Top Stock Highlights of the Week: Retirement Age, Kopitiam Operators, and Commodity Prices

Welcome to the top stock highlights segment where we write on interesting corporate snippets or happenings in the business world.

Kopitiam operators

You may believe that renting retail space is costly, but did you know that coffee shops also qualify as hot real estate that changes hands at eight-digit figures?

Last month, a coffee shop in Tampines called Gong Xi 21 Food Court was transacted at a mind-blowing S$41.68 million.

Covering an area of 604 square metres (sqm), the property has 18 stalls and 76 years left on its lease.

The price translates to a price per square foot (psf) of S$6,964, which is comparable to the prices of retail space along Orchard Road.

In another transaction, a coffee shop in Yishun changed hands for S$40 million, but this was much smaller at just 397 sqm.

Its psf price works out to be S$9,361, close to 50% higher than the psf price transacted in Tampines.

Then, yet another coffee shop in Jurong West Street 41 was transacted recently at an eight-figure sum, though the exact number was not revealed.

Such pricey real estate means that it may be tougher for coffee shop operators such as Kimly Ltd (SGX: 1D0) to expand.

As of May 2022, Kimly owned a network of 85 food outlets, 164 food stalls, and several restaurant outlets, while also operating a food retail division.

Retirement age

As of 1 July, Singapore has adjusted its retirement and re-employment ages upwards.

The government’s move allows more seniors to continue working and helps to expand the talent pool for organisations looking for experienced employees.

The retirement age has been raised from 62 to 63 years, while the re-employment age has inched up to 68 years from 67 years.

Also, employees who are 55 and above who are hired will qualify for re-employment if they have worked at the same employer for two years or more.

The government intends to slowly raise the retirement and re-employment ages to 65 and 70, respectively, by 2030.

It’s gratifying to know that you will still have a job in your silver years and that you cannot be terminated on grounds of age before the statutory retirement age.

However, the question is whether people still wish to work till 70 in the future.

If you start investing at an early age, you can slowly build up a retirement fund that will help you to retire earlier than the statutory age.

By building up a stream of passive income through dividends, you can even choose to retire earlier and enjoy your golden years in comfort.

Commodity prices

Commodity prices have been falling sharply after touching a record-high last month.

The Bloomberg Commodity Spot Index, which tracks the movement of 23 energy, metal and crop futures, has plunged more than 20% since then.

This decline came as investors fret over a possible recession that will dampen demand for commodities such as petrol and wheat to coffee and nuts.

These falling prices will certainly go a long way to easing soaring inflation, which has hit a 13-year high in Singapore in May and a 40-year high in the US.

Supply chains are still expected to remain clogged in the near term due to the Russia-Ukraine war, and this snarl may keep prices elevated in the longer term.

A recession is also just a possibility and as China’s economy rebounds from the pandemic, more demand may push prices back up again.

The swing in commodity prices will affect players such as blue-chip commodities giant Wilmar International Limited (SGX: F34) as well as Olam Group Ltd (SGX: VC2).

The movements in commodity prices will also impact smaller players such as Golden Agri-Resources Ltd (SGX: E5H), Kencana Agri Ltd (SGX: BNE) and Bumitama Agri Ltd (SGX: P8Z).

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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.

The post Top Stock Highlights of the Week: Retirement Age, Kopitiam Operators, and Commodity Prices appeared first on The Smart Investor.