Portfolio Update - May 2017

*As of 10 June 2017

Counter	Average Price	Yield on cost(%)	Weightage
Singtel	3.7072	4.74	26.37%
First REIT	1.2736	6.00	9.88%
Fraser Logistics & Industrial Trust	0.9317	7.50	9.54%
ParkwayLife REIT	2.4000	5.10	6.14%
M1	2.3600	5.00	6.04%
UOB Bank	18.2150	4.00	5.18%
Capitaland Mall Trust	1.9050	5.80	4.88%
Guocoland Limited	1.8150	2.75	4.64%
CDL Hospitality Trust	1.3050	6.80	3.34%
AimsAmp Cap REIT	1.3300	8.40	2.65%
Capitaland Mall Trust	1.9238	5.70	2.19%
Starhill Global REIT	0.7550	6.25	2.15%
Capitaland Commercial	1.3523	6.15	1.92%
SPHREIT	0.9293	5.80	1.85%
Keppel Corp	6.4300	3.00	1.83%
Ascendas Hospitality	0.6991	8.03	0.99%
STI ETF	2.8058	3.50	9.57%
Total		5.24	100.00%

Legend

CDP

SCB

Total Invested Capital = $35,365.02

Total Expected Dividends/month = $154.14

Average Dividend Yield = 5.24%

I have been putting off updating my portfolio for the month of May owing to spending more time on a side business I have recently started to execute. If all goes well, this side business may allow me to increase my warchest amount, which I can use to deploy when time calls for it.

There was a lot of changes in the portfolio in the first part of this month so I have decided to include the changes in this portfolio update.

The month of May - June had been an eventful one for me. I had reduced several poor performing counters, while increasing exposure to rebalance my portfolio.

1) Small stake with Guocoland

Firstly, I have started with a smallish stake in Guocoland at $1.815 a piece. This property counter had been lagging the big caps, namely Capitaland in response to the government relaxing of property cooling measures. It has not really spilled over to the share price of Guocoland yet, but my small stake is more of valuation buying instead of dividend play. This counter has no strong history of paying large dividend yields, so correspondingly a smallish stake.

2) Increased position with Singtel and liquidated Starhub

I have also decided to rebalance my telco portion of my portfolio by exiting Starhub and correspondingly increase my existing position in Singtel. I know right now my portfolio is heavily weighted to Singtel, standing at a hefty 26% in weightage! This does not mean that I have utmost confidence in the future performance of Singtel and its subsidiaries, given their weakest performances particularly Bharti Airtel. Neither does it say that Starhub is likely to do much worse than it would currently. But from the current circumstances, I just feel that Starhub dividends are unsustainable whereas Singtel's dividends would continue to be sustained. The impending IPO of Netlink Trust would not mean a bumper dividend, and I am not expecting anything from Singtel either. The investment thesis on Singtel remains the same as I had previously posted on this before.

3) Completed 2 trades on SIA

I had previously put some money on SIA and waited patiently for the slow rise in share price due to improving sentiments and also speculation due to some analysts claiming that SIA would book a 25% increase in profits. This claims led to some strength in SIA stock, with it reaching a high of $10.80+. Unfortunately, the shock loss reported resulted in a strong gap down in price the following day. It was not surprising given the bruising effect onto the sentiments of traders, whom ran for the exit. The greater the expectations, the greater the disappointment when results do not meet expectations. Unfortunately for me, I failed to take profit. Upon the news reported, I decided to take action and bailed on when the market opened the following day. I still managed to make some kopi money, but it is good enough for me. As the prices eventually reversed to a low of $9.66, well below my entry price. Which I took the opportunity to pick some up again on the rebound at $9.79 a piece and finally exited at $10.08 to round up the 2 trades done on this counter. The share price might continue to rise on speculation on possible privatisation after the strategic review. But I feel the chance to be likely low, though I will not rule out the possibility.

4) Increased position in First REIT

I have increased another tranche of First REIT as the share prices seem to have retraced quite a bit, perhaps due to the change in CEO, which is still of questionable direction and also a substantial stakeholder reducing some of their stake in the REIT. I am not certain why the weakness, but this is just my hypothesis. Depending on this, the CEO will lay of the direction for more inorganic growth in the REIT, which it had been relying on for the past few years to grow. My opinion is that the direction of the new CEO is likely to be the same as the outgoing one as that strategy has proven to have performed well over the decade, so he would likely not to make any changes. Therefore, I took the chance to increase my stake a just little bit more.

5) Made several rebalancing work on my mini portfolio in Standard Chartered

I have managed to initiate Priority Banking status to my bank account and this allowed me no minimum commissions on my trades. With this, I am now likely to just use my Standard Chartered account for my trading and investing activities, given their way much cheaper brokerage rates compared to the others.

With this power on hand, I took the opportunity to clean out my mini portfolio, reducing heavy positions and increasing smaller ones, provided that the share prices are still fair enough to purchase. Some of the REITs I have had already ran up, so I didn't touch them. I sold some like Mapletree Logistics due to the strong run up in prices, and also that I had such a small stake I didn't see the need to increase my positions with. I had also closed/reduced positions in Ascott REIT and Aims Amp REIT, they had been my outsized positions in this mini portfolio and now I had finally been able to take some profits off the table. I increased some positions in Starhill Global, Capitaland Mall Trust and Keppel Corp. I was also thinking of taking profit on Ascendas Hospitality, but I feel that there is still some growth potential and also dividend yield still pretty decent to warrant me holding on. I had been thinking of adding some after XD at $0.76 but my priority banking status had not been initiated yet so that chance had passed.

The overall portfolio I have is not heavily weighted to Singtel and the REITs. The impending rate decision next week may cause some volatility to my portfolio, but nevertheless, I will use that chance to further beef up my portfolio of income stocks.

That is pretty much it. As a result of my rebalancing efforts, I have reduced many of my stocks positions recently. My portfolio size has now reduced to the $35k region, given expensive valuations in REITs, which is the sector I am monitoring to increase positions in. Excluding the telcos, UOB, Keppel and Guocoland, now my entire portfolio is made up of REITs.

I am not saying that REITs are cheap or the way to go at the moment, but I still believe in companies who are mandated to pay back the profits they have earned. Better than owning a share of the company which takes majority of the profits earned to pay large salaries to their family members running the company or "reinvest" into new areas of growth potential. Unfortunately, it is not as easy as it seems. If interest rates increase faster than growth can pick up, this would be a poor environment for REITs. So definitely still better to diversify our nest eggs.

REITs currently form around 45% of my portfolio, and that is set to grow larger should opportunities present itself next week when Janet Yellen makes her decision.