Me & My Money

Win-win thinking turns even a layoff into opportunity

On his experience in China, Mr Tng credits a "win-win" mindset for his career progression there from 1995 to 2006. "When you work with the Chinese partners, you are looking at different interests. You need to get the alignment, then you can work toge
On his experience in China, Mr Tng credits a "win-win" mindset for his career progression there from 1995 to 2006. "When you work with the Chinese partners, you are looking at different interests. You need to get the alignment, then you can work together," he said.PHOTO: SEAH KWANG PENG

Independent investor seized the chance to take part in a section of the Clipper yacht race

Forging a career overseas requires a particularly positive outlook, notes independent investor Steven Tng, 49, who worked in procurement for 11 years in China.

Mr Tng, who studied in one of the last local primary schools that taught in Chinese, credits a "win-win" mindset for his career progression there from 1995 to 2006.

He recalled a case where looking after a business partner's needs in a creative way helped to bring about greater cooperation.

In 2003, the French automotive firm he worked for, Valeo, wanted to save costs by purchasing parts directly from a Chinese supplier instead of going through a middleman, a Chinese company.

That middleman, however, also happened to be his employer's business partner.

HIGH-YIELD BONDS AND REITS

In the current climate, stock indexes are very near to historical highs and there are limited prospects for the local property market. Hence I have invested in local and overseas high-yield bonds and Reits for the longer term.

MR STEVEN TNG, on the investments he makes after sizing up the market situation.

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  • Q What has been your biggest investing mistake?

    A I invested money in Malaysian Clob shares around 1994. I was hoping to make quick and easy money then. At that time, Clob shares were doing well. I would invest in what friends or the news said was good and did not do research.

    As a result of the financial crisis in 1998, the Clob trading platform was shut down and I lost all the $8,000 I had invested.

    Q And what has been your best investment move?

    A I bought a bungalow near the Shanghai city area in 2005 and sold it last year for a seven-figure return in Singapore dollars. The garden is about 4,000 sq ft and the gross floor area of the house is about 3,000 sq ft.

    When I was working in Shanghai, I saw house prices going up and thought that with the rapid economic growth, property prices should go up further. I lived in it till I came back to Singapore in 2006 and rented it out thereafter.

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To avoid offending this partner, he helped work out a scheme that would allow his company to purchase parts it needed from Europe directly from a supplier. This saved it money as it no longer needed to go through a middleman.

"When you work with the Chinese partners, you are looking at different interests. You need to get the alignment, then you can work together," Mr Tng said.

He started work in 1993 as a fire officer at the Civil Aviation Authority of Singapore just after receiving a degree in business administration from the National University of Singapore. The physical and outdoor nature of the job was what attracted him.

In 1995, he decided to move to China to seek a new challenge.

"At that time, China was opening up and they had a lot of opportunities for foreigners to work there. I wanted to take up a challenge.

"Language-wise, coming from a school that taught in Chinese, I thought I had an advantage."

After moving to China, he worked for two years as a procurement officer for a paper company in Jiangsu province. Then, he joined Valeo as a procurement director.

He left in 2003 for German automotive company Webasto, where he worked till 2006.

He returned to Singapore then because he wanted his two young sons to attend primary school here. He joined the procurement team of an American company which made labels and packaging materials.

Last year, that firm restructured operations in Singapore and he accepted a retrenchment package.

He took the opportunity to embark on a major adventure, taking part in a section of the Clipper Round The World Yacht Race.

His wife, Valerie, is a finance and administration manager. They have two sons, Xavier, 16 and Yves, 14.

Q Moneywise, what were your growing up years like?

A I was the fifth-oldest in a family of seven children. We lived in a single-storey wooden house with a zinc roof near the old Paya Lebar airport.

My father and grandparents sold daily provisions at wet markets. My mother was a housewife who made preparations for the store.

Until I was about 16, I would wake up at 5am every weekend and during the school holidays to help out till around 3pm. We had just enough to cover necessities.

My allowance was about 70 cents, which was just enough for a bowl of noodles and a drink.

Q How did you get interested in investing?

A I started to invest when I was about 22. I was studying business administration at NUS and had a group of friends interested in investing.

I started by subscribing to IPOs, and then picked up stocks based on rumours, news or discussions.

Q Describe your investing strategy.

A I have long-term and short-term parts in my portfolio.

The long-term part consists of instruments like property, bonds, unit trusts, real estate investment trusts (Reits) and shares. I look to hold it for about six months to three years.

I also have a short-term portfolio which is used for trading. I intend to hold stocks in this portfolio for two to three months. Instruments I use include structured products, shares and options.

For both parts of the portfolio, I choose instruments to invest in based on the market situation.

In the current climate, stock indexes are very near to historical highs and there are limited prospects for the local property market. Hence I have invested in local and overseas high-yield bonds and Reits for the longer term. They still give me relatively decent returns of 3 to 6 per cent - way higher than savings account and fixed deposit rates - while I wait for a market correction.

I look at how stable the income streams of Reits and bond issuers are before investing. For instance, I bought Citigroup bonds denominated in Aussie dollars because the firm's books appear to be doing okay.

Reits I own include Ascendas Reit and CapitaLand Mall Trust. I look at their occupancy rates and how stable the income from their assets is before buying them.

For the trading part of my portfolio, I look at broad macro and industry data. I bought shares in the three local banks at their lows in February as there was too much correction and they dropped below their book value. I cashed out in early April after the Straits Times Index moved to the 3,000-point mark.

Q What's in your portfolio?

A Sixty per cent of it is now held for the long term and 40 per cent for the short term.

The long-term portfolio comprises high-yield bonds, Reits and unit trusts.

Within the short-term portfolio, I have structured notes, shares and options. Under one of the structured notes, the return is 7 per cent as long as the share prices of the three banks remain above certain prices. If any one of the banks goes below this strike price, the bank has the right to ask me to convert all the capital that went into the note into the shares of that bank.

The average annual return for the long-term part has been about 5 per cent a year for the past five years. For the short-term part, the average annual return is about 8 per cent a year.

I bought an apartment at Sophia Hills condominium for about $1.5 million, or $1,900 per square foot, in the fourth quarter last year. It is a three-minute walk to Orchard Road.

I also bought a two-bedroom apartment in Bangkok for a few hundred thousand Singdollars in 2014. Its market value has not changed much since. It is now rented out with 5 per cent gross yield.

Q What's the most extravagant thing you have done?

A Last year, I spent $20,000 to prepare myself for the Clipper Round The World Yacht Race. I started preparing for the race around June last year and started sailing in October. The money was spent on the race entrance fee, four weeks of training before the race, clothing and insurance.

The race goes on continuously for a few weeks, so you have to learn to rest and sail continuously for long periods. You live and work with 20 people from different countries on your boat. I took part in leg two, which involved sailing from Brazil to Cape Town. It took 16 days and a lot of hard work and determination, but the experience was worth every cent.

Q What are your immediate investment plans?

A I am holding a five-figure sum of cash now as I am expecting some correction in the markets. A sign that a correction is coming is that the US treasury yield curve is close to as flat as what you see before previous crises.

Normally, the yield curve is steep, with longer-term yields higher than short-term ones. It becomes flatter when good investors like banks think the risk is too high and shift money from risky assets to safer assets like short-term treasury securities. These are people who first know when the crisis is coming. That pushes the short-term yield higher.

There will be opportunities to buy risky assets like shares, futures and options after the correction.

Q How are you planning for retirement?

A I am not working for other people, and am doing my own investments. I see myself continuing for at least the next five to 10 years. It's still like a full-time job.

I will need about $5,000 to $6,000 a month for my wife and me in retirement.

I will generate that amount from my investment returns and property.

Q Home is now/I drive...

A A terrace house near Katong. I live with my wife and two sons.

I bought the house in 2011 for just under $2 million. It is freehold and close to amenities. Recently, I received a quote of $2.6 million despite the current weak environment

I drive a BMW X1.

A version of this article appeared in the print edition of The Sunday Times on May 08, 2016, with the headline 'Win-win thinking turns even a layoff into opportunity'. Print Edition | Subscribe