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Added to position in DBS. T-bill 3.8% p.a. cut-off yield.

Friday, November 24, 2023

Just a quick update on what I have done in recent days to my investment portfolio.

For anyone who is following me on YouTube, it is no secret that I have been looking to add to my investment in DBS.

I identified the immediate support to be at $32.00, and if that should break, then, $31.80 would be next.

I added to my position at closer to $31.80 a share but it is just a nibble.

I see longer term support for DBS at between $30.00 to $30.50 a share.

So, that is where I would like to buy more.

DBS continues to impress me with its much higher ROE of 18% to 20% when compared to UOB and OCBC which have ROE of around 14%.

So, I feel that this justifies DBS trading at a higher price to book.

There is also the fact that DBS pays dividends quarterly and as a retiree who lives off his passive income, this is also attractive to me.




Next topic is T-bills.

The auction happened yesterday and the cut-off yield was 3.8% p.a.

I estimated it to be 3.88% p.a. but 3.8% p.a. is good enough to make me happy.

What also makes me happy is that non-competitive bids were fully allotted.

T-bill ladder is intact!

Next auction is happening on 7 December.

So, nothing earth shattering happened, really.

Just sticking to my plan.

Always have a plan, your own plan.

If AK can do it, so can you!

12 comments:

Rellangis said...

Hi AK,

Scooped up a bit of DBS at 31.81 today too. I feel is a good business to hold on to and collect quarterly dividends. If it drops further can buy some more haha.

Yv said...

Happy Fri AK,

I got a tad too greedy and went for a competitive bid right at the 3.8% mark, and ended up with 40% allocation.

Learnt a lesson, mai geh kiang...

garudadri said...

Dear AK
Nice entry
I added DBS at 31.85 last week but just 100 shares. I had added 100 of UOB a couple of weeks ago. The falling US yields have boosted the beaten down REITS. Nevertheless, the banks are weaker as the NIM peak is probably beyond us. Recessionary fears are ebbing as well.
However, all three banks are technically weak and they might drop more- I will be adding more of course, without waiting for key support levels etc
Seasonality is in favor and it pays to take some risk with the SG banks
Regards
Garudadri

AK71 said...

Hi Rellangis,

I also feel that $31.80 is a fairly good price to pay compared to when Mr. Market was feeling more optimistic. :)

Ready to buy more at $30.00 to $30.50. ;p

AK71 said...

Hi Yv,

Well, if using CPF-OA money, got to do competitive bidding to be safe. :)

I do feel that a minimum bid of 3.5% p.a. in such an instance for me would be sufficient compensation since there really isn't any other alternative for CPF-OA money.

AK71 said...

Hi Garudadri,

Thanks for sharing your thoughts! :D

I also feel that there is a chance of more weakness in the stock prices of our local banks.

However, as a retiree who is living off his passive income, I cannot afford to buy more consistently.

Will be waiting to buy at stronger supports if they should be tested. ;p

HH said...

Hi AK, with T-bills yield around 3.8%, is it still worth it to top up the CPF medisave account to the BHS amount? Understand the MA pays 4% interest but you will lose the liquidity. Just planning ahead. :P

AK71 said...

Hi HH,

I am still topping up my CPF-MA.

4% p.a. makes it a no brainer. ;p

See:
Topping up my CPF Medisave Account. Again?

HH said...

Hi AK,

I see. I have set aside funds already to top up my MA. In previous years no brainer to top up cos interest rate low. I guess I overlook the compounding effect also by topping up MA. Ok will do so. The 1st low hanging fruit for the new year. :P

AK71 said...

Hi HH,

Lazy AK loves low hanging fruits! ;p

SGP55 said...

Hi AK, been follow you about bank in SG. What is your take if since FED mentioned interest rate cut likely next year. However, I into dividends stock, is OCBC book value better if the share price about $12.30. Unless unexpected events happens where big dipped may happen to ocbc share price. Is DBS or OCBc better for 10years term holding. Bank business likely affected more in coming years especially bank such as trust bank.

AK71 said...

Hi SGP55,

I did an interview last month with The Fifth Person on the topic of banks and possible reduction in interest rate.

If you go to their YouTube channel, you will find it.

Too long to type here. ;p

I am invested in all three local banks.

I don't know which bank will do better in the future but all three should do well enough.

All else being equal, for sure, lower stock prices will offer better value. :)


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