, because at the end of the day, the other party will get to screen it, so they will actually bid at more reasonable prices.

“This is good news for consumers, because the bid price being lower will actually bring down the cost for consumers as well.”

What does this mean to each telco?

How it works out for Singtel

Many felt that Singtel is the biggest loser here.

1. Offer Starhub’s content and create a more comprehensive bundle to compete in an area they were weaker than starhub.
2. They could potentially have to share EPL content with Starhub. this is good as it will let Starhub do the work for them.
3. They have a better mobile internet content now. Singtel for me have the better team here, it will benefit them.
4. Their strategy to get exclusive content and crush Starhub will likely fail.

The impact to bottom line will likely be:

1. Mio TV subscribers will be up. But it will not factor significant into Singtel’s bottom line as the revenue stream from Singapore is small.
2. Cost for content likely to come down.
3. This will be made up by increase cost to compete in other front. At the end of the day it might be  more cost since they paid high for EPL. But they are deep enough to afford that.
4. Cross carrying means that Starhub is likely to buy their content. They will not charge low for this. It is still a win for them here.

Essentially, Singtel should stay quite stable.

How it works out for Starhub

Many felt that Starhub could be the biggest winner here.

1. They have more content that are valuable. For now. For Singtel and even M1 to come up with good packages, they can monetize and its a good revenue stream.
2. It also means that the differentiating factor for starhub, which are their Hubstation and Exclusive Content will not differentiate them. A big minus.
3. They lag Singtel in mobile internet content now. They will need to buck up here.

The impact to bottom line will likely be:

1. New stream to monetize content for now. Likely impact will be minimal
2. Churn rate would fall since people are resistant to change set top box. New couples will not want to get a new phone line just to put Mio Tv and Mio Tv is facing some problems with reliability of transmission from what i heard. This will benefit revenue
3. Cost will even out. They will ask for EPL content, but it is likely not to be cheap or even much higher! Eventually, their content cost may be even higher and they will not take this up.
4. Increase in marketing cost. They will need to find new ways to differentiate themselve. it is likely they are fighting a battle to not fall into the likes of M1, where they pale in comparison in the eyes of consumers compare to Singtel. Cable TV was Starhub’s shinning light. Now its not exclusive anymore.
5. Cost may mean dividend yields get impacted. Starhub’s attractive 20cent forward div is flirting very close to their free cashflow. If capex dun go down, we might not see so high div in the future.

How it works out for M1

Its open playing field for M1

1. Likely case they will be the front runners because they have no access baggage. Pay TV could make them look better in the eyes of consumer.

Conclusion

I believe the main theme here is that:

1. Competition environment will change. Reducing switching costs and churn prevention cost through giving freebies will increase. On the whole it impacts net profit and margins.
2. They will need to differentiate again. The key differentiation is in service level. Things like will Mio TV disconnect from my soccer match? Can i receive my Starhub calls or can i always get 3G anywhere i want? Why is my internet speed on mobile so slow? Why is it at night, Starhub cannot access youtube fast?
3. All this above means that investment in infra increases. This impacts free cashflow and Starhub and M1’s dividends.
4. Telco will be commodity thats all. Margins based on game theory might remain steady but will thin. With a limited basket of subscribers, likely profits will go down and free cashflow as well. We should be looking at smaller dividends.

So after ADF1, there will be ADF2, maybe ADF3, 4, 5678910. As a shareholder, I must be happy lah because more private funds = more incomes = more dividends and higher share price.

Crap!

What do shareholders want?

Good business that generate at least reasonable profit and surplus cash.

What is the business of ARA?

Assets Management. I.e. take money from clients, pool them and invest.

What do clients want?

Return on their investment, hopefully not losing money with adequate return on invested money.

To link them up, it is the inverse of …. good profitability = happy clients = well managed funds.

A well managed fund is one that most likely will produce good return on investment for its clients. So since when it has become irrelevant? This is the core, the main reason why ARA exists! Can someone help me by saying, “Oh it is fault of the unprepared writer who write without any understanding.”

But there may be something more to that. For a person like Mr Lim, it is unreasonable to think that he don’t understand this. And for many company, appearing in News or Magazine like “The Edge Singapore” is more for the sake of publicity than giving investor or shareholder a better understanding of their company. ARA needs publicity for lot of reasons. At the mist of doing so, never give out negative news/views, not even being perceived negatively because they may be get punished in ways more then they deserved. The best way to get through is —– give them what they want. They refer to whoever that read “The Edge Singapore.”

So how can we use this piece of information?

One, it clearly shows that as an income investor, investing in REITs for yields is not good in Singapore as the rules set on these trustee fees and acquisition fees is such that the manager earns more by acquiring more assets and making more transactions!

The structure is not to refine its underlying assets to yield more!

Until that changes in Singapore, this stupid comment by Mr Lim just shows that asset managers only care about making the REIT big big. That will make their pockets fat fat.

You get the feeling that we investors get the short end of the stick. The reits, instead of behaving like normal reits, end up as speculative plays. When another recession comes and assets gets revalued downwards, they ask us for more money.

If you are an investor, which one would you invest in? the manager or the reit?

A subsidiary of Warren Buffett’s Berkshire Hathaway has struck a deal to purchase Atlanta-based Empire Distributing, which has operations in Georgia and North Carolina. Empire is owned by brothers David and Michael Kahn. That subsidiary is grocery distributor McLane, worth $34 billion. Bill Anderson’s First Beverage Group, including ex-GE Capital executive Sean McLaren, advised Empire on the deal.

McLane provides grocery and foodservice supplies for thousands of c-stores, mass merchants, drug stores, military locations and chain restaurants, with 38 distribution centers nationwide. Berkshire Hathaway purchased McLane from Wal-Mart in 2003 for $1.45 billion.

Ironically, the beer industry believed not too long ago that McLane would make an entrance and bypass franchise beer distributors. Turns out they had their eye on wine and spirits. So what now? We can only speculate the impact this will have on the industry but it seems unlikely Buffett will stop with Empire Distributing. Recall that Berkshire Hathaway also has $11 billion stake in Coke and used to have a large stake in Anheuser-Busch.

We told you yesterday that Buffett likely paid top dollar since Georgia is a franchise state. A law in Georgia caps acquisition based market share at 25% so it would seem that he can’t buy too much more market share. However, there are indicators that the 25% law won’t always be in place.

This deal could have sweeping implications for the wholesale wine and spirits business. Clearly McLane was smart to obtain their beachhead in a franchise state, where the suppliers are not able to fly. From that established and well-protected base, McLane can move into other regions. This isn’t the last we’ve heard from them. What is unknown at press time is what the wine and spirits suppliers think of such a large public company buying into their distribution system.

What is also unclear is how much McLane, a logistics expert, will integrate Empire’s operation into their own. McLane has 38 distribution centers, including one in Georgia and NC. It already services many of the same off-premise accounts and a few on-premise accounts. Will we see wine and spirits on McLane trucks? Time will tell.

As you can see, there are many unanswered questions which we will attempt to answer for you in the coming weeks. Stay tuned…

WINE “ONE OF THE LARGEST” SPENDING CATEGORIES FOR SENIORS

Nielsen analyzed the shopping habits of four key generations – greatest generation (aged 64+), boomers (45-63), gen x (33-44) and millennials (15-32) – and gave a rundown on what marketers should expect when targeting these groups. Interestingly, wine is one of the largest spending categories for seniors at $124 per year. Boomers spend $125 per year on wine, while gen x spends $78 and millennials spend $61 annually.

In looking at other trends, the greatest generation is the most frequent shoppers and more deal prone than other age segments. Both the greatest generation and boomers shop club, dollar and convenience/gas channels more frequently. Millennials don’t like to waste much time in stores and shop less than other groups but buy more per trip. Along with gen x, millennials favor mass supercenters and mass merchandisers over more traditional formats like grocery or drug stores which remain a draw for the greatest generation and boomers, says Nielsen.

[Wine And Spirits Daily >>]

Will add on if the price every drops to 1.90. If it does not then at least i have accumulate an adequate amount at 7-9% yield.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. Do follow my Dividend Stock Tracker which is updated nightly  here.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. Do follow my Dividend Stock Tracker which is updated nightly  here.

Some of them were Sinotel and Oceanus. Looking now, seems that oceanus didn’t actually took off and sinotel have beeen correcting as well.

So what does this mean? An opportunity to load more or a justification that its just speculation that like Ausgroup, their true value is much higher? you tell me.

I run a free Singapore Dividend Stock Tracker available for everyone’s perusal. Do follow my Dividend Stock Tracker which is updated nightly  here.