International investments in Singapore make quadruple sense at this time. First, Singapore is a sound international investments center. Second, international investments in water are special there. Third, a special Multi-Currency Sandwich opportunity presents itself for international investments in Singapore now. There is more! Let’s learn how this big, small country, can help us increase profits with international investments in water now.
I like international investments. I like Singapore. This visa in my old passport shows how when I lived in Asia, I visited this tiny island nation a lot.
Then I moved to Europe but noticed that many Singapore business people stayed in touch. They were making many international investments in and from Singapore. This country was growing. A middle class was emerging and Singaporians were aggressive, good business people.
Now international investments in Singapore makes sense from a number of ways because even more I like investing in water!
First, let’s see why Singapore is a good value market for international investments. Michael Keppler rates international investments value in international stock markets continually and Singapore as one of the best value major markets. There are only seven major markets that Keppler feels have good price earnings ratios, good enough dividend yields and such to be ranked as good value. Singapore is one of them. Plus this market is getting attention now and is rising. The Strait’s Times Index is up from 2,277.91 to 2,860.21 in 2006. For more on this see garyscott.com/international_investments/international_investments_89.html
Second, Singapore is a friendly country for investors. The 2006 Report on Economic Freedom Reports: In 2005, the Hong Kong–based Political and Economic Risk Consultancy (PERC) selected Singapore 's judicial system as the best in Asia . Opposition politicians rightfully criticize Singapore 's judicial system for its record of siding with prominent politicians, but foreign investors are more concerned about commercial law and the efficient way police handle nonpolitical crimes. PERC's ranking could give the economy a much-needed boost. Singapore's financial system is sound and well-regulated, but barriers to foreign banks and bank ownership persist. There were 23 “qualifying full banks” (QFBs), 36 wholesale banks, 111 commercial banks, and 47 offshore banks at the end of 2004. According to the U.S. Department of Commerce, “The Singapore Government promotes its regulatory environment as business-friendly, with transparent and clear regulations. Private foreign investment has been the main force behind Singapore 's rapid development over the past 30 years,” reports the Economist Intelligence Unit. Singapore's investment laws are clear and fair, and they pose few problems for business.
Third, Singapore is an excellent center for investing in water purification. Yesterday’s message looked at how Singapore imported water expertise for generations and now exports these water purification skills. This message looked at one of the leading Singapore water purification companies Hyflux. See garyscott.com/international_investments/international_investments_125.html
However here are other water purification businesses such as Darco Water Technologies Ltd. and Eco Water Ltd. We’ll look at these firms in upcoming messages.
Finally, fourth, you can borrow Singapore dollars at a low interest rate. For example, Jyske Bank is lending Singapore dollars right now at 5.25% (locked until December 14, 2006). This offers great opportunity for a “no forex risk” Multi-Currency Portfolio Sandwich.
There are several types of Multi-Currency Portfolio Sandwiches. One type locks in interest rates. Investors borrow a low interest currency and invest in CDS or short term bonds that guarantee a higher return than the loan. For example, borrow yen at 1.88% and invest in short term Turkey bonds that yield 12.86%. This guarantees a 10.99% positive carry. However, let’s remember this type of Multi-Currency portfolio has forex risk.
The second type of Multi-Currency Sandwich borrows a low interest currency and invests in some other type of investment in the same currency, either a bond or equity. For example, one can borrow yen for 1.88% and invest in Japanese equities etc.
Here is a powerful idea. Borrow Singapore dollars and invest in Singapore water companies. If the shares in these businesses rise 10% a year, you’ll earn 19.5% a year if you leverage two to one.
Take, for example, an investment of $50,000 with a $100,000 loan in Singapore dollars at 5.25%. $150,000 is invested in three water shares, Hyflux, Darco and Eco. If the $150,000 rises 10%, the profit is $15,000. The loan cost is $5,250 so the profit on the $50,000 invested is $9,750, nearly a 20% return.
There are no forex risks. You borrow Singapore dollars and invest in Singapore dollars. The main risk is that the shares do not rise more than the cost of the loan, 5.25%. Especially in the short term, they could fall and the losses would be magnified just like profits are. In other words, if the shares fell 10% in a year the loss on the portfolio would be nearly 20%!
Investors can do well investing in these shares with no or less leverage. The idea has power, good fundamentals and is an investment that is good for the environment and mankind as a whole. Every investors should speculate with the added leverage only to their own level of comfort and never leverage more than one can afford to lose.
I have written a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that shows the rewards and the risks. The report also outlines the five new Multi-Currency Portfolios we are tracking in our Borrow Low- Deposit High Multi-Currency Sandwich Educational Service. You get this report FREE when enroll in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. Details are at https://www.garyascott.com/catalog/bldh
Singapore water shares have many powerful forces supporting them now. Clean water is a commodity that has to grow in value. The Singapore water market shares offer good value.
Investors who have the ability to hang on through short term downsides and who believe in the idea of investing in water may find Singapore water shares leverage with low cost Singapore dollar loans a good entrance to profit.
Speaking of entrances. Below is a photo of another Barro Viejo interior in a house near Cotacachi. Tomorrow’s message looks at how the new president-elect in Ecuador could enhance opportunity there.
Until then, good investing!
P.S. Will water shares rise or fall in the near term? No one can tell. This is why we also need to invest beyond logic! Merri and I will celebrate the New Year at El Meson. Join us. Look at Ecuador real estate after and stay on for the “Inspired Investing Beyond Logic” course. For details go to https://www.garyascott.com/catalog/va/