Portfolio Update - July 2016

*As of 31 July 2016

Counter	Average Price	Yield on cost(%)	Weightage
UOB Bank	18.2150	4.00	21.83%
OCBC Bank	8.6000	4.00	20.62%
First REIT	1.2500	6.75	6.74%
Keppel Corp	5.3700	5.00	9.66%
SPH	3.7500	5.00	6.74%
Capitaland Commercial	1.3523	6.15	4.05%
SPHREIT	0.9293	5.80	3.90%
Keppel DC REIT	1.0102	6.50	2.42%
Ascendas Hospitality	0.6991	8.03	2.09%
Mapletree Logistics	0.9800	7.40	1.76%
STI ETF	2.8058	3.50	20.18%
Total		4.61	100.00%

Legend

CDP

SCB

Total Invested Capital = $16,749.29

Total Expected Dividends/month = $64.34

Average Dividend Yield = 4.61%

The rally in the markets after BREXIT is now showing signs of weakening. Given the sudden plunge last Friday, it is looking like another opportunity to add to my portfolio. I have already taken advantage of the weaknesses of the markets to make 2 significant additions to my portfolio.

The main transactions this month if you have noticed from my portfolio is the liquidation of Saizen REIT and using the proceeds and more cash injected to buy into SPH and more Keppel Corp. As such, my total invested amount has increased to almost $17k, bumping up my expected monthly dividend to almost $65. The dividend yield remains a low end of 4.61% owing to the larger positions in the banks and STI ETF. I am currently looking to add to positions away from banking counters if possible, and addition of SPH and Keppel Corp is a step to diversify my holdings, though still heavily weighted to the banks at this moment in time.

Keppel Corporation has been in my holdings as more of the trading play if possible, but if I am not able to make the trading plan then it is still a nice blue chip to have given weaker valuations at the moment. Now that the SCB rule of minimum commissions have kicked into effect starting next Monday, I am unlikely to add to positions unless the valuations are very compelling. I might even consider moving positions to CDP, but I would prefer to wait and watch as brokerage charges in SCB is still slightly cheaper than CDP. I might as well accumulate more before transferring over since the charges for transferring is fixed at $10.70 per transfer per share.

SPH is more of an income play for myself, and an alternative income stock to the REITs I currently hold. At the moment, REITs are trading near their highs ever since speculation that the US Fed is unlikely to raise rates caused a sudden gravitation towards bonds and REITs. SPH share price plunged back to close to its low after it reported very much weaker results which poses some risks to the current dividend payout to being cut. This puts the scenario of having the current 5% yield I am looking at reducing to 3-4% is to a very much possible outcome given that the current payout is squeezed to a 100%. Still, I am fairly positive on its property segment, also a reason why I am invested in SPH REIT. The media segment has been a drag for a couple of years already and it is up to the management of SPH to seek out ways to improve its income stream away from media and advertising.

Saizen REIT has been liquidated because of the risk coming from the proposed transaction they announced earlier the past few weeks. If they do proceed with the transaction, it is likely they will stay listed, which I believe might be a disappointment to the speculators believing in the actual liquidation of the REIT. Moreover, the share price now is very close to the liquidation value of 1.172 - 1.056 = $0.116. I am willing to take the profits off this counter given the risks of a falling out of the liquidation procedures. The money in this counter would also technically not contribute to any income as at the moment Saizen REIT is an empty shell company, and I would rather use the money to deploy into income stocks rather than waiting for news which may not produce significant upside. In other words, the risk now is now larger than the reward to hold Saizen REIT. And so, sayonara Saizen REIT, it has been nice speculating with you for the past few months.

And so that is all for the month of July. The main focus for me in the coming months is to add to diversification away from banks and to income stocks wherever possible. I don't foresee REITs falling back down anytime soon, but I am eagerly anticipating the time when it does, because you can be pretty sure I would be busy picking up REITs to boost my income segment of my portfolio.

Chaos.

Portfolio Update - June 2016

*As of 30 June 2016

Counter	Average Price	Yield on cost(%)	Weightage
UOB Bank	18.2150	4.00	24.10%
OCBC Bank	8.6000	4.00	22.75%
First REIT	1.2500	6.75	7.44%
Keppel Corp	5.3600	6.00	7.09%
Capitaland Commercial	1.3523	6.15	4.47%
SPHREIT	0.9293	5.80	4.30%
Keppel DC REIT	1.0102	6.50	2.67%
Ascendas Hospitality	0.6991	8.03	2.31%
Mapletree Logistics	0.9800	7.40	1.94%
Saizen REIT*	0.0645	0.00	0.64%
STI ETF	2.8058	3.50	22.27%
Total		4.61	100.00%

Legend

CDP

SCB

Total Invested Capital = $15,177.93

Total Expected Dividends/month = $58.07

Average Dividend Yield = 4.61%

This month, the only thing we kept hearing in the news was the BREXIT saga. Nobody expected it to happen, as they did not believe the Brits would be so stupid to risk exiting the EU. But they did. And so the mayhem.

Just nice that the mayhem happened when my portfolio has been drastically reduced in size ever since the wonderful SCB has decided to charge minimum commissions. I have been busy liquidating stocks which I had no intention to keep for the long term and decided on a few to focus on accumulating more shares. This has resulted in a suddenly very much reduced variety of stocks in my portfolio, as we can see for the month of June.

Despite the reduction in variety, the portfolio value actually increased quite a bit to $15k, up from $13k in May. I took the opportunity of BREXIT to accumulate more shares which I had decided to focus on. However, dividend yield for the portfolio has reduced as I liquidated positions on the weaker counters which tended to have higher yields. The month of June also seen me using SGXcafe to record my transactions and dividends. It is truly a useful portfolio monitoring software which provides real time (end of every day) profit/loss of your portfolio, dividends generated from inception, etc all from just regularly and diligently recording your purchases and sales. I am still recording my portfolio using the traditional excel sheet, as I love to see my portfolio in the format I have created.

So in summary, some of the noteworthy transactions made in June are:

1) The average down in UOB, I bought more after BREXIT, as I felt the bank is largely unaffected by Britain's exit, as its focus of operations have been largely in the SEA region.

2) Bought some First REIT with my traditional broker, adding them into my CDP account.

3) Increased position on Keppel Corp with SCB. If prices were to surprise on the upside, I may consider to sell partially or all as a trading play. If not, I would simply hold for dividends.

4) Took on increased positions on all REIT counters I am focusing on for my SCB portfolio, with the exception of Saizen REIT, which I expect them to delist soon and be liquidated on their own, needing no action from me.

And so that is all for the month of June.

Standard Chartered no min commissions NO MORE!!

I have not been writing posts other than my monthly portfolio updates lately owing to busy schedules and change in jobs scopes. I have recently moved on from my oil and gas job to another industry, which meant that my monthly contribution to the employee stock purchase is no more. It is a real pity because it was a pretty good scheme which allows you to DCA my own company shares. Most times we would be making money because it is a US company and with the US market flirting with its previous highs again, it doesn't take a genius to subscribe for them shares. Oh well, its time to move on, I should not just think of staying at a company just because I want collect their shares! Unfortunately at the new company I am at now, they are not listed so no shares for me :(

Anyway, I am veering off topic now. A few days, I had a rude shock when I read that Standard Chartered would be doing away with their famous marketing point, which means they have finally succumbed to charging a minimum commission and joining the rest of the stock brokerages. If I had to hazard a guess, I would put the blame on the change on lot size on SGX from 1000 to 100 back in January last year. Since then, small retail investors like myself realised it was really worth to purchase 100 shares each time using Standard Chartered platform while enjoying no minimum charges, yet being able to continuously average down our prices should the market go against us. It was this reason that I was actually promoting Standard Chartered in my blog in many of my articles. Of course, if there is a great deal, I believe I should share it with everyone :)

Hmm, so now what? With this $10 commission, I went into deep thinking these days on what to do, particularly when a large ton of my stocks are worth $500 or less, in fact, ALL of them are, with the exception of STI ETF. And when it takes effect on 1 August, if I wanted to realise my shares gain/losses, I would be screwed by the $10 charges for every stock I sold. That would be uh oh. Dayum.

So with great reluctance, I have decided on starting the liquidation of my mini-portfolio in SCB within these 2 months. It is a great pity, particularly when I had only just started this portfolio like last year, in fact, it is almost barely a year old and SCB decided to change their terms. I did consider waiting for the next round of dividends due in July, but that would be pretty tight. And so I wave good bye to my mini portfolio, don't get me wrong, its not entirely liquidated yet, but I am in the process of doing so. But from my own records, the mini portfolio had done remarkably well within a year. It really helped when you could take timing of your positions out of the equation, coupled with the slightly lower commissions compared to the other brokerages, trading around those positions was really possible. With the added bonus of me starting the positions during one of the weakest periods of REITs and interest rate sensitive assets, the portfolio was pretty successful. At least I could take heart that it was successful when it ended. The added advantages of diversification did help too, with some counters particularly the industrial REITs doing poorer than the other sectors.

And so I have went through my portfolio to pick out some REITs I would like to focus on, while looking to liquaidate everything else. I have selected about 5-6 REITs, each a representative of the different REIT sectors available in the market, namely the industrial, commercial, retail, hospitality and so on. Perhaps I will publish my portfolio at the end of this month for those who are curious what those positions are. The rest of the other positions are really smallish positions that was purely bought to diversify further or with a purpose to trade around those positions but did not materialise.

I did consider just leaving the mini portfolio just the way it is. Yes, don't touch it at all, just let it continue generating its minuscule income. I would not be able to do anything about it should the fundamentals of the companies sour. That is not what I wanted, but the positions would be really small to me in future. And there is an option to build on it further, by buying $4000 worth of stock additions to make the $10 commissions worth. However, I just did not like my stocks lingering in custodian accounts when I could transact the same thing with my normal brokerages yet enjoy the similar commissions with my stock safely in my CDP. Even though those rates are on a promotional basis, I suspect the competition for clients' money is so cut throat that this promotion is likely to continue. Already, for Lim and Tan, I have already seen them extending their $10 small lot size promotion consecutively since the start when the lot size was reducing back beginning last year. So yes, there is indeed no point to keep them stocks in my custodian account.

So here is what I intend to do. Keep the focus stocks including STI ETF, eliminate the other smallish positions. Perhaps use the money from the liquidation of the smallish positions to increase positions in the focus stocks should the prices still be favourable. And then once it has reached the 1000 shares limit, I would be prepared to pay $10 plus to transfer the shares to CDP. I did also consider buying stocks with had existing DRP or reinvestment programmes in place so that I could simply DCA without incurring charges from buying from the market. But I would prefer to collect income instead ploughing it back into the market, since the purpose of buy such assets is to generate income. It also eliminates the possibility of having odd lots and the difficulty in liquidation when the need arises.

At this rate, however, I anticipate that my portfolio value will continuously decrease to and even lower level than the already low levels as I had previously embarked on a large scale reduction in my portfolio this few months. Therefore, I would be looking to increase positions, perhaps using the normal brokerage to add to the REIT/Trust section of my portfolio as it has fallen behind the regular blue chip positions. And I promise I will give an update at the end of this month.

Portfolio Update - May 2016

*As of 31 May 2016

Counter	Average Price	Yield on cost(%)	Weightage
OCBC Bank	8.6000	4.00	24.94%
UOB Bank	18.8800	4.00	13.69%
Croesus Retail Trust	0.7843	8.00	9.10%
Capitaland Commercial	1.3429	6.15	3.89%
First REIT	1.1754	6.91	3.41%
Soilbuild Business REIT	0.7628	7.80	2.76%
Starhub	3.3200	6.00	2.41%
Keppel DC REIT	0.9919	6.56	2.16%
Cache Logistics	0.9680	8.15	2.11%
SPHREIT	0.9417	5.80	2.05%
AIMS AMP Cap REIT	1.3363	8.37	1.94%
M1	2.3600	6.00	1.71%
Ascendas Hospitality	0.7217	8.03	1.57%
Mapletree Logistics	0.9900	7.40	0.72%
Saizen REIT	0.0645	0.00	0.70%
Sheng Siong	0.8400	3.00	0.61%
IREIT Global	0.6650	9.00	0.48%
Lippo Mall REIT	0.3200	9.90	0.46%
Kingsmen Creatives	0.6250	3.00	0.45%
Far East Hospitality	0.6200	7.00	0.45%
STI ETF	2.8058	3.50	24.41%
Total		4.99	100.00%

Legend

CDP

SCB

Total Invested Capital = $13.795.50

Total Expected Dividends/month = $57.22

Average Dividend Yield = 4.99%

Once again, another month of activities in the market news segment with the slight jitters from the Federal Reserve hawkish remarks to the unconvincing US economic reports. Despite this, markets remained fairly unchanged, with slight profit taking for stocks mid month in anticipation of some risks coming from the FOMC meeting and possibly some decisions that might derail the fragile economy.

The lack of market movements, however, did not prevent an active rebalancing of my portfolio during this month. People would quote the sell in May and go away nonsense, but statistically, it has proven to be largely untrue. So stay invested, and if markets shock us to the downside, then stay even more invested, notice I emphasise the word "more". Yes, you know what I am talking about.

Some of the main changes are:

1) Reduction in Croesus Retail Trust position

The recent strength in the units have tempted me to take some profits of my largest holding in my SCB account. Anyway, I was intending to rebalance my portfolio, so what better way to reduce my heaviest position as the shares strengthen and bring it closer in line to the current exposure I have with the other units in my SCB account.

2) Addition of Capitaland Commercial Trust units

Smallish positions was incrementally added as the share prices weakened mid May. Office supply is heading for a glut in 2017, but I am betting on the proven management and solid fundamentals of this REIT to weather through the storm as I continue to collect dividends from it. This is one of the REITs I would look to increase positions should markets take a tumble similar to GFC levels, as I like the way the management has handled previous crisis.

3) Smallish addition to SPH REIT

Share prices of retail REITs weakened somewhat in May, but not to the extent of SPH REIT, as I felt that its solid balance sheet did not warrant its fall in value, picked 100 shares at $0.925. Will continue to monitor and add if it falls further.

4) Smallish position initiated for Kingsmen Creatives

This is a new addition to my portfolio, which caught my attention when the prices fell strongly after its poor financial results. I like the businesses it does but unfortunately, its businesses are strongly correlated with the strength of the economy. The weakened share price since 2015 reflects its poor earnings and dampened investor sentiment. Looking at the price chart of Kingsmen would also point to a much better margin of safety to buy now then before. PB of kingsmen is almost 1, and for service companies like Kingsmen, Neratel and the like, it is really a good bargain to buy some as a bet of value. Do note that Neratel currently trades 4x PB.

5) Full liquidation of Neratel, NOL and Ascott REIT

I have fully taken profit on Neratel as it is selling its income generating payment solution business which is the main reason for me to add to Neratel. Without this business, it would have more volatile earnings and it is more difficult to have some degree on certainty in its income. NOL has reached the agreed deal and it is only a matter of days the offer will be despatched to investors. However, I have decided to liquidate it first so that I have cash on hand to put it into other opportunities since this counter yields nothing. Ascott REIT was something I was looking to trade on strength. Prices fell strongly on the placement issue back in April, and have rebounded since. I still do not like the management fees structure and its exposure to the hospitality business is not really what I wanted as I am in the process of accumulating Ascendas Hospitality. Hence, the full liquidation of Ascott REIT.

Observant readers would have noticed that my portfolio has been reducing in value month on month. This reduction has been largely restricted to my SCB mini portfolio account which is heavy on income stocks. I am looking to reverse this by adding more income focused stocks soon, should REITs and other trusts start to fall on fears of an impending hike in interest rates.

Remember, it does not matter how much you start with, but whether you start the first step in your investment journey or not! That makes a hell lot of difference, in the eyes of compounding that is.