Portfolio Update Oct 2020

My portfolio took a beating from the market plunge in recent weeks leading up to the US Presidential Election. It is a healthy correction and reality check from bad news such as worsening Covid-19 situation in Europe and uncertainty over future stimulus.

Portfolio value drops $7k to $199k despite capital injection of around $10k.

I still firmly believe that this crisis presents opportunities to buy quality income producing assets at discounted prices. While it is disappointing to see investment portfolio value get eroded and declining personal net worth, it is important to stay calm, stick to own plan by executing small steps towards fulfilment of long term goals during such uncertain times.

My upcoming plan would be to add Mapletree Logistics Trust at below Preferential Offering price of $1.99, add Mapletree Industrial Trust at below $3 and hopefully initiate a new position in Keppel DC Reit below $2.80. The best time to invest is now for a better future! 

Portfolio Actions

1. Added 302 shares of UOB at $19.56

2. Gotten 1,500 shares of FCT at $2.34 from Preferential Offering

3. Conversion of 10,000 shares of CCT into 7,200 shares of CICT after the merger

4. Nibbled 297 shares of CICT between $1.75 and $1.82 using the free brokerage promo by Philips POEMS

Portfolio Dividends

1. Received 6 shares of UOB from scrip dividend

2. Received 48 shares of OCBC in SRS from scrip dividend

3. Received $2,590 of capital returns from Capitaland Commercial Trust from the merger

My SRS portfolio value declines slightly to $68.5k. Mapletree NAC Trust has recently reported a DPU of 2.876 cents for 1H FY2020/2021 and acquired a 50% stake in The Pinnacle Gangnam office building in Seoul, South Korea.

I wish the best for all in your investment journeys. Thanks for reading.

With love & peace,

Qiongster

CMT + CCT = CICT Completion

Today marks the completion of merger between Capitaland Mall Trust (CMT) and Capitaland Commercial Trust (CCT) to form the largest Reit in Singapore called Capitaland Integrated Commercial Trust (SGX:C38U). Do note that the ticker name of the new entity is the same as former Capitaland Mall Trust. 

For shareholders of CMT, no action is required; for shareholders of CCT, they will receive 0.72 share of CICT and 25.9 cents today on 28 Oct 2020 for every share of CCT owned.

As I own 10,000 shares of CCT, I have received the 7,200 CICT shares from the conversion of CCT and $2,590 in cash from the capital return.

Together with my existing 7,800 CMT shares, in total, I now have 15,000 shares of CICT geared for the post Covid recovery of the economy and retail scene.

Besides admin stuff related to conversion of CCT shares, for those of you who are using a Philips Capital POEMS trading account, there is an odd lot (<=99 shares) brokerage promotion for trading CICT applicable to cash, CPF and SRS. There will be no brokerage fee imposed on the trade but SGX clearing fee, access fee and GST still apply. 

As the share price of CICT languishes at an attractive level now, I may make good use of this promotion to add on to CICT in the next few weeks by adding 99 shares every day. 

With love & peace,
Qiongster

3 Commodities in Life

The three precious commodities in life are time, money and energy. As time decays, energy can be recharged through sleeping or resting but the maximum capacity of our energy degrades just like a battery does due to inability to store charges. Money, on the other hand, grows as we work by exchanging time for money. 

Sometimes I ponder if retirement entails getting to enjoying own sweet time, enjoy spending the money earned during younger days while keeping our bodies at high energy levels. I think it may not be possible due to the natural process of ageing and we are not able to intake as much foods when we are older or possess the same energy and health levels compared to younger. 

The lure of financial freedom at a younger age than the official retirement age of 60s hence opens up the world of options and presents the great opportunity of retiring early to enjoy all 3 precious resources at the same time in our living lives. 

It is difficult but not impossible to attain financial freedom in Singapore or any cities in the world. With faith, discipline and belief, we should strive for it. If we cannot achieve financial freedom, at least we will be close to achieving it through financial stability or at least feeling secured. 

With the increasing uncertainty of jobs prospects in many industries, replacement of human labour by artificial intelligence and robots, the more importance and urgency that we should increase our sources of passive income and work towards financial freedom. Of course, it is not wrong to possess a YOLO mindset thinking that life is short and enjoy life by spending all the wealth we earn to ensure we die with zero money. Afterall, we dictate the life we love to live.

We have to be aware of losing the most precious commodity of life as time is ticking away. While we gain more money as we grow older, we have to be conscious and resign to declining energy levels. 

Thanks for reading. 

With love & peace,
Qiongster

Net Worth Update Oct 2020

My net worth increases $14k to $979k from Sep 2020.

It is another step closer to SGD 1 million.

I injected around $13k to buy Aims Apac Reit, UOB and subscribed to Frasers Centrepoint Trust's preferential offering shares.

I have attempted and passed my IPPT with $200 incentive.

I will continue to live frugally, grind at work, save up and inject more money into the stock market for the rest of the year.

I am looking forward to the earnings reporting season of Reits in the coming weeks and sitting back to collect dividends. Let the Cum Dividends rain $$$!!!

Thanks for reading.

With love & peace,
Qiongster

Applied for Frasers Centrepoint Trust Preferential Offering Shares

I initiated a small long-term position in Frasers Centrepoint Trust (SGX: J69U) in Aug 2020 using my daily expense funds.

It was not part of my plan but the temptation of owning a stake in resilient sub-urban malls before phase 3 and subsequent recovery of the economy was too strong to resist. 

Coincidentally, the price I nibbled is $2.34 which is the same as the preferential offering price. $2.34 is a fair price as it is near to the book value of FCT and previous preferential offering price of $2.35 in Jun 2019. 

I just paid up for my entitlement and some excess of the preferential offering shares at the ATM to double up my small investment in FCT. I believe that its share price will experience further weakness and possibly drop further before making a strong wave up based on catalysts of either solid financial results or further improvements in the pandemic situation.

I will slowly and steadily add on to my positions in FCT at close to its book value whenever I have the opportunity and spare cash in future. 

FCT is well positioned for the economy recovery and is a long term resilient sub-urban mall play. Short term traders and speculators will be flushed off the boat and get burnt badly while long term investors will be handsomely paid off with their loyalty and patience.

Thanks for reading.

With love & peace,
Qiongster

Added UOB

I first initiated position in UOB (SGX: U11) in May 2020 at $19.72 and have collected $1.14 of dividends, bringing the average holding cost to $18.58.

As the share price of UOB is languishing below its NAV of $22.59, I feel that it is still an attractive investment prospect. This is despite headwinds in the economy, increasing Non-Performing Loans, declines in Net Income Margins and extension of bank dividend caps to 2021. At 0.8x book value, with dividend yield close to 4%, I believe it is better to invest in banks during times of uncertainty rather than waiting for the economy to recover before doing so. During economy booming times, we will then have to pay inflated prices for bank shares.

I think that UOB is more conservative and defensive relative to DBS and OCBC because it has greater presence in domestic markets, larger focus on South East Asia growing and youthful economies, higher ROE and edging out in dividend yield. Ideally, it would be great to own all 3 banks to have the best of all worlds but given limited resources now, I decided to focus on accumulating UOB first.

Hence I decided to add some more UOB shares and my order was filled at $19.56 this morning.

I also collected 6 free UOB shares from scrip dividend reinvestment which is going to be implemented for next year's dividends too. 

See Related Posts:

Nibbled UOB

Own the banks or let banks own our money

Thanks for reading,

With love & peace,
Qiongster

IPPT returns. Using body and sweat to earn some money

Individual Physical Proficiency Test (IPPT) sessions for operationally ready NSmen have been suspended since 31 Mar till 30 Sep 2020.

IPPT has been finally opened for booking from 1 Oct 2020 onwards.

As fit Singaporean sons, this is either an annual national service liability to attempt and pass it or rather an opportunity to reap some monetary rewards from acing it.

For the past 10 odd years, I have been seeing this as an annual affair to earn back some money from taxes for my war chest to cover some brokerage costs for buying stocks. This is despite me being an unfit guy who seldom exercise or go for runs.

This year is no different. I passed the IPPT with 63 points and qualified for $200 incentive despite having not run for the past 6 months and merely did some push-ups and sit-ups occasionally at home. I ended up with cramps, aches all over body after the test but it's worth it. 

Monetary incentives from IPPT are actually classified as active income and will be taxed. 

It is an irony that passive income from interests and dividends are not taxed in Singapore while any income earned using body, mind, blood or sweat will be taxed by the government. This is how the capitalist system works and hence the more we should be motivated to own more income producing assets to generate more passive income that do not require physical effort to earn.

Thanks for reading. 

With love & peace,

Qiongster

What will I do about Suntec Reit?

A year ago, I initiated position in Suntec Reit (SGX: T82U) because I believe it was an undervalued Reit with immense growth potential and headroom for DPU to increase. I suffered capital losses since as I entered at $1.88 near the highs.

Its share price even plunged to the lows of $1.12 during the stock market crash in Mar 2020 but I was unfazed. I did not cut losses nor add on to the investment by averaging down because this was intended to be a small long-term position and I had other better buying targets then in Mar 2020.

On 8 Oct 2020, Suntec Reit announced the proposed acquisition of 50% stake of London Nova Development from Canada's pension fund for £430.6m. The development consists of two Grade A office buildings in the heart of Victoria, West End, London with a leasehold tenure of 1,042 years. The net property income yield is 4.6% and this acquisition is 4.9% DPU accretive. There is 100% committed occupancy with long WALE of 11.1 years. 

This acquisition will be funded fully by debt, propelling the gearing ratio of the Reit to 45.2% which is close to the revised leverage limit of 50% as stipulated by MAS. As as result, the selling of fearful retail investors and some funds caused the share price of Suntec Reit to dip more than 3% on 9 Oct 2020.

It is almost certainly that an equity fund raising is on the cards in the near future to possibly pay off short term liabilities, for working capital or for the next acquisition. The dividends collected from Suntec Reit by unitholders in the recent years will not be enough to cover the additional capital outlay. Hence short term traders and funds holding Suntec Reit with no long term commitment are selling it.

I believe that this acquisition is beneficial to unitholders for the long-term in terms of DPU, geographical diversification, strengthening and growth of Suntec Reit's property portfolio at the trade-off of incurring additional debt at a weighted cost of debt of 2.58%. Locally in Singapore, there is limited room to acquire long leasehold high quality commercial properties for around 5% yield. Hence it is justifiable that the manager seek opportunities abroad in Europe for expansion of its portfolio. Suntec Reit has faced challenging times to sustain its DPU due to the health pandemic impacting retail operations in Suntec City and its newly developed properties such as 9 Penang Road, 477 Collins Street in Melbourne and 21 Harris Street in Sydney have not fully contributed to their property income.

As a long term investor, I treat this transaction as merely another purchase of an overseas property for geographical diversification as well as to increase assets for additional future recurring income. It is a first foray into UK commercial property market even though Suntec Reit is focused on deepening its presence in Australia while also seeking opportunities in other key gateway cities such as Seoul, Tokyo, London, Paris, Frankfurt and Berlin.  

I am prepared to subscribe to rights or preferential offering if there is any equity fund raising in the short-term to avoid dilution. However, I do not plan to average down on my holdings in Suntec Reit unless if its share price plunged to below $1.30 then I may consider given the larger margin of safety.

Thank you for reading.

With love & peace,
Qiongster