Wednesday, 2 October 2019

My Investment Portfolio (End Sep 2019)




No transactions were made in Sep 2019.

I applied for 50,000 units of Lendlease Global Commercial Reit’s (Lendlease Reit) IPO. If I am lucky, I could get 12,000 units (or less) depending on the ballot result and how oversubscribed it is. If I am unlucky, I will get 0 units and incur the application fee of $2. Whatever the case, the refund amount will be in time for Keppel DC’s preferential offering. What great timing.
(ps: I just found out that I got 5,200 units! Lucky me. )

Many people have written comprehensive reviews on Lendlease Reit IPO so I shall not go into those. While Lendlease Reit IPO is not fantastic, my other main reasons for buying are because (i) marjority of its business is in Singapore and (ii) its the yield and P/NAV is slightly better than those tier 1 Reits (i.e. lower P/NAV and higher yield). It has been a long time since there is a Reit IPO with marjority of its businesss in the local market. The last was Keppel DC Reit if I remember correctly and that was a few years back! In the event, Lendlease Reit underperforms, its valuation and price could be benchmarked against tier 2 Reits such as Starhill Global which is trading below NAV and has a yield of around 7%. Adding Lendlease Reit will diversify my Reit portfolio since I currently have only 1 commercial reit, which is Mapletree Commercial Trust.

Keppel DC Reit preferential offering is in early October. Its share price has rose up on the news of the acquisition which would boost the dividends and the fact that data centres industry valuations are highly due to the projected demand in data centres.

Mapletree Commercial Trust has also announced plans for private placement and preferential offering to acquire Mapletree Business City (Phase 2) (MBC II). This would mean that Mapletree Commercial will own the entire development of Mapletree Business City Development. The acquisition will provide accretion of 4% and 2.2% to the distribution per unit and net asset value.

Dividends received* in Sep 2019: $175.57 (Keppel DC)

Total dividends received in 2019: $6,080.64



Average dividends per month: $506.72


Total Portfolio Market Value: $184,454


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.

Monday, 2 September 2019

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 13th 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 4th 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.




Thursday, 1 August 2019

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.