Wednesday, 30 September 2020

Sept 2020 Updates

Sept 2020

Portfolio Value after market close

S$129,962.76

Wifey's Portfolio Value after market close

S$92,752.76

Purchase

None

Sold

None

Dividends

1) CapitaLand Retail China Trust (CRCT) @ $241.60
2) ESR Reit @ $66.20
3) Mapletree Logistics Trust @ $153.72

Total: $461.52

Short-Term Transactions

None

Summary

01 Sept 2020 STI Open: 2,538.55
30 Sept 2020 STI Close: 2,466.62
 
My portfolio value fell by about $3,500 this month.

And with work getting busier, there is little time for me to study the market hence I rather not trade.

STI closed lower than its opening for the month of Sept which is contrary to the prior month. 

July closed lower, August closed higher and finally September closed lower again.

This roller coaster ride is a mirror of the lack of clear direction of the local market. In other words the bulls and bears are still fighting with no clear winner yet.

If you ask me how to invest in this market, I would say follow your investment plan if you have one. I have blogged about my plan here and here.
 
If you do not have a plan, you might want to use the STI as a gauge. In my opinion at 2,500 levels, it might be a good time to start nibbling your preferred counters.
 
As always, enter in batches.
 
Three pieces of good news
 
1) Mapletree North Asia Commercial Trust (MNACT) has announced its maiden entry to the South Korean market by investing into a 50% stake in The Pinnacle Gangnam, a Grade A office in Seoul.
 
Looking at it from a long term perspective, this will further reduce its concentration in Festival Walk.
 
In the near term, this acquisition is expected to offset the temporary reduction of income from Festival Walk.
 
While the initial yield of 3.2% appears to be low, around 97% of the leases have fixed annual rental escalations of 2 to 3%.

One downside is the relative low occupancy rate of 89.6% as compared to the market average of 95%. However this might not be a huge hurdle for a manager as experienced as Mapletree.
 
Even 'steadier', the Reit manager also announced that it will waive its performance fee until the Reit's DPU exceeds 7.12 cents which is the pre-Covid amount achieved.
 
Thumb's up!
 
2) CapitaLand Commercial Trust (CCT) has finalised the merger with CMT although it's all to be expected. To be honest I didn't even bother to send in my vote.

With this finalised I am looking forward to the performance of the new entity, CICT.

3) CRCT has announced it is expanding into new sectors apart from its traditional retail sector. 
 
The Reit will include office and industrial assets as part of its portfolio diversification strategy.
 
This reduces its sector concentration risk which I feel no doubt, is driven by the effects brought on by Covid-19.
 
Indeed, Covid-19 has made many companies realised their risks and accelerated their transformation.

Many of those that failed to realise this have unfortunately been forced to close down. And these companies included many brand names familiar to all of us. We have seen this in Singapore and all over the world during this pandemic.
 
With the above announcement, I expect CRCT to follow up by announcing their maiden investment in the new sectors soon.

Just a gut feeling.

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