[High Investment Risk!] Country’s Defence Dependence on One Main Foreign Country

Reports this week suggest Ukraine’s military satellite links were throttled with US involvement, though who ordered it is disputed. 

The Wall Street Journal reported that Musk ordered the military version of Starlink slowed, leaving some Ukrainian attack and interceptor drones practically unusable. The Telegraph, citing four sources, reported that Musk proposed the cap and Trump approved it, clearing the way for the Defense Department to slow Starshield. The cap began on Oct. 14, after the administration urged Ukraine to stop striking Russian oil infrastructure, and Zelensky said he read it as a message from the American government. Musk says limits are decided by the US military and ultimately the president, while Trump and the White House deny involvement and some US officials say Musk acted alone. Whoever decided, a slowdown impedes Ukraine’s intelligence gathering, interceptor drones and long-range strikes.

As a result, Ukraine is now on the back foot, with a greater risk of losing territory.

Dependence on One Major Foreign Defence Provider

The episode shows the core risk of depending on one foreign provider for defence: infrastructure is leverage. Whoever controls a network can throttle it and affect other countries, whether through government policy, a commercial decision or one person’s discretion. The recipient rarely chooses the timing, and can be left unsure of the cause. Ukrainian officials were still trying to establish whether the restrictions were political or corporate, and a state cannot plan its war plans around a decision it cannot attribute.

Dependence also narrows policy options. A country that needs a supplier or another country’s goodwill will weigh that goodwill in every decision, including military ones. Alliances do not remove the problem, because they shift with leaders, elections and domestic politics, and supply guarantees seldom survive a falling-out. Lock-in compounds it: once drones, targeting and logistics are built around one system, switching is slow and costly.

Splitting military suppliers from multiple countriese addresses these weaknesses. Redundancy means that if one source is cut, delayed or degraded, others keep the capability running. Competing vendors give a buyer room to negotiate on price, terms and technology transfer. No single capital can use a supply line as a pressure point. Sanctions, export controls and factory disruptions tend to hit one supplier at a time, not all of them at once. Several countries already work this way. Poland has bought from both the US and South Korea. Singapore buys its main defence heavily from the USA, but its ancillary and small arms fields American, German, French and Israeli systems across different domains.

While Ukraine had some diversification, it remained too heavily concentrated on US technology and equipment, and now faces the risk of a worse outcome in the war.

A reminder for us as well, not to concentrate our holdings in one or two companies *also a reminder of me to avoid adding to my US REITs too, despite their high yield :)

How it Affects Investment

Heavy reliance on one foreign country for defence is a huge risk factor in the current climate. Investors should demand a premium for any country whose defence depends on a single supplier, especially the USA; its current head of state is unpredictable, which means procurement can be delayed or curtailed, leaving a country without sufficient defence infrastructure to protect itself. Investors should be aware of this risk, and weigh it more heavily.

The country risk of investing in a country which has too much dependence on USA is now serious and damning for investors. We should demand a higher risk premieum for such countries.

Portfolio Update Oct 2026: Singapore REITs at 7% Yield and above: My $120,000 Annual Dividend Plan

Utilising the sell down in shares, I have reallocated capital; Alibaba (partially), KORE and Goodwill were sold off to buy more NTT DC REIT, Yangzijiang Financial and United Hampshire US REIT. A new REIT, CapitaLand Ascendas REIT, has also been added, as I find the 7% yield a decent risk-reward ratio.

Expected Annual Dividend

Fears of high interest rates/rate hikes have sold down REIT prices, which means very high yields. This has enabled me to accumulate these REITs at prices offering a very high dividend yield; in my view, one of the best investment opportunities in Singapore to build wealth now.

 My annual dividend is now expected to be $120,000 per year.

<not investment advice; dividends not guaranteed>

Impending French Default: Singapore Interest Rates To Soar and Affect Properties Too

France carries one of the eurozone’s heaviest debt burdens, well above 100% of GDP. A default remains a tail risk, but the damage would extend beyond the French Treasury. It could spread through the banking system and eventually reach Singapore.

French banks hold substantial amounts of French government bonds (OATs), which are treated as safe, liquid assets and used to meet regulatory requirements and provide collateral. A default would force banks to recognise losses on these holdings. Given the relatively thin equity buffers banks maintain against their total assets, even a modest haircut across a large sovereign bond portfolio could erode a significant portion of their capital.

Basel capital ratios would come under pressure. Eurozone sovereign debt denominated in domestic currency has generally received a 0% risk weight under the standardised approach, meaning banks have historically needed to hold little regulatory capital against such exposures. Losses would reduce Common Equity Tier 1 (CET1) capital, while changes in credit ratings and risk assessments could increase risk-weighted assets. Defaulted bonds could also lose their eligibility as high-quality liquid assets, putting pressure on the Liquidity Coverage Ratio.

This could trigger a sovereign-bank doom loop. Weakened banks would require recapitalisation, but the government expected to provide support would itself be in default. Depositors might withdraw funds, wholesale funding could dry up, lending would contract and the resulting economic slowdown would further reduce tax revenues.

Why France Cannot Print Money like the USA

France cannot simply print money to escape the crisis. Although its debt is denominated in euros, France does not control the issuance of the currency; monetary policy is conducted by the European Central Bank (ECB). Article 123 of the Treaty on the Functioning of the European Union prohibits the ECB from directly financing governments. Unlike the US, UK and Japan, France cannot independently rely on its central bank to create the currency in which its sovereign debt is issued. Its options would be politically difficult fiscal consolidation, debt restructuring or default, alongside any conditional support available through European institutions.

France is therefore a more lIkely candidate to collapse than USA 

Global banking stocks could sell off sharply, with French lenders such as BNP Paribas, Société Générale and Crédit Agricole among the first affected. Contagion could then spread through derivatives exposures, repo markets and US dollar funding channels, putting pressure on American and Asian lenders as volatility rises.

Trickel flow of a Property Sell Down Here

Singapore would not be immune. As an open financial centre that relies heavily on global capital flows and deep US dollar funding markets, it could face higher funding costs and wider risk premiums. The Monetary Authority of Singapore (MAS) conducts monetary policy primarily through the exchange rate rather than a conventional policy interest rate, while SORA is determined by conditions in the Singapore dollar overnight interbank market. A severe global funding shock could put upward pressure on some Singapore dollar funding rates, including SORA, depending on liquidity conditions and market expectations. Any sustained increase would feed into the compounded rates used for home loans, SME financing and other property-linked debt.

Property would be one of the most immediate areas of concern for households. Many floating-rate home loans in Singapore are pegged to SORA, so a sustained increase could raise monthly instalments as loan rates reset. Owners who stretched their finances to upgrade to a condominium, recent buyers who paid elevated prices and investors with limited cash buffers would be particularly exposed. If borrowing costs rise while household purchasing power weakens, property transactions could slow and prices could come under pressure. Tighter lending conditions and forced sales by overleveraged owners would amplify the downside. Developers with unsold inventory could also face a double squeeze from higher financing costs and weaker demand. At the same time, higher discount rates would put pressure on property valuations, including those of property funds and REITs.

Singapore's banks would face indirect risks even if their direct exposure to French sovereign debt were limited. DBS, OCBC and UOB could experience mark-to-market losses on bond portfolios as global yields rise, potentially affecting CET1 capital depending on how the holdings are classified and accounted for. Lower asset prices could also weigh on wealth management fees, while weaker collateral values and rising loan delinquencies could increase credit provisions and reduce retained earnings. Higher SORA might initially support net interest margins, but any benefit could be offset by higher credit costs and weaker loan demand. Singapore's banks enter such a scenario with relatively strong capital positions, although a prolonged global shock would test their resilience.

The sequence could be a banking crisis first, a fiscal crisis next and, eventually, a property market shock for Singapore. For households with floating-rate mortgages, the consequences could be felt in every monthly instalment.

NTT DC REIT Aligns Fees With Unitholders; Singapore Companies Haven’t

NTT DC REIT has made one of the more unitholder-friendly proposals in Singapore’s REIT market. Its manager wants to replace the current performance fee of 3.5% of NPI with one linked to year-on-year DPU growth. The change is subject to unitholder approval and would take effect from FY2026/27. 

The hurdle is clear. No fee is payable at DPU growth of 3.0% or below; growth above 3.0% earns 0.1% p.a. of deposited property, and growth of 5.0% or more earns 0.2%. The manager will also waive its FY2026/27 fee if DPU falls short of the 7.80 US cents IPO forecast, and fee units will be issued at NAV when the market price is at or below it, limiting dilution. No DPU growth, no performance fee. 

Sharp Contrast to Singapore REIT Managers

Singapore REIT managers like capitaland and Keppel rarely put unitholders interest at a high priority, Hence they are unlikely to follow. Sponsor-backed REITs carry a structural conflict; the sponsor sells, and the REIT its subsidiary buys. Critics argue these REIT managers like to encash proprties at high valautions to their child REIT, while asset growth lifts fees even when per-unit returns lag. A DPU hurdle removes that cushion. 

CapitaLand and Keppel, with sponsor-linked pipelines, hence are unlikely to volunteer one, as they want to keep profits for themselves and have little interest to the Singapore investing community holding their REITs. Their current performance fee is tied to asset size and net property income growth and not to the overall dividend. This structure requires the child REIT to constantly acquire without care to the valuation bought from their sponsor.

Taking NTT DC REIT new payment structure, for the past 5 years, both capitaland and Keppel will receive no performance fee with Capitaland only successfully taking one year of fee. Below is how their track record would compare against NTT's REIT structure.

• CICT: 10.40, 10.58, 10.75, 10.88, 11.58 cents. Annual growth is +1.7%, +1.6%, +1.2%, +6.4%; 
• Keppel REIT: 5.82, 5.92, 5.80, 5.60, 5.23 cents. Annual growth is +1.7%, −2.0%, −3.4%, −6.6%; 

Japanese REIT managers has started to take care of the investing community while Singapore REIT managers are unlikely to follow suit.

Yangzijiang Financial 1H2026 Results: Deep Discount, Debt-Free, High Dividend Yield

 YZJFH remains one of the most mispriced balance sheets on the SGX. The stock trades at 19.4 Singapore cents. NAV sits at 53.21 cents per share as at 30 June 2026.

That's just 0.36x book. A 63.5% discount to stated net asset value. For a debt-free Singapore-listed company, that gap is too wide to ignore.

Start with the cash. YZJFH held S$575.4 million in cash and cash equivalents at end of 1H2026. Total liabilities were only S$118.4 million.

93% of those liabilities is deferred tax. Not money owed to a bank. Note 21 of the financial period confirms the company has zero borrowings, this period and last.

Strip out the debt book, equity investment entirely. Cash alone covers roughly 85% of the current S$676 million market cap. That's a rare margin of safety.

Now the debt investments book. This is where sceptics will push back. Gross debt investments stand at S$1,323.2 million.

Against that, YZJFH has provisioned S$520.3 million. A 39.3% blended coverage rate. Break it down further and the picture gets clearer. Performing loans (S$466.6 million) carry a 6.2% loss rate. Underperforming (S$189.4 million) sits at 27.6%. The non-performing book (S$667.2 million) is provisioned at 65.8%. That's aggressive provisioning. The 53.21-cent NAV isn't inflated by optimistic bad-debt assumptions. It has already absorbed the worst case. There is a possibility of higher profits baked in if YZJFH recovers more capital than it has provisioned for.

On dividends: YZJFH's stated policy since 2022 is to pay out at least 40% of earnings.  Annualising 1H2026's S$38.3 million profit gives roughly S$80 million for the year. At a 40% payout, that's about S$32 million. Spread across 3.4 billion shares, that's 1 Singapore cents per share. At today's price, that's a prospective yield of 5% for a debt free company

For NAV bargain hunters, this is a rare combination. A cash-heavy, debt-free balance sheet. Conservatively provisioned against its worst assets. Trading at a third of book, with a credible path back to a dividend.

YZJFH: 20 Cents Now, 40 Cents Within Reach- The NAV Math Says Maybe

I am now seeing a clear valuation anomaly at Yangzijiang Financial Holding (YZJFH). My reference point is the S$0.53 NAV per share reported as at 30 June 2026 (slide 10) link: 1H Financial reports, against a prevailing share price of S$0.20, which implies the stock trades at 0.40x book (slide 2), or roughly a 62% discount to intrinsic value. In my view, this gap is unjustified given the quality of the underlying asset base, and I see room for the stock to re-rate meaningfully from here. The company too has started an aggresive share buyback of its shares given the selling pressure, this signals a massive undervaluation.

The NAV isn't a paper number built on hard-to-value assets. YZJFH holds total AUM of S$1.82 billion (slide 5), of which S$575.4 million is cash and cash equivalents (slide 10), cash that can't be disputed or written down. On liabilities, the picture is equally clean: YZJFH carries zero bank borrowings, and 93% of its S$118.4 million total liabilities is deferred tax, not debt owed to a bank (slide 10). A balance sheet this liquid and this lightly geared gives me confidence in the NAV.

On the debt side, YZJFH has already taken its lumps, and in my assessment, conservatively so. Of the S$1,323.2 million gross debt investment book, S$667.2 million is classified non-performing; against that, YZJFH has set aside S$439.2 million in provisions, which means an expected credit loss rate of 65.8% on the bad debt (slide 8). Across the whole debt book, the provision rate is 39.3% (slide 7). These aren't light-touch numbers; they reflect the worst-case book being written down hard already, so the S$0.53 NAV isn't hiding a debt time bomb, it has already absorbed one.

The trend, in my view, is now turning in the company's favour. 1H2026 saw a S$16.6 million reversal of credit loss allowances as recoveries progressed (slide 6), and the gross debt balance has fallen for four straight periods, from S$2,639 million in FY2022 to S$1,323.2 million now (slide 6). Net assets grew 6.0% half-on-half to S$1,851.9 million (slide 10), and YZJFH has already deployed 70% of its planned RMB1.0 billion into high-yield opportunities (slide 3), on top of applying for a Capital Markets Services license with MAS to build out fund management. None of that progress is reflected in the share price.

S$0.40 as a reasonable base-case target, not an aggressive one: investing now would double an investor's capital from current levels, and the stock would still be trading below its S$0.53 NAV, which means there is a margin of safety even at that higher price. In my view, this is the disconnect the market is missing: a cash-rich, lightly-geared, conservatively-provisioned balance sheet, growing its NAV and expanding into new revenue lines, still priced at 40% of book.

Key takeaway: at 20 cents against a 53-cent NAV, with a credible path to 40 cents that still sits below book value, I rate YZJFH's share price one of the more mispriced value opportunities on the SGX.

Why taking the ETS saves you more money than taking a Plane

 Most Singaporeans default to flying to KL. It's the obvious choice — 75 minutes in the air beats a four-hour-plus train ride, so why would anyone think twice? I did. And the moment I actually put ETS and flight prices side by side, the "obvious choice" stopped looking so obvious.

Economy ETS Seat: RM110 vs a Scoot seat

An ETS ticket runs about RM110 one-way. At today's exchange rate (roughly RM3.18 to S$1), that converts to S$34.60.

A Scoot flight on the same route is currently pricing around S$83 one-way for a standard economy seat, before baggage or seat selection are added on.

That's a gap of about S$48.40 — the train comes in 58% cheaper.

Business ETS Seat: RM165 vs an SIA seat

Same story at the top end. ETS Business Class — extra legroom, wider seats, priority boarding — costs RM165, or S$51.90.

A Singapore Airlines economy seat on the same route runs about S$220.

That's S$168.10 saved, or 76% cheaper — and worth noting, that's the ETS's premium class against SIA's standard one. There's no equivalent luxury tier on the rail side; RM165 is about as good as the train gets, and it's still cheaper than a basic plane seat. (SIA fares can also climb well past S$220 depending on season — so on some dates, the gap is bigger than this.)

The Opportunity Cost of Time

Granted on a whole the journey time via ETS is slower in the city, but I think this is justified, Let's compare the time difference

✈️ Flying:

• Journey Time to Changi Airport (MRT via Tanah Merah): 40m
• Arrive ahead of check-in: 1h 30m
• Flight time (SIN–KUL): 1h 15m
• Immigration + baggage at KLIA: ~30m
• KLIA to KL city centre by car: 1h 00m
• Total: 4h 55m

🚆 Train (Location → Woodlands Checkpoint  → ETS):

• To Woodlands Checkpoint: ~1hr 15 m
• Immigration clearance + crossing, both nodes: 20m
• Walk CIQ to JB Sentral and Boarding: ~20m
• ETS, JB Sentral to KL Sentral: 4h 20m
• KL Sentral to KL city centre by car: 15m
• Total: 6h 30m

Yes, I do lose roughly 2.5 hours in travel time — but for a saving of $48.40 to $168.10, that's an easy trade to make. And once the RTS Link opens, crossing into Johor Bahru gets quicker and far more reliable, even if it won't dramatically shrink that time gap on its own. Time cost aside, this isn't a marginal win — it's a genuine financial hack, and it's the train, not the flight, that has it.

The ETS has now increased it's frequency of train service enabling us to choose more timeslots for travel