My Investment Portfolio (End Aug 2019)

Transactions made in Aug 2019:

- Bought 1000 units of SIA at $8.92

I bought SIA when it fell below $9. Although the share price has fallen further, I am expecting prices to rebound in Nov/Dec period when it gives out dividends. This may not happen depending as there are many factors affecting the world’s economic growth. There is the trade war between USA and China, the Hong Kong protest which is into its 13^th week and Brexit. The trade war has already affected our manufacturing companies greatly in the past few months. PMI and export has gone down. If this quarter’s GDP is negative, Singapore would officially be in a technical recession.

I am surprised by how STI is still above 3,000. I have been expecting STI to go to 2,800 levels.My person opinion is that STI may rebound in the short term, but in the long run, things will go downhill (down trend). I am refraining from buying more as I want to use the opportunity to stock up on bank stocks when the down trend come. Banks stocks will likely be affected if a recession comes as risk of bad debts and writing off of these debts increase.

It will be interesting to see how the so-call defensive stocks perform in my portfolio (ComfortDelGro, Sheng Siong, ST Eng and reits) when the time comes. Did you know that in the past, telcos such as Singtel, Starhub and M1 were known as defensive counters? Look at how their share price has tanked even before any recession. All these due to government regulations in allow the 4^th telco to enter the market.

What are your thoughts about the global economy?

Dividends received* in August 2019: $1,364.82 (Singapore Technologies Engineering, Wilmar, Comfortdelgro, Raffles Medical, Singapore Post, Ireit, OCBC, Sheng Siong, Old Chang Kee, Fraser Logistics & Industrial Trust, Suntec, Mapletree NAC, Mapletree Commerial Trust)

Total dividends received in 2019: $5,905.07

Average dividends per month: $492.09

Total Portfolio Market Value: $182,984.03

Notes:

Dividends are recognised after ex-dividend (xd) date.

Average dividends per month is calculated by dividing the dividends received by 12 months regardless of the month.

Portfolio excludes Singapore Savings Bonds.

My Investment Portfolio (End Jul 2019)

Transactions made in Jul 2019:

- Bought 6,800 units of Ascendas-hTrust at $1.04 
- Sold 900 units of SIA at $9.68

Sold my SIA just before it XD and result announcement as I had a feeling I was not positive about its result announcement on 31 Jul. Also, I was able to make slightly more than the dividends amount by selling it.

I have been queuing for Ascott Reit since May 19 but did not manage to get my orders fulfilled. It has since gone up from $1.17 to $1.30. In early Jul, Capitaland announced a proposed merger to combine Ascott Reit and Ascendas Hospitality Trust (AHT). In the proposal, Ascott Reit will acquire all AHT units for S$1.0868 per unit, comprising S$0.0543 in cash and 0.7942 Ascott Reit-BT units issued at a price of S$1.30.

In view of this, I switched my tactic and purchased AHT instead at $1.04. This way, I would have a stake in Ascott in the near future, if the proposal goes through. 

Why did I not just buy Ascott directly at $1.30 then since I want to own a stake in it? Because with AHT at $1.04 and Ascott at $1.30, it is more expensive buying Ascott. Let me show you the calculations. For ease of calculating, I will exclude commissions. 

***

(A) Cost required to purchase 10,000 units of Ascott = $1.30 X 10,000

                                                                               = $13,000

This amount can be used to buy AHT = $13,000 / $1.04

                                                             = 12,500 units

After merger:

Number of Ascott Reit-BT units to receive =12,500 X 0.7942

                                                   = 9,927.50 units

Cash to receive = 12,500 X $0.0543

                      = $678.75

After merger, 12,500 AHT units will give 9,927.50 Ascott Reit-BT units and $678.75 of cash.

(B) The value if merger goes through = $678.75 + 9,927.50 X $1.30

                                      = $13,584.50

Difference in value [(B)-(A)] = $13,584.50 - $13,000

                               = $584.50

***

So a person will stand to 'gain' $584.50 by doing this. Or if the person already owns Ascott Reit, it may make sense to sell it and buy AHT and make this gain. 

The next question would like be why I purchased 6,800 units of AHT? It was a calculated move to get the least number of Ascott Reit-BT odd units. To minimise odd units, buy AHT at multiples of 6,800 (i.e. 6,800 / 13,600 / 20,400 / 27,200). The table below shows the number of units of Ascott Reit-BT and cash you can get by owning AHT. Do note that calculation excludes the policy of how they will handle the rounding up or down policy. Based on 6,800 and 13,600 units of AHT, it is like that one will get 5,401 and 10,801 units of Ascott Reit-BT respectively. 

Dividends received* in Jul 2019: $1083.95 (Singtel, Keppel Corp, Keppel DC, Singapore Post)

Total dividends received in 2019: $4,540.25

Average dividends per month: $378.35

Total Portfolio Market Value: $179,159.15

Notes:

Dividends are recognised after ex-dividend (xd) date.

Average dividends per month is calculated by dividing the dividends received by 12 months regardless of the month.

Portfolio excludes Singapore Savings Bonds.