My Investment Machine 2019 Year End Review

*figures exclude $369.24 received on 31 Dec 2019 from Ascendas-hTrust*

Ironically, when I did the 2018 year end review, I was expecting the market to tank and dividends yield to drop as companies payout less dividends. Thankfully, I was only half right. The market did not tank and STI Index even went as high as 3,400. But my dividends yield did drop. The unrealised gain which was wiped out, that I shared about in  end 2018 year has been reinstated. 

In 2019, I received $7,308.07 of dividends. My average yield decreased to 3.71% and dividends received increased by only 5.01%. This is despite a 27.21% increase in portfolio value. What a disappointment. My investment capital thus far is $181,301.11. 

In terms of total dividends received over the years, I have received $28,653. It is a slow ride up for me. Seeing how other financial bloggers getting this figure to $1 million is a dream and motivation for me. 

This year, I made 18 transactions. 12 were buy/add transactions while 6 were sell. This is the highest number of transactions I made in a year since I started trading. Interestingly, 7 of the transactions were due to scrip dividends, preferential offerings, rights issues and delisting of shares. I know that I need to make more transactions over the market to deploy more of my resources into the market if I want to achieve some form of financial freedom.

2020 is going to be a busy year. With less time to monitor the market, with the 50 price alerts I have set, I will be able to trade effectively at appropriate junctures.  I am expecting Singtel to cut its dividends as this is the last FY it is paying a fixed dividends amount.  Keppel Corp is another share to look out as Temask may or may not control 50% of its share come end 2020.

All the best in the year of 2020. May you and your love ones be healthy, happy and safe. May the rat year bring you lots of luck!

My Investment Portfolio (End Nov2019)

Transactions made in Nov 2019:

-  Bought 1,200 units of Mapletree Com Tr at $2.24 during preferential offering (excess rights was alloted to other family members)

I am still waiting for an opportunity to offload my SIA shares. In the meantime, I had subscribed for the rights issue of Ascendas Reit along with excess rights! Ironically, I am building up my portfolio through rights issue and preferential offerings! 

If the market remains at this level, I will cross the $200k portfolio value in December when the Ascendas Reit rights issue application result is out. Fingers crossed.

Dividends received* in Nov 2019: $539.17 (Frasers Logistics & Industrial Trust, Singapore Post, SIA, Ascendas Reit, Ascendas Hospitality Trust, Mapletree North Asia Commercial Trust)

Total dividends received in 2019: $6,731.56

Average dividends per month: $560.96

Total Portfolio Market Value: $199,505.74

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 Oct 2019)

Transactions made in Oct 2019:
- Bought 2,600 units of Lendlease Reit at $0.88 during IPO (Was balloted 5,200 units, but allotted half to family member)

-  Bought 1,100 units Keppel DC Reit at $1.71 during preferential offering (excess rights was alloted to other family members)

I was surprised by the news of Temasek's proposal to gain control of Keppel Corp. It is good news for me since Keppel Corp is ranked number two in my stock portfolio. With the announcement, Keppel Corp overtook ST Eng to become number one. All this without me doing anything. The share price is probably going to hover around the offer price over the next 12 months, bearing unforeseen circumstances. 

In the meantime, I am looking at off loading SIA. I am expecting its share price to continue on the upward trend over the next couple of days till it announce its result and possibility when it is in CD (dividends). 

Dividends received* in Oct 2019: $111.75 (Mapletree Commercial Trust, Suntec Reit)

Total dividends received in 2019: $6,192.39

Average dividends per month: $516.03

Total Portfolio Market Value: $195,318.69

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 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.

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.

My Investment Portfolio (End Jun 2019)

Transactions made in Jun 2019:

- Sold 2,600 units of CapitaCom Trust at $2.11

- Bought 6,000 units of Astrea V3.85% at $1 (IPO)

Dividends received* in Jun 2019: $149.1 (Accordia Golf Trust)

Total dividends received in 2019: $3,456.3

Average dividends per month: $288.03

Total Portfolio Market Value: $184,320.84

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 May 2019)

Transactions made in May 2019:

- Bought 1,000 units of Capitaland at $3.50

- Bought 800 units of SIA at $9.38

Just last Month, STI broke 3,400 level. Within a span of one month, STI has fallen to mid 3,100 level all because of one man, Donald Trump. From news of a possible trade deal between USA and China to news that the talks broke down. 

While these were happening, I bought SIA and Capitaland. I still have 2 more other orders yet to be fulfilled. The month of June will be exciting as it will give stronger signals on whether the bears has taken over. After all it has been more than 10 years since the last recession. 

In terms of dividends received, I received less dividends this month compared to a year ago. This is mainly because I divested Netlink Trust and failed to invest its proceedings into another stock in a timely manner. At this rate, I may face a decrease in total dividends this year compared to last year. 

For OCBC and Raffles Medical, there maybe slight adjustments to the dividends received as I may opt for scrip dividends. 

Dividends received* in May 2019: $1609.81 (Jumbo, Raffles Medical, Mapletree North Asia Commercial Trust, Ascendas Reit, Frasers Logistics & Industrial Trust, Sheng Siong, ComfortDelGro, Wilmar, OCBC, Suntec Reit)

Total dividends received in 2019: $3,397.20

Average dividends per month: $275.6

Total Portfolio Market Value: $168,684.36

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 Apr 2019)

No transactions were made in Apr 2019.

STI continues to climb upwards and broke the 3,400 mark. No one can point out confidently whether it will go  to the pre-sub prime crisis level of 3,800 or go back down to 3,000 or even 2,800 levels. 

I am glad that the portfolio which I have painstakingly built up now has more reputable companies in the top five. The top 5 holdings I have now account for over 53% of my portfolio. 

At this moment I can only continue to stay invested and try to be as disciplined as possible. There are temptations to divest off some stocks, especially REITS as some of them have reached all time highs. Take for example Ascendas Reit, it has broke the $3 barrier. Mapletree Commercial Triust and Keppel DC Reit are two other examples as they are at $1.93 and $1.51 respectively. Although ST Engineering has not reach its all time high, it may break the $4 level, a level which it last traded in 2013. 

At this moment, I am monitoring SGX, SIA, Ascott Reit and Capitaland. I am also reading up on the two upcoming Singapore IPOs (i.e. ARA Hospitality Trust and Eagle Hospitality Trust). 

Dividends received* in Apr 2019: $1030.82 (Mapletree Commercial Trust, Keppel Corp, ST Engineering) 

Total dividends received in 2019: $1,697.39

Average dividends per month: $141.45

Total Portfolio Market Value: $165,728.03

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.

Keppel DC Reit First Quarter 2019 Financial Results

I seldom share on the financial results due to a lack of time and inexperience in looking through financial statements/results.

Here are some takeaways I had from Keppel DC Reit First Quarter 2019 Financial Results which was released on 15 Apr 19.

Please DYODD. I am vested in this stock.

DISTRIBUTION PER UNIT (DPU)

The gross revenue has increased by 26.4% to $48 million. More importantly, the distribution per unit (DPU) has increased by 6.7% to 1.92 cents compared to last year, mainly due to the contributions from its new acquisitions of maincubes Data Centre in Germany, and Keppel DC Singapore 5.

I am always thankful and appreciate it each time DPU increases. It is the hard work of the trust manager and its fore-sight. Many a times, we take it for granted that DPU is to remain the same or increase. If you want a case of decreasing DPU, go look through Sabana Reit’s DPU from the period of 2011 to 2015.

OCCUPANCY LEVEL

Currently, Keppel DC Reit overall occupancy level is 93.2%. While majority of its data centres are at 100% occupancy level, there are a couple which is pulling the overall occupancy level down. The main two data centre dragging it down are the Basis Bay Data Centre in Malaysia and Keppel DC Dublin 1 in Ireland whose occupancy levels are 63.1% and 61.8% respectively.

Keppel DC Dublin 1 occupancy level has actually improved slightly. Last year, its occupancy rate was 56.6%. But then, they have shared that the low occupancy level was because that data centre was an old asset. This was the reason why asset enhancement is being carried out at the site to improve energy efficiency. Hopefully, when this is completed in 2020, the occupancy level will increase.

As for Basis Bay Data Centre in Malaysia, the occupancy level used to be 100% until 2017 when it dropped to 63.1%. Back then the site was fully occupied until the master lessee downsized its operations from three to two floors. Since then, the Reit has not been able to lease out the remaining floor.

Weighted Average Lease Expiry (WALE)

The WALE has fallen from 9.1 years in 2017 to 8.0 years. I am not too concerned about this for now because of the following reasons:

-        Only 2.4% and 4.9% of the leased area is due for expiry in 2019 and 2020 respectively

-        2021 is the year to watch as 16.3% of leased area is due for expiry

-        It is hard to switch data centres because of the amount of preparation and work required to ensure a seamless migration (unless it is closing down of operations or downsizing)

-    Demand for data centre is expected to remain strong with internet of things, 5G mobile network, and autonomous vehicles and machines. Basically, everyone and everything is consuming data these days.

GEARING

Its aggregate leverage (gearing) is at 32.5%. This is below the regulatory ceiling of 45% which means that the reit can still embark on more acquisitions without the need for rights issue depending on the size of the acquisition(s). Currently, 81% of its borrowings are hedged at a fixed rate while the remaining 19% are tied to the Floating Rate.

NET ASSET VALUE (NAV)

Its NAV is $ 1.05. Do note that it is currently trading above its NAV.

GROWTH SINCE LISTING

Keppel DC Reit ’s property portfolio has grown from $1 billion to S$2 billion since its inception. Although there was a rights issue then in 2016. Personally, I think that the management has done quite well in growing the portfolio. While there will always be room for improvement, I am not one to take the growth in stock value (NAV), DPU and stock price for granted.

Hopefully, the management can continue their track record and bring Keppel DC Reit to new highs.

My Investment Portfolio (End Mar 2019)

Transactions made in Mar 2019:

- Sold 2,000 units of M1 at $2.06

This month is a barren month for two reasons. I did not receive any dividends in the month of March and funds, from the divestment of Netlink Trust and M1, which I have been trying to redeploy has not been deployed yet.

Technically speaking, I was forced to sell M1. I sold submitted the papers to accept Konnectivity’s (owned by Keppel and SPH) voluntary conditional general offer when the news came out that Axiata had accepted the offer of S$2.06 per share for its entire stake of 28.6%. With that, M1 lost its free float as more investors accept the offer and it will be delisted after the close of the voluntary conditional general offer. Since this was going to happen, I may as well get my money out as soon as possible and put it to other use, rather than wait for Konnectivity to do a compulsory acquisition in April 19.

Singapore Reits and Business Trusts have soared once again, ever since US Federal Reserve announced that they would be more patient with future adjustments. The likes of Ascendas Reit, Keppel DC Reit and Mapletree Commercial Trust have formed new all-time high. The Mapletree Commercial Trust story is even more amazing. Within less than 8 years, its price has doubled. From an IPO price of $0.88, it is now at $1.90.

In the meantime, I am keeping watch on SGX as its price has went down to $7.3 after Hong Kong Stock Exchange shared its plans to launch futures contracts on the MSCI China A Index. With its dividends policy to pay out $0.075 every quarter, it presents a yield of around 4.1%.

Dividends received* in Mar 2019: $0

Total dividends received in 2019: $666.57

Average dividends per month: $55.55

Total Portfolio Market Value: $159,451.24

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 Feb 2019)

Transactions made in Feb 2019:
- Sold 5,000 units of NetLink NBN Tr at $0.795

I had a queue order to sell NetLink NBN Tr for several months. As I mentioned in my post in Jun last year, I was going to hold it for a short duration only. In fact, I held it longer than expected. I was surprised that the queue order was fulfilled just a day before the financial result was out as the share price was nowhere near $0.795 then. 

Personally, the recent rise in share prices was surprisingly given the fact that the manufacturing growth (Purchasing Managers' Index) has been slowing down for the past 5 months. Also, several corporate results were not ideal, yet the share prices rose.

In the meantime, I am looking at accumulating more shares such as Keppel Corp and FLT since I have a pool of money from selling off NetLink NBN Tr. Hopefully, my GTD orders get fulfilled. 

Dividends received* in Feb 2019: $89.69 (IREIT GLOBAL, Singapore Post, Jumbo, Mapletree NAC Trust)

Total dividends received in 2019: $666.57

Average dividends per month: $55.55

Total Portfolio Market Value: $161,135.15

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.