Global Investments

Downside is the lack of transparency of its investments and yearly rights issues.
Have anyone wondered since the manager is related to ST Engineering, some of its investments will be in that area of exposure. One example is the aircraft leasing. It's a pity that global investments are not invested in unlisted equities related to ST due to their mandate as I will think returns will be far more interesting

GIL released its 2Q/1H2014 results this morning:

1) DPU declared for 1H2014 = 0.75 cents.
2) FCF required for DPU = 9.617 million
3) FCF generated in 1H2014 = Net OCF(recurring CF) + Net gain on sale of investments = 6.545 + 3.247 = 9.792 million
4) As at 31June 2014, the cumulative unrealized fair value gain of its Listed Equity portfolio was SGD 6.56 million.
5) Since recurring FCF is not sufficient to cover DPU, Management has been relying on gain on sale of investments (of listed equity) to make up the short fall – So far so good it seems – but can the Management do it consistently in the long run ? Only time will tell.
6) Yield is still pretty attractive at just slightly below 10%

(not vested)

If we based on same scrip take up rate as 2013 (65%), the cash required for dividend will be about 3.4 Mil, well within the OCF.

(26-06-2014, 07:49 AM)mrEngineer Wrote: Downside is the lack of transparency of its investments and yearly rights issues.
Have anyone wondered since the manager is related to ST Engineering, some of its investments will be in that area of exposure. One example is the aircraft leasing. It's a pity that global investments are not invested in unlisted equities related to ST due to their mandate as I will think returns will be far more interesting

Re yearly Rights issue, 1H14 report already out and no news of the anticipated Rights issue this year. View such announcement usually made earlier part of the year, may be no Rights issue this year?

Bought some today tfore now vested

Decided not to be deterred by the next Rights issue. My thinking is if Chairman BSF holding 10% can stomach it, it shouldn't be too bad, and thus so can a miniscule holder like me. Just be ready to buy more at discounted price when the Rights is announced and also subscribe fully for the Rights. One plus is I can opt for its scrips in lieu of divs at 10% discount.

Plsd to rec any commts

(21-08-2014, 06:36 PM)john Wrote: Bought some today tfore now vested

Decided not to be deterred by the next Rights issue. My thinking is if Chairman BSF holding 10% can stomach it, it shouldn't be too bad, and thus so can a miniscule holder like me. Just be ready to buy more at discounted price when the Rights is announced and also subscribe fully for the Rights. One plus is I can opt for its scrips in lieu of divs at 10% discount.

Plsd to rec any commts

Too much abbreviation might make your post difficult to read. Please take note

Regards
Moderator

I guess most buddies don't agree with GIL transparency. But it has high score in this area. Wonder

Improved Ranking in the Governance and Transparency index (AR2013)

GIL participated in the Governance and Transparency Index 2013, jointly launched by the Business Times and the National University of Singapore’s Centre for Governance, Institutions and Organisations, which assesses the financial transparency of companies based on their annual announcements.

Our Governance and Transparency Index score increased from 47 points in 2012 to 78 points in 2013 and our ranking improved further from 82 in 2012 to 25 in 2013 out of 664 listed companies which participated in the Governance and Transparency Index 2013.

This continued improvement in our ranking was made possible by the commitment of the Board in maintaining high standards of corporate governance.

(26-06-2014, 07:49 AM)mrEngineer Wrote: Downside is the lack of transparency of its investments and yearly rights issues.
Have anyone wondered since the manager is related to ST Engineering, some of its investments will be in that area of exposure. One example is the aircraft leasing. It's a pity that global investments are not invested in unlisted equities related to ST due to their mandate as I will think returns will be far more interesting

(09-09-2014, 06:01 PM)Ray168 Wrote: I guess most buddies don't agree with GIL transparency. But it has high score in this area. Wonder

Improved Ranking in the Governance and Transparency index (AR2013)

GIL participated in the Governance and Transparency Index 2013, jointly launched by the Business Times and the National University of Singapore’s Centre for Governance, Institutions and Organisations, which assesses the financial transparency of companies based on their annual announcements.

Our Governance and Transparency Index score increased from 47 points in 2012 to 78 points in 2013 and our ranking improved further from 82 in 2012 to 25 in 2013 out of 664 listed companies which participated in the Governance and Transparency Index 2013.

This continued improvement in our ranking was made possible by the commitment of the Board in maintaining high standards of corporate governance.

(26-06-2014, 07:49 AM)mrEngineer Wrote: Downside is the lack of transparency of its investments and yearly rights issues.
Have anyone wondered since the manager is related to ST Engineering, some of its investments will be in that area of exposure. One example is the aircraft leasing. It's a pity that global investments are not invested in unlisted equities related to ST due to their mandate as I will think returns will be far more interesting

There is no correlation that having a low corporate governance score will lead to rights issue. These are two separate things.

GIL didn't hv Rights issues 2014, they decided to discontinue the yearly Rights ritual? Thinking of increasing my stake, would appreciate forumers' comments

(vested)

(10-09-2014, 07:11 PM)level13 Wrote:

(09-09-2014, 06:01 PM)Ray168 Wrote: I guess most buddies don't agree with GIL transparency. But it has high score in this area. Wonder

Improved Ranking in the Governance and Transparency index (AR2013)

GIL participated in the Governance and Transparency Index 2013, jointly launched by the Business Times and the National University of Singapore’s Centre for Governance, Institutions and Organisations, which assesses the financial transparency of companies based on their annual announcements.

Our Governance and Transparency Index score increased from 47 points in 2012 to 78 points in 2013 and our ranking improved further from 82 in 2012 to 25 in 2013 out of 664 listed companies which participated in the Governance and Transparency Index 2013.

This continued improvement in our ranking was made possible by the commitment of the Board in maintaining high standards of corporate governance.

(26-06-2014, 07:49 AM)mrEngineer Wrote: Downside is the lack of transparency of its investments and yearly rights issues.
Have anyone wondered since the manager is related to ST Engineering, some of its investments will be in that area of exposure. One example is the aircraft leasing. It's a pity that global investments are not invested in unlisted equities related to ST due to their mandate as I will think returns will be far more interesting

There is no correlation that having a low corporate governance score will lead to rights issue. These are two separate things.

Number of Outstanding Shares
FY2010 = 393,006,086
FY2011 = 550,208,520
FY2012 = 825,312,780
FY2013 =1,191,982,617
FY2014 =1,334,472,601

New Shares Issued: Dividend Scrip
2013 = 26,103,375 (Dividend Scrip; Issue Price = SGD 0.1522 per share) = 2H2012 dividend
2014 = 90,304,464 (Dividend Scrip; Issue Price = SGD 0.130 per share) = 2H2013 dividend
2014 = 52,185,520 (Dividend Scrip; Issue Price = SGD 0.130 per share) = 1H2014 dividend

NPAT (SGD million)
FY2011 = 12.2
FY2012 = 19.1
FY2013 = 28.8
FY2014 = 24.3 (Down 15.6%)

EPS (SGD cent)
FY2011 = 2.34
FY2012 = 2.45
FY2013 = 2.82
FY2014 = 1.92 (Down 31.9%)

Return on Equity (ROE):
FY2011 = 9.0%
FY2012 = 11.2%
FY2013 = 12.5%
FY2014 = 8.8% (Down 29.6%)

NAV per share (SGD cents)
FY2010 = 31.0
FY2011 = 27.2
FY2012 = 23.0
FY2013 = 20.6
FY2014 = 21.3 (UP 5.6% - I think mainly due to accounting reclassification of Ascendos – from being an associate to “available for sales financial assets)

DPS (SGD cents):
FY2010 = 1.0
FY2011 = 1.5
FY2012 = 1.5
FY2013 = 1.5
FY2014 = 1.5

Dividend Distribution = Equivalent Cash Amount ( SGD million):
FY2010 = 3.9
FY2011 = 8.3
FY2012 = 12.4
FY2013 = 17.9
FY2014 = 19.6

OCF + Gain on Sales of Investments – Dividend Distribution :
FY2014 = 11.558 + 6.450 – 19.6 = - 1.6 million (Deficit)

Comments:
1) For FY2014, NPAT, EPS and ROE dropped, -15.6%, -31.9 and -29.6% respectively
2) NAV per share increased 5.6% y-o-y (I guess due mainly to accounting reclassification of Ascendos – from being an associate to “available for sales financial assets)
3) There was no Right-Issues in 2014, nevertheless, number of shares issued have increased considerably via Dividend Scrip Scheme.
4) Accounting profits seem enough to cover DPS of 1.5 cents in 2014– but from cash flow perspective, OCF plus gain on sales of investments is not enough - if all dividends were to be paid in cash.
5) Cash Dividend yield of DPS=1.5 cent seems very attractive - scrip dividend yield is even more attractive ~ Question is how long could this DPS = 1.5 cents be maintained, with increasing number of new shares being issued each year ?.

(not vested)