National Day Rally 2018

From the national day rally, we learnt about a few things that could be useful for our investment. 

Home Improvement Programme

Firstly, the government is planning to upgrade and redevelop our public housing. In particular, I am interested in the upgrading part. The “Home Improvement Programme” will benefit 230,000 flats. There will also be a HIP 2 in 10 years’ time.

This creates new projects or contracts for local companies to take up. For instance, I feel that IsoTeam can benefit from this government policy tremendously. IsoTeam has been a major player when it comes to maintenance and repairing/upgrading of HDB flats. 

Now trading at 0.280/share, it looks like a good time to buy the dip. I think it dipped due to many reasons such as the recent fall in revenue and failed investment in SGBikes. However, with a strong order book, it should work out just fine in 2019 even though it might appear volatile in the coming months. 

Healthcare

More polyclinics will be built in Sembawang, Eunos, Kallang and Bukit Panjang by 2020, and in Tampines North and Nee Soon Central by 2023. More healthcare subsidies will also be eligible for lower and middle-income residents, and the pioneer generation.

This is vey necessary as our country morphs into an aging population, like Japan. More healthcare services will be needed in the future. If you are keen on getting some healthcare stocks, it may be prudent to keep them for the long term. Sadly, SG Finance Guy does not have any interest/stake in the healthcare industry. Hence, no stock tips available.

Smart Nation 

This is me cheating a little bit as Smart Nation was introduced in 2017 National Day Rally instead. Anyways, as we can see, the government has been stepping up its effort to make Singapore technology-driven.

As far as I can see, this is one of the only few ways we can sustain our economy growth in the long run. There are a lot of companies benefiting from this. One company that I can think of is Netlink Trust.

Netlink Trust is the company that comes to your house and set up the fibre broadband. In return, you will have to pay them service charge for setting up and also monthly fees for using their fibre network. These costs are charged via your telco subscription company such as Singtel, M1 or Starhub. They are also in charge of the maintenance of the fibre network underground.

NetLink Trust is not a bad stock to buy as it can perform consistently during bad times. Most of the time, people tend to save up more and spend less during a recession. They may therefore spend less on high-class dining, travelling to less expensive areas for vacations or even stop buying branded clothes altogether. However, they will almost never cancel their subscription for wi-fi. 

Hence, Netlink Trust will most likely not lose its recurring revenue from the fibre network service charges that people pay every month as everyone more or less requires access to internet no matter rain or shine. So, instead of betting on which 4 Telcos will be the winner at the end of the day, why not just invest in NetLink Trust that still probably has a business no matter the economic outlook?  

SG Finance Guy’s opinion

My personal opinion is that from these government policies moving forward, we know that there are defensive stocks out there that can still perform despite an incoming recession. Waiting out in cash for the next recession to be over will only incur loss in the value of money. Instead, go buy some defensive stocks so that one can reap steady dividends even during a crash. 

Disclaimer: Website and the information contained herein is not intended to be a source of advice or credit analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.

 

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