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My Singapore Stock Portfolio End October 2011

This is an update to my Singapore Stock Portfolio for the Month end of October 2011. For previous months, please see
Singapore Stock Portfolio for the Month end of September 2011

Singapore Stock Portfolio for the Month end of August 2011

Just made some minor changes to the Portfolio, sold off CDL Hospitality some parts of Ascott, Cambridge and SPH. Also added  more positions to Ascendas, Mapletree Commercial, CapitalMall Trust at value prices. Most stocks have rallied quite nicely last month especially with the deal by ECB for Greece bondholders to voluntarily take a 50% discount on the bonds. However, focus has now shifted to Italy, which is a much bigger economy than Greece and fear continues to dominate the market. I don’t think the dark clouds are over and I will still tread cautiously, avoiding the cyclicals.

img-singapore-end-october-2011-stock-portfolio

CDL Hospitality – Sold it off at $1.58, representing approximately 15% profit in less than a month. While I could have waited for the dividends, I thought I might as well lock in the gain, which is close to double the annual dividend yield on the stock. Also, looking at the global outlook, things still look rather gloomy, I don’t think I will take my chances on a highly cyclical stock.

CapitaMall Trust – I added the positions at $1.785, which is higher than the average price of my current holdings, but still represent a subsantial discount to the last 2 weeks where it spiked to $1.90. I actually wrote a post about CapitaMall Trust in response to a private placement earlier.

Keppel REIT – Another stock I purchased and sold off within the month, thus not listed here. I bought it on the announcement that Keppel REIT will be issuing rights to purchase Ocean Financial Center from Keppel Land. I thought the 10% drop was an over reaction by the market and thus bought in at 93.5 cents. Within about a week, the price hit $1 and I sold it off for a nice 6.5% profit. Why didn’t I keep it for dividends? Simple, I think the global economy still looks gloomy and office rentals will be the first to fall among all the REITs. Furthermore, the oncoming supply of offices are worrying, I wonder about the stability of office rentals especially in the city center where Keppel REIT owns most of its assets. It was a short term punt and if the price did not recover shortly, I would be ok with a 7.5% dividend yield.

 

For further reading, you may be interested in:

My Singapore Stock Portfolio for the Month end of September 2011

My Singapore Stock Portfolio for the Month end of August 2011

My Malaysia Stock Portfolio for the Month end of September 2011

My US Stock Portfolio for the Month end of September 2011

14 Responses to “My Singapore Stock Portfolio End October 2011”

  1. hi, im a newbie and have been doing my own research for a few weeks and i’m extremely fortunate to come across your blog! GREAT EFFORT! i enjoyed reading your posts and i am looking into REITs. especially Suntec REIT, is it advisable to buy it down since it has dipped a lot? i intend to buy it as a long term investment, looking forward to dividends and patiently waiting for it to increase back to normal. i have years on my hand to wait. what are your views? thank you

    best regards

    • Hi bt,

      Good for you! It’s good that you are starting to invest and getting educated before investing in stocks is definitely worth the time and effort.

      In the case of Suntec REIT, I am also looking at it. As you have pointed out the price has been beaten down quite a lot and the current dividend yield is already quite high for a retail/commercial play at close to 7%. What’s better is that the management company ARA has announced a $410 million remake of Suntec City. The AEI is expected to increase Suntec’s NPI by 33%, however, it will only commence in mid 2012 and complete in mid 2015. Now, that’s a really long wait. If you can wait that long though, I think Suntec REIT does present some good value. Another key thing to note about Suntec is the large exposure to office play, which is generally quite vulnerable to a downturn and also having just one main retail asset Suntec Mall means that it is not really well diversified.

      If it is the first REIT you are looking to buy, I would recommend buying some other higher quality REITs first as the basis of your portfolio. Suntec should just be a diversifier and not the core of your REIT portfolio in my opinion.

  2. Raymond Lim says:

    It is good to invest in CitySpring Infrastructure Trust ? Give good dividend at the moment ? Have any fundamental analysis on CitySpring Infrastructure Trust ??

    • I am not familiar with Cityspring, dividend yield looks high at the moment. However, when I look at the report, the earnings are closely related to fuel prices. So as fuel prices soared over the last quarter, earnings dropped rapidly and being a regulated industry, Cityspring cannot raise prices according to market price. They have termed the losses due to “under recovery of fuel prices”, I would monitor it over the next quarter to see if they can recover this loss.

  3. Raymond Lim says:

    I have invested in the following counters for their good dividend and intend to accumulate more and invest for very long term for retirement :-
    (1) Singapore Press Holding (SPH) (T39.SI)
    (2) Singapore Post (SingPost) (S08.SI)
    (3) SunTec REITS (T82U.SI)
    (4) StarHub
    (5) SingTel
    (6) Mobile One

    Have already collected around 13k of dividend this year 2011. It is possible to keep this counters for long term ? Coz i have spoken to retiree, including my Dad, whom own SPH and SingPost for their yearly dividend for passive income.

    Then how about DBS, UOB and OCBC, Keppel Corp ?? those strong counters but seldom i heard ppl keep them for passive income although these counters do provide good dividend.

    • Hi Raymond,

      All the stocks which you mentioned, I have them all except Mobile One. I think they are all very good dividend counters as you already know since you collected quite a lot of dividends. I believe all of them have long term sustainability, I just feel M1 business prospects are slightly lacking compared to the other 2 telcos. Both SPH and Singpost are very old monopoly being impacted changes in technology and rising costs, it will be important to see how they mitigate these risks. SPH is already moving towards property development and management.

      Among all the banks, I like OCBC best because of consistent and increasing dividends. OCBC is also slightly more conservative than DBS which is expanding all over China and OCBC has a strong financial services franchise. Keppel Corp, SembCorp, banks are all very cyclical and tend to have low dividends of about 3-5% compared to other dividend payers which pay in the region of 5-8%. Also, due to the cyclical nature, you only get good dividend yields of say OCBC when the price is very depressed, so when the stock price rebounds, most investors will take profits. However, if you adopt a long term view, I believe these stocks can also be kept for long term, but try to get them at acceptable dividend yields of at least 5% and up.

  4. 1milliondiary says:

    Hi Calvin,

    In your monthly stock portfolio update, would you be able to provide the average entry price for every stock you have?

    • Hi 1milliondiary,

      Request noted, I will try to incorporate my average cost price. However, in absence of dividends collected, calculating returns just based on cost price can be quite misleading.

      Thanks!

  5. Raymond Lim says:

    Hi Calvin,

    It is possible to provide an analysis on the following counters ? :-
    (1) SIA Engineering
    (2) SMRT
    (3) SATS LTD (Singapore Air Terminal Services)
    (4) ST Engineering

    I think these counters are stable and non-cyclical as these companies provide transport services, Air Terminal services, Air Plane repair and maintenance and military/manufacturing. These counters provide attractive dividend and they are backbone of Singapore economies.

    • Hi Raymond,

      Yup, these companies you mentioned are indeed somewhat defensive, ranking in terms of defensiveness would be
      1. SMRT – Public transport which is not affected by economy changes, growth driven by population growth and inflation.
      2. SIA Engineering – Huge cash hoard, focus mainly on maintenance and repair (MRO). Sponsor SIA guarantees certain revenue, revenue air traffic driven.
      3. SATS Ltd – Air traffic driven, so vulnerable to economy cycles. Food services under SFI are more defensive.
      4. ST Engineering – Performs wide variety of services from defense to MRO and others. High exposure to USD fluctuations and economy cycle driven.

      However, dividend yields for all hover around 5-6% range, which is not too high but not too low either. I think I will run an analysis on SMRT first as I am currently holding the stock. Try to get through the rest later.

      Thanks for your suggestions!

  6. Hi Calvin
    Thank you for all your sharing here. I learned alot just going through your site. I like your analysis on CapitalRChina .

    Can you share with me your take on :-

    a. Capitalmall is a defensive stock . Is the valuation more expensive in terms of PE?
    b. Capitacom is the valuation cheaper than CapitalMall ?

    This is in consideration that the valuation is cheaper, although the office market may be softening in the short to medium term?

    What are your thots on the above ? Can you share in terms of dividends returns ?

    • Hi Emily, thanks for the complements!

      a. CapitaMall Trust is a defensive stock, it trades at a slight premium to NAV of $1.55 and has a dividend yield of 5.3% given a leverage of 39% which is pretty decent. Although I don’t really focus on P/E since earnings are not a measure of REIT performance, but P/E for CapitaMall Trust is about 14x vs CapitaCommercial Trust at about 20x.

      b. Captiacommercial Trust trades at a huge discount of close to 30% to NAV of $1.49 and has a dividend yield of 7.3%.

      Capitacommercial on the surface looks like a value buy, but office sector is the most cyclical and has the least defensive business. In the event of a downturn, office rentals and valuations may drop substantially, epsecially those grade A offices in CBD, see my Keppel REIT post.

      Given the current crisis brewing in Europe and US, it is imperative to stay in defensive assets. As you can see, I do not hold any pure play office REITs at this point of time as I think there is significant downside.

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