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My Singapore Stock Portfolio May 2013

05.13.2013 · Posted in Dividend Stocks, Singapore

This is an update to my Singapore stock portfolio for May, with closing prices as of last Friday. I put the portfolio as of last week so that it takes into account my newest acquisition Croesus Retail Trust. For previous month, please see

My Singapore Stock Portfolio End February 2013

My Singapore Stock Portfolio End December 2012

My Singapore Stock Portfolio Mid November 2012

 

img singapore stock portfolio may 2013

 

Mapletree Greater China Trust and Croesus Retail Trust

While I haven’t been looking at the current REITs, the new IPOs of Mapletree Greater China Trust and Croesus Retail Trust did pick my interest. I got some lots from balloting for MGCT and purchased from the open market as well at about $1.03-$1.04. I didn’t manage to get any lots for CRT, so I purchased from open market at about $1.13. For more info about MGCT and CRT see

Croesus Retail Trust IPO

Mapletree Greater China Commercial Trust IPO

 

First Resources and Golden Agri

Other additions include palm oil plantations First Resources and Golden Agri. The recent continued weakness in CPO prices allowed me to purchase First Resources at a good price and further average down on Golden Agri. While we do not know how long the oversupply situation is going to last, some analysts predict this year 2nd half, some later, I believe in simply buying on weakness. Fundamentally, the long term outlook for edible commodities such as CPO is still bullish as population growth is the biggest catalyst.

Palm Oil Plantation Stocks Tree Maturity Profiles

 

Vard

The stock price weakness for Vard (formerly STX OSV) is certainly surprising, given that the market clearly knows even the $1.22 offer price was a discount to the intrinsic value. New owner Fincantieri makes it known that they do not intend to rock the boat, so I took the opportunity to average down. As you can see the proportion remains at about 12%, despite the drop in price. I was waiting for it to breach below $1, but it never did. Research houses have the target price as high as $1.80+, we will see how this year’s results turn out. For more info, see

Vard Investor Relations Q&A with Private Investor

STX OSV General Offer Ends

Ernst & Young Report Recommends STX OSV Shareholders to Reject $1.22 Offer

 

United Engineers

This is an interesting one, when most of the developer are bullish in prices, United Engineers stock price retreated, even though there was a big dividend coming up. The idea behind United Engineers was simple, to buy it for the investment properties like as if it was a property investment company. The RNAV of the investment properties is at $6.60, while the stock is trading at $3. Taking into account other assets and debt, it is trading at a hefty discount to its RNAV. The dividend yield is about 3.3% and it has been pretty consistent for the past few years.

 

For further information, you may be interested in:

Croesus Retail Trust IPO

Mapletree Greater China Commercial Trust IPO

Palm Oil Plantation Stocks Tree Maturity Profiles

Vard Investor Relations Q&A with Private Investor

STX OSV General Offer Ends

Ernst & Young Report Recommends STX OSV Shareholders to Reject $1.22 Offer

My Singapore Stock Portfolio End February 2013

My Singapore Stock Portfolio End December 2012

My Singapore Stock Portfolio Mid November 2012

 

164 Responses to “My Singapore Stock Portfolio May 2013”

  1. Hi Calvin,

    I have been reading your website for quite a while now. Just wana say that you really did a good job providing us with all these free and valuable information!

  2. Hi Calvin,

    What’s your take on Golden Agri? The recent results show a decline in 30% in profit. Good to load in weakness?

    Thanks

    • Hi Vic, the results are expected and in line with forecasts due to the weak CPO prices. The question is how when will the CPO eventually pick up again, but yes I do recommend loading on weakness. The CPO stock prices are up today, especially for Golden Agri and First Resources.

  3. Hi Calvin,
    Mind sharing with me what price you bought Utd Engineers? How do you view their purchase of WBL corp, do you think the business will become too compicated to manage after the purchase?

    • Hi MICH, I bought between $3.00-$3.10 before ex-div and div was $0.10. I am not particularly concerned about it becoming too complicated, there are many conglomerates and they are doing fine. I am also not particularly positive on the synergies, it’s just an added bonus if there is any so I am neutral about it.

  4. Hi Calvin, what is your take on Vard Holdings now that the share price has not moved upwards? When would you consider as a time to decide whether to continue holding or to sell to cut loss? Thanks!

    • Hi Diana, overall results are in line, since there are many people asking I will write a post to discuss a bit more. I don’t see any reason to sell, fundamentally its still solid.

  5. Hi Calvin,

    Mind sharing how many lot you ballot for Croesus?

    The balloting result show that everyone get even a few lot if the ballot number is little. So im curious why you did not get.

    Hope to see your Vard analysis again.

    SAM

  6. Hi Calvin,

    What is your take on silverlake? Is it good to accumulate more shares for silverlake based on the current price?

    • Hi Jace, I am keeping it for the long run, it still has upside from further business growth and recurring income but is no longer a cheap bargain when I first got it.

  7. Hi Calvin,
    You mention you could not get any lots for croesus Rtrust, how many lots do you usually subscribe for an IPO, croesus for eg? Does it mean that if i apply for more lots, that would ensure higher chances of allocation?

    • Hi MICH, in general for private placements the more you subscribe and the stronger your relationship with the bank, the easier to get lots. One way of course is to join their IPO club. For balloting, so far my experience is that it has been quite random, I got lots before when I only applied for some but got nothing when I applied for a lot more.

  8. richard says:

    capitamall has not appreciated as have other reits.i am interested to know why it is a large part of your portfolio.i am open to buying more.

    • Hi richard, I am holding it for the long run and for dividends. I am not expecting it to run up a lot from now as its yield has already compressed significantly. The reason for it being a large part is that it is part of a core portfolio which I generally do not trade. I add to positions when the price is weak.

  9. richard says:

    hi calvin

    starhub is a sell with a few investment houses.what do you think?
    ascendas is also a sell.are you thinking of selling them in the future?
    your site is an inspiration

    • Hi richard, like CMT, Starhub is part of a core portfolio, I wouldn’t sell unless the business has a fundamental change for the worse. Ascendas is also part of the core, definitely no reason to sell as it is the strongest and most diversified industrial REIT. Thanks!

  10. richard says:

    hi calvin my singapore investments are a copy of your holdings.many thanks

    • Hi richard, do take note that everybody have different financial goals, risk profile etc. It may not make sense to copy wholesale, always know what you are doing for your own investments rather than just following. It is ok to read other people’s analysis of the stock market, but always form your own views.

  11. Hi Calvin,

    QAF is introducing scrip dividend, will you be taking up? My worry of taking it up is I will be left with odd lots that will cost more to sell in future. What is your advice?

    • Hi TL, nope I do not subscribe for scrip anymore. I prefer to have the flexibility to do my own reinvestments. Another factor is of course the fact you get stuck with odd lots.

  12. Hi Calvin ,

    What is your comments about Suntec ? which still traded below NAV .
    i go through Suntec financial report and found out some of their earning come from BFCD and One Raffles Quay incoming support ,which will be end soon , that means Suntec DPU is not sustainable in future.

    TQ

    • Hi mlbeh, Suntec looks good. AEIs are on track at Suntec City, pre commitments to rent are high.

      One Raffles Quay has full occupancy and MBFC1 is also almost fully occupied. No issues there.

  13. Hi Calvin, can you please advise the stock tickers for golden Agri n first resource ? Based on historical charts, the price for first resource seems on the high side unless I’m looking at the wrong ticker: frld.si

  14. Hi Calvin, do you also invest in any high-yield bonds/UT? Any insight to share?

    • Hi Diana, I am not invested in unit trusts. The non transparency and high charges are a deterrent, but they can still be useful for e.g. if you have more than $60k in CPF SA, as unit trusts are the only investment vehicle available to the SA.

  15. Hi Calvin,

    any take on Soilbuild’s IPO?

    Danny

    • Hi Danny, no I have not looked at Soilbuild seriously, I am more focused on the listed stocks now and picking up value as the market is correcting.

  16. John Liu says:

    Are you still bullish on vard? What is your strategy on this? Will you take this opportunity to sell?

  17. Hi Calvin,

    I just entered Croesus at 1.07. Do you think it’s a good price to accumulate now?

    Thanks
    Vic

    • Hi Vic, I started accumulating below $1.05, just be aware of the fx risks. Remember this should just act as a diversifier and therefore should not be a significant part of the portfolio.

  18. Hi Calvin, just wondering if you have considered Geo Energy Resources as part of your portfolio?

    • Hi diana, nope I am not very confident about coal at this point and there is a lot of research to do, i.e. the concessions, the grade of the coal, demand for coal, transportation costs, infrastructure costs etc. etc.

  19. Hi Calvin, do you also hold any high yield bonds as part of your portfolio?

    • Nope, not at this point. High yield bonds are typically not available on the retail market, they are available OTC and the min purchase price is pretty high. Just be aware that the high returns are due to the higher risks as stated by their credit ratings.

  20. Hi Calvin,

    There is a heavy correction today, especaily reits. Are you looking to load up some reits shares during the correction or looking at some other shares?

    • Hi TL, yup I have started to pick up little bit on the REITs, looking to accumulate more on weakness.

      • Hi Calvin,
        That is fast. I am hesitate to move yet as I am not sure what strike the correction and prefer to monitor further, hopefully I do not miss the boat. Can you share what are the reits that you picked up?
        I am looking to load up my current holdings in Ascott and CapitalRetailChina. Also hoping to pick up MapletreeInd or Cache, which I missed out during the last bull run.
        But my resource is limited, so I am considering very carefully. The price is still quite high despite the correction.
        What do you think about ComfortDelgro that has take a very serious hit?

        • Hi TL, I just nibbled some of the conservative ones, namely CapitaMall Trust and Fraser Centerpoint Trust. Most of the retail trusts should be fairly stable due to defensive rental revenues. To me it’s just a nice time to deploy some of the capital I have been accumulating which otherwise would just be sitting there.

  21. Hi Calvin please advise is suntec undervalue nav is higher than share price and compare sabana with suntec which will you choose to invest?

    • Hi Tony, given a choice btw Suntec and Sabana I Will pick Suntec due to the fact it is retail properties mixed with office and the properties are in very prime areas. But it also depends on valuations of course.

      • Anonymous says:

        Hi Calvin, thanks for your reply. Why suntec had lower P/B compare to nav? Do you consider suntec undervalue as compare to other reits? How about Ascendas HT and Saizen?

        • Hi there, there are many reasons for a stock to be undervalued, it could be not enough people recognizing the value, the market discounting it, irrational fear etc. etc. there is no exact explanation. Suntec is ok where its at, it’s a hybrid REIT of office and retail, so it’s between say CMT and CCOT. MCT is a close proxy as a hybrid.

  22. Hi Calvin,

    What’s your take on King Wan Corp as a high dividend stock ?

    http://sgx.i3investor.com/blogs/towardsfinancialfreedom/8331.jsp

    • Hi SY, the high dividend yields of above 9% projected includes the liquidation of their Thai assets. But core yield of close 5% still seems not bad considering they are in a net cash position and fcf projection looks strong. I am not familiar with their business, but on first glance looks like an undercovered, possibly undervalued stock. Order book and revenue projections look pretty rosy though, have to do more due diligence on the revenue projections.

  23. Hi Calvin,
    The prices of REITS have dropped quite siginificantly on thurs due to suggestions that the FED might consider tapering their QE soon. Does that worry you considering that a large proportion of your portfolio are REITS, do you have any intention of rebalancing your portfolio because of this? In the event that the FED actually start tapering, I presume the fall for REITS would be even greater, no?

    • Hi MICH, there could be shifting from defensive assets such as REIT and high dividend stocks to bonds if the interest rates start to rise. In that sense there may be an impact on the stock price, but it doesn’t change the fundamental of the stocks. Could be an opportunity to picking up more if the price falls dramatically. Actually if you compare my current portfolio to 2012, you can see I have already shifted a large chunk from REITs to non REIT sectors for my stocks. I have also sold some properties to take gains.

  24. Hi Calvin,

    Do you mind sharing what your average cost for Vards?
    Are you doing a write up on the recent Q1 result?

    SAM

  25. Hi Calvin,

    Why would there be a shift from defensive assets such as REIT and high dividend stocks to bonds if the interest rates start to rise?

    I thought if interest rise, all stocks, reits and even bond price will drop? No?

    • Hi alvin, at this stage of the cycle, an increase in interest rates is probably a signal of confidence in the economy. So the cyclical stocks should do well. There would be a shift from defensive assets to cyclical to capture the upward movement. While existing bond prices will drop, the new bonds issues will be at higher yields, so again the defensive dividend stock yields may not be as attractive anymore when say risk free bonds interest is higher.

  26. Hi Calvin,

    Any thoughts on the pending SPH reit listing?

    Thanks

  27. patricia says:

    hello Calvin
    You mentioned you nibbled at CMT and Frasers Centrepoint. May I know at what price did you buy the above shares recently.
    I am still sitting on the sideline with MapleTree Greater China reit because it has risen to $1.06. :(

  28. Hi Calvin,
    Just FYI for you and your readers, there was an insider purchase of 100 lots of Suntec Reit at $1.81. I take it as a good sign…

  29. richard says:

    hi calvin

    any thoughts as to why ascott reit has not done as well as the other reits.is it only their overseas holdings? that is the problem?

    also any thoughts on sheng siong.is the price expensive?

    many thanks for the continuing support for your many readers

    • Hi richard, I think Ascott has done fine in terms of its business. Their results look good. Stock price is not the same as business performance.

      I am interested in looking at Sheng Siong as the dividend payments look more certain now.

  30. Woa today another sell down…

    Lost quite a bit… How ah?

    • Hi alvin, if you had bought when the prices were attractive, you shouldn’t have lost much. It’s just a minor correction. If you were chasing and bought at higher prices, then you will eventually get burned. This is in fact a good time to start bargain hunting a little.

  31. Hi Calvin,

    If u are planning for retirement now..would you purchase bond issue by our singapore bank such as uob 5.05% bond OTC? I know this is going to be call back but it is the kind of bond im refering to for retirement.

    I also want to ask if nterest rate rise, would bond be issue at higher coupon rate or lower compare to now where 3-5% is the norm.

    Would u also consider bond unit trust?

    Thanks.

    SAM

    • Hi Sam, bond unit trusts can be useful if you do not have enough money to build a bond portfolio, min. $250k per lot.

      Bonds can form an important part of the portfolio for fixed income and to reduce volatility through diversification from equities. This is a relatively big topic to tackle in a single comment. I suggest either you come for the course first or we can have a consulting session if you are looking to plan for retirement.

  32. Hi Calvin, what is your opinion on SGX share price?
    if compare telco(like starhub and M1) to SGX, you will pick which to invest for long term?

    • Hi Tony, I am not looking at SGX.

      I prefer Starhub to M1 due to its larger rang of product offerings, esp. the home package. It is the only real competitor against Singtel in the domestic market.

      • Hi Calvin thanks for your reply.
        You have Starhub In your above portfolio, wonder why you select starhub as compare to singtel and from which fundamental point of view?
        Regard US to reduce bond buying which interest rate to be increase, would you invest US bank( BAC or WelFagro) for long term?

        • Hi Tony, I have both Singtel and Starhub.

          I am not invested in any US banks, Singapore banks will also benefit from increased interest rates so I don’t see a need to take on US financial sector exposure. My US portfolio still consists of primarily consumer stocks. I may take on cyclical exposure on Singapore side, rather than get exposed to both cyclicality risks and fx risks.

          • Hi Cavin, please share what you mean in layman term “may take on cyclical exposure on Singapore side, rather than get exposed to both cyclicality risks and fx risks”
            How do you feel of DOW have been -ve 3 digits these 2 to 3 days?

          • Hi Tony, cyclical exposure refer to stocks which tend to be more volatile and move up and down drastically. It can result in more volatility of the portfolio value. Fx risks refers to currency risks from investing in foreign stocks. So a cyclical stock may be Sembmarine in Singapore, while a stock like Haliburton could expose you to both cyclical risks and fx risks.

  33. Hi Calvin, you mentioned any increase in interest rate could points to cyclical stocks doing well. Apart from container shipping-NOL which I believed belongs to the cyclical industry, are there any other cyclical stocks out there which we can keep in view?

    • Hi Pollux, there are many industries which are considered cyclical, including oil & gas, construction, commodities etc. Bear in mind though not all of them move in the same cycle. For example, the construction cycle does not always correlate with the physical commodities cycle.

  34. Hi,

    Thanks for your kind sharing! Would like to know, what’s your view on Noble Group and SembCorp?

    Cheers!

    • Hi Pete, generally I don’t form views and I don’t really look at these 2 stocks much. However, I am interested in SembCorp’s utilities business which is very defensive and just waiting for the right time to pick it up.

  35. richard says:

    hi calvin

    i do feel that questions from readers as to your own purchase prices are rather inappropriate.telling us what you buy and when is surely marvellous enough

  36. Hi Calvin, what do you think about bond etfs for example? They have monthly dividends that are rather generous. Can you advise if they are a good alternative for dividend stocks and why you don;t have them in your portfolio? Thanks!

    • Hi Su, SGX listed local bond ETFs like ABF SG Bond have relatively low yields (about 1%) at the moment . Other bond ETFs like iShares Asia Bond ETF has higher yield, but the dividends are quarterly, not monthly. So not sure which bond ETFs you are referring to.

      Remember that when interest rates increase, bond values will generally drop. The extent of the drop depends on the duration.

  37. Hi Calvin, vanguard total bond market ETF (BND) has monthly dividends of 0.2 per share . The price of this ETF is quite expensive though but if there were cheaper similar bond etfs, would that make it a valuable source of dividend ?

    • Hi Su, the yield for Vanguard Total Bond Mkt ETF is only about 2+%, not sure why you call it ‘generous’. It’s pretty low in my opinion, but that’s because interest rates globally are rather low. Bonds definitely serve a purpose as a diversifier in a portfolio, but entering now when the bond prices are high may not be ideal.

  38. greenrookie says:

    Hi calvin and Su,

    Just to kaypoh a bit about bonds, I read from d.o.g from valuebuddies regarding buying bonds funds. Bonds are safe because there is a maturity date when you can get back your capital at par value. But bonds funds (ETF also a fund to my understanding), usually buy and sell bonds before they are matured, so when interest raise, they might not be able to exit in time or at the”wrong time” leading to the value of the bonds to be badly affected, and since there is no maturity date, your fund might be struck at sub par value for a long time.

    I was researching on CMA retail bond of 3.8 percent, there have a ratio of NP to fixed costs of around 3 times, which I find reasonable safe, I include dividends in the interest cost, but that can be stopped by CMA in bad year, so my calculation is rather conservative at least the CMA dun get hit by severe property depression, the maturity is in 2022, but there is option to redeem the bonds at 2016, if they dun,payout rate become 4.5%, not actually a bad deal.

    If the interest rate turn tippsy, 4.5 % is not actually a big burden to CMA, and you can still look forward to getting everything back in 2022

    2 cents worth

    • Hi greenrookie, bond ETFs are different from bond mututal funds. Bond mutual funds have active managers who may long/short, exit positions before maturity etc. Bond ETFs are generally indexed so they hold a basket of bonds and would rarely deviate, hence they don’t try to time the market. The pro of a mutual fund is that they can actively manage the duration of their portfolio, so you may get higher returns from them, the con is that they could the timing wrong.

      Bond ETFs in general hold until maturity. However, in general when interest rates increase the bond prices will drop across the board. The severity of the drop depends on the duration of the bonds. And yes, I do recommend going into individual bonds if you can afford to, because you can just wait for maturity if you locked in at a reasonable yield.

  39. Greenrookie says:

    Thanks Calvin, learn something new today again!!

  40. Hi Calvin, with the recent dips in share prices especially REIT, are you considering rebalancing your portfolio by selling more REIT and load on weakness on cyclical stocks? With reports urging investors to drop REIT, in your opinion, would it be high risk to continue to hold on them and hope to ride out of the price dip? Thanks!

    • Hi Diana, when we are talking about rebalancing, it should be the opposite. You sell stocks which have increased in value since they are now a larger proportion of the portfolio due to the increase in prices and load up on stocks which are weaker. There are reports which put underweight on REITs like CIMB, but there are also reports which say to buy REITs as its an opportunity i.e. OCBC.

      So I do what I always do, buy good stocks when they are cheap. I will continue to hold them as long as they are fundamentally still doing well, which most of the the SREITs I own are.

  41. Hi Calvin, i sincerely appreciated your kind sharing ! Thanks you very much

  42. Hi Calvin, I would like to consult you what are the few stocks I can buy for dividend investing. There are so many counters, don’t know which to pick, could you recommend just 2 or 3 good one for long term investment. THANK YOU VERY MUCH!

    • Hi Jo, for long term investing, in general it should be ok to go for blue chips like CapitaMall Trust, DBS, Keppel Corp, ST Engineering, just to name a few. It will good to be diversified in terms of industry and it doesn’t hurt to get the STI ETF as well. If you look at the very long term, more than 5 years, these stocks should do well. Of course, if you buy them cheap, you can make even more.

      • Hi Calvin,
        Does STI ETF pay dividend like ordinary shares, if yes, how is it derived? I notice there are at least 2 STI ETF in the market, I assume they should have some differences?

        • Hi MICH, yes STI ETF does pay dividends. The dividends given out for the year would be the same as if you bought all the stocks in the index and collected the dividends. It is of course weighted according to the weight of each respective stock in the index. There is also a small fee which should be charged on the dividend payout, if not it will be charged on the NAV.

          • Anonymous says:

            Hi Calvin,
            Could you share with us your views on 2 upcoming IPOS, namely SPH Reit & OUE HT? Would you personally be interested in subscribing to them yourself?
            Many thanks.

          • Hi Anonymous, at this point I will not be subscribing as I already have substantial exposure to Singapore retail REITs from CMT, MCT, FCT and Suntec. In general, I don’t really have much hospitality REITs as I feel they are the least defensive among the REITs. The environment at this point is also slightly negative for REITs due to fears of rising interest rates, it would be prudent to study the debt maturity profiles and debt structure of the REITs before entering.

  43. HI Calvin

    I am newbie.
    My first and only purchase was AHT at IPO, $0.88 x 3 lots.

    They recently announced Preferential Offering.
    Does it e.g dilute my shares or affect the dividends if I do not do anything?
    Or what if I participate?
    Why would one choose to ignore or participate

  44. Hi Calvin,

    What’s your view regarding the 1-for-1 rights issue by UE ?

    • Hi SY, I am not particularly happy with the rights issue. The exercise price is too low in my opinion, they are selling the equity too cheaply. There are 2 options now, either I cut loss now or I subscribe for the rights and then sell later on. Anyway, it’s a small percentage of my portfolio.

      • Hi Calvin,
        Since UE price their rights issue at $1.50, does that put pressure on the share price and cause it to gravitate towards the $1.50 mark? That would be a steep decline?

        • Hi MICH, yes it would definitely do that. You can see that whenever there is a massively discounted rights issue, the stock price would drop dramatically towards the exercise price. Especially one for one is very damaging for the current shareholders, since there will be massive dilution.

  45. Sweetpea says:

    Hi Calvin, many friends called today the doomsday for the stock mkt and I see my portfolio all went into red. What is your take on this as perhaps some of the REITS you are holding are also affected negatively by the fallen price?

    • Hi Sweetpea, volatility is expected of any stocks, regardless of how defensive they are. It’s always a good time to start picking up bargains when there is fear in the market.

  46. Hi Calvin, are you able to advise what kind of signs should one look out for indicating that the recent market sell-off in the REITs has ended? How can one be confident to take new positions in view of today’s volatility? Thanks.

  47. Hi Calvin, consult you since market signaling end of QE which type of stock will be most affect and what type of stock we should lookout for trending? If interest rate increase US strong economy, is it good?

    • Hi Tony, all the stocks will be affected, but to different degrees. Most importantly, fixed income instruments such as bonds will be most negatively affected. Fixed income like stocks i.e. business trusts, REITs will probably be negatively affected due to the rising required yields. Defensive stocks will be next in line as investors shift from defensives to cyclicals. Overall, in a rising economy out of a downturn, cyclicals will outperform defensives. Yes rising interest rates is a good signal of a strong economy.

      • Hi Calvin, how is your weekend?
        Thanks you very much for your reply. Is Sembmarine, SATs, Supergroup, Noble and ChinaMinzhong consider cyclicals? Are they now cheap to buy and how long will market down trend? Please advise

        • Hi Tony, have been very busy moving house. Therefore didn’t have much time to post or reply comments.

          Sembmarine and Noble are cyclicals.

          SATs is a probable cyclical due to exposure to airlines, but strong fcf and yields make it defensive as well.

          Super and ChinaMinzhong are more like consumers, thus not considered cyclical.

  48. Charles says:

    Hi Calvin, I noticed from your portfolio that you have no stocks from any of the banks, even though their dividend offerings are not bad. Any particular reason?

    • Hi Charles, I have decided not to enter financial stocks unless they are really really cheap as they are very cyclical. Would have to wait for another major crash for that to happen.

  49. Hi Calvin,

    With the Reits correction, are you still holding on to the reits or is it time to get out of reits?

    What if the interest rates start to rise, it is not good for reits. Alreally just talking by US ,” not until 2015″ dividend counters have corrected, more downside ahead?

    What should income investors do now?

    Thanks for your insights.

    LSP

    • Hi s Lee, I am holding on and buying more!

      There is already a good spread for the REIT yields, it’s not like they are trading at 2-3% yields, which physical properties are. So even if the interest rates rise eventually, it’s not a big deal as the rates are unlikely to go from 5% to say 8% or something for retail REITs for e.g.

      Another good way is to shift a bit of the portfolio from to cash rich dividend counters such as ST Engineering, as the rising interest rates would not affect them as much since they don’t have to deal with increasing interest expenses.

      Another strategy is to go for slightly lower yields, but higher growth stocks such as First Resources etc. as growth will outperform in the rising economy and the income yield will compensate for the time period while waiting for a full recovery.

      • Hi Calvin,
        Would you say that @$3.99 and tm pe 21, ST Engineering is overvalued? But annual dividend yield is 4.3% which is attractive enough.
        Appreciate your thoughts, please. Thanks very much.

        • Hi jojo, I wouldn’t say it is overvalued. It’s not a big bargain, but it’s got good growth opportunities, good free cash flow, strong cash holdings and a stable dividend yield.

  50. Hi Calvin,

    UE has hit as low as $2.20. Is it advisable to average down and take part in the rights issue later on ?

    • Hi SY, I am out of UE. I wouldn’t recommend investing in a company that overpays for an acquisition and has to issue massively diluted rights to decrease the leverage.

  51. Hi Calvin,
    With the right issue from UE recently, it has a negative impact on the share price of the company dropping to near 2.2.
    Do you think it is an opportunity play for this share right now since it rnav pre right is $6.6 and post right mostly ard range of $4 .

    Sam

    • Hi sam, I am out of UE. I wouldn’t recommend investing in a company that overpays for an acquisition and has to issue massively diluted rights to decrease the leverage.

  52. Hi Calvin,
    With the recent sharp correction, especially in reits, are you back for bargain hunting in Reits stocks? Or are you still focussing on the non-reits stocks?

    • Hi TL, yes I have been buying some of the REITs, like CMT, FCT, MCT etc. I am also looking at strong fcf defensives which have corrected downwards somewhat.

  53. Hi Calvin, have you sold any of your part of your portfolio besides UE?

  54. Hi Calvin ,

    What is your view on sgx?

  55. Hi Calvin,

    What’s your take on CMT? Anything below $2 is a valued buy?

    Thanks
    Vic

  56. Hi Calvin,

    CDL H reits have also been whacked down pretty hard. At current levels (about 1.7), what’s your take? Good to buy in?

    • Hi Vic, all the REITs have been hit pretty hard. My stance is always to stay with the more defensive one in more volatile times. I would consider REITs like CMT or FCT to be much more defensive.

  57. Dear Calvin, is biosensor a good buy, coming divident and high target price.

    Many tks for sharing ;)

  58. Hi Calvin,

    What is your view on the selldown on Vard today? it breached the $1 you were aiming for. good idea to buy into weakness?

    • Hi Travis, not under such circumstances. Fundamentally there are challenges with the Brazilian operation and I need more clarity before investing further.

  59. Hi Calvin,

    STV had dropped to 0.965 today. Any particular reasons of this?
    Is this a good time to add more or hold first?
    Your view pls. Thanks.

    • Hi EK, that’s because of the profit guidance that Brazilian operations are having a drag on the profitability. How bad will have to wait for results. I am just holding for now.

  60. Hi,

    What is your take on the recent profit guidance warning from Vard causing the price to take a huge dip. Would you consider DCA now at this current price?

    Thanks.

    • Hi TL, I am waiting for more clarity on this and I have to determine if this is a short term trend or something that will persist in the long run.

      I am holding for now.

  61. Hi Calvin, what’s your take on Vard? Today’s closing at 905 is scary.

  62. Are you still optimistic about vard holdings?

  63. Hi Calvin,

    You have been discussing about share investment recently, how about real estate investment? There is no project excite you?
    How about discussion on the Malaysian property direction? Is area like Kajang, Cyberjaya, and Semengih worth investing?

    Many thanks.
    Casey

    • Hi Casey, that’s a good question. I am in the process of liquidating a large chunk of my property portfolio to lower leverage, take profits and also prepare for increasing interest rates.

      I am not in the market for buying any property at this point as it is still early to predict how the increasing interest rates can affect the property prices. Growth areas like Kajang are probably ok due to the increasing public transport connectivity, the MRT is definitely a big plus for real estate in KVMRT. It will have a positive impact on surrounding properties when completed.

  64. Hi Calvin, Any thoughts on Vard? Are you laughing at the incredible low price now? :D

    • Hi Peter, I am just waiting for more clarity, hopefully the results are not as bad as expected and the management is just preparing people for the worst.

  65. Hi Calvin, what are your thoughts on Vard based on current status? Some analysts have downgraded the target price to 86 cents. Still worth holding?

    • Hi diana, see my latest post. I am holding for now as I feel that the Brazilian problems are temporary, but how long it will take to turnover is still unknown.

  66. Hi Calvin,
    What is ur take on vard. Trim or cut?

    Sam

    • Hi sam, I am holding. Remember that you should always look at the portfolio from an overall perspective rather than individually. This stock risk level has gone up, but it will stay in my portfolio as the high risk portion.

  67. Hi, congrats on your new house!

    Like to seek your opinion, is FCT@1.87 and Suntec@1.53 (as of 10/07) are fair entry price? Also, what’s the acceptable P/E ratio to you for stock like ST Engineering / SIA Engineering. Thanks!

    • Hi Pete. Thanks! To me both FCT and Suntec are at fairly attractive prices and FCT is especially defensive. Suntec does have good potential by 2014 when the AEI is fully completed, the new space should be 100% occupied before they start. However, the potential increase in interest rates can affect REIT prices negatively, so invest with caution and the very long term in mind.

      For me ST Engineering, can consider if P/E below 20x, if can reach 15x or lower even better. It depends on what you are after though, whether you are going for asset allocation or deep value. It’s got good fcf and has tons of cash and the revenue streams are pretty defensive. SIA Engineering is similar, but it will have a premium over ST Engineering as it has got better margins.

  68. Thanks Calvin! I am holding on too but will caution on the Brazilian job. Do share with us should you decide to sell your Vard shares. Have a good sunday!

    • Hi Diana, I will try my best to give updates on a regular basis, but at times I do not have the time to do so. Remember that Vard is just simply a high risk stock allocation, it’s meant to be volatile. Once you start looking at the big picture of the whole portfolio and not fixating on individual stocks, you will be able to manage your portfolio and emotions better.

  69. Hi Calvin, would you be subscribing to the SPH REIT?

    • Hi Diana, no I did not subscribe to SPH REIT. I think I have enough exposure to retail SREITs at the moment and I prefer CMT and FCT for their solid management team and much stronger diversified portfolio.

  70. Hi Calvin, FCT and CMt are now near to their 52 weeks lowest. Do you think it is a gd time to buy or should we wait for the new in Sept on QE before buying?

    • Hi lincoln, I have been accumulating both FCT and CMT at the current prices. But given the threat of rising interest rates, they are both subject to substantial volatility due to market fears and also tightening yield spreads. If you want to buy, make sure you are in for the long run and deploy conservatively in staggers.

      • Hi Calvin, can I just check what is ur current average price of FCT and CMT? I entered at FCT at ard 1.85 and CMT at ard 1.86. I read abt their 3rd qrt and this two companies have sound foundation. They are gd defensive stocks and I wanted to collcollect and keep for long term. :)

        • Hi lincoln, I can’t remember my exact prices, but the yields are generally at least 5.3% and above when I buy into these 2 stocks. That’s what matters, to buy it based on value at that point of time. Yes, they are good defensive stocks, with good growth potential and strong portfolio, definitely worth keeping for long term.

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