My Investment Portfolio (October 2023)
STI continued its downtread for October to end at 3067 points, down around 4.8% as compared to last month closing. Concerns this month include Israel-Hamas conflict which could translate into war in Middle East, rising US long duration bond yield, rising oil prices etc. Volatility had also increased significantly in the markets this month, as compared to previous few months. REITs had also been sold off due to concerns of higher interest rate for longer, though they did recovered some lost ground towards the end of the month.
I have attended the following physical AGMs/EGMs/briefing this month - Wing Tai, Spindex, Chuan Hup and Lion AsiaPac.
For my top 30 holdings this month, most stocks had lost ground due to general market weakness. Samudera Shipping dropped out of the list after announcing a profit warning for their 3Q23 result. But there were a few outperformers. iFAST did well after announcing their 3Q23 result as their ePension project in Hong Kong had started to contribute revenue. Bonvests and LHT also did well.
I have bought the following companies from the market this month - AF Global, AP Oil. Asia Enterprises, Baker Tech, Bund Center, Captii, Chemical Industries, Credit Bureau Asia, EnGro, F&N, Frasers Property, Goodland, GuocoLand, Heeton, Ho Bee Land, Hongkong Land, Hock Lian Seng, Hong Leong Asia, Hong Leong Finance, Hotel Grand Central, Hotel Royal, Hotung, Huationg Global, Isetan, Jardine Matheson, Koh Brothers, Lum Chang, Mandarin Oriental, Metro, MYP, New Toyo, Pacific Century, PEC, SBS Transit, SHS, Sinarmas Land, Singapura Finance, SingTel, Stamford Land, Stamford Tyres, Straits Trading, Trendlines and Tye Soon. No sale trade was done.
I have participated in the following preferential offer/rights issue - AV Jennings.
Next month will be another quiet month although some companies will be announcing their 3Q23 results and updates. With only two months left before the end of the year, it will be a good time to slow down and do some reflections before the year draws to a close. Markets are expected to be more quiet as we head towards the holiday season so I don't expect much big movements. Therefore, it is quite likely that this is going to end up with another negative year for equities in general as well.
My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 31 October 2023)
Top 30 Holdings (Sing$ Denominated shares)2. Hongkong Land
3. Jardine Matheson
5. DFI Retail Group
Top Holdings (HK$ Denominated shares)
Top Holdings (Aust$ Denominated shares)
1. AV Jennings
1. Streettracks STI ETF
3. CapitaLand Integrated Commercial Trust
5. Best World
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 up (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. Fung Choi Media - In Liquidation
21. DMX Technologies - In Liquidation
22. Europtronic Group- In Liquidation
23. China Sun Bio-chem Technology
24. Attilan Group
25. Transcorp
Labels: Portfolio
posted by ghchua at 6:49 PM
19 Comments:
Hi Mr Chua, May I have your opinion on - is it still ok to invest (MT / LT) in Chuan Hup and Wing Tai?
thanking U in advance, Elizabeth
Also on Metro, Bukit Sembawang & Hong Fok..thanks much
Hi Elizabeth,
I think I don't have a license to give stock advice or recommendation here but I will just touch on these few stocks and it depends on your risk assessment and also valuation in order to decide whether to invest in any of them.
But overall, I think these stocks are trading at decent valuation, especially Metro due to its China exposure. If you want a developer with pure Singapore exposure, then Bukit Sembawang fits the bill. Hong Fok also has a majority of assets in Singapore, while Chuan Hup is more focused on Australia. Wing Tai has a mixture of mostly Singapore and Hong Kong, but they have a retail business which is doing quite well.
To conclude, I think stocks in real estate segment like these few stocks had not done well lately due to higher interest rate environment. However, I do believe that these companies have holding power to tide through the current tough times. They have done it before without raising funds from shareholders, and I believe that they will do so again this time round.
Thanks much, Mr Chua. I am already holding shares in these stocks ...just wondering should I hold (is it still worthwhile)or should cut loss as their price had dropped a lots lately.
Hi Elizabeth,
To sell or hold, I think it depends on your investment horizon. No one would know best except yourself. I don't think it is wise just to sell because of share price movements. Focus on the fundamentals of the companies instead and determine whether they will be able to survive in higher interest rate environment. Of course, valuation matters too and you would not want to sell a good stock cheaply to the market, just because it had hit your "cut loss" target price.
Hi Mr Chua,
I can see that you are still buying asia enterprise, may I know what's the motivation behind it? A turnaround story?
Hi Unknown,
To be very frank with you, Asia Enterprises is a boring business, as they are involved in distribution of steel products. But they have a conservative balance sheet with zero borrowings. This enables them to pay dividends to shareholders every year since IPO. This business is quite capital intensive and therefore inventory turnover rate is important. It is also affected by volatile steel prices, which makes its profit margin difficult to predict.
However, I think it currently offers a decent margin of safety in terms of share price. The company had managed to ride through various business cycles previously, and I think they will also do so in the coming years ahead.
Dear GH Chua,
I am a retiree looking to invest to get some passive incomes. If you were me, given options to invest in Golden agr., Bumitama agr. and First Resourse. Which would you choose? Thank you.
Faith
Hi faith,
If you are investing for passive income, why the interest in plantation stocks? These stocks are known to have volatile earnings profile, due to fluctuations in margin and CPO prices. I would not recommend any of them if you are investing for stable income.
Dear GH Chua,
Oh dear, for retirees who want to buy stocks for 5% of passive income, which is advisable? I do not like reits. Thank you.
Faith
Hi faith,
I don't think I have a license to give stock recommendations so I will just give general comments here.
In the stock market, there is no such thing as guaranteed returns. Even if a stock gives you 5%pa yield or even higher, it does not mean that it is risk free as you can lose your capital.Therefore, I think a better strategy is to look at stocks in defensive sectors, while being careful not to pay a premium for them.
If you don't like REITs, you can look at property stocks with a substantial allocation in investment properties, so that they can generate recurring rental income to pay dividends to shareholders. Sector wise, you should look at stocks in defensive sectors like utilities, consumer staples, transportation, telcos etc. These sectors are more stable in a sense that their income is quite sticky.
Having said that, it does not mean that one have to only stick to defensive sector stocks. Some stocks in other sectors do give decent dividend year in year out, but you have to be selective and only pick those with proven track record. Also, it is important not to overpay for them.
Hope the above helps.
Hi Mr chua
I see that ur style of investing is on value stocks and waiting for value to unlock. But i oso see reits on ur portfolio. Were they there before ur value Investing style?
And will u add on to reits if they were beaten down enough such that value starts to arise? Thanks.
Hi mitchell,
Just to clarify. I am not a pure value investor. I have bought stocks for growth, yield etc, but my main focus is on value. So, you might have noticed that most of the stocks are bought in for value, mainly at discount from book value rather than for earnings growth.
As for REITs, one must understand that the rebound recently is based on interest rate outlook. Which means, you should not be restricted to only the REIT sector if you wish to ride on this theme. Property stocks will also benefit from lower interest rate, just to give you an example.
As to whether I would add onto my REIT holdings, I have always been cautious on them, mainly because some of them have been raising funds from the market frequently be it via rights, PO, placements etc. I seldom buy them from the market, but choose to participate in them more via those fund raising exercises or scrip dividend scheme. I have also been cautious on overseas REITs listed on SGX, mainly because of asset-liability currency mismatch in some of them.
Hi,
Do you have guocoland in your portfolio? it has been trading at very steep discount against NAV /RNAV, very stable dividend of 6cts (could give more though) and very high quality investment properties. Its development projects are all selling like hot cakes, so the cash flow is very healthy. Do you think privatisation is on the cards? or major restructuring like 'Reit-ing' its assets is on the way?
Desmond
Hi Desmond,
I think if you go through my blog posts in detail, you would have noticed that I had been a buyer of Guocoland for quite sometime.
The main issue for me is that they are quite a big risk taker as compared to some other developers listed on SGX. This can be seen from their landbank in Lentor area, and also quite high gearing. However, as you have mentioned, their execution seems to be ok, as sales had been going well.
As to your question of REIT or privatisation, I think we should not speculate on anything at this moment. Their focus currently is to execute those projects well and deliver returns. It is also difficult to do a REIT listing currently as interest rate is still high and valuation would be an issue.
Hi Chua,
Congrats on the Noel gift, the selling price of the Noel building is excellent. Noel gift will be sitting on 43 mils net cash post transaction, I guess a special dividend is on the way....
Hi Unknown,
I think we should not count the eggs before they are hatched. Many things can happen between now and the eventual sale. I think I will only be happy when they actually completed the sale and received the money.
Based on their track record, I think they should declare a special dividend from the sale. The amount though, is still unknown until they received the money I guess.
Keep your fingers crossed! :)
It will be better that the net proceeds is invested into the business which will be better equipped in generating more revenue for the shareholders.
Hi WTK,
If you take a closer look at Noel Gift balance sheet, they have more than $11 million in cash, enough for their existing gift business. Unless they are going to do property development or investment properties again, they should at least return some of the proceeds from the sale. This is especially so as they have been selling down their investment properties portfolio for the past few years.
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