Hin Leong Trading Financial Woes – How Does It Affect You?

Hin Leong Trading Financial Woes - How Does It Affect You?

You would probably read about Hin Leong Trading scandal whereby the company recently revealed US$800 million of undisclosed losses and the company is seeking US$3.85 billion in debt. It was mentioned that Hin Leong Trading owes US$3.85 billion to 20 lenders.

Thinking that it will not affect you? As the saying goes “One problem leads to another”, among the lenders are the local banks DBS (SGX:D05) , UOB (SGX:U11) and OCBC (SGX:O39). They have a combined exposure of at least US$600 million to Hin Leong Trading. OCBC Bank currently makes up 2.53% of my stock portfolio and I am looking at adding more during this COVID-19 crisis.

If you look into the financial statements of the 3 local banks, oil and gas bank loans are classified under “Transport, storage and communication” sector. DBS have the highest exposure. Below are the extracts from each bank’s financial statement where you can find from their respective website.

DBS FY19 Financial Statement

DBS have an exposure of 8.7% (S$31.6 billion) to the transport, storage and communication sector.

Hin Leong Trading Financial Woes - How Does It Affect You?

OCBC FY19 Financial Statement

OCBC have an exposure of 5.0% (S$13.3 billion) to the transport, storage and communication sector.

Hin Leong Trading Financial Woes - How Does It Affect You?

UOB FY19 Financial Statement

UOB have an exposure of 4.1% (S$11.0 billion) to the transport, storage and communication sector.

Hin Leong Trading Financial Woes - How Does It Affect You?

Taken from Hin Leong Trading company website, below are the services that Hin Leong Trading provides. They range from Petroleum Products, Marine Bunker Supply, Storage, Lubricant and Greases, Shipping and Trucking.

Hin Leong Trading Financial Woes - How Does It Affect You?

Impact To SembCorp Industries Ltd (SGX:U96)

Not only banks, SembCorp Industries Ltd was not spared. Sembcorp Cogen Pte. Ltd is a subsidiary of Sembcorp Industries Ltd. There was a gasoil supply and storage agreement between Sembcorp Cogen and Hin Leong Trading whereby Sembcorp Cogen purchased from Hin Leong Trading, and Hin Leong Trading stored and managed on behalf of Sembcorp Cogen, gasoil reserves to fulfil certain regulatory requirements under Sembcorp Cogen’s electricity generation licence.

Sembcorp Cogen had

  • Terminated the Gasoil Supply and Storage Agreement on 22nd April 2020.
  • Commenced legal proceedings in the High Court of the Republic of Singapore (the “Court”) to assert its ownership of the gasoil reserves which are stored in designated tanks at Hin Leong Trading’s affiliate, Universal Terminal (S) Pte Ltd (“Universal Terminal”).
  • Obtained an order from the Court to, amongst other things, restrain Universal Terminal from moving, removing or disposing any of the gasoil reserves claimed by Sembcorp Cogen, and to ensure that such gasoil reserves are stored separately from any other gasoil on 24th April 2020.

Summary

I am not sure how deep the impact of Hin Leong Trading financial woes will impact the local banks and SembCorp. As of today, all 4 stocks are still trading in green. The stock market can really be irrational. Or perhaps the banks are already used to lending money to oil traders and not getting their money back?

Just my few cents worth, trade with caution.

Screening For Dividend Stocks In April 2020

Screening For Dividend Stocks In April 2020

Last month, the stock market had crashed due to the impact of COVID-19. Since then, the stock market has started its recovery when news of government from different countries started to provide stimulus budget to revive the economy. During the crisis, I have picked up OCBC Bank, Singtel, US Manulife REIT and added more of CapitaMall Trust when their stock prices fell. If you didn’t know, I am a dividend investor. Thus, I usually look out for stocks with attractive dividend yield that provides me with endless dividends many years ahead. The stock market crash has provided me with such an opportunity.

I will run the Stocks Café stock screener every month which gives me a list of stocks that fulfill my dividend criteria. I fall into the medium risk type of investor and thus I never looked at stocks with dividend yield more than 10%. Below are the criteria that I used to identify dividend stocks.

  • Current Yield (%) >= 5 and <= 10
  • Price / Earnings <=20
  • Price / Book <= 3
  • Market Capitalization >= 1B

Below are the top dividend yielding stocks as of 10th April 2020. I believe you will see some REITs that you have been eyeing for before the stock market had crashed. Even though the stock prices have started the recovery, the current yield is still attractive.

NameCurrent Yield %P/EP/BMarket Cap
Mapletree NAC Trust9.9814.440.6112.8B
OUE Commercial REIT8.71113.380.6182B
Ascendas-iTrust8.6445.291.0841.4B
DBS7.8377.650.99848.7B
Frasers Logistics and Industrial Trust7.5689.050.9742.1B
CapitaRetail China Trust7.5578.460.8451.6B
Frasers Commercial Trust7.3857.910.7941.2B
Suntec REIT7.379.210.6053.6B
CapitaMall Trust7.1258.890.7986.2B
Ascendas REIT7.03817.71.2910.1B
Yanlord Land6.7332.970.3582B
ComfortDelgro6.52712.251.2523.2B
Frasers Centrepoint Trust6.2759.410.872.2B
UOB6.1977.740.84933.4B
SIA Engineering6.1810.441.292B
CapitaCommercial Trust6.08212.770.7845.6B
SPH REIT6.08111.840.7862.1B
TCIL HK$6.04417.20.3293.7B
SATS5.93815.92.2113.6B
OCBC Bank5.9227.910.86339.4B
Jardine Cycle & Carriage5.8336.710.8758.1B
Mapletree Commercial Trust5.5955.450.9555.6B
Yangzijiang Ship Building5.4355.90.6013.6B
Guocoland5.3855.720.3741.4B
Olam International5.2089.010.8524.6B
SPH5.19512.190.722.5B
Frasers Property5.1287.320.4533.4B
Lonza5.0425.720.6595.9B

Last, I just want to mention again that the above list is for reference only and we should do our homework before buying into the stock simply for the dividend yield.

Screening For Dividend Stocks In March 2020

Screening For Dividend Stocks In March 2020

The stock market crashed this week on further news of the spread of the COVID-19 virus and also the oil price war between Saudi Arabia and Russia. Due to the continued bad news, the Straits Times Index (STI) fell as much as 6.03% on Monday, 9th March 2020. As you can see from the chart below, the Straits Times Index (STI) crashed further on Friday, 13th Mar 2020 before rebounding slightly at the end of the day.

During such crisis, there is an opportunity to start picking up quality stocks that can climb back and continue its growth when the stock market normalize in 1 or 2 years time (I guess).

If you had followed my blog, you know that I always have my stock screener ready to identify stocks that gives me a good dividend yield. When stock price goes down, the current dividend yield goes up.

The stock screener offered by Stocks Café allows me to save the conditions that I can pre-set. You can check out my review here on the Stocks Café Dividend Stocks Screener (Read more: Screening For Dividend Stocks Using Stocks Cafe Stock Screener).

Screening For Dividend Stocks In March 2020

Below are the top dividend yielding stocks as of 14th March 2020.

NameCurrent Yield %P/EP/BMarket Cap
Cromwell REIT SGD9.4949.320.8481.7B
Mapletree NAC Trust8.6515.110.7033.2B
OUE Commercial REIT8.48713.730.6332.1B
Ascendas-iTrust8.3615.471.1211.4B
CapitaRetail China Trust8.257.750.7741.5B
CDL Hospitality Trust8.05412.040.7351.4B
Starhill Global REIT7.75719.360.6511.3B
Far East Hospitality Trust7.18916.770.6131B
Frasers Commercial Trust6.8098.580.8611.3B
Yanlord Land6.7332.970.3582B
Frasers Logistics & Industrial Trust6.66710.271.1062.4B
Ascendas REIT6.52419.11.39210.9B
UOB6.4557.730.84833.4B
SPH6.38315.020.883B
DBS6.3577.741.00949.2B
Yangzijiang Shipbuilding SGD6.2895.10.5193.1B
Suntec REIT6.25510.850.7124.3B
Hong Leong Finance6.2510.40.5611.1B
SPH REIT6.16414.570.972.5B
TCIL HK$6.11710.780.343.8B
OCBC Bank5.8438.020.87439.9B
ComfortDelgro5.72513.971.4273.7B
SIA Engineering5.55611.611.4352.2B
CapitaMall Trust5.49111.531.0358B
Jardine Cycle & Carriage5.4097.450.9719B
Bukit Sembawang5.37913.450.7911.1B
Olam International5.2989.450.8934.8B
SATS5.27817.892.4874B
Genting Singapore5.14711.911.0188.2B

Last, I just want to mention again that the above list is for reference only and we should do our homework before buying into the stock simply for the dividend yield.