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Largest investments updated (2Q 2022.)

Tuesday, June 14, 2022

I last did an update on my largest investments in early April.


Since then, there have been quite a few changes.

I have reduced my investment in Centurion Corporation since that update.

and

I have used some of the funds raised to increase my investment in OCBC even as Mr. Market sinks into depression, making it my largest investment in the local banking sector.

I have also increased my investment in Capitaland China Trust and Frasers Logistics Trust so that they join the list of largest investments in my portfolio.




The current list of largest investments in my portfolio looks like this:

$500,000 or more:
CPF

In a bear market, especially a fierce or prolonged one, having a meaningful amount of CPF savings for those of us fortunate enough to be CPF members gives peace of mind. 

The CPF is not only risk free and volatility free, it pays fairly good coupons too.

Long time readers of my blog might remember one year when I said my CPF savings outperformed the stock market.

See:

$350,000 to $499,000:
AIMS APAC REIT
IREIT Global
OCBC

My investment in OCBC is larger now than when I last blogged about it.

See:





$200,000 to $349,000:
ComfortDelgro
DBS
UOB
Wilmar International

In this category, I added to my investments in ComfortDelgro and Wilmar International.

See:

$100,000 to $199,999:
Sabana REIT
Capitaland China Trust
Frasers Logistics Trust

Sabana REIT is happier to be in this category now because it is lonely no more.

See:

I have hyperlinked the latest relevant past blogs.

So, if you want to find out why I did what I did, please read those blogs.




I believe that these largest positions in my portfolio will continue to generate good income for me even when Mr. Market is suffering a depression.

Passive income for 2Q 2022 is looking pretty good right now and I will share the results once all the numbers for June are in.

I should be publishing the blog in early July, if nothing unexpected happens.

Too much activity recently and I look forward to being relative inactive in the not too distant future.

However, Mr. Market's depression could become worse and since I am cheap, I probably would not be able to resist buying more stuff on the cheap.

Perhaps, it has something to do with the word "cheap" because suddenly I think of baby chickens.







Unless we are highly leveraged, don't panic and do a Chicken Little.

Don't be held hostage by Mr. Market's depression and remember to live life as we normally would.

As long as we are invested in bona fide income producing assets which have the ability and will to reward us, the sky is not falling.

What if we are highly leveraged?

Well, you tell me.

This ends the update.




30 comments:

Desmond Yong said...

AK not interested in US, HKSE stocks?

AK71 said...

Hi Desmond,

Oh, you might have missed these blogs:

1. Is Nio the new Tesla?
2. Buying more Chinese tech stocks today.

Tiny exposure.

If I had many millions of dollars, I might have to look elsewhere for more opportunities but I don't. (TmT)

Anyway, as an investor for income, there are plenty of options in Singapore to keep me pretty satisfied. :)

KC said...

Dear AK, with markets in bear territory, would you wait till the dust have settled before deploying more of your war chest?

AK71 said...

Hi KC,

Unlike the COVID-19 pandemic induced bear market when we saw fear and panic on a global scale which led to global stock markets to melt down rapidly, recover somewhat and then moved sideways for many months, this time, I feel there could be a greater differentiation between stock markets.

The US stock market, especially the tech heavy NASDAQ has been melting down dramatically because the valuations were crazy high and the situation was driven by more than ample liquidity which is now drying up and will continue to dry up if the FED continues to increase interest rate and do quantitative tightening.

Stock markets which do not have such excess and I think Singapore's market is one such example should not suffer a stellar meltdown and, broadly speaking, I don't think we will although we could continue to see prices softening.

The Hang Seng Tech Index, another example, could have already bottomed because the stock prices went into a tailspin many months ago and with China trying to stimulate its economy, it is doing the opposite of what the FED is doing.

So, I am generally sanguine about some counters like OCBC, for example, also because technically, I see a positive divergence in the making (i.e. as the RSI approaches oversold region, the MACD which measures price movement and volume seems to forming a higher low.)

This is a sign that downside, if any, could be limited.

So, the dust could already be settling for some.

Of course, Mr. Market is sometimes perverse which is why it is still a good idea to keep some powder dry. :)

KC said...

Thanks for your thoughts AK.

AK71 said...

Hi KC,

Just me being mental and talking to myself again, of course. ;p

Winnie said...

Hi AK,
Just want to thank you for the multiple posts the past 1-2 months. Really appreciate you taking the time to share generously here on the journey of financial independence. This post is again my Din xin wan (heart calming pill, not Beethoven anymore haha) now. Stay healthy and safe!

garudadri said...

Dear AK
Nice to read this and look forward to your end of Q2 figures
I have her buying FLCT and will add more very soon
Their Australia expansion plans are credible but the interest rates trend are getting tougher with the RBA hiking aggressively
In fact, I am watching the Aussie banks that are great dividend payers and will add to my long term existing holdings if prices fall further with enticing yields north of 6%
However, they are basically long term
MIT is also only radar and hoping to add under 2.40 or around that
The SG banks are still attractive and I bought some last week and waiting for another dip lower to buy more of the three
Regards
Garudadri

keng said...

Hi AK, have you taken another look at Cromwell REIT? Price has gone down below IPO price, and consequently it's yield.

Has the price gone low enough for you to consider or are the assets quality still bothering you?

Hope to hear your thoughts on this.

AK71 said...

Hi Winnie,

I am glad that talking to myself has not helped only my own mental condition. LOL. ;p

Gambatte! :)

AK71 said...

Hi Garudadri,

Thanks for sharing your thoughts.

Good to see that you are staying calm and sticking to your plan. :)

AK71 said...

Hi Keng,

I already have a very substantial investment in IREIT Global which gives me exposure to Europe.

I also like IREIT Global more than Cromwell REIT for many reasons.

At the moment, there isn't a compelling reason for me to invest in Cromwell REIT.

OK, I am just lazy and don't want to have another counter to monitor. ;p

AK71 said...

Hi Keng,

You might want to do a quick comparison of their financial ratios:

http://ireitglobal.listedcompany.com/financial_ratios.html

https://investor.cromwelleuropeanreit.com.sg/financial_ratios.html

Could be something to consider, if you have not looked that way before.

keng said...

Thanks for your kind comments!

Hope you dont spend too much time shopping for stocks and focus more time on your MMORPG :P

garyp said...

Hi AK,

Did u mean u sold away your Centurion? Or left it untouched?

AK71 said...

Hi Keng,

Oh, for sure, the fun stuff comes first.

Always. ;p

AK71 said...

Hi garyp,

I am still invested in Centurion Corp.

It just isn't one of my largest investments anymore.

ThinkNotLeft said...

hi AK, on IREIT, was wondering if exchange rate risk is going to be significant moving forward.

I had Elite Commercial, priced in GBP. GBP had depreciated 10% against SGD compared to 1 year ago.

Similarly, Euro had depreciated 9% against SGD, compared to 1 year ago.

SGD will be strong, as our MAS wants strong SGD to fight inflation. USD will be strong, as US Fed is rising interest rate rapidly. Euro interest rate is around 0%; hence Euro faces downward presure as US and other countries increase interest rate.

AK71 said...

Hi ThinkNotLeft,

Yes, unfortunately, this isn't something we can control.

As long as we are invested in REITs which have some or all income from outside of Singapore, exchange rate risk is something we would have to live with.

This is like the tide, sometimes higher and sometimes lower.

Do we want to have a Singapore centric portfolio and not worry about this risk but worry about concentration risk instead?

Another question, do we want a strong Singapore Dollar or a weak one?

I am inclined to believe that somewhere in the middle is where we realistically should be.

We cannot take only the good and none of the bad.

Things don't always go our way but if we invest in some bona fide income producing assets that will pay us fairly, we should do better than most.

Eddy said...

Hi AK,
Some positive news on IReit Global. 👍🏼 “)
https://www.businesstimes.com.sg/companies-markets/ireits-sant-cugat-green-bags-new-12-year-lease-for-204-of-propertys-total-lettable

AK71 said...

Hi Eddy,

Thanks for sharing this.

Huat ah! :D

AK71 said...

IREIT Global announced on 21 June that it has secured a 12-year lease for about 5,300 square metres of data centre space at its Sant Cugat Green asset in Barcelona.

The tenant is a joint venture between 2 Spanish information technology companies.

The lease represents about 20% of the asset’s total lettable area.

The initial annual rent is approximately EUR0.7 million, and it features an annual rent escalation that allows for a 3% margin above Spain’s consumer price index.

The total lease duration includes a two-year renovation phase that began on 20 June and is rent-free, as well as a break option at the end of the eighth year on 19 June 2030.

“Since 2016, the data centre space has not been leased out and is considered as structurally vacant”, explained Louis d’Estienne d’Orves, CEO of the REIT’s manager.

“However, we have managed to fill up the entire space in approximately two years after we first acquired a stake in the property towards the end of December 2019 – a great achievement considering the challenging operating environment caused by the COVID-19 pandemic, rising inflation, and geopolitical tension in Europe”, he added.

Taking the new lease into account, the occupancy rate of Sant Cugat Green would improve from 77.1% as at 31 March 2022 to 97.2% on a pro forma basis.

Meanwhile, its weighted average lease expiry (WALE) would improve from 3.6 years as at 31 March 2022 to 5.0 years.

A total capital expenditure of approximately EUR7.8 million has been agreed to upgrade the power supply requirements, air conditioning and fire protection of the data centre, with IREIT contributing EUR5.4 million and the tenant contributing the remaining EUR2.4 million.

This upgrading works will bring the data centre to a tier 3 rating, which enhances the uptime performance, valuation and future leasing potential of the data centre space at Sant Cugat Green, the REIT added.

IREIT Global was last done on the Singapore Exchange at SGD0.62, which presently implies a distribution yield of 7.10%

Alcus Trader said...

Hi AK,

With the depreciating Yen against SGD, Daiwa House Log Trust has been on a decline. Do you see value at the current price? Interested to hear your thoughts.

AK71 said...

Hi AT,

We just had a little discussion on DHLT.

You will find it in the comments section of this blog:
Daiwa House Logistics Trust: Good or not?

Talking to myself as usual. ;)

Alcus Trader said...

Hi AK,

Thanks for your fast response. :D

You did mentioned that "...Having said this, if Daiwa House Logistics Trust should see a significant decline in unit price, I might buy some."

I'm assuming that the current price of $0.65 is not significant enough yet.

AK71 said...

Hi AT,

Daiwa House Logistics Trust's decline in unit price is pretty significant.

I would have bought some at 65c or even 66c if the big decline was purely due to Mr. Market's depression.

The distribution yield would have expanded which would have made the Trust a more attractive investment.

If we simply look at the unit price, it seems like we are getting a better deal now but the underlying value has not changed because the unit price is tracking the decline in the Yen which would affect the NAV and, ultimately, the DPU.

Of course, we can speculate on the direction of the Yen and whether it could appreciate in the near future but I am less inclined to do so these days.

I also have other concerns regarding the Trust and it isn't that attractive to me, all else being equal.

SL said...

Hi AK, with interest rates rising, do you think now is still a good time to enter aims amp reit n IREIT at the current price?

AK71 said...

Hi SL,

I already have pretty large positions in these REITs and, so, unless their unit prices decline significantly from here, all else being equal, I won't be adding.

AK said...

Hi Ak71,

Can share what other concerns you have regarding Daiwa?

AK71 said...

Hi AK,

Those that could be shared openly, I already blogged about in:
Daiaw House Logistics Trust: Good or not?

Some things, unfortunately, I cannot share publicly.


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