I was watching a documentary on TV that talked about how the urgency for reducing our global carbon footprint and its impact on the climate. I believe that as temperatures rise - to intolerable levels of 40 and 50 degrees Celsius - a huge proportion of our land mass will turn to deserts (as compared to over 20% currently). This implies a significant land shortage, which will becomes even more pronounced as the global population increases. This land shortage doesn't only affect arable land but also inhabitable land i.e. residential housing, retail malls, parks, office spaces, etc. As a result, land and property will start to rise dramatically and render the cost of housing increasingly inaccessible to the mass market. The rich-poor gap widens and home ownership - which once used to be a financially serviceable amenity turns into a luxury product available only to a privileged few who can afford it.

So time really flies when you are up about and at work. I've been here for exactly 100 days tomorrow. Similar to what I usually do back home: I have my developed my own routine for where I grab my coffee (on weekdays and weekends). The baristas know what I usually order. I even go to the same places for lunch and dinners sometimes. Some form of routine is good I guess.

If I had learned anything at all over the last decade of my professional life and investing, it is that banking is a transaction-based business. Year-end performance appraisals are evaluated almost entirely based on the number of deals closed, number of trades made, etc. Not that is not obvious but we subconsciously ignore this when it comes to investing. Much like brokerage firms, media works pretty much in the same way. Money is made on trades, and indirectly from viewership. The company who provides you with news and updates stays in business not because your knowledge is enriched, but because they are hoping that you will act on that piece of news - making that stock trade, sharing it with someone else who might act on it, and make money from the commissions. Bluntly speaking, these companies profit from the influence they have over their customers, and that has commercial value. Once you come to understand this, stuff that you read online, you take with a pinch of salt, you analyze and approach it with a healthy sense of criticism (and sometimes skepticism). It will help you make better and well-informed decisions rather than acting on impulse. "Money is made in the sitting."

As an investment banker I used to work very long hours (I still do) and we were almost always allowed to be reimbursed for dinner and transport expenses if we worked past a certain time (usually 9:00pm). Some times I would claim for these expenses, but other times I would not. And people found that puzzling. As I grew older and stayed longer in the office, I discovered that some of the most simple pleasures at the end of a hard day’s work was simply just to take a 10-minute stroll away from the office or use the public commute back home, enjoying the outdoor air in the process. Taking the taxi on the other hand constantly nauseated me because of the enclosure and motion. It was partly because of that, I did not usually claim for any transportation reimbursement. Likewise for meals and per diem allowances: Unless absolutely necessary such as dining with professional parties such as clients as part of the job, I would then claim for these meals. But I know of people who would go the full length to obtain all recoverable expenses as long as it was within the organisation’s HR policy. There’s nothing technically wrong with that. The rules that were set that way by the folks up there are also the same rules that are part of broader staff retention strategy, that is: To keep employees happy and contented so that they know they are well fed and taken care off. It was only in my later years in banking that I realised making these claims were also a deeper cultivation of a subtle employee-mentality . By attempting to ‘milk’ the system and extract the maximum benefits, one subjects himself/herself to the dependency on the little privileged comforts of life. There’s nothing wrong with that, in fact I believe the banks wanted you to do that. In Nassim Taleb’s words: “Someone who has been employed for a while is giving you strong evidence of submission. Evidence of submission is displayed by the employee’s going through years depriving himself of his personal freedom for nine hours every day, his ritualistic and punctual arrival at an office, his denying himself his own schedule, and his not having beaten up anyone on the way back home after a bad day. He is an obedient, housebroken dog.” So should one day I am unable to afford the ‘luxury’ of going home in a cab or rely on someone to pay for my meals, I would never feel insecure.

The last couple of weeks have been incredibly exciting for Singapore: SuperReturn Asia, DealStreetAsia's PE/VC event, the Milken Asia Summit, Forbes CEO conference and the F1. Visitors getting into Singapore today are neither required to serve any quarantine nor wear masks in public. Everything feels like it's been reverted back to 2019 - big MICE events, face-to-face meetings, public gatherings, etc. It almost feels surreal. Except that I am not in Singapore. Envious onlookers residing in Hong Kong can only drool at the party from afar and read about these large-scale social events in the news and LinkedIn feeds. Last week, Hong Kong finally announced that it was lifting mandatory quarantine for arrivals into the city. From the 14-day quarantine implemented last year to 7 days and recently to 3+4, inbound travelers now simply need to do 0+3 i.e. no quarantine but just a 3-day monitoring period (still better than serving quarantine in China). It was a long awaited step, but some have said this was too little too late . Against the backdrop of an increasing number of people and firms moving from HK to Singapore , and the recent high-level summits taking place over the last couple of weeks, I guess HK is finally saying " enough is enough and we have to get back in the game or run the risk of really losing out in the long term. " It seems like Singapore has played its cards well and somehow "gotten ahead of the game". "Singapore may have the edge at the moment, but Hong Kong has more longer-term advantages to attract capital and talent" - HKEX Despite the COVID restrictions, the relatively high costs of housing, stilfing space and population exodus, there is some truth in HK being better positioned than Singapore in terms of leveraging the resources of Asia's largest economy - China. Besides, conference go-ers are generally indifferent to where the party is held as long as they are invited and there is reasonable certainty of a huge turnout. Understandably, those sitting on either side are motivated to swing the odds back into their favour. I am not trying to pre-empt whether or not the tables will eventually turn for both cities but recall back in 2020 at the onset of the pandemic, Hong Kong was at one point of time leading the charge on potentially emerging from the abyss. And then in a twist of events, it was tightened again in late 2020 due to the resurgence of the 'second wave' . When the dust finally settled in early-mid 2021, I vividly recalled HK was gradually moving back to larger group gatherings and reinstating back-to-the-office work. Over that same period, Singapore on the other hand was back-tracking. I had been preparing to depart Singapore in May, looking forward to getting some reprieve that at least face-to-face meetings were possible in Hong Kong. Singapore didn't make any significant headway in lifting the restrictions until later that same year . And then in 2022 after the spring break, HK again went into partial shutdown for over a month. Look, you might be wondering what is the point behind all of these. If there was anything I learned over the last 2 years from the pandemic, it is that nothing is ever really permanent . The stable state of things we are familiar with can be easily contested at some point of time or another. We took public gatherings for granted until COVID happened. Singaporeans took for granted chicken rice, a somewhat common staple would always be there until Malaysia halted the exports of Chicken for awhile in May 2022 . The same way energy stability in Europe have always been considered a given until they were forced to take sides amidst the Russia-Ukraine war. Even the economies that were halfway around the globe probably didn't expect their food supply chain to be disrupted by a territorial conflict involving one of the world's largest exporter of grains. Things can change in an instant. In 2021 when I thought Hong Kong had finally sorted COVID out and Singapore was still lagging far behind in terms of getting infection numbers under control, look how one year has totally reversed the state of things when Hong Kong became the unfortuate victim of the Omicron resurgence in February 2022. Just like the conference go-ers, the companies and workers that have relocated to Singapore can easily find themselves moving back to Hong Kong very quickly once normality has been restored. Change is the only constant and the race is long. Sometimes you are in front and sometimes you are behind. All things - no matter how good or bad they may seem to be today - can change very quickly.

In 2017, I flew to Riyadh for the first time ever to attend the Future Investment Initiative (FII) conference. This was Saudi Arabia’s largest and first ever nation-wide event orchestrated to bring in the largest and wealthiest investors, businessmen and celebrities from all over the world. Obviously a large budget had been set aside to fund these events, in exchange for sovereign publicity or to bring in foreign investment. Held at the Four Seasons, the whole thing was so high profile that it was dubbed “Davos in the desert” by the media. Many governments have their own versions of the FII - the APEC summit, Boao Forum, Saint Petersburg as well as other relatively smaller but similarly symbolic events hosted by relatively high profile media and organizations including the Forbes, Fortune, etc. In addition to rubbing shoulders with the who's who in the upper echelons of the business world., the people who travelled to these places often associate strategic importance with the cities that hosted these MICE events. Hong Kong was always known to be the top MICE destination for such events. Accessibility was one of the biggest draws. No one needs to plan ahead to be in Hong Kong. There are basically at least a hundred flights in and out from the city every day. The 20-minute commute from the airport to the city centre means that one can fly in the morning and get out by night. Besides, there was always something to do in town: Cultural festivals, concerts, business conferences, food and the shopping. And there would always be investors to meet and friends to catch up with. All you have to do is book your tickets and go. Almost every company with a meaningful global presence in Asia has an outpost in Hong Kong. At one point of time the city was even leading the charge in convening the " most brilliant minds in international tech " via the RISE conference - a must-go for any technology company with a serious interest in Asia. But there is less reason to get into Hong Kong today. Aside from the fact that many companies and conferences have shifted away, a string of covid testing procedures awaits upon arrival at the airport. Travelling into Hong Kong today has become a meticulously curated trip. Despite the recent inaugural policy address by the new chief executive in Hong Kong to reclaim the city’s historic position as a premier financial center and to step up talent acquisition and retention, people seemed to have somewhat lost confidence in what the future holds for the city. To stem the further outflow of companies and talent, the government had also in recent months very publicly unveiled a high-level banking summit to host the titans of finance back in its city center. Yet inbound quarantine measures and restrictive health monitoring continue to weigh on travel. Unlike the FII in Riyadh, never in my wildest imagination, did I expect a city like Hong Kong to have to host a large summit in order to convince high profile bankers, businessmen and investors to come to its shores. If you wanted to raise capital in Asia, Hong Kong was definitely one of the cities you had to stop by. No questions asked. During the "peak season" of investor roadshows and conferences, it was even common to bump into some of the bigwigs when you were in town (I remembered sharing the same lift with David Rubenstein once in HK at a conference). The reality that Hong Kong now has to go out at length to advertise a high profile banker summit reveals how much its economic environment has deteriorated over the last few years. Aside from the exodus of companies and talent, the debt and equities market has basically also dried up . Companies that wanted the largest and most jumbo offerings almost always came to the HKEx because of the size, depth of liquidity and diverse pools of capital. People go to Hong Kong for the riches - and it was not uncommon to find multi-bagger companies listed on the Hong Kong Exchange as compared to Singapore, which in my view, the latter is more suited for those who seek stable returns and the preservation of wealth. In order to justify and maintain its leading role as an IPO destination for Asia, the Hong Kong exchange had also initiated waiving revenue requirement for tech IPOs in an effort to revive the IPO market. Singapore is quite the classic example of how efforts in positioning itself as a listing hub has proved relatively futile. Its tie-up with NASDAQ and Tel Aviv has been questionable - none of which has produced any signficant tangible results. Even, the newly launched SPAC framework, which was probably meant to be an avenue for VCs and early tech investors to cash out, has yet to see outstanding results with only three listings to date. Part of this was probably also due to bad market timing. Hong Kong has enjoyed much success in priding itself as the go-to Asia Pacific regional hub for business and equities market over Singapore largely attributed to China. It is undeniable that China played a part in creating the huge ecosystem of listed companies. The sheer size of the market breeds liquidity, which drives more brokerage and trading activity, more research coverage, more investor awareness, drawing in more capital for companies. Globalization (i.e. China opening up its doors) also played a big role in that process. As such, Hong Kong didn't really need to sell itself as a prime destination or lower its standards in order to attract the influx of capital and large companies. Maybe not until recently. But once we start to compromise on quality and start doing things like waiving revenue requirements for tech IPOs, things can start to get dangerous. And if not careful, this shift could end up being permanent and structural.

I always have had interesting conversations around the assumption and concept of terminal value (TV) in my valuation and financial modelling classes. The above formula is an extension of the Gordon Growth Model - an economic model developed by Myron Gordon , a professor from the University of Toronto, a key assumption being that a company lasts forever . Corporate life cycles and the secondary market The ecosystem of companies and their life-cycles today are very different from 40-50 years ago. Nokia came and went in 7 years. BlackBerry (RIM) lasted for no more than two decades. GE is probably one of the more closely relevant examples of how a company lifecycle could run its course for a relatively longer time before being dismantled into three separate segments in 2021. But I think most companies today don't enjoy that kind of legacy. Many corporate decisions are made using five and ten year plans. While founders may even have a longer term view of how they envision the business to be, these are mostly aspirational, some might even say fluffy. To make a call on a business over a 20-year horizon is almost unfathomable. Most human minds can't handle outcomes beyond a few decades, and as a result, economists try and simplify this scientifically, and in the process, disregard the cyclical nature of businesses - which is a practical consideration for most investors with a finite professional life. After all, the terminal value is only as tangible as the ability to monetise the underlying asset at the right time. The perpetual growth model also ignores the effects from secondary markets - investors and individuals that are prone to speculating on a company's value, taking positions both on the stock and derivative instruments such as CFDs and options. This opens up an alternative scenario: Instead of holding on to a share to perpetuity, there is a choice to flip their position for a quick profit, as long as the equity story continues to hold up. This makes both the use of market multiples and communicating the right narrative even more relevant. The 2% perpetual growth rate Besides, as we all know, casting the remaining cashflows into terminal value after the forecast period usually implies that you are basing 60-80% of the total firm value on the discount rate and the perpetual growth rate, which to me seems very paradoxical given that we spend a significant amount of time working out the company's revenue and free cash flows, only to chuck it into a mathematical black box. Interestingly, the so-called 2% rate widely used in our perpetual growth models originated from New Zealand in 1989 when the reserve bank codified its monetary policy. According to the then central bank chief, he said that this was “ a chance remark " and that the figure was " plucked out of the air to influence the public’s expectations ”. The US would later on reference and incorporate this into their policy goals to balance economic growth, wages and unemployment among other things. If you try and communicate this with someone sitting in China or parts of emerging Asia, no one would have a clue what you were talking about. Most people in Asia simply don't care about what long-term growth rate you use for arriving at the terminal value. Don't get so caught up in economic and finance theories We used get into hours of academic discussions over the WACC and terminal value during my earlier days in banking. Some of it was deemed as a test of your corporate finance knowledge. Other times it was because a valuation report required the loose ends to be tied in order to arrive at a fair value , or that we needed to demonstrate some form of credibility in the delivery of our report. The reality is: In the M&A world, there is no such thing as a fair value . No correct answer for the WACC. There are only astute decision makers and those who are afraid to get caught on the wrong side of the outcome. Calculating the cost of capital or terminal growth rate with precision is only crucial either from a financial reporting point of view or only if you expect someone important to be challenging these assumptions specifically. " What is then the right discount rate to use? " Perhaps the more appropriate question is: What kind of returns are you expecting ? If you are evaluating a start-up, this could be anywhere north of 35%. For private equity firms, the rates could range between 15-25%. Institutional investors of public equities could expect 9-15% with zero tolerance for failure. Simply put: The discount rate is mostly investor-driven - which if you think about it, very similar to the CAPM (Capital Asset Pricing Model), only that the CAPM assumes the investors to be fully diversified. Investors who use their own yardstick for the discount rate and can't get to the valuation they want, generally try to manipulate the cash flows or find ways to "create value" in order to establish a case for the investment. Don't get so caught up with economic and valuation theories. They are only as important as much as you can use them in the real world. As the dynamics of the real world change, so must our understanding and application of finance.

There are many merits to taking a company public – prestige, a sense of accomplishment, the publicity and glamor that comes with it, and also the ability to further raise capital from subsequent offerings. Behind the 400-page prospectus of legal disclosures and marketing taglines are hours of laborious work invested by an army of bankers, lawyers and accountants. Despite the tedious process of taking a company public, many shareholders insist on taking this route. On average, nearly all IPO bankers commit to a timeline of 6 to 12 months, subject to regulatory approvals and customary due diligence being in place. In reality, this process takes somewhere closer to 2 years and in some cases even up to 4 years. The costs of going public is more than you think. According to a survey conducted by PwC, more than 80% of CFOs commented in a survey that the one-time expenses relating to an IPO were in excess of USD 1 million – these are costs relating to the engagement of legal counsels (both onshore and offshore), accountants, commissioning a market study report, the book building process (gathering investor demand) and other miscellaneous expenses. These costs also vary according to the complexity of the company structure and the readiness of the company in terms of being compliant with regulatory requirements from the authorities. All these excludes the underwriting fees charged by banks which are typically 6-7% of gross proceeds raised. As an example, the listing of e-commerce company Y Ventures on the Singapore Catalist last year in July 2017 grossed in approximately SGD 7.7 million in proceeds, of which SGD 1.7 million (more than 20%) went to listing expenses. While this could be a unique case given the incredibly small size of the offering, average costs for public offerings of up to USD 100 million were anywhere between 7 to 30% of total proceeds raised. This number comes down to between 4.5 – 9.0% for deal sizes of between USD 250 to 500 million and 2-3% as we approach the billion-dollar mark, which is fairly in line with market practice of advisory fees being 2 to 8% of transaction size. Post IPO expenses – not something to overlook. Oxford Economics and PwC estimate that at least USD 1 million of additional costs annually are required to maintain a public company. The largest part of this goes into a more robust accounting and auditing process, but there are also additional resources that are required to be put in place such as investor and public relations, information technology and internal staffing costs amongst others. To put this in a financial perspective: If your company is performing at an annual run-rate of USD 50 million, this will put a dent of at least 2% in your net profit margin every year. Most companies are just not functionally ready. Most companies do not have the necessary resources for executing a stock exchange listing. For most, it is also probably the first time they are taking a company public. Shareholders and management try to do a number of things to compensate for this gap – including hiring full-time senior professionals who have prior experience in capital markets (usually ex-investment bankers), assembling a team internally to execute the transaction and conducting a beauty parade to select the best bankers and lawyers to lead the process. On the surface on it, the deal could look well-orchestrated with an international line-up of the top firms. However, this usually results in an intricate mesh of numerous professionals with somewhat polarized personal agendas leading to overburdensome workload on the company’s management and IPO team as they try to coordinate the various working parties. If not handled well, this additional workstream will create undue stress on the operational team which should be focused on the day to day workings of the business. If you are a small to mid-sized company with a great product, solid business model, fantastic equity story and looking to raise capital for expansion, you are better off working with a strategic partner such as a private equity or venture capital firm who could potentially be more helpful in growing your business and sourcing for capital. If the IPO roadmap is something you must take, work closely with a trusted advisor right at the onset to minimize the need for mobilizing too much company resources and reduce decision fatigue for senior management and key stakeholders. As key issues in the IPO process get progressively resolved and transaction starts to take shape, the company can still onboard more banks to execute the book-building process.

So, none of this makes sense anymore. For a long time, offshore financing - which was predominantly priced off the LIBOR or overnight rates - had always been significantly lower than the benchmark rates in China. For years, raising offshore money at a lower cost had always been the de facto fundraise strategy. Today, it is obvious that the tables had turned, quite abruptly as well. After you account for taxes, hedging costs (which is somewhat upside down now) and geopolitical risk, raising offshore money in China doesn’t seem to make much sense at all, not at least in the near term. While the rest of the world is hiking interest rates, China is going in the opposite direction , encouraging credit activity to boost growth and revive the economy. Earlier on, a consultation paper was also released, outlining guidelines towards formalising and further regulating the approval of offshore debt, on the pretext of promoting the healthy and orderly development of overseas financing by enterprises. Putting aside its over-leveraged property market and inflation in the rest of the world, it is almost as if the policy is indirectly encouraging Chinese companies to source for capital domestically rather than look elsewhere for financing. The combination of all of the above, coupled with no end in sight of travel opening up, seems to hint that China is closing up from the rest of the world. With the largest manufacturing engine closed from the world and the severe shortage of oil due to the war, you can hike all the rates you want but I don’t think that is going to meaningfully bring prices down.

Learning, knowledge and staying up to date with the news and what's going on in the world is your own personal responsibility. The same goes for your health. Nobody was ever hired into a smooth sailing job. You were hired to fix a problem or to clear up a mess. Take the cheapest and happiest mode of transport wherever possible. Never look down on anyone because of what they do or where they are from. Usually, no one is incompetent. Everybody is good at some things and bad in others. Some people are just placed in the wrong places at the wrong time. Work hard, but make time for adventure every now and then. Have faith - even if you feel victimised. Over-deliver, don’t over-promise. Let making a great product be your primary focus rather than try adjust your output and deliverables based on dollar and cents paid. Optimism almost always triumphs pessimism. The change in mindset is usually all a matter of crossing a thin line or seeing a whole new perspective. In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing. Take responsibility for your own decisions and actions. Embrace both the good and bad things that happen. Never compare with others, thinking that they were lucky or fortunate. You make your own luck. Pursue work excellence with a balance. Life is full of bad decisions, screw up and then just move on. Never show a black face unless you have to. Impulsive anger and frustration may come back and bite you. Rather than being annoyed, be amused. Instead of getting angry, become curious. In place of envy, feel admiration. Don't let success get to your head or failure get to your heart. Prove the doubters right by making mistakes, before proving them wrong in the long run. Avoid the “fake it ’til you make it” belief and focus only on making it. Wake up earlier than others. Talk about ideas, not people. Put in more than you get in return at first. Stick to a strict schedule, even if it makes less time for excessive fun and relaxation. Support the success of others, rather than hoping they fail. Sacrifice your social life and weekends. Admit you need help and ask others for guidance. Accept insecurity and fear as unavoidable emotions. Do what others would say is an impossible task, without making excuses or feeling like a victim. Get up after getting knocked down, stronger and more prepared than before. Smile at the people who doubt your abilities. Material possessions are overrated. Own less. Focus on the things that really matter. Success is a lifestyle not a result.

If the Central Banks got it wrong on monetary policy , can we also assume that the valuation models that we have done and relied on for the last two decades are also flawed? Though hard to mathematically quantify, truth is: Liquidity drives a huge part of value. Put simply: an asset is only as valuable as the next guys who wants it. Against the current backdrop of monetary tightening to fight inflation and funds becoming more cautious about their investments, asset prices seem to have reacted and dramatically fallen. Growth is another key driver of value - which in this case, is being eroded by rapid inflation, adding to the further discount in prices. The double whammy here is that the same high growth companies that sold astronomical prospects of the future will face the real test over the next two years as they fight against a policy that encourages the cool down of the economy. Is there a playbook to rectify this? Was it an error on the part of Central Banks when QE was introduced in the aftermath of the 2008 financial crisis? Did early bitcoin and cryptocurrency adopters see this gradual erosion in the value of money coming? I'm not sure. Most of the existing infrastructure we know is build around a set of 'stable' economic assumptions. Capex for power grids and oil exploration / refining (which are easily 10 to 20-year projects) have been traditionally modelled around $60 oil . Cap rates for real estate (another presumably long term asset class) are largely driven by interest rates. Likewise with breaking down the cost of any manufacturing plant, which is driven by the input prices of raw materials including commodities. The world just cannot absorb the sudden change in prices that would dramatically disrupt these economic models that we have relied on for many decades. Beta quantifies risk by measuring the standard deviation of an asset price against a reliable index benchmark over a long term dataset - the key word being long term. Furthermore, assuming that the immediate future would follow a reversion to the historical long-term would be borderline laughable given the current state of world affairs. So if we can't rely on beta and the pricing assumptions of today, the best thing to do is to probably wait it out until the world finds some sanity (and stability) amidst the current circus of events.

No quarterly reporting is like streaming a 4K video in standard definition (SD) - it’ll look fine from afar but you won’t get the same clarity close-up. Investors and stock punters in Singapore may have less to look forward in terms of earnings results when the new rules that do away with quarterly reporting kicks in on 7 February. I am an advocate of quarterly reporting, even if regulators now do not set this as a hard mandate for listed companies. Dealing with the new asymmetry of information. Investors no longer have the privilege of observing seasonality in business cycles in certain fast-moving industries such as consumer and retail. This makes it potentially make it more difficult to gauge business performance, which could result in reliance on alternative sources of data including analyst research reports, stock discussion forums and market talk over kopi . The reliability and credibility of third party information sources will become more important than ever. “Are your quarterly financials reliable?“ With the new disclosure rules in effect, the half-year-on-half-year financial performance will gradually take precedence over the quarterly numbers. While managers will feel less pressure to show a report card every three months, these quarterly operational and financial indicators enables: Investors to react more quickly to any near-term volatility in the business cycle and make well-informed recommendations to the board; Management to allocate resources and budget more effectively as compared to half-yearly reporting. A longer window of time. Without quarterly reporting, companies now have more room to move around their order book and working capital over a 6-month window instead of the usual three months. Half yearly disclosures also give companies more room and time to sweep teething issues under the carpet that could have been addressed early on through the quarterly announcements. Material and sensitive information will also have a longer time to linger within company walls and increase the temptation for insider trading. It’s like streaming a 4K video in standard definition (SD) - it’ll look fine from afar but you won’t get the same clarity close-up. On the private side, this should have less impact since investors may continue to request for quarterly management accounts for due diligence. The impact on cost of capital and valuation. The basis for calculating cost of capital is predicated on risk. And risk is a function of uncertainty. For example, cost of debt is driven by viability of repayments. Financial institutions are more likely to offer more competitive rates for companies that demonstrate the ability to make quarterly repayments. More disclosures imply greater transparency and visibility which in turns reduces the risk profile of the business. For companies that continue to maintain timely updates on their earning results, there should be some valuation premium reflected through a lower cost of capital. Companies that keep their books clean and organized on a regular basis should also be valued higher on the basis of better corporate and financial governance. Overall, focus on the longer term. Shifting the focus off quarterly announcements will probably compel investors to take a longer term view on the company and discourage unhealthy speculation on quarterly results. The shift to half yearly reporting will likely encourage more businesses to go public and reduce the costs for some existing listed companies. But for those companies that have fundamental problems, this isn’t going to move the needle much.

With cities going into lockdown mode, it is starting to feel like governments of the world are putting economies into a temporal cryostat. So here's what I think could be a possible storyboard for the rest of the year. Stage 1: Pandemic virus hits, people fall sick and die. 1Q 2020 is effectively a washout. While healthcare systems around the world are dealing with the impact of the virus, government suspends international travels. Airlines, cruises, hotels and tourism sectors are hit. the whole of 1Q 2020 is basically a sh#tshow. Lockdowns. Home quarantine measures are put in place with some countries closing down mass gatherings and public gatherings. People go out less and therefore spend less, reducing domestic consumption. As large companies suffer, smaller companies face similar issues in terms of cash payments and some will inevitably go out of business. Throwing money into the system to fight fire. Governments have started to introduce monetary stimulus packages, except that this time unlike the 2008 financial crisis, money doesn't solve the problem because money doesn't heal people. Tax breaks and incentives only benefit companies that are profitable - the smaller mom and pop businesses that support domestic consumption gain nothing from this. With lockdowns, physical distancing and the extent of the virus, the general public is starting to lose confidence that things will revert back to the good old days. It's gonna be a game of who's the last man standing. As we enter into the third month of the pandemic, some businesses will have recorded close to zilch revenues while cash continues to burn through with fixed operating overheads. Some enhancements to the fiscal stimulus package such as discretionary cash payouts will help some companies in the short run but there will not be enough to go around for everyone. Then comes the layoffs. With reduced capacity, companies are forced out of businesses, jobs are lost and overall consumer spending suffer as disposable incomes drop. This compounds the already existing problems caused by the virus. Economic recovery will be protracted because (i) a cure / vaccine on the virus has yet to be found; (ii) The lift on travel bans will be progressive and take some time; (iii) Life will never be the same again - there will be additional costs of doing businesses such as heightened business continuity procedures and increased sanitisation costs. Companies will need time to gradually adapt to this 'new normal'; (iv) We have now also become aware of how vulnerable we can be to an 'invisible enemy' that we still don't really know much about. Because of that, we are also unsure if there could be a similar 'relapse' taking place in the future. Unlike trade wars and armed conflict which can be negotiated and prevented, there is unfortunately no way to prepare or defend against this apart from maintaining / enforcing personal hygiene - and more importantly, executing this in a coordinated fashion on a global scale. Global social infrastructure comes under pressure. Studies have shown that social relationships have both short and long term effects on health and society as a whole. Prolonged periods from staying at home and/or being out of a job puts the psychological well-being of people at risk: The stress of losing income, the lack of interaction with friends and co-workers, and in many cases, feeling disgruntled with the inadequacy of elderly healthcare needs - will create tremendous emotional burden for people. This recession is no longer just a liquidity crunch like in the 2008. This impacts not only jobs in financial services but the employment on a wider scale. In China, where it was said to be ground zero for the pandemic, default and late payment on consumer loans have just started. If that is any precedent, we are likely to see a similar trend of defaults happening in other economies starting as soon as Jun 2020. And if people can't keep the lights on at home, they are more likely to take to the streets. Government financings first, then comes capital markets. The stimulus packages from governments around the world will be the first of many financings to come. The longer it takes for spending to return, the more cash companies burn. Some businesses will default on loans, request for extensions and some will even tap the capital markets for equity capital - quite similar to the wave of rights issues undertaken by many large corporates after the 2008 financial crisis. What the government giveth, the people must return. A large gaping hole in the budget will form especially with some countries already starting to tap into their reserves. At some point of time, this has to be given back whether in the form of tax or government stakes in key industries. "I help you now, but you owe me one". The most important thing for the situation today to improve is for the global economy and trade has to pick up and return consumer spending back to its normal levels.

In one meeting someone asked the CFO about revenue growth. He looked at the guy and said 'Revenue is an ego game. We could boost revenue tomorrow if we wanted. We run this company for gross profit.' - Twitter Got me thinking about how companies are reporting their sales order book, price and sell their products. One company has certainly taken this literally. Of course, Luckin Coffee isn't the only firm in history to have done this. Just not so long ago (about 1 year), the media widely publicised Luckin Coffee has being one of the upcoming competitors that is likely to give Starbucks a run for its money, especially in China. This was further sensationalised with the listing thereafter in May 2019 . I don't vouch for the quality of LK's coffee but after Xiaomi's IPO, the idea of selling low cost + decent quality merchandize suddenly became a very possible and scalable business model for a lot of aspiring entrepreneurs. Since products were going to be dirt cheap, in order for this to work, you practically need to sell helluva-lot of merchandize. And in the age of data digitization, you don't want to only rely on solely on offline sales through brick and mortar stores. You call in the calvary - the army of bots, data analytic tools, artificial intelligence and all the mumbo jumbo of the tech world. It was all the rage. For a moment, the epiphany was that LK had successfully leveraged China's leading AI and big data technology to drive its sales and any company that didn't incorporate data analytics in its growth strategy was considered part of the older generation of companies. At one point of time, the word on the street was blockchain (it might still be today). Today and who knows for the next 5 years, word on the street will be data, robotics, AI . But big data and the complex systems that churn the numbers have made due diligence even more challenging. Because of the vast amounts of data, making a decisions around these becomes somewhat like relying on a black box. For portfolio fund managers, not only do you just rely on the information given to you, you pass that information into complex models and these black boxes which you may not fully comprehend, and ultimately make that decision to invest. Caveat emptor and god help you if you have no warranties and indemnities. But all of machine error stems from human error. The people who deliver the numbers and build the black box are humans. Human subject to fatigue, bias and greed . The relentless pursuit for sales is manifested as greed in different ways: controversial related party transactions, customer kick-backs, fabricating sales figures, etc. All for greed and personal gain. As LK explodes, many fragments of this starts to fall apart. The founders had apparently invested in other financial products with margins from the banks. Margins which were pledged with LK shares. HNWI could get leverage as high as 100x. This means, for every $1 million deposited, the banks basically allow you to invest in $100 million worth of financial products - bonds, gold, derivative contracts, equities, etc. If those products go to sh%t or the value of your collaterals drop, you either put in more money or surrender your collaterals to the bank. Either the bankers had spurred the founders to get more leverage due to the rising share prices or the founders get gotten greedy and wanted more money for themselves. Was the COO manipulated by the founders to fabricate sales? What really motivated him to do that? Only time will reveal the outcome of those investigations. With most of the founders' shares gone today and the dislocation of interest alignment, can investors get any assurance that the business will run normally after this saga? The ecosystem of banking and financial products continue to amaze me - that greed, in particular the greed for money and prestige can really change a person. Any investment built on fabricated figures and over-leverage will implode eventually. Starbucks didn't become famous overnight. It takes years of pure hard work and consistency to build a legitimate brand from scratch. This should be a wake-up call for both investors and start-ups who still believe that they can change the world in 1-2 years and make a quick buck.

'Less is more - no intern has ever impressed me with knowledge coming into the internship. Many have pissed the entire team off by thinking they had knowledge coming into it. The most impressed I ever was with an intern was a kid who carried around a notebook and just wrote down everything that sounded strange. He then googled it after hours, and if it was still strange he'd ask what it meant. The most important "task" as an intern is identifying the comers at the analyst/associate level and having them like you. Each SA to full-time hire we convert is by asking that level who they liked the best.' - Wall Street Oasis Candidates these days try to impress too much. They bring in their arsenal of credentials, testimonials and references in a bid to be selected as that outstanding one. But so few realize that the most important trait that employers are looking for is “ groom-ability ” and the ability to just learn. At the junior level, firms are are not looking for heroes, they are looking for someone can be consistent with deliverables, and disciplined in doing the little things well. That said, I think trying to 'score' at interviews can be tough. On one hand, you are competing with others for the same role, and knowledge seems to be the benchmark. On the other hand, you are trying fit into the social fabric of the firm. At the end of the day, the most important thing to remember in any interview / conversation is to be genuine as a person and don't ever over-sell on your technicals and experience. A good banker is both good at numbers, communication and fitting in well.

It's exactly day 34 since the circuit breaker as I am writing this. Much of my daily life has been largely revolved around the four walls at the home and the view of the outside from my window. The streets are noticeably quieter, and the reality of the circuit breaker becomes even more obvious when you step out to buy food - Instead of the usual hustle and bustle of people sitting around, the counters of the Burger King outlet near my place is lined with bags of burgers and queues of delivery drivers and residents waiting to collect their orders. Instead of enjoying my meal at the outlet, I now have to deal with the mess I make at the table at home. I've also probably had more burgers than I should have in a week. But after 34 days at home, it's hard to have much variety (at least from my perspective). Live to eat or eat to live? So I missed the good old days where we ate out. Who doesn't. I like my Japanese noodles served hot in a bowl. I enjoy the ambience of the shop, the view of the chefs in the kitchen preparing my noodles and the staff 'yelling' occasionally as the orders are taken. The taste of ramen cannot be matched by the authenticity of eating it in Japan itself, but a lot of the shops in Singapore have done a good job of trying to replicate it. Unfortunately, this is not going to be possible, at least until June 1, maybe even longer? Who knows? Because part of having a good ramen is the dining experience, I had so far refrained from ordering any takeout until recently. With the number of COVID cases reported globally not abating in most parts of the world, there's always an overhanging doubt: will this eventually be a "new normal" in the way we eat? The whole eat-at-home experience also led me to realize that as introverted as you may be, dining - at the end of the day - is a very communal thing. Like it or not, without the company of good friends and/or family, eating is just eating. This is true not only for Asian civilizations but also many European cultures for example in Spain when the dinners last past midnight. Yes, dining can be considered a privilege, but unless society descends into anarchy or another pandemic decides to wipe out the bulk of our food supplies, humans still live to eat . Understanding this gives me a little bit of comfort that at some point of time, restaurants and food outlets will eventually come back to life once the pandemic has subsided. And I think the same applies with many other aspects of life and businesses as we previously knew it - air travel, tourism, conferences and meetings. Can Zoom and other virtual meetings replace the way companies transact with each other? Would you take a tour of the glaciers at the comfort of your computer without having to set foot on Greenland? Because the existence of the virus is effectively challenging the very innate want of human beings to go out, interact, trade, etc. At some point of time, I believe people will figure out how to make this happen - perhaps not so much by adapting businesses to the new normal - but by figuring out how we can both contain the virus, as well as, put in place new mechanisms / procedures that will enable all of us to step out and enjoy the sun again. PS: The takeout ramen was good.

Days like these make you think a lot about how adaptable humans can be. You can keep us at home and restrict our movements, but some way or another, we will find the means to make do with what we have and some times even improvise - like I've come to learn that you don't need to go to Yoshinoya for a beef bowl, you can easily make one at home with a gyudon packet from Donki. And instead of my usual cup of magic, my mornings are spent by the window with a butter cookies dipped with a strong dose of Nespresso. Surely productivity across companies must have gone down during the last two months. Not solely because people are confined to working from their homes and are distracted by other chores, but largely because most of everywhere else in the world has basically come to a standstill. It's hard to say which is which but I think one drives the other. Where do we go from here? I don't think we will stay this way for long. Peer-to-peer interaction is still very much the core of civilisation. I was watching a property webinar today on how the real estate market has basically weathered every known recession since 2000. One of the anecdotes that was shared was: Do car accidents deter people from driving on roads forever? No. People don't stop driving just because of one or a few accidents. Humans are adaptable. We invent traffic lights, implement anti-lock braking systems, we impose harsher penalties on errant traffic offenders and we educate the general public on road safety - but we certainly won't ban people from driving. If life throws us a curve ball, we adapt. If the virus takes away in-person meetings, we use Zoom. So we can't eat outdoors, we just call for food deliveries. Businesses will find a way to re-purpose themselves e.g. makers of luxury goods will make masks ; airlines will continue to operate by transporting cargo and private car drivers will do step up to fill any additional demand for food deliveries during this period . Doctors around the world continue to test and treat patients everyday. So maybe the optimism in markets these days isn't so much about whether stocks have 'bottomed out' or if scientists around the world are on track to find a cure for the virus. There is just too much we can learn about these pathogens. They evolve and even if we suppress them today, who knows what lies in store for the next few decades. But for now, the world looks hinged on the confidence of our survivability. Such is the adaptability of human beings. And in days like these where people are dying by the thousands everyday from the virus, rather than be a sourpuss, sometimes all we need is just a little optimism.

"Cruise liners are basically floating hotels. I think quite a number of them will be bankrupt soon." Creativity and innovation are priced on the assumption that there is healthy underlying demand from the end user. In 2014-15, liftboats became increasingly popular with many boat builders and offshore oil diggers. Apparently, digging for petroleum requires you to send more than a couple of boats out to sea - rigs, tugging barges, work and accommodation barges. The liftboat combines a few of these functionalities, allowing you to just send one vessel out, thereby saving costs. Some of the larger offshore companies had ordered these vessels, paying for as much as $600 million. As the resources in shallow waters depleted, companies started to send their vessels further out to sea. And to make sure that it remained commercial to drill for oil, they had to dig deeper and longer, requiring the use of more sophisticated rigs such as drill-ships, some of which cost as much as $1 billion to build. So you can understand that when prices of oil tumbled below $50, everyone across the value chain - from builders, charterers to explorers - were scared sh*tless. If you end up with a $1 billion piece of metal and oil prices hovering at around $40-50 a barrel - would you stay put and lose money or drill and lose money? Can you re-purpose a drill-ship for a different consumer market? A number of these once glorified companies actually went out of business or got acquired by other operators. It's not so different in today's circumstances. With most of automotive manufacturing out of commission, car manufacturers such as Ford and GM had started to re-purpose their plants to build respirators / ventilators. Air travel has also basically come to a standstill because no one is traveling - for business or for leisure. But when it comes to the last mile delivery - food, groceries and basic supplies - airlines can quite possibly convert their fleet to transport supplies and cargo. Although tourist arrivals have taken a hit, hotels can be used to ease some of the capacity constraints faced by hospitals. But a cruise-liner is basically a floating hotel. You can try re-purpose the vessels to transport cargo but it'll take too much work. We already have plenty of dry bulk vessels for that. In addition, a lot of these cruise companies based in the US don't seem to be part of Trump's stimulus package as they hire a lot of foreign workers and aren't technically incorporated in the US. Some industries are better positioned that others to pivot their resources. The current situation is really a test of a company's ability to effectively re-purpose itself, essentially - to innovate or die.

Over the weekend, I was deliberating about stakeholder contribution and their business involvement. We liked some people because they have been long-time friends. We like some others because of having worked together in some capacity. Aside from that, we consistently interact with people whom we also consider to be potential investors, partners, prospective employees and interns. And I tried to pencil all of these down into a matrix to see where all the different stakeholders fit in. Bottom-line: The interests of all co-founders have to be fully aligned, but more than that, each person also needs to demonstrate competency Opportunity costs are an important factor in aligning interest. Put it simply: If founders are in the venture as a 'hobby' or on a part-time basis, the venture probably isn't going to work out Cheer-leaders, idea generators and business evangelists should not be paid, unless they are personally committed to and vested in the business, either in an executive or non-executive role.

The last many weeks were becoming to feel like the GFC days in 2007-2008. I distinctively remember crude trading at USD140+. Governments all over the world were raising interest rates and borrowing costs and yet share prices kept rising. I had just started my career not long in an accounting firm. It was a bull market on the run and even I could feel it in the office as waves after waves of my colleagues 'jumped ship' to the investment banks. Then it just happened very quickly - oil prices collapsed to $36, Lehman Brothers went under and there was even talks of some insurance companies being 'too big to fail'. I remember the emptiness in the streets in Raffles Place and recently it is becoming to feel that way again - except that this time, it seems that no amount of money put into the economy can 'save' the situation. The world needs a 'cure' and money does not seem to be the solution.

After having observed various colleagues, clients and friends over the last 10+ years and watching how some of them have evolved, I realised some common traits in those who consistently fail to deliver in their personal and professional lives. Ego . People like to hear what they want to hear - most people don't like to be disagreed with. They like to hear the good things about them, and that their opinions are important and resonated by everyone. Very few will appreciate critical feedback even though what they are doing may be wrong. Remember this also the next time someone steps on your ego. Laziness or sloth. Taking for granted that someone else will do your work. This usually comes with the feeling of a sense of entitlement due to one's age, experience or perceived wisdom. Inertia. Knowing what needs to be done but yet procrastinating it to a later time and then attributing the inability to execute due to the lack of resources or time - especially for items that need the most critical attention. Narrow-mindedness. The world is changing and evolving everyday. And those who refuse to keep an open mind and embrace change will suffer under the limitations of its old paradigm. The change in mindset is a matter of crossing a thin line, and that makes all the difference. Sometimes all you need is a gentle nudge or push to see a whole new perspective. Personal delusion. To think and act under the belief that you are someone else. It's ok to have dreams and ambition but don't wear shoes that are too big for you or make promises that you can't deliver. Be real and comfortable in your skin. Let learning and the will to act be a way of life.