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Chinese tech, IREIT Global and CPF.

Thursday, September 22, 2022

On 7 June, I blogged about trading Chinese tech stocks for pocket money.

Back then, Chinese tech stocks experienced uplifts in their prices and I sold some of my units in Lion-OCBC Hang Seng Tech ETF.


AK invests in tech stocks?

Alamak, this must be AK's long lost evil twin blogging!

Anyway, in case you don't know, read:

Investing in Alibaba and Tencent.

I added to my position twice in the ETF in the months leading to 7 June.

The ETF does not pay a dividend and it is not a good fit for the purist income investor.

So, for me to make some money from the ETF, I have to trade which was what happened on 7 June.


Trading Chinese tech stocks.

Pretty decent capital gains.

With the ETF's unit price having declined rather significantly, I decided to add to my reduced position.

I placed an overnight BUY order at a price lower than my average price and it was filled early this morning.

It was slightly lower than the price which marked the lowest point of the double bottom pattern which formed in April and May.

Technically, the ETF is oversold but it could, of course, stay oversold for a while.

I do not see a positive divergence as the MACD has not formed a higher low.

So, the ETF could see its unit price drifting lower or going sideways for a bit.

Could we see the low of 15 March retested?

If that should happen, I hope I would be brave enough to buy some.

Apart from this purchase, I also added to my investment in IREIT Global at close to 50c a unit earlier in the week.

Mr. Market seems to have taken some medication and depression has stabilized.

Still, Mr. Market could get another bout of anxiety and, everything else being equal, I will most probably get more IREIT Global on the cheap then.

The only thing holding me back now is the fact that the new year is coming in about 3 months.

I need to set aside $40,000 to make voluntary contribution and top up to my CPF account.

It might sound like I am complaining but I really am not because, to me, the CPF is a risk free and volatility free investment grade bond.

At my age, having a meaningful investment grade bond component in my investment portfolio is sensible.

My significant CPF savings provides certainty and peace of mind.

I know things are looking pretty bad in more ways than one and on many fronts.

However, we have to soldier on as even the darkest night will eventually pass.

If AK says so, it must be so. ;p


Recently published:
IREIT Global is a bargain.

1. Inflation, passive income and budget.
2. CPF money is not our money?
3. $1.1 million in CPF savings.


Singapore Dividend Collector said...

Hi there

I've been looking at iREIT Global as well. Does the concentration of property in France not concern you?



AK71 said...

Hi EX,

Yes, I had to apply for time off from the gaming CSM to blog. ;p

I avoided investing in tech stocks for the longest time not only because I didn't understand them but also because their sky high valuations were mind boggling.

With their prices having crashed, they are looking more like businesses which value investors might be interested in. :)

Although I increased exposure to the ETF, my position still forms less than 1% of my portfolio's market value.

So, it is a very small investment.

Oh, I didn't know it is trading in US$ as well. ;p

AK71 said...

Hi Mike,

IREIT Global's portfolio had only 4 assets in Germany.

Then, they bought some assets in Spain and France.

Concentration risk has reduced a lot compared to the early days.

Daniel Yip said...

I still failed to make money from HS Tech ETF, maybe mr. market don't like me

AK71 said...

Hi Daniel,

Oh, Mr. Market doesn't like anybody.

Mr. Market will do whatever he wants whenever he wants.

Still trying to understand Mr. Market.

Not easy. (TmT)

garudadri said...

Dear AK
I desisted from adding to IREIT for now. All the REITS as well as builders are on the downtrend and with further hikes in interest rates, I am hoping to add at slightly lower prices, one at a time, to bolster my passive income
Nevertheless, the yields should be at least 8% or higher , for overseas asset holding REITS, to cushion the downside to capital loss as this can happen
Take CRCT for example, down to 1.05 as I type. The twin effects of Chinese issues plus rising rates are in play
I am hoping to add this one to average down as of now
IREIT CICT Ascendas etc, all on the watchlist
I have desisted from adding to my loss making Chinese ETF, banks etc etc and will have no choice than to wait for their domestic issues to settle and economy to recover- this might be a long wait though sadly
Best wishes

AK71 said...

Hi Garudadri,

Being cautious is almost never a bad thing as you will have more dry powder standing by.

I don't know if the yield has to be 8% or higher because that could be accomplished with DPU accretive debt funded acquisitions which would mean a higher gearing level.

IREIT Global's gearing is much closer to 30% than 40% which makes me feel that a lower distribution yield is acceptable especially when we take into consideration that only 90% of distributable income is paid out.

As for China, as long as they keep to their zero COVID policy, things will not get better anytime soon is my feeling as no amount of stimulus is going to help if people are locked up at home. ;p

My positions in CLCT and the Chinese tech ETF together form, maybe, 4% of my portfolio.

So, it seems that I do not have a big exposure to China but a weaker China would affect many other businesses in my portfolio, I am sure.

Just have to wait it out and hope for the best.

HEY YOU! said...

Hi AK,
Have you considered prime us reit? Could you share your views if you have?

AK71 said...

Hi Hey You,

Nope. I don't have any interest in S-REITs with 100% US assets.

I am uncomfortable with how they go around avoiding US withholding tax.

Feels like they are exploiting a loophole.

When in doubt, I stay out. :)

HEY YOU! said...

Hi AK,
How do they avoid us withholding tax?

AK71 said...

Hi Hey You,

"For listed securities which derive income in the U.S., the U.S. Internal Revenue Service ("IRS") requires certain documentation from the ultimate beneficial owner to ensure the appropriate level of withholding tax is deducted."

This is from the Manulife US REIT website.

You can read the full details:
Manulife US REIT.

I just don't want to have to deal with stuff like this. ;p

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