2020 Year End Review & Year To Date Dividends

This time last year, Covid19, then known as Coronavirus was just breaking out in Wuhan. No one knew what was coming except for those in the medical professions in Wuhan dealing with the outbreak. The market bottomed in March 20 and recovered shortly after.

The biggest take away from this is to STAY INVESTED, DO NOT TIME THE MARKET. 

When I look back at my 2019 year end review, I was spot on, on Singtel and Keppel Corp. I wrote "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." If only I had taken profit then. But this is life, you never know what will happen. 

I had put in more capital this year and crossed both $200k and $250k milestone for my portfolio as the overall portfolio turns green. I am aware that should my portfolio becomes red, I would go back to below $250k. 

In 2020, I received $6,803.58 dividends as I went for scrip dividends for bank shares. My average yield decreased too. Year to date, I have invested a total of $241,900.93 into the market, with current value at around $270k.

In terms of total dividends received over the years, I have received $35,825. It is a slow ride up for me. 

This year I made a total of 25 transactions, the highest ever in a year. 18 buy/add/scrip transactions and 7 sell transactions. I made more transactions this year due to the pandemic as I rebalance my portfolio and also added more stocks with my warchest. I am gladfully to have managed to welcome DBS, Mapletree Ind Tr, Mapletree Log Tr and STI ETF into my portfolio. Adding on Keppel DC Reit, Keppel Corp and OCBC. 

I had make my maiden foreign stock purchase this year. Since they account for less than 2% of my portfolio, it is nothing to shout about, hopefully more opportunities arise for me to add on to this portfolio. 

I think that 2021 will be a recovery year for STI. It is very unlikely that STI will go back to below 2,500 levels. It will likely trend side ways as financial results are not going to be great. With more vaccinations getting approved for use and the way investors and traders price in future growth, it is just a matter of time STI continues it ride up breaking the 3,000 levels. 

Even if touch wood another circuit breaker is implemented, it will only have short term impact as everyone seems to have taken a long term view judging from how overseas market is reacting too. They have priced in the fact that vaccination will be widely available and accessible, and can control the pandemic, although  rationally we know that it will take time to mass produce and vaccinate everyone in stages. 

As always, I will continue to stay vested and add more shares when there are opportunities. 

My Investment Portfolio - Foreign (Dec 2020)

 

Above is from my portfolio tracker on StocksCafe. 

I did not make any changes to my portfolio since my purchase of International Business Machine (IBM) in Oct. Back then the stock got battered down and it has rose back as quickly. That is how volatile the stock market can be. 

In the meantime, I am waiting to collect dividends from all 3 stocks in December while looking out at other companies such as VISA, MasterCard and Pay Pal. 

My Investment Portfolio - SG (End Nov 2020) - $250k milestone

Transactions made in Nov2020:

- Bought 2,500 units of Keppel DC Reit at $2.68

- Bought 1,000 units of Mapletree Logistic Trust at $1.99 via rights issue. (I applied for excess rights and the remaining excess rights were 'sold' to my partner and children portfolios.)

The month of November has shown us how important it is to remain vested and how hard it is to time the market. Within the month of November, business sentiments have changed drastically and stocks have mooned (rocketed up). Although I bought around $8.2k of shares this week, my portfolio exceed the $250k milestone. More importantly, my portfolio has turned positive. 

STI went from 2,423 and end at 2,800 levels, touching a high of 2,920 in the month of November. Dow has even hit all time high levels which indicates that it is over bought as COVID is still with us, the whole world will not get vaccinated so fast. Business are still cutting cost and some are continuing their retrenchment exercise or closing down. Market has priced in future growth at a long term view.

I had shared about how I was queuing for Comfortdelgro (CDG) last month. My price was not fulfilled (by only $0.01). CDG has zoomed up too. I am not too sure if the boat will come back. But well, that is life. I will still be watching out for CDG for any pull backs. 

Currently, I do not have any intentions to sell my stocks based on their current prices. But if the banks  (DBS and OCBC) continue to rocket, I will probably sell off half of my holdings. 

Other than those stocks that I own, I am not actively watching out to purchase any new shares. I will be applying for Ascendas Reit preferential offering at $2.96. As usual, I will apply for excess rights. As for DBS, I will be going for the scrip dividends again.

Dividends received* during the month: $1,204.31 (DBS, Singtel, Frasers Logistics & Commercial Trust, Ascendas Reit, Mapletree Industrial Trust, Mapletree North Asia Commercial Trust)

Total dividends received in 2020: $6,951.01

Average dividends per month: $579.25

Total Portfolio Market Value: $260, 324.87

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 and Foreign Stocks

   

$71.74 cash in 3 months from GooglePay App

I will always find way to make my money work hard and ways to earn some extra cash. The GooglePay app is one of the latest craze. The ways to earn the cash reward is just ridiculously easy. Also, the cash rewards are credited instantly into your paynow account. No minimum withdrawal amount/duration or buttons to click.

I have received $71.74 reward in cash in 3 months, from Sep 20 to now (i.e. Nov 20). There are several ways to earn the rewards:

1) Referral $5 each for Referrer and Referee 

2) Scratch cards: Pay your friends (min amount of $10, limited to 2 scratch cards per week). Your friends must be on GooglePay too. Then just pay them $10 each and get them to pay you back the same amount.

3) Scratch cards: Tap and Pay (min payment amount of $3, limited to 2 scratch cards per week). Similar to how you do payWave payments over POS. Instead of using your credit card, you use your phone with GooglePay app and NFC on and tap it on the POS to make payment.

4) Scratch cards: Scan QR Code and pay (min payment amount of $3, limited to 2 scratch cards per week). Scan the payment QR code using GooglePay and make payment. It works even on M1 payment bill.

Basically other than Referral reward, you can get up to 6 scratch cards for 2 to 4 on a weekly basis. The terms and conditions changes every now and then, so you can check the offers section in the app frequently to see how many scratch cards you can get.

The scratch card is like lottery, the amount of cash you get depends on luck. It normally ranges from between $0.40 to $0.9. I was lucky twice and got $11.08 and $2.29 respectively. Moreover, my $2.29 cashback was from a $5 purchase, which is a nearly 50% cashback. 

Free money just take. Good things do not last forever. 

If you are interested in other referral links or codes, you can visit this page on My Investment Machine. 

My Investment Portfolio - SG (End Oct 2020)

 

Transactions made in Oct 2020:

- Bought 2,000 units of STI ETF at $2.552
- Bought 2,000 units of Mapletree Logistic Trust at $2.05
- Added 63 units of OCBC via scrip dividends
- Added 27 units of DBS via scrip dividends.

I have shared previously on how I was contemplating whether to buy STI ETF. In the end, I bought it along side with Mapletree Logistic Trust. Meanwhile, Comfortdelgro is creeping towards my purchase price. If it does hit the price, I think my order will get fulfilled at long last. 

Dividends received* during the month: $252.12 (Mapletree Commercial Trust, Suntec, Old Chang Kee, Mapletree Logistics Trust)

Total dividends received in 2020: $5,746.70

Average dividends per month: $478.89

Total Portfolio Market Value: $225,502.56        

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 and Foreign Stocks

My Investment Portfolio - Foreign (End Oct 2020)

 

Above is from my portfolio tracker on StocksCafe. 

I bought 15 units of International Business Machine on 20 Oct at USD117.47. Unfortunately, the stock got further battered down due to the rise in covid19 cases and deaths in US, and the upcoming election. 

Now to wait for the election result! It is so exciting and can really go either way  although market seems to be pricing in a Trump loss. 

My Investment Portfolio - SG (End Sep 2020)

 

Transactions made in Sep 2020:

- Sold 1,500 units of SGX at $8.88

STI index has been hovering around 2,400 level. I have been wondering whether I should now buy the STI ETF index to prepare for a ride up in the future. The dividends yield is nothing much to shout about, but in this low yield environment it beats other instruments. Also, I do not need to select and bet on specific stock since my portfolio already has this in place.

In the meantime, I am not really in a rush to buy or sell. But the intent is to continue to make some purchases as staying vested in the long run is the way to go. 

I did not receive any dividends this month as I subscripted to raffles medical scrip dividends. Similarly, I also opted for scrip dividends for DBS and OCBC.  

Dividends received* in Sep 20: $0

Total dividends received in 2020: $5,494.58

Average dividends per month: $457.88

Total Portfolio Market Value: $221,605.82

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 and Foreign Stocks

My Investment Portfolio - Foreign (End Aug 2020)

 

Above is from my portfolio tracker on StocksCafe. 

I bought 23 units of Intel Corporation 51.75 USD on 25 Jul. I bought it after the stock was oversold due to the news came out about their7-nanometer (7nm) production delays. AMD is in a league of its own for manufacturing of nanometer chips for now and its stock price has rose nearly 100%. 

Intel is not just about manufacturing of chips and computers. They are also in the business of the IOT (internet of things), data centres, cloud sloutions etc. Hence, I am banging on these aspects of its business to be its next growth sector. 

Meanwhile, Intel dividends came in on 1 Sep, while Coca Cola is in CD.

Stay calm and stay vested. 

My Investment Portfolio - SG (End Aug 2020)

 

Transactions made in Aug 2020:

- Bought 2,000 units of Keppel Corp at $4.82

Decided to average down Keppel Corp since it has been oversold after the Temasek dropped the $4 billion partial offer. 

I am looking to offload my SGX at $8.86 since I bought it with the intention to sell. With a month more to go before it XD, it is likely to reach this price. 

In the dividends received in Aug 20, I have excluded Raffles Med, DBS and OCBC since scrip dividends will be offered and I am likely to go for that instead of cash dividends. 

Dividends received* in Aug 20: $722.50 (ST Eng, Ireit, Lendlease, Wilmar, Keppel Corp, Ascott, Singtel)

Total dividends received in 2020: $5,494.58

Average dividends per month: $457.88

Total Portfolio Market Value: $237,089.03

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 and Foreign Stocks

My Investment Portfolio - SG (End Jul 2020)

I did not make any transactions in the month of July as I have been busy at work.

Interestingly, the two purchases which I made in Jun rose faster than what I expected.

I am watching the bank stocks closely and have keyed in price alert to keep me informed of its movement. The banks will be reporting their quarter result soon and their result will be worse than previous quarter since NIM impact will be reflected this time and NPL will definitely increase.. For DBS , the date to watch for is 6 Aug. I am still vested in OCBC and DBS stock. As what I have shared earlier, if we were to go back to 2009 P/B ratio, the price to watch for in today's context can be found here. Will it drop to this level? Who knows. I am not waiting for it to go to that level. Instead I will buy bit by bit as it goes lower.


Dividends received* in Jul 20: $706.72 (Suntec Reit and Keppel DC)

Total dividends received in 2020: $4,772.08

Average dividends per month: $397.67

Total Portfolio Market Value: $226,820.44

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 and Foreign Stocks

My Investment Portfolio (End Jun 2020)

Transactions made in Jun 2020:
- Bought 1,500 units of SGX at $8.24
- Bought 3,500 units of Mapletree Ind Tr at $2.72

I made 2 purchases in the month of Jun. I bought SGX as I felt that the share price was oversold after the announcement that the license agreement with MSCI will not be renewed beyond February 21. There is still 8 months before the agreement ends and SGX's management team has a proven track record. Thus far, SGX has shared a few news to make up for the shortfall in recent days. Some of the recent news include launching FTSE Taiwan Index futures on July 20 and acquiring remaining 80% of BidFX to bridge OTC and listed FX markets.

As for Mapletree Ind Tr, I bought the share the next day after the news came out that the stock will  join STI, replacing SPH on 22 Jun. Funds would typically purchase Mapletree Ind Tr in the lead up to it being added to STI. Similarly, funds would sell SPH in the lead up to its removal from STI.

I had also shared in an earlier post that I had purchase my first foreign stock, Coca-Cola Co. The foreign stock is not updated in the portfolio in this post. 

Dividends received* in Jun 20: $1,316.46 (Mapletree Ind Tr, Wilmar, Keppel Corp, Comfortdelgro, Astrea V3.85%)

Total dividends received in 2020: $4,065.36

Average dividends per month: $338.78 

Total Portfolio Market Value: $227,976.14

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 and Foreign Stocks

My Maiden Foreign Stock Purchase: Coca-Cola Co (NYSE: KO)

After investing in the Singapore Exchange stock market for 9 years, I made my first foreign stock purchase. I procrastinated a long time and it was not an easy decision to make this purchase. There are so many foreign stocks to choose and analyse, exchange rate, withholding tax and brokerage rates to consider. 

So what did I purchase?

I bought 20 units of Coca-Cola Co (NYSE: KO) at 45.92 USD on 22 Jun. 

I am sure this Coca-Cola Co does not need any introduction as it is a 134 years old beverage company offering over 500 brands in more than 200 countries and territories. 

I am quite sure all of us have drank their product before multiple times. Their most popular brands are Coca-Cola, Diet Coke, Fanta, and Sprite. Coca-Cola Co products include water, enhanced water, and sports drinks; juice, dairy, and plant-based beverages; tea and coffee; and energy drink. 

Some financial data which I pulled up leading me to purchase the stock:

PE Ratio: 19.84
P/B Ratio: 9.96
Net Margin: 26.95%
Annual EPS: $2.07
ROE: 48.92%
ROA: 11.2%
ROI: 19.98%

$6,560 interest from OCBC 360 in 5 years

Do note OCBC 360 is going to slash the interest from 1 Jul 2020 onwards. All good things come to an end.

Many people underestimate the amount of interest or cashback they can receive from various products such as bank accounts or reward programmes. Life is tough, we should make our money (savings) work hard, even when we are sleeping. 

Take for example, OCBC 360 savings account. I have been sharing with friends to sign it up or other similar products such as DBS Multiplier account and UOB One Account. Only some heed the advice. 

Recently, a friend asked me how much interest I have received from OCBC 360 account. I went to calculate and was pleasantly surprised. I received $6,560.05 of interest in 5 years, from 2015 to 2019. The breakdown by year is below.

Year	Interest received
2015	$1,209.39
2016	$1,178.12
2017	$1,242.72
2018	$1,251.64
2019	$1,678.18

Using OCBC 360 to get such returns is really as easy as ABC. I am sure there are others who have received even more interest as they fulfilled all criteria to get even more interest. I did not bother to fulfill the Wealth and Grow bonus interest criteria.

Over the years, OCBC 360 has changed how interest is awarded and the different criteria to fulfilled.

How did I accumulate these interest from OCBC 360? It was easy. I did the following:

i)   Maintained an account balance of at least $70,000

ii)  Credit my salary in the account

iii) Meet the spending criteria 

iv) Increase average daily balance by at least $500 from the previous month

i)   Maintained an account balance of at least $70,000

This $70,000 is my emergency fund. Hence, I do not put them into fixed deposit since I need the funds to be fluid. I have previously shared about this in 2019. I have some emergency funds in SSB too. Yes, even our emergency funds should work for us too. 

To maintain the account balance level, I will transfer out the extra funds when the OCBC 360 interest are paid on the 7th working day of the month and when my salary is credited into the account.  

ii)  Credit my salary in the account

This is the easiest. Just a one-time action to provide the documents required by your HR.

iii) Meet the spending criteria 
Charge at least $500 per month to an OCBC credit card. As a parent, I hit this amount easily.

iv) Increase average daily balance by at least $500 from the previous month
The trick is to set up a recurring transfer on the 1st of every month. I setup mine such that it transfers $700 on the 1st of every month. I put in a buffer amount in case unexpected funds are deposited into my account due to work related expenses claims.

It does not matter which savings account you use, whether it is OCBC 360, DBS Multiplier or UOB One Account as long as your savings generate interest. It just happens that OCBC 360 suits and generates the most interest for me based on my current use and needs.

From Jul onwards, I will only be able to get around 1.3% interest from OCBC 360 since I will only qualify for Salary and Save interest component. I have yet to decide whether I will still continue with OCBC 360 or switch to another bank since I suspect that other banks will cut their interests rates.

I have also created a new page with referral links and codes, some of which provide savings or cashback. Hope you find them useful. Every little bit matters and adds up.

Note: This is not a sponsored post by OCBC, DBS or UOB. 

My Investment Portfolio (End May 2020)

From StocksCafe

May was a boring month. I did not make any transactions and STI is moving sideways. If STI continues to move sideways, I plan to make at least 1 more purchase before waiting to see if the bankruptcy phase comes in, during the 2nd half of the year. If it does, STI will experience another sharp drop, led by banks.

Temask has been doing national service, trying to lessen the impact of COVID19 with their various care packages, including giving face shields, masks and hand sanitizers to different groups of people. Also, trying to help (aka rescue) several companies such as SIA and the latest is Pacific International Lines. But there is a limit to how many companies they can help. 

From StocksCafe (Click to enlarge image)

I received my largest amount of dividends in a month in my investment journey. It was partly due to my recent purchases of DBS and OCBC. I am still expecting my total dividends amount to be lower than last year. Moving forward, most Reits and Trusts will defer dividends payout as they conserve cash and maintain high capital levels. Similarly, other listed companies, even banks, will do likewise. It is just a matter of when.

Dividends received* in May 20: $2,132.84 (DBS, OCBC, Singapore Technologies Engineering, Mapletree North Asia Commercial Trust)

Total dividends received in 2020: $2,748.90

Average dividends per month: $229.08

Total Portfolio Market Value: $199,074.59

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.

SIA FY Results: What caused SIA to loss $732m in the 4th quarter?

SIA FY 2019/2020 

SIA reported its first Full Year loss of $212 million. This was mainly due to a loss of $732 million incurred in the 4th quarter (Jan to Mar 20). As expected, there is no dividends declared this time.

SIA Net Asset Value (NAV) is now at $7.86, dropping by more than $3 compared to a year ago. This value will change after the rights issue.

This means that SIA is currently trading at a Price/NAV ratio of less than 0.50! SIA is in a unique position. While other airlines caters to both domestic and international travels, SIA caters to only international travels. When the number of COVID19 cases decrease in other countries, airlines typically are allowed to start operating their domestic flights which helps them to generate some form of revenue. SIA has to depend on our government negotiation with other countries to start international flights between the countries. Hence, its recovery will be slightly slower. 

Lets take a look at what caused such a big loss in the 4th quarter:

From: SIA Press Release

SIA made a loss in the 4th quarter mainly because of (i) fuel hedging loss of $198 million and (ii) fuel hedging ineffectiveness of $710 million. 

Fuel hedging loss occurred because fuel prices plunged in the first quarter. The demand for oil dropped when countries embarked on a lockdown to flatten the COVID19 curve. This was coupled with an oversupply of oil with price wars happening resulting in oil futures contract becoming negative in an unprecedented event. 

Fuel Hedging ineffectiveness happened because SIA over hedged. This was due to the capacity cuts made resulting in a lesser fuel consumption.

While SIA had shared that they expect more fuel hedge in future quarters, they have not share whether they expect fuel hedging ineffectiveness. There were no details on the average duration of the contracts so it is hard to guage.

What about staff cost? 

From: SIA Consolidated P&L

SIA managed to reduce staff cost by more than 60% this quarter to post just $273.6 million. They shared that it was due to the various support schemes given by the government. It is noted that in March, they have also undertaken wage cuts for its management team and compulsory no-pay leave for employees. I hope that they will look after their staff especially those on NPL even during such crisis.

There are other cost that would be incurred during this period like aircraft maintenance, landing, parking, handling costs. But my biggest concern is on fuel hedging ineffectiveness. SIA could have provided some details on this so that investors can make an informed decision especially those who are wondering whether to exercise the rights issue.

What should you consider and steps to take for SIA Rights Issue

SIA did a Rights Issue of Rights Shares and Rights MCBs. I am not vested but because so many friend are asking, I thought I should share on these.

RIGHTS SHARES

Based on the Record Date (5 May, 5pm), for every 2 SIA shares, you will get 3 rights shares. If you have 1,000 SIA shares, you will be alloted 1,500 rights shares. You can check your online CDP account if you are unsure. 

These rights shares are re-nounceable. This means that they can be traded from now till 21 May 2020, 5pm. The symbol for the rights share is “LRDR”, under the name "SIA R". 

As the issue price of the one rights share is $3, the price of the rights share is affected by the price of SIA shares. Due to market efficiency, the formulae for price of rights issue is: 

Price of rights issue = price of SIA share - $3

For example: if SIA share is trading now at $3.80, the rights shares will trade at around $0.8 and below. 

If SIA shares trade below $3 during this period, the rights shares will trade at $0.001 because it is cheaper to buy SIA shares directly instead of the rights.

If you have the rights shares, you can do one of the following:

a) Sell your rights shares (before 21 May, 5pm)

b) Exercise and payment for your rights 

You need to pay $3  per right share. Payment can be made online at SIA website (before 28 May, 5pm) or at ATMs (before 28 May, 9.30pm)

On 8 Jun, you can trade them as SIA shares via symbol "C6L". 

c) Buy more rights shares and then proceed with (b) 
Another method: If you want more SIA shares, more than what you are allotted with, you can make payment for excess shares. The excess is subjected to allocation, with priority given to rounding up to hundreds. 

d) Do nothing

If you are planning to do step d) as you are disappointed with SIA, do consider doing step a).

RIGHTS MANDATORY CONVERTIBLE BONDS (MCBs)

Based on the Record Date (5 May, 5pm), for every 100 SIA shares you will receive 295 rights MCBs. If you have 1,000 SIA shares, you will be alloted 2,950 rights MCBs. You can check your online CDP account if you are unsure. 

These rights shares are re-nounceable. This means that they can be traded from now till 21 May 2020, 5pm. The symbol for the rights share is “GANR”, under the name "SIA MCB R". The issue price of the rights MCB is $1 per share.

This is a zero-coupon conversion bond which means that there will be no interest payments. At maturity, after 10 years, the maturity amount for 1,000 units of MCBs is $1,806.11. As this is a conversion bond, the maturity amount will be converted to SIA shares at conversion price of $4.84 per share (subjected to adjustments such as consolidation or subdivision of Shares, capitalisation of profits or reserves, capital distributions, dividends, share repurchases and others). 

If there are no adjustments, in 10 years:

1,000 units of MCBs = $1,806.11 = 373.16 SIA shares 

1st two columns from SIA Announcement 

SIA can recall the MCBs early at a predetermined yield of between 4% to 6%. 

Due to the nature and issue price of MCB , it is currently trading at $0.001. 

If you have the rights MCBs, you can do one of the following:

a) Sell your rights MCBs(before 21 May, 5pm)
If you can still make a profit after deducting commission.
For example if you have 20,000 SIA shares, you will get 59,000 rights MCBs. If you sell the rights at $0.001, you will get $59, excluding commission.

b) Exercise and payment for your MCBs 

You need to pay $1 per right MCB. Payment can be made online at SIA website (before 28 May, 5pm) or at ATMs (before 28 May, 9.30pm). On 9 Jun, you can trade the MCBs.

c) Buy more rights MCBs and then proceed with (b)
Another method: If you want more SIA shares, more than what you are allotted with, you can make payment for excess shares. The excess is subjected to allocation, with priority given to rounding up to hundreds. 

d) Do nothing

Please do your own due diligence on the steps to embark on after reading this. 

SIA has published a full advertorial on the rights issue on The Straits Times.

From The Straits Times (page A5, 15 May 2020)

My Investment Portfolio (End Apr 2020)

Transactions made in Apr 2020:

- Bought 1,000 units of DBS at $19.55

- Bought 1,000 units of OCBC at $8.63

I continued to buy stocks in the banking sector in the month of April as shared in my earlier posts in Apr and Mar. Do note that this is not a buy call. Please DYODD. I am going in with a long time horizon of at least 2 years and with expectations that these banks will cut dividends or not give out dividends in the near future as they maintain high capital levels.

DBS has just announced their Q1 2020 result and maintained their dividends for this quarter at 33 cents. It is important to note that this result, similarly for UOB and OCBC upcoming Q1 2020 financial result, will not and does not capture the full impact of the Fed rate cuts. The full impact of the rate cuts will be felt in the Net Interest Margin (NIM) in the Q2 2020 result. There will also be more non-performing loans (NPL) and allowances for loan losses. 

In case you are wondering, DBS's Q1 net book value is  $19.86. The share price is above the book value due to the upcoming 66 cents payment which will XD on 12 May. 

I am still looking into the possibility of buying more bank stocks if it drops lower. Also, looking into the other stocks such as CDG, ST Eng and reits.

2020 Dividends received in Teal colour

Year to date, the amount of dividends received is only at $616.06, which is the lowest I have received so far since 2015. Dividends were impacted as some companies cut dividends to conserve more cash and some postponed their AGMs due to Covid19. For the former, if these are reits, they retain part of the dividends to retain more capital and will only pay them out at a later stage. For the latter, once the AGMs are held and resolutions are passed, the dividends will be paid out. 

Bearing unforeseen circumstances, I am expecting to receive* my highest amount of dividends, of at least $2,000 for the month of May. Fingers crossed! 

At this point in time, I am not too worried, as I am already expecting this year's dividends to be lower than last year. If you are an investor, I believe you will have the same thinking and are prepared for it. My dividends could be less than $6,500 this year. 

Dividends received* in Apr 20: $66.14 (Mapletree Commercial Trust, Suntec Reit)

Total dividends received in 2020: $616.06

Average dividends per month: $51.34

Total Portfolio Market Value: $199,584

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.

Mapletree Commercial Trust cut 4th quarter dividends by 60.6%

Mapletree Commercial Trust (MCT) just announced their 4th Quarter 2019/2020 Financial Results. MCT shared that they will be paying out only 0.91 cents dividends this quarter in anticipation of uncertainties arising from COVID-19 pandemic. This is a more than 50% cut compared to the previous dividend of 2.31 cents in Q4 FY2018/2019.

Was the financial result really that bad? Lets find out.

REVENUE AND NET PROPERTY INCOME

From Mapletree Commercial Trust Slide

Both revenue and net property income increased by more than 10% compared to the previous financial year (FY). It seems impressive, but this increase seems to be mainly due to contributions from the newly acquired Mapletree Business City II. 

From Mapletree Commercial Trust Slide

The revenue and net property income of the existing properties, excluding Mapletree Businesss City II, shows that both figures dropped. This is likely due to the COVID-19 pandemic. Considering that the circuit breaker started on 7 April, we will see a more drastic drop in the next quarter result.

DISTRIBUTION PER UNIT (DPU)

From Mapletree Commercial Trust Slide

Although the distribution per unit has dropped by 60.6%, it is important to note that this is because $43.7 million of distribution was retained.  

This is part of MAS' plan to extend the period for distribution of taxable income. This will allow companies to manage their cash flow in view of the challenging operating environment. The dividends will still be distributed, but at a later period.

OCCUPANCY LEVEL AND WEIGHTED AVERAGE LEASE EXPIRY (WALE)

From Mapletree Commercial Trust Slide

Occupancy level is still high over 95% while WALE is at 2.6 years. Specifically for the retail sector, the WALE is 2.2 years which is quite usual as F&B companies sign short term lease. Both occupancy and WALE will likely drop in the next quarter.

GEARING

MCT's gearing is at 33.3%. There is still plenty of room for them to take on debt or make acquisition if required. Currently, 78.9% of its borrowings are hedged at a fixed rate while the remaining are tied to the Floating Rate.

NET ASSET VALUE (NAV)

NAV is at $1.75, a slight drop of $0.01 compared to Q3 FY2019/2020.

However, if you look at the NAV by FY, it has been increasing steadily every year. Although there was 2 rights issued in 2016 and 2019, I am still happy with the performance of MCT. The management has done a very good job.

I am quite surprised that MCT's share price is still above NAV at the time of writing. I am expecting the price to drop further with circuit breaker measures in place. I have no intention to sell MCT share since I have them from IPO and they consist of just 4% of my portfolio. I am not considering adding them at the moment unless the price drops further.

In short, I think that this quarter's result is quite decent. Agree?
Dividends was cut not because of a drastic drop in revenue or profit, but due to the need to conserve cashflow. 

How far did DBS, OCBC and UOB shares drop in 2009?

Have you wondered how far the local bank shares (i.e. DBS, OCBC, UOB) fell during the Global Financial crisis, also known as the Subprime Mortgage crisis in 2009?

All 3 bank shares recorded their lowest share price on the same day, on 10 March 2009. As the share prices itself would not provide much context, I have also include other details such as net asset value, price to book ratio and dividend yield. 

The price to book ratio shows an interesting sign as DBS recorded the lowest ratio of 0.59 as its shares dropped to $6.42. 

Compare to today, in the light of the COVID19 developments, the details are as follows:

As of 3 April 2020

OCBC price to book ratio is the lowest at 0.81 while DBS is the highest at 0.93. The dividend yield is for reference. During financial crisis, the banks will likely cut dividends as they conserve cash and prepare for more non-performing loans.

How much would DBS, OCBC and UOB share price be if they were to fall to the price to book ratio of 2009? 

DBS would need to fall to $11.34! Is this possible?

I have no idea. In the meantime,  I did 2 purchases in DBS as stated in my end March portfolio update. I have also recently purchased OCBC. 

My Investment Portfolio (End Mar 2020)

Transactions made in Mar 2020:

- Bought 800 units of DBS at between $18.65 and $21.15
- Sold 5,000 units of Sheng Siong at $1.10

- Sold 1,000 units of SIA at $6.68

- Sold 2,000 units of Sembcorp Marine at $0.73

- Sold 4,000 units of SingPost at $0.72

- Sold 7,000 units of Jumbo at $0.205

I have never made so many transactions in a single month before. I have been using this period of time to re-balance my stock portfolio by selling the weaker links and adding on more solid companies. It was not an easy decision as the realised loss is around $13,000. But I believe this is necessary. 

The epicenter of the COVID19 has just shifted from China to Europe and USA. With this, we can expect more supply chain disruptions globally. The number of COVID19 cases has increased at a tremendous rate. The reproduction figure of COVID19, is key figure to watch for.

I am looking at adding more bank shares, CDG and ST Engineering. Do note that with COVID19, it is likely that all companies will cut dividends in future quarters. There is also a likelihood of zero dividends as companies due to the cashflow constraints companies are facing. This include even the likes of the financial sector (i.e. Banks). 

Dividends received* in Mar 20: $0

Total dividends received in 2020: $549.90

Average dividends per month: $45.83

Total Portfolio Market Value: $160,731.64

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.