Saturday, June 11, 2016

Singtel - My First DCA (Dollar Cost Averaging) Counter

I have been contemplating to put aside  a fixed quantum of amount every month to form part of my DCA (Dollar Cost Averaging) Investment portfolio. Finally, I've made the move and selected one of the blue chip, Singtel (Z74) as my first DCA counter. 

Managed to get 300 shares @ $3.90 yesterday and my plan to investment 300 shares per month on on-going basis. 

In order to have full control and flexibility of my DCA transactions, I've chosen to purchase the shares directly from the market (via POEMS, they are still having their promotional 10 bucks commission [till end of the year] for transaction less than 1,000 shares) instead of through the DCA plan with Maybank, OCBC or POEM (Shares Builder Plan). 

Some of you might be curious as to why I didn't choose the ETF for DCA instead?

There are a couple of reason actually :

1. All a long, I am eyeing to own at least one local telco stock. So, I thought to kick-off my DCA with a telco stock. Among the 3 telcos (Singtel, Starhub and M1), Singtel is the largest [in fact, largest in the Southeast Asia] and has the better valuation in terms of their P/B ratio and profit margin):
Singtel's P/B ratio : 2.52
Starhub's P/B ratio : 22.27
M1's P/B ratio : 5.43

Singtel's Profit Margin : 22.82%
Starhub's Profit Margin : 16.19%
M1's P/E Profit Margin : 15.65%

[The above stats are from Yahoo Finance]

2. The dividend yield for EFT is not as "juicy" as  Singtel's, even though it is less than 1% difference ;-)  

3. In the recent news, Singtel is to list its broadband unit, Netlink Trust by Apr 2018 and hence there is a potential up side for the shareholders (from the disposal) in the short-medium term.   

The intention is to accumulate slowly...but surely... 


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