Tuesday, December 31, 2013

My Investment Portfolio (December 2013)

STI ended the year at roughly the same level as the start of it. There had not been much news flow this month as most investors are having their usual December year end holidays. Trading volume was thin. The two half day sessions during the month doesn't help things either. Lack of corporate developments was also apparent during the month as most company staff might be away on holidays as well.

For this month, I have attended the following AGMs/EGMs/briefings - OUE, UIS, Riverstone, Ezra, SIIC ENV, CM Pacific, Miyoshi and Second Chance Properties.

For my top 30 holdings, UIS had been delisted and therefore removed from the list. Pending distributions from the liquidators, UIS will be liquidated. F&N also dropped out of the list after it went ex-entitlement with respect to distribution in specie of Frasers Centrepoint shares. Stamford Land is a new entry in my top 30 list for the first time as I had been accumulating the stock for the past few months.

I have bought the following companies from the market this month - AP Oil, ASL Marine, BBR Holdings, Fischer Tech, Haw Par, Hotel Properties, Hupsteel, Kingboard, Kingsmen, Metro, Popular, Singapore Reinsurance, San Teh, Straits Trading and UOI. I have closed my positions in Elite KSB and Sound Global after their announcement of delisting from SGX. I have also reduced my stake in GRP and Rowsley.

I have accepted the following voluntary delisting/cash offers this month - Asia Power and Devotion Energy Group. I have also participated in the following scrip dividend schemes - AIMS AMP Industrial REIT, Boardroom, Cambridge, MapleTree Industrial Trust, MapleTree Logistics Trust and SP AusNet.

I have subscribed to the following rights issues - Ascott REIT, Technics Oil&Gas and Tiong Seng.

January 2014 is expected to be a quiet month until near the end of the month, where companies having financial year ending September 2013 will be holding their AGMs. I will be attending some of these AGMs to get further updates from the companies.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 31 December 2013)

Top 30 Holdings (Sing$ Denominated shares)
1. Sarin Technologies
2. Bukit Sembawang Estates 
3. United Engineers
4. Old Chang Kee
5. Haw Par 
6. Jardine C&C
7. Superbowl
8. Metro Holdings
9. Aspial 
10. SGX
11. OSIM International
12. Sing Investment & Finance  
13. Bonvests 
14. A-REIT
15. SembCorp Marine
16. Noble Group  
17. CapitaMall Trust
18. Hiap Hoe
19. Hotel Grand Central
20. Far East Orchard
21. Hong Leong Finance 
22. The Hour Glass
23. Low Keng Huat
24. Hong Fok
25. Singapura Finance
26. GK Goh
27. Hotel Royal
28. MTQ Corp
29. Stamford Land

Top 5 Holdings (US$ Denominated shares)
1. Jardine Strategic
2. Dairy Farm
3. Hong Kong Land
4. Jardine Matheson
5. Mandarin Oriental

Top Holdings (HK$ Denominated shares)
1. Fortune REIT
2. Tan Chong International

Top Holdings (Aust$ Denominated shares)
1. AV Jennings

Top 5 Holdings (CPF OA investment)
1. Keppel Corp
2. Streettracks STI ETF
3. CapitaMall Trust
5. Challenger Technologies

My Hong Kong Stock Portfolio
1. Peace Mark Holdings - Under Voluntary Liquidation

My Australia Stock Portfolio
1. GPS Alliance Holdings Limited

My Unlisted Company Portfolio
1. Automated Touchstone Machines Ltd
2. Iconic Global Limited
3. Greatronic Limited
4. General Magnetics
5. Fastech Synergy
6. Beauty China- Under Liquidation
7. Memory Devices
8. Jurong Tech - In liquidation - Compulsory winding up (Insolvency)
9. FM Holdings
10. Japan Land - In liquidation - Members' voluntary winding up
11. Zhonghui - In liquidation - Compulsory winding up (Insolvency)
12. FerroChina - Under Liquidation
13. FirstLink Investments
14. NEL Group
15. KXD Digital Entertainment - In liquidation - Compulsory winding up (Insolvency)
16. Shanghai Asia Holdings - In liquidation - Members' voluntary winding up
17. Jets Technics
18. UIS -  In liquidation - Members' voluntary winding up
19. Guangzhao Industrial Forest - In liquidation - Compulsory winding up (Insolvency)
20. Hongwei Technologies Limited (In Provisional Liquidation)

My Unit Trust Portfolio:


Saturday, December 28, 2013

Review/Reflections for 2013

It is time of the year to do a review again. Thinking through what to write for this post, I thought readers out there might be bored to read the same old things again. Because there is not much change in what I had been doing in 2013 as compared to 2012, which means there is nothing new to write. Except for adding onto my existing portfolio and also reducing my stake in some old ones, there is not much change in the way I manage my portfolio.

But of course, if I want to write about market "noises", there are plenty of them but I shall leave that to readers to follow the news instead. Just a summary, STI did pretty much the same from the start of the year to near the end. Therefore, it is really a stock picking market this year.

Coming back to my portfolio, I have lost around 17 stocks this year through M&A deals like general offers, delisting etc. A few of my top holdings had been taken out, with familiar names like Viz Branz, Guthrie GTS, UIS and maybe Superbowl. They had not been replaced and I just added onto my existing holdings to "promote" some of them up to my top 30 holdings. I guess this is a good way to re-invest back to the portfolio since I know these stocks pretty well rather than looking for new companies which I might not be comfortable with.

As usual, I have also been participating in rights issues, scrip dividend schemes etc for my existing holdings this year.

For my CPF OA and CPF SA portfolios, they are pretty much the same. For my CPF OA portfolio, I did add onto my existing unit trusts and also make minor changes to the stock portfolio. But since I did not make any contribution to my CPF since mid-2011, it is simple business of just re-investing dividends and also proceeds from M&A deals. My CPF-OA stock portfolio is a subset of my cash stock holdings, therefore, there is no need to generate new ideas just for CPF-OA stock investment. I just need to select stocks that can fill up my capital since there is a stock investment limit involved. For unit trusts, it is just adding onto my existing funds.

As usual, I have not computed my returns for the year so don't ask me about my returns. I have explained the reason for that previously and I shall not repeat here. But I do monitor my portfolio every now and then and I reckon that I did better in the first half than the second half of the year. All in after deducting my monthly expenses, my portfolio value is higher than the end of last year.

I have maintained the count of attending more than 100 company meetings this year which includes AGMs, EGMs, briefings etc. I try to change companies every year so that I will not attend the same ones every now and then. But unfortunately, sometimes I have to follow some companies closely and therefore there will be times that I attended more than one meeting of a company in a year. I have met some old friends and also make some new friends at company meetings this year.

I have continued meeting up with my friends in my investment group this year. I had been invited to other investment groups but I have not prepared to be involved in so many groups currently. As I am a full-time investor for only around 2.5 years, I need to build up my company "database" more before getting more involved in so many groups. Also, there is a time limitation as I need to be committed to the group if I joined them. Since I could not spare the time currently, I shall stick to only one group.

Finally, for my blog, I had continued to maintain my post count of around one review every month this year. Of course, I will post every now and then when I have some interesting ideas or strategy to share. Remember my style is always - no spreadsheet. Not much company specific posting also unless I have some story to tell like the UIS story. Readers who are interested in company specific research should refer to some of the links at my blog. Sorry, but I rather want to focus my blog on discussion on my portfolio and strategy of managing it. Of course, if you have any company specific questions, I will be more than happy to engage you if you ask for my comments.

I guess this is pretty much I wanted to review for 2013, and let us hope that 2014 will be a better year. I certainly hope that my readers had made money in 2013, and I will be looking forward to many more good returns in 2014. I hope you do too!


Monday, December 09, 2013

REITs scrip dividend scheme - Beware of its pitfalls

Dear readers,

I have shared previously at this blog on the scrip dividend scheme or dividend reinvestment plan (i.e. DRP). Readers who missed it previously can review it again at the link below:

Recently, during my conversation with one investor, I have discovered that he had elected to participate in the DRP for a REIT but did not choose the part cash, part share option. He choose Option 1 to let the company decide the number of units that he could be given, based on their computation. Incidentically, this REIT take the whole unit and ignore the decimal places to compute the number of units he is entitled to for each dividend payout. And for REITs, it is even worse because they tend to spilt one dividend into many components when computing the numbers. For example, below is the dividend payout for REIT M on 29 Nov 2013.

2. 1JUL-30SEP,DRP SGD 0.00025
3. 1JUL-30SEP,DRP SGD 0.00265

The issue price of the DRP is priced at S$1.0545 per unit. Assuming a unit holder holding 1000 units of REIT M, he will be issued:

1. (1000 x 0.0048)/1.0545 = 4.55
2. (1000 x 0.00025)/1.0545 = 0.237
3. (1000 x 0.00265)/1.0545 = 2.513
4. (1000 x 0.0105)/1.0545 = 9.957

Since, each component will be rounded down to the nearest whole unit, we have 4+0+2+9=15 units. Which means, this investor took home 15x$1.0545=$15.82 worth of units. If he had elected for cash dividend, he would have taken $4.80+$0.25+$2.65+$10.50=$18.20. Put it simply, he had lost 13% of his dividends in one quarter by simply opting for Option 1!

Remember, this is only one quarter worth of dividends. Since there are four distributions in one year, I leave readers out there to do your own computation on the amount of dividends he would have lost for letting the company decide on the computation. For this REIT, they have retained the residue amount of dividend so you won't get your remaining cash back as dividend if you opt for Option 1.

You might ask, if one still wants to take the scrip dividend and not cash, what should you do to minimize rounding errors? The answer is to take part cash, part scrip option. This will "force" the REIT to give back some of the remaining part of each component that is not converted into units to cash and return to unitholders.



A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

Powered by Blogger