Thursday, May 21, 2020

Nibbled UOB

I have sold off Frasers Centrepoint Trust which I nibbled at 2.07 for some kopi money and have been banging my chest and head as its share price shot up to 2.30. My entry point was at 2.03 followed by a correction to 1.96 and then a surge after news of the end of circuit breaker were released. I decided to sell as my visit to Northpoint City over the weekend reminded me that 2 months of rentals are waived for many of the clothing, entertainment and non-essential shops which are still closed in the malls and its DPU will take a year or so to recover back to above 12 cents. It was a poor trade with poor entry and exit points but anyway that was history so let's move on.

To atone for my sins, I searched for new purchase targets to nibble. Preferably existing solid counters in my portfolio or new great companies. I considered adding CapitaMall Trust at 1.85 but does not make sense as I just added at 1.75 a month ago. I also considered CapitaLand Retail China Trust at 1.29, Silverlake axis at 0.235, Thaibev at 0.66 but none gave me the risk assurance, robustness or shiokness. 

So looking at the state of banks, DBS has recently XD, fell by the 0.66 dividend amount and slowly recovered. OCBC and UOB are still in CD mode and trading at 0.8 times book value. As I already have OCBC in my SRS portfolio, I looked into UOB, did abit of research that it was the only Singapore Bank with growing Southeast Asian presence, particularly in Thailand and Malaysia. With strong conviction that we should own the banks instead of letting banks own our money, I find it worthwhile to start nibble UOB to start a new foray as its Cum Dividend is 0.75 meaning purchasing it at any price below 19.75 will achieve a holding cost of below 19. In the long term, we can be sure that its share price will go back above 25.

I have depleted my primary war chest and will not be adding to my investments in the coming weeks. I am not bothered by the development of pandemic situation and whether the markets will continue to crash or rebound. I will just continue to grind out, stick to my plan and emerge out of the virus stronger than before. Thanks for reading!

Love & Peace,


Anonymous said...

Why would the prices of retail reits be increasing when the latest news is that retail and F&B outlets still cant open for maybe another month? This is bad news rather than good news.

Qiongster said...

As an investor, we have to bear in mind that the market is a leading indicator of the economy. The share price of retail reits is a reflection of the 6 to 9 mths future of shopping malls. The stock market is not the economy. The share price of retail reits is not the shopping malls. We are now nearing the end of circuit breaker and even though the retail shops in malls will not be fully opened in Jun, there is more certainty now that they will possibly open in Jul and Aug and by year end, they will all be opened. The share prices have factored in the drop in DPU and loss of net property income. For eg. FCT was still priced at around 2 recently, a 33% discount off its high of 3. Even after rebounding to 2.30, it is still at a 20+% discount off its glory days. I believe that the bad news have been factored in. It will take a great deal of more frightening news to make investors and funds to sell their stocks again.

Anonymous said...

Sounds like an emotional decision to buy and sell

My Investment Machine said...

I believe that reits and trusts in the mall business will drop as the introduction of reopening of business in phases will cause more loss of property income. These business which are not allowed to open will need rental rebates from malls/govt. This will affect the profit and distributable income of the reits/trust.

Unknown said...


Unknown said...

It's not what we know. It's what we don't know.