My Investment Portfolio (February 2021)
STI ended this month at 2949 points. Concerns about increasing bond yield and inflation had been on the mind of investors this month. Also, there had been sector rotation again from new economy stocks to old economy ones. These had capped STI performance for the month.
For my top 30 holdings, Tat Seng had been a major mover after announcing evaluating feasibility of a possible spin-off and listing of their PRC business. Bukit Sembawang Estates also did well after receiving upgrades from a few brokerage houses. Another mover, EnGro posted a decent set of full year results. iFAST though, was a main laggard as investors sold off new economy stocks, but remained in top spot. Reits in the list did not do well too as investors reacted to increasing long term government bond yield in US.
I have bought the following companies from the market this month - AF Global, Amara, AP Oil, AV Jennings, Ban Leong, Brook Crompton, Captii, Cheung Woh, Chuan Hup, Delfi, F&N, Hong Fok, Hong Leong Finance, Hongkong Land, Hotel Properties, Hotel Royal, Indofood Agri, Koh Brothers, Mandarin Oriental, Metro, Noel Gifts, NSL, OUE, Overseas Education, Pan Hong, Singapura Finance, Sing Investment & Finance, Stamford Land, UIC, Wing Tai, Yoma and Yeo Hiap Seng. I have also reduced my stake in First REIT R.
I have accepted the following voluntary delisting/cash offer this month - IP Softcom. I have also participated in the following rights issue - First REIT.
It had been another volatile month for stock markets around the world. With most companies having completed their full year result reporting, it is time for me to sit down and reflect on some of those results. I would not be making major changes to my portfolio in response to those result announcements, as most had been expected. However, I will take those results into consideration when deciding which stocks to add into my portfolio going forward. With the sell off in new economy stocks, they have started to look attractive again. I will remain prudent though and keep in mind on their valuation when deciding which candidates to introduce into my portfolio.
My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 26 February 2021)
Top 30 Holdings (Sing$ Denominated shares)1. iFAST
1. Jardine Strategic
2. Mandarin Oriental
3. Hongkong Land
4. Jardine Matheson
5. Dairy Farm
Top Holdings (HK$ Denominated shares)
1. Tan Chong International
2. Shangri-La Asia
Top Holdings (Aust$ Denominated shares)
1. AV Jennings
Top 5 Holdings (CPF OA investment)
1. Streettracks STI ETF
2. CapitaLand Integrated Commercial Trust
4. Keppel Corp
5. Challenger
My Hong Kong Stock Portfolio
1. Peace Mark Holdings - Under Voluntary Liquidation
2. Alpha Professional Holdings Ltd (formerly known as Z-Obee Holdings Ltd)
My Australia Stock Portfolio
1. GPS Alliance Holdings Limited
My Unlisted Company Portfolio
1. Iconic Global Limited
2. Dongshan Group Ltd (formerly known as Greatronic Limited)
3. General Magnetics
4. Fastech Synergy
5. Memory Devices
6. Jurong Tech - In liquidation - Compulsory winding up (Insolvency)
7. FM Holdings
8. Zhonghui - In liquidation - Compulsory winding up (Insolvency)
9. FerroChina - Under Liquidation
10. FirstLink Investments
11. NEL Group
12. Jets Technics
13. Guangzhao Industrial Forest - In liquidation - Compulsory winding u p (Insolvency)
14. Hongwei Technologies Limited (In Provisional Liquidation)
15. FDS Networks Group
16. Aussino Group - In Liquidation - Creditors' voluntary winding up
17. China Oilfield Technology
18. China Milk Products Group - Under Liquidation
19. Pacific Healthcare
20. Eratat Lifestyle - In Liquidation
21. Fung Choi Media - In Liquidation
22. K1 Ventures - In Liquidation
23. DMX Technologies - In Liquidation
24. Europtronic Group
25. China Sun Bio-chem Technology
26. Attilan Group
27. Winas - In Liquidation
Labels: Portfolio
posted by ghchua at 5:32 AM
31 Comments:
Hi mr chua
Do you see the rise in bond yields an opportunity to add more shares that have fallen due to it? Especially in reits
Thx
Hi 1,
Increase in government bond yields does affect equities as now risk free assets yield higher interest, so why take the risk investing in stocks?
Ultimately, it all boils down to valuation. As I have said in the last part of this blog post, valuation becomes more important now. When bond yields are low, you can always try to buy tech stocks trading at sky high valuation and still make money. When bond yields are higher, you would have to be more careful now. It is not a simple concept whereby you just buy stocks that have fallen. Ultimately, valuation matters and even when some stocks had fallen, they might still be trading at expensive valuation.
As for REITs, I would say it depends. If a REIT can deliver sustainable increase in DPU over the long term, short term market correction due to higher bond yield might be a good opportunity to add some of these high quality REITs into our portfolio. However, do be careful as not all REITs are created equal. Some REITs are trading at high yield basically because of their poor track record. Raising bond yield will just push them lower as their DPU had been decreasing in the long term. Therefore, do avoid these REITs if you can.
Hi Ghim Hock, what are your thoughts on SPH given:
1. The recent Coupang IPO news
2. It's turn towards property, which seems to be in line with many of your holdings e.g property companies
3. It's huge cash pile.
Thank you!
Hi Jem,
My thoughts on SPH....
1. Coupang IPO though positive, is only a one off gain if SPH decides to dispose its stake. They might decide to hold it though. But ultimately, it is just a very small stake and will not move the needle much.
2. I do like asset backed companies like property ones. But valuation must be decent enough. For SPH, I don't see it as attractive as some of those companies that I hold as my top holdings. Though I do hold SPH in my portfolio, it is not one of my major holdings.
3. I don't think SPH is holding onto a huge cash pile, if you take into account the amount of borrowings they have in their balance sheet.
Hello Mr Chua,
What is your views on OUE?
Notice that U are still buying this stock regularly for the last few months in spite that it has been a non-performancer for the last few years??
and also its link to the Riady family - shouldn't U be wary??
thanks much, elizabeth
Hi Elizabeth,
OUE does have value if you look deep into the company. Yes, it is related to the Riady family but its assets are mostly in Singapore and not in Indonesia. Most importantly, most of their assets are situated in prime areas in Singapore. Names include OUE Bayfront, OUE Downtown, One Raffles Place, Mandarin Orchard Singapore, Mandarin Gallery, Crowne Plaza Changi Airport etc.
If you look back at their track record, they would always dish out special dividends whenever they have excess cash after selling their assets. My concern is really their high gearing, but some of them are in their listed REIT. And OUE Commercial REIT already announced proposed disposal of OUE Bayfront, so that will reduce some gearing on the group as a whole.
Trading at around 0.28x book value currently, I believe that the stock is cheap. The company had also bought back shares consistently from the market lately, and cancelling them after buying back.
As for the performance of its shares, yes, it had underperformed the market for the past few years. I can't speak for the market, but one reason might be the market might be giving them a "Riady discount" and the stock is not covered by any brokerage house.
Thanks very much, Mr Chua for sharing your insights on OUE..
Hi Mr Chua, may I know yr view of bund center now ?
Hi bamboo,
There is no change in my previous view on Bund Center. For FY20, their revenue for hotel and property leasing was affected due to travel restriction and temporary closures. But they have paid out a higher dividend in FY20, declaring and paying out an interim dividend of 2cts per share, as compared to 1cts per share in FY19.
Their cash level is still decent at around S$159m, despite being a Covid disrupted year and paying out a higher dividend. Balance sheet is still neat with zero borrowings.
Hello Mr Tan, new reader here! Thank you for bein so generous with your monthly insights, really excited to read all your posts and comments! May I know which broker do you use? And also is it advisable to invest each time in a lump sum every 2-3 months or is it better to invest a little each week/ day? I’m really new at this, would appreciate any help and advice. Thank you!
Hi whealthker,
Thank you for dropping by at my blog!
I think for brokers, it is quite a personal question. Different investors have different needs. Some go for cheap brokerage charges, some go for good service, some go for good online tools etc. It really depends on individuals and I would not say which one is better. For me personally, I go for cheap brokerages so I normally use Lim&Tan, DBS Vickers (cash upfront account, not the normal one) and iFAST. There are more cheaper ones out there like Tiger but they are nominees rather than CDP settled accounts, so I don't use them.
As for the frequency of investing, it depends on what you are investing in. For more volatile ones like individual stocks, it will be better to invest consistently at least once every few days or every day. For ETFs, unit trusts etc, they are more diversified and less volatile, so you can do one lump sum investment every month.
Thank you for the reply! I am looking to buy individual stocks to hold for the long term (inspired by the many dividend income investors like yourself in Singapore), shall do more research on stock picking and all. And I will definitely continue viewing your blog.
Thanks again for sharing all your insights and analysis!
Hi Mr Chua, may i have your view on Aztech Global IPO? Thanks.
Hi Unknown,
I don't like the way Aztech Group delisted the company from SGX a few years back, divested all their non core assets after delisting and then relist the company again as Aztech Global at a higher valuation.
Therefore, I will not be looking at the IPO at all, no matter how attractive is the company.
Hi ghchua,
Neither would I! I will not want to be fooled the second time.
Hi! Mr Chua, thank you for sharing your insights on Aztech IPO.
Shifu Chua
Noted that inflation is going up, and REITs prices mostly dropping especially like the previous great ones like ME8U, AJBU etc. Does it mean the current valuation for REITs is too high as the REIT yield is not attractive after considering inflation? At what level of yield, then REITs will be OK to enter again? Are these REITs stopping growing and the yield will be standstill?
Thanks
SHifu Chua
Which Reits listed in SGX will be more inflation-proven?
Thanks
Hi Sunny,
I think I have discussed about REITs previously in other blog post comments here. You can check back some of these comments to gain some insights.
My short answer is - I don't like data center REITs like Keppel DC Reit at current levels. The yield is too low and valuation is not cheap at around 2x book and above. Mapletree Industrial REIT yield is higher at 4%pa+, but my pick for Industrial REIT is still Ascendas REIT as their yield is higher and they are bigger than the other two.
As for the level of yield that you are looking at, I think it depends on the sector. There is no one size fits all kind of yield. Some sectors are trading at lower yield because they are deemed more stable or higher growth. But that changes all the time and it really depends on what you are looking at that particular point.
I don't think REITs will stop growing. They are always trying to do enhancements to their current assets and buy more assets to increase their distributions. But sometimes, their unit price overshoot, making them expensive relative to other alternative yield assets like bonds.
Inflation is always an ugly animal for yield instruments like REITs. Which means, when it goes up in a big way, almost all the REITs will go down. We have seen it during previous years when US Fed starts to increase its interest rate aggressively.
transit conc can accept ?
cei can accept offer ?
Hi steven,
For Transit Mixed Concrete, I have accepted the offer as the family and UOB had sold out. I cannot rule out though that its share price might increase after the offer closes, depending on the new plans of the incoming controlling shareholder. Also, construction sector seems to be recovering slowly.
CEI I have accepted the offer since the offer is deemed fair and reasonable by the IFA. However, I have taken some of it in AEM shares in order to ride on its future growth, together with CEI.
Shift Chua
Do you think CDL a good buy and hold at this moment? Did not see you buy CDL but others recently, but which property company got good potential when Sg property continue rocketing up.
Thanks
Hi Sunny,
If you check back my previous blog posts, I did bought CDL in September and October last year. At that time, the stock was badly sold down due to their investment in Sincere. I also remembered that you questioned my decision to buy family controlled companies like CDL, Heeton, Hong Fok, HPL, etc during that time.
Since then, I think CDL had recovered a bit of ground together with the general market. Therefore, I searched elsewhere for value and bought other property developers. But I still like the stock though, as now their investment in Sincere had been mostly impaired. Their next catalyst could be a listing of their UK hotels from M&C in a form of a hospitality REIT.
I won't go into specific names but property developers and hotel stocks in general had been trading at a decent discount from their book value for quite sometime. I guess if you follow my blog posts every month, you would have known which companies that I have been buying regularly. I don't buy stocks only for their potential earnings but rather most importantly, they must be trading at decent valuation. Don't chase to buy a stock or sector just because everyone is buying.
Shifu Chua
I have learnt from you.
Thanks a lot and hope you could continue guiding me. I wish I could have your wisdom ❤️
Hi GH,
How are your mutual funds doing?
Regards,
Edward.
Hi Edward,
Unfortunately, FSM has discontinued their public profile unit trust portfolio. Therefore, I could no longer update it publicly.
However, in general, my unit trust portfolio is moving along quite nicely. I still maintain overweight positions in emerging market equity funds, Japan equity fund, Singapore equity funds and Asia equity funds. Underweight positions in US fund and European fund. Neutral position in Global equity fund though, as they are quite general so the risk is managable.
Hi GH,
Thanks for the reply.
You are positive on Asia including Japan and emerging market.
The last UT portfolio of yours that I follow have 23 funds; S$132,816.90 invested, Current value S$223,761.33 and S$90,944.43 (68.47%) unrealised profit. The bulk of the funds are managed by OCBC. Any further reviews and advice after the long period of about 4 years ?
Hi Edward,
There are some changes but if you are referring specifically to Lion Global funds (formerly known as OCBC), they are mostly single country Asia equity funds like India, Korea, Taiwan, Thailand and Malaysia equity funds plus a short duration bond fund. These are actually small bets for specific positioning in these countries. But due to Covid-19, I have not been adding into those funds as it is a global crisis. I have been mostly buying regional funds like emerging market equity fund, Asia equity fund, Japan equity fund and Singapore equity fund.
However, Korea and Taiwan had done quite well since last year as these are countries which have a lot of tech companies in the index. India is ok, but Thailand and Malaysia had been disappointing. But I have been looking to add onto laggard markets like Malaysia and Indonesia lately. For Indonesia exposure, I am using Aberdeen Standard Indonesia Equity Fund.
I think going forward in general, some of these funds might underperform due to the expected raising interest rate environment. More volatility is also expected. If you are asking me specifically which fund to invest, I think it is a difficult question for me to answer. This is because I am only using CPF funds for my unit trust portfolio, so therefore I did not look at those funds that are not in the CPF Investment scheme. But in general, I believe value will outperform growth this year. So, if you are selecting funds, look for fund managers which exhibits a value bias like Franklin Templeton, Harris Associates etc. These are funds which have mostly old economy stocks rather than new economy ones like tech.
Hi GH,
Thanks for the reply.
The key word is Tech. I cannot help noticing the key word "China" is missing.
And, also underweight in US Funds is also in extension underweight Tech.
Microsoft, Apple, Nvidia, Micron, Qualcomm, Alphabet, Verisign etc are big components in such tech centric Funds.
Just my observations. However, your reply affirmed my own understanding of the current market. Much Thanks & appreciated.
Hi Edward,
I don't have a specific fund for China as a global emerging market fund will have a decent allocation to China. Therefore, I will add onto my global emerging market fund to get that exposure.
I don't have sector specific fund in my UT portfolio now. I only do global, regional and country specific allocations. Though a US equity fund will have exposure to big tech companies, the risk is still managable as it contains stocks from other sectors.
I also don't like funds that comes with too narrowly focused to themes like green energy, Gen Y/Z spending etc. We have seen how the likes of internet funds, guaranteed funds etc underperformed last time. It is better to structure your portfolio based on country, and let those funds do sector allocation for you.
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