Portfolio news this week (ending 13 June)

Here’s the top news this week affecting my positions in Singapore O&G, iFAST and TripAdvisor.

TripAdvisor vs Booking: Booking.com will terminate existing contracts with attractions and tours and will create an experiences partnership with TUI’s Musement instead. Booking.com users will eventually be directed to Musement’s experiences.  Building an experiences business is clearly not easy when you are a late mover like Booking.com or Musement. Musement offers 70,000 tours and attractions which are mostly focused on European attractions while TripAdvisor is 5x larger and offers 395,000 bookable experiences globally. Experiences is a huge market – most bookings are done offline (via the phone or on-site) so there should be room for more than one winner in this market.  Link 

Tourism recovery during Covid-19:  “Two in five (41%) consumers are optimistic that they will take the same or more trips than last year” according to a TripAdvisor paper. The paper also indicated growing interest in domestic trips in the United States, Germany, Australia and Japan while restaurant searches in New Zealand (the first country to recover from the virus) has spiked. Link

Singapore O&G share plan and buybacks: Singapore O&G spent ~SGD88k buying 409,000 shares (average price paid was around SGD0.21) this week. These purchases are probably meant to fund their share performance plan which involved giving 2 million shares to employees other than Dr Heng and Dr Lee who are the founding doctors of the company. One third of the shares vest at the end of June 2020, 2021 and 2022. This share performance plan will probably cost less than SGD1 million to implement so it should be affordable for the company. SOG has plenty of cash on their balance sheet and this plan is a nice way to align doctors and employees with shareholders. There could be a slight overhang if employees choose to sell all their shares on vesting day so avoid selling on the last working day of June! Link

iFAST and brokerage price war: Singapore’s casinos are closed so some gamblers are using SGX as their casino. Stock brokers are capitalizing on this trend. Tiger Brokers, a Chinese stock broker  backed by Xiami and Interactive Brokers launched their Singapore stockbroking business this week and is now offering 0.08% per trade with no minimum charges for SGX trades. POEMS cut their fee this week to match Tiger’s fee for their premium clients (SGD250k AUM). iFAST’s FSM platform is already offering 0.08% per trade with a SGD10 minimum fee for most of their clients so I’m not worried. Besides, iFAST is probably in the best position to offer free stockbroking trades because they also sell unit trusts, bonds and insurance and derive most of their recurring income from unit trust fees. Link

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