Investment Portfolio for MS B in Singapore

This assignment analyzes a proposed investment portfolio for MS B in Singapore's real estate market. The portfolio includes REITs (e.g., JIT and F-REIT), residential condominiums, commercial offices, and shares. The analysis evaluates the potential return on investment (ROI) considering factors like property appreciation, rental income, dividends from REITs, and mortgage financing. The goal is to determine if the portfolio can generate adequate returns exceeding inflation.

Running head: FUNDAMENTALS OF INVESTING
Fundamentals of Investing
Name of the Student:
Name of the University:
Authors Note:

FUNDAMENTALS OF INVESTING
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Table of Contents
Introduction:...............................................................................................................................2
1. Identifying the investment opportunities presented to MS. B:..............................................2
2. Recommendation provided to MS. B:400..............................................................................3
Conclusion:................................................................................................................................5
Reference and Bibliography:......................................................................................................7

FUNDAMENTALS OF INVESTING
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Introduction:
The study aims in identifying the relevant investment opportunity for MS B, which
could help in improving relevant returns from investment. In addition, the recommendations
are based on relevant returns, which could be provided from investment. Furthermore,
different equity stock, REIT and property investment options are evaluated for MS B, as
adequate portfolio could be designed for her investment purpose. The performance of
property market has instigated the investment requirement, which holds investment
instruments related to property sector.
1. Identifying the investment opportunities presented to MS. B:
Investment amount SGD 5,000,000
Particulars Per sqft Price per sqft Amount Expected rent
Residential
Condominium 1,200
SGD
2,800
SGD
3,360,000
SGD
7,000
SGD
9,500
Commercial
Office 1,200
SGD
2,800
SGD
3,360,000
SGD
7,000
SGD
9,500
The above table mainly helps in identifying the investment option in property and real
estate, which could improve return generation capacity of the portfolio. Both investment has
the same kind of investment and returns. However, the investment type of both the property
is relatively different (Baum & Crosby, 2014). The demand for residential and Commercial
property has exponentially grown in Singapore, due to which the return could be high. Hence,
accommodation of the shares in portfolio could help in improving the return generating
capacity of MS B.

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Particulars Current
share price
Net Book
Value
PB Dividend yield
(%)
Avg Traded
Volume
CWL 12.8 9.8 1.31 1.50% 20mn
JIL 1.8 2.15 0.84 3.50% 1mn
F-REIT 2.9 3.2 0.91 4.50% 2.2mn
P-REIT 1.5 1.3 1.15 6.75% 22mn
The above table mainly depicts the overall returns and current share price of proport
stocks and REIT, which could be used in identifying the most viable investment option for
formulating the portfolio. The entire enlisted shares have been taken into consideration,
which could improve relevant return generating capacity of MS B. The evaluation of Price to
book ratio is conducted to identify the most viable investment opportunity, which could be
listed in the portfolio (Newell, Pham & Ooi, 2015).
2. Recommendation provided to MS. B:
Investment Per sqft Price per sqft Amount Return
Residential Condominium 1200 2800 SGD 3,360,000 SGD 99,000
Commercial Office 1200 2800 SGD 3,360,000 SGD 99,000
Mortgage payment SGD (84,000)
Return 1.70% SGD 114,000
Investment Current share price Number of Shares Amount Return
JIL 1.8 266,665 SGD 479,997 SGD 16,800
F-REIT 2.9 400,001 SGD 1,160,003 SGD 52,200

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Total Investment SGD 5,000,000 SGD 183,000
Particular Value Amount
Return from investment 3.66% SGD 183,000
(-) Inflation rate 3.00%
Actual return from investment 0.03% SGD 33,000.03
The above calculated portfolio depicts the overall return that could be generated from
investment, which might help in identifying investment viability. In addition, the overall
return after adjusting the inflation rate is mainly at 0.03%, which indicates the profitability
that is generated from investment of 5 million SGD. The portfolio mainly utilises mortgage
system, which helps in accommodating the asset investment and utilises the full investment
value. The investment capital is mainly used for investing in shares and REIT, which could
help in generating higher returns from investment. Therefore, combining the shares of JIL, F-
REIT of and property investment in the portfolio, which might allow MS B to tap into the
returns provided by the rising property market. In this context, Deng & Wu (2014) mentioned
that creation of adequate portfolio could eventually allow investors in generating higher rate
of return from investment, which could increase the level of profits from investment.
The investments in Crystal World Ltd and P- REIT could be identified by MS B, as
the price to book ratio of the investment was relatively higher than 1. This indicates that share
price of the company is relatively overvalued and is expected to decline in near future. In
addition, both price of the investment is near 52 weeks high, where it could be assumed that
investment scope in the security has dried out. This could not allow the investors in improv
their wealth, which in turn could hamper relevant profits from investment. Ho & Rengarajan

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(2017) stated that investors mainly choose stock, which are undervalued by investors, as they
increase investment capital and provide high returns from investment.
The overall investment in JIT and F-REIT needs to be conducted by MS B, as it
provides an investment opportunity, as the price to book ratio is relevantly undervalued. This
indicates that share price of the company is undervalued and could increase in near future. In
addition, the dividends provided by both the investment is relatively high, which could help
in generating higher income from investment. The total dividend return that is provided from
the investment is relatively at the levels of SGD 69,000. Moreover, JIT and F-REIT mainly
has high level of inclination to provide relevant dividends, which could increase return from
investment (Nanda & Rhodes-Kropf, 2013).
Lastly, the investment in Residential Condominium and Commercial Office can be
conducted by MS B with the help of mortgage system. The use of mortgage could eventually
help in utilising both the property investment, which might help in generating higher rate of
return from investment (Reddy, Higgins & Wakefield, 2014). The investment in real estate is
mainly estimated to provide a return of 1.70% on yearly basis after paying all the mortgage
payments.
Therefore, Ms B with the help of above drafted portfolio could generate adequate
return and tap into the trend of real estate, which is currently flourishing in Singapore.
However, the return that is provided from the investment is relatively higher than the
inflation rate, which could help in raising relevant value to of the portfolio.
Conclusion:
The overall portfolio depicted in the above assignment could mainly allow MS B to
generate relevant returns from investment in Real-Estate of Singapore. The portfolio created

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for MS B could eventually help in identifying financial viability of the investment, which
could in turn generate higher return from investment. The portfolio is mainly estimated to
provide a return of 0.03%, which amount to SGD 33,000.03. The combination of REIT,
shares and property could eventually help in generating the required level of return from
investment. Ignoring stocks and REIT with higher Price to earnings ratio could eventually
help in improving the sophistication level of the created portfolio in generating higher returns
from investment.