Yesterday, I was invited for a short interview on Money FM 89.3, Singapore’s first business and personal finance radio station, by Chua Tian Tian, the co-host of the station’s Money Matters show. We discussed a number of topics, which include:
- What a potential ceasefire between Israel and Iran would mean for the stock market and oil prices (Hints: Peace is a big positive for equity markets because more people can channel their energies into improving the world, and over the long run, that’s really what fuels the global economy; oil prices have experienced five major crashes over the past four decades despite demand for the commodity being higher than supply in each year, so it’s really difficult to tell what will happen to oil prices)
- What OCBC’s announcement that it will not convert its Class C non-voting Great Eastern shares into ordinary shares when they come up for conversion in five years mean for investors of OCBC (Hints: OCBC is attempting to privatise Great Eastern and its decision to not convert the Class C shares implies that it intends for Great Eastern to remain a public-listed entity if the upcoming delisting resolution fails; whether Great Eastern is successfully privatised or not will not move the needle for OCBC because nearly 94% of the economics of Great Eastern already belongs to OCBC and 6% of Great Eastern’s S$8.7 billion in shareholders’ equity currently is much lower than OCBC’s shareholders’ equity of S$59 billion)
- How will Lum Chang benefit from the upcoming spin-off of its interior fit-out business, Lum Chang Creations (Hints: Lum Chang’s management appears to be aiming for the market to be able to better recognise the value of Lum Chang Creations, since Lum Chang Creations has “demonstrated strong growth in recent years”; whether the spin-off is a long-term positive for Lum Chang or a non-event will depend on the future business performance of Lum Chang Creations.
- Why does US President Donald Trump want the Federal Reserve to lower interest rates in the USA by at least two to three percentage points (Hints: Trump appears to think that US government bond yields will decrease if the Federal Reserve lowers interest rates, but the problem is the Federal Reserve controls only one interest rate, which is the federal funds rate, and most US government bond yields depend on market forces)
- What Federal Reserve Chair Jerome Powell’s testimony before Congress means (Hints: I don’t watch the Federal Reserve’s actions in my investing activities because the Federal Reserve does not exert as much power over the stock market as some people think)
You can check out the recording of our conversation below!
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Touche. Solid arguments. Keep up the great work.