Feb 2020 Updates

Feb 2020

Portfolio Value after market close: S$130,500.85

Wifey's Portfolio Value after market close: S$61,970.85

Purchase: None

Sold: None

Dividends:

Suntec REIT @ $93.88
CCT @ $154.40

Received $11.75 from shares being borrowed on the SBL programme. 

Slight increase in portfolio value over last month end. Surprisingly as the market is a bloody red today with STI dropped close to 100 points.

Several counters have reached or is closing to my TP. Might enter in batches next week depending on the trend. 

My Plan for this Virus Crisis

We are now in the midst of the Wuhan virus outbreak with the spread showing no sign of abatement. Neither has a cure or vaccine been found yet. 

To make matter worse, another outbreak of H5N1 bird flu has been reported in Hunan, China. 

Naturally these led to a bearish trend among the stock markets worldwide. 

I'm sure most people already has a plan in mind on how to tackle this crisis with reference to their investments.

Some will stay on the side line and try to catch the bottom.

Some will accumulate, citing the famous adage: Be greedy when others are fearful.

Some will attempt to short the market. 

So what's my plan for this?

It is quite simple actually. It's a hybrid of the first two strategies.

1) I am spending most of my time on the side line trying to accumulate more funds while watching the news and market closely.

2) Whenever a counter in my watchlist hits my initial target price, I will do a quick re-analysis and buy a small batch.

2a) Key to this is buy in batches. Because the market can turn in any direction any time. So if the share price of the counter drops further to a certain percentage, I will buy in again pending another quick look through.

2b) If a cure or vaccine is found for the virus, the market would almost certainly rebound sharply.

Then I can buy on the rebound also. However the key to buy on the rebound is that one must be nimble. So it is imperative to watch the news closely.

Now this is something that I can't say for sure that I will have the time to do it.

Hence with point 2a above, at least I would not have missed out totally on good opportunities. 

CRCT-MNACT REIT Maybe?

I was thinking last night that with the flurry of M&A among REITs recently, would we see a merger between CapitaLand Retail China Trust (CRCT) and Mapletree North Asia Commercial Trust (MNACT)?

Afterall CapitaLand bought over Ascendas-Singbridge not too long ago.

The portfolio of CRCT and MNACT are similar in nature to an extent. They are synergistic geographically and in the type of properties - retail. 

Some basic metrics of both counters

CRCT

Market Cap (based on $1.53 share price) : $1.84 B

No. of Properties: 13 (China) 

Property Value: $3.8 B

MNACT 

Market Cap (based on $1.16 share price): $3.7 B

No. of Properties: 9 (China, HK, Japan) 

Property Value: $7.6 B

I couldn't find any information on market capitalisation from CRCT's report but a quick calculation got me $1.84 B. 

So if a merger does occur, we are looking at a REIT with about $5.54 B market capitalisation and 22 properties in North East Asia worth $11.4 B thereabout.

I also did a quick comparison against some of the REITs among my portfolio for curiosity sake. 

MLT Market Cap: $6.15 B

CCT Market Cap: $7.9 B

Suntec Market Cap: $5.2 B

Anyway the above is just a wild thought on a boring night. Just read and forget.

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On a side note, I drove my bro to a certain bubble tea shop just now.

Despite being a Tuesday afternoon, I saw streams of youngsters going into the shop.

That got me curious. After that I found out this shop is actually a franchise by a local mini celebrity. And a really famous singer once said this is his favourite tea shop in Taiwan*. 

(Not going to name names as I don't want to advertise for them and more importantly, I seriously find the tea so so only. Haha.. But some of you might recognise from this bottle.)

The busybody me did a quick back-of-the-envelope calculations. 

Their tea costs between $4 - $7. And they already sold nearly 500 cups by 2 pm. 

Basing on $5 a cup and a sales of 1,000 cups per day, their annual revenue is easily $1.8 M. 

With a 50% margin (easily for a F&B product like bubble tea), they are earning close to a million every year. 

Cool.

Lessons learnt: 

1) Power of networking

Especially if you know famous people. 

2) Power of celebrity endorsement

Just a simple one sentence remark by that famous singer can make this shop people mountain people sea.

Really power.

* Edited some information. 

SGX E-learning

Decided to do something fulfilling again today. While baby M was having her afternoon nap, I logged into SGX to do some elearning on Specified Investment Products (SIPs).

I must admit while I know about warrants and Daily Leverage Certificates (DLCs), I am not familiar with the other SIPs so this website is a good place to start reading up with.

For those interested, the website is

https://onlineeducation.sgx.com/specifiedinvestmentproducts/

All in all I took about an hour for the reading and quiz. Importantly, I have gained alot of useful knowledge from here for my investment journey.

The topics covered includes:

1) Exchange Traded Funds (ETFs)

2) Exchange Traded Notes (ETNs)

3) Futures

4) Options

5) Structured Warrants

6) DLCs

7) Leveraged Inverse Products

Oh for those interested in trading SIPs but do not have the relevant qualification or experience, I believe reading these modules and doing the quiz online can help you to obtain the necessary approval from your broker to trade. You have to pass the quiz of course though :)

Anyway below are some screenshots for sharing purpose.

Go ahead and read up more if you think it helps. Enjoy guys!

Finally Made My CPF Nomination

So I had some free time yesterday and I decided to do something meaningful which is to make my CPF nomination.

What prompted me to do it are two reasons:

1) Firstly it is now possible to make the nomination online via cpf.gov.sg. This means it is super convenient as compared to last time. 

2) Secondly and more importantly is this:

Now this made me sit up. Why should I let my money be handled by a stranger who get a cut of it after I passed on? 

No way I'm going to let that happen so I quickly made use of the pocket of time I had and logged into the CPF website.  

The whole process of nomination is quite straightforward and self-explanatory. All in all it took me about 10 min to complete the process to ensure my CPF will be distributed according to my nomination.

The information needed are as follows:

1) Your SingPass

2) Your nominee(s) name and NRIC No. (You can nominate up to 8 nominees) 

3) Name, NRIC No. and email address / HP No. of two witnesses.

With the above details you are all set to do your nomination.

Do note that after you have made your nomination, your two witnesses have to log into the CPF website to confirm (witness) your nomination within 7 days.

For curiosity sake, I went to check on the fees payable to the Public Trustee's Office if the CPF is to be distributed by them and the details are as follows:

Hope you have made your nomination too. 

January 2020 Updates

Jan 2020

Portfolio Value after market close: S$130,401.20

Wifey's Portfolio Value after market close: S$64,721.20

Purchase: 

1) CapitaLand Retail China Trust (CRCT), 5,000 shares @ $1.53
2) Japfa, accepted allocation of 3,000 rights and applied for another 7,000 excess

Sold: None

Dividends: SingTel @ $340

Portfolio value increased to ~$130K this month with the addition of the 5,000 shares of CRCT. This is one of the counters in my watch list and when its share price fell to my comfortable level, I proceeded to queue and managed to get it at $1.53.

 

Have written a short piece on this in the previous post.

 

Have decided to take up my Japfa allocation and apply for some excess as I view this as a nice opportunity to increase my holdings at a lower price than market.

There are a few other counters with price getting near to my TP. Will be watching closely.

My focus this year remains non-REITs, particularly banks, as part of my portfolio balancing.

 

Share price of DBS has fallen by quite a bit today before recovering slightly in the last two hours. However it is still above $25 which is still too high in my opinion.

First Purchase of the Year

Today STI closed 1.8% down. Barely catastrophic if you ask me. However the mini bloodbath presented some opportunities for entry. 

While share price of some counters in my watchlist remained quite resilient, some dropped and started to recover during mid day like the banks. For some, the price dropped and hovered at that level and that gave me some food for thought. 

Made my first purchase of the year today when the opportunity arose. CapitaLand Retail China Trust (CRCT) was trading at $1.54 / $1.55. I queued at $1.53 and managed to get it in the last hour. It might not be the bottom price but it is comfortable enough for me. Slightly below NAV with >7% forward yield. 

Just not my style to go all in in one go. Prefering to enter batch by batch. Hence the same for this counter. 

I don't know whether this is the start of a black swan or just a temporary response to the  Wuhan coronavirus outbreak. My feel is leaning towards the latter. 

If the price drops further I might buy in again. 

Time in the market is better for me than timing the market simply because I'm real bad at the latter.

Crisis = Opportunities