4th Qtr 2021 : Portfolio & Dividend Update

 Time flies, we are now at end of 4th Qtr 2021 and about to enter a new chapter in 2022. Same as life, the market is such unpredictable, while we are hoping to return to a more normal life with more VTLs ( Vaccinated Travel Lane) and opening up of economic activities, suddenly a new virus variant named  "Omicron " hit us, hard and furious, with so many countries imposing travelling ban from South Africa and it's neighbouring countries.

World scientists are worried about this new variant because of so many mutations it has vs previous one, it seems that we want to "live with the virus" and "the virus also want to live with us" ( most of us), from the initial finding, that it seems to be more transmissible.

Until the next 2-3 weeks where we will have more data or finding coming out, we are not sure if this new variant ( Omicron) will be more "virulent " and cause more severe illness for those being infected and how effective current vaccine be able to deter the spreading or any increase in patients hospitalization or death.

Let's pray and hope that it will turn out to be less virulent ( as from some initial clinical observations from South Africa). Fingers crossed and I am always on the more "optimistic side " ... :D


Market Trend Line:






Even with the current dip, STI is still much higher than last year's March low with YTD gained of around 8+%, of course, we can't rule out that it may drop further if the "Omicron " turns out to be a worse and naughty version of the new variant. It is not really cheap to buy at this point in time, but since it is moving below the long term trend, I guess is good for those long term / young investors to do the DCA for the long run, although the price may not be that "compelling" like during the crisis.




As for S-REIT, it just moving along the trend line (with slightly lower recently). The increasing IPO activities seem to get more excited recently with the new Daiwa House Logistics Trust and the incoming Digital Core data centre REIT. Also have noticed more Equity Fund Rising, be it a right issue /PO or private placement for more acquisitions, well, that's how REIT grow and expand.

We must remember that REITs are mostly for income and not for trading or expecting a sudden/huge increase in stock price appreciation. The value is firmly tight with future rental/ cash flow and plus some asset value appreciation, no matter how good is the assets ( under a REIT), there is always a limit on how it churns out the cash from these assets. I think we must be more realistic in accessing the value of any "hot assets class REIT", some times, certain REITs will attract much more attention or funds flow during pandemics like logistics or data centres. It might not be wise to keep chasing this high price REIT if the dividend yield is already being compressed too much, like 3% or less for the data centre REIT in some cases. From initial stage after listing, with lower gearing , a REIT will be able to increase its DPU by making new acquisitions using Debts or a mixture of Equity + PP or PO. This seems quite common as REIT will show their future ROFR assets for acquisition in their IPO prospectus.



Well, the current price looks more realistic and in line with the market trend and if are happy with 4+%, plus some growth and stable DPU from the data centre, this could be an option now. Of course, please do your own DD, this is not a call to buy or sell... as a disclaimer, I don't own this REIT.


How Much would You've Lost if You had Bought All Singapore REITs at Their All-Time High <source: reit-tirement.com>


Remember: "Price Is What You Pay. Value Is What You Get" .. by Warren Buffett.






HK HSI is down by almost -13% YTD as compared to other Asian Market where most of it has +ve return. HSI is currently trending below -0.5SD and still around 9% to reach -1SD (light green line) where there is strong support for the past 27 years. If you still believe that HKG and CHN tech stocks will rebound eventually, I think this might be a good opportunity to accumulate some HS Index funds like Tracker Fund -2800, where you will have a mixture of old economy stocks (banks/ property/utilities /consumer staple -around 70%) and tech stocks (like Tencent/Baba/Meituan/JD.com/BYD etc) around 30%. You will also enjoy a 3% dividend yield while waiting for the recovery. But I have to admit that this may take a much longer time than we expect, one will need to have patience in venturing into the HK market at this point in time.

Instead of buying HK Tech ETF 3067 which is 100% tech stocks and very volatile, this HK Tracker Fund 2800 ETF might be a good option if you want to have some exposure to HK/CN tech sector. 

Again, please do your own DD and this is not a buy or sell call, you need to know your investment objective and horizon, as well as your risk tolerance in investing in HK or any HK Tech stocks now.

 The risk appetite and time frame may be different from person to person, please do not just follow blindly or copy anyone's ( bloggers, including me ) idea to trade or buy, he/she may have different risk tolerance and profile. 

You need to have your own judgement and analysis before pressing the buy/sell button as you know yourself well and should try not to have "Investment/stocks Tips Mentality" which doesn't end up well most of the time. The behavioural of following Blogger A to BUY and asking Blogger B's opinion then selling after seeing Blogger C's decision to SELL is dangerous and doesn't work well for long term investment.


Be yourself, Not a follower...

"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." - William Feather.


Well, this is very good advice from AK:

Invest in Alibaba Group? High risk, high reward?



4th Qtr Portfolio & Dividend Update :


Portfolio Return YTD ( TWR ) = 11.79% ( outperform STI by 2.85%)









TTL dividend in 4th Qtr 2021 = $21,960.84

This is the lowest amount to be collected in 2021 as you may see from the chart that most of the dividends were collected in the 2nd and 3rd Qtrs of the year where most of the HKG counters and Banks are paying the dividend during these two quarters. 

TTL Dividend for 2021 = $156,901.63 ( which is 9% lower than last year's total).

The lower dividend in 2021 is partly due to my investment in Tech stocks ( amounting to around 12.5% of my total portfolio value now) which doesn't pay dividends normally ( except tiny from Tencent). If I took the portfolio value of tech stocks with a 5% yield ( my current yield from Equity), the total amount of dividend would be quite similar to 2020.  Besides, most of the banks ( SG and HK) and REITs are still yet to fully restore their dividend up to the pre-covid level.

Let's hope that Omicron will not be as bad as Delta and we may see a further recovery of market/economy and companies will be able to pay more dividends in 2022 !!  Hahaha , juts my dream :D




Not much change for my portfolio since the last update, I still have almost 50% in HKEX and 40%/10% remaining in SGX and LSE respectively. 

I am still considering if should re-enter back the KLSE market as there is still some good companies / value-recovery play over there, eg Carlsberg / Petronas Gas etc.




Again, not many changes for my portfolio breakdown by sector, only some minor tweaks here and there, like increasing a little bit on REITs and Tech sectors.




Throughout the last quarter, I only sold 1 stock - HiSun Tech ( one of the smaller payment service providers in China and some overseas biz) due to some issues of their ops in the US ( being investigated by the FBI on some security issues). I decided to cut loss with -18% lost on this counter, but since the investment value is rather small with a loss of -$2954.63. Well, this is the risk of investing in small-mid cap tech stocks, sometimes, we do encounter some unexpected ops issues from time to time. 

Ok, other than the above 3 income stocks, I have also added a small amount to BABA/Ping-An and Tracker Fund-2800 to balance up the income/growth ratio. 


Top 30 Holdings:



Recently, I do receive inquiries about my view on the HKG market (especially tech stocks).

I don't have a crystal ball and don't know what will happen to the HKG market, but one thing for sure is that it will continue to be very volatile judging from China government's relentless actions tackling the data security / anti-competition / taxation issues etc... and the grand plan of " common prosperity". All these may affect the future cash flow and valuation of all the China companies listed in HK or the US. As I mentioned / blogged earlier , we shouldn’t expect a quick recovery for this , sometimes it may take much longer time for market to reverting to mean due to prolong uncertainty and market conditions/sentiment.We will really need to have the patience for this and if you are investing for short term,I definitely think this may not suits you.


Well, this is the latest !!


China to Close LoopholeUsed by Tech Firms for Foreign IPOs

<source: Bloomberg News: December 1, 2021 >

"China is planning to ban companies from going public on foreign stock markets through variable interest entities, according to people familiar with the matter, closing a loophole long used by the country’s technology industry to raise capital from overseas investors.

The ban, intended in part to address concerns over data security, is among changes included in a new draft of China’s overseas listing rules that may be finalized as soon as this month, said the people, asking not to be identified discussing private information. Companies using the so-called VIE structure would still be allowed to pursue initial public offerings in Hong Kong, subject to regulatory approval, the people said. 

Companies currently listed in the U.S. and Hong Kong that use VIEs would need to make adjustments so their ownership structures are more transparent in regulatory reviews, especially in sectors off-limits for foreign investment, the people said. It’s unclear if that would mean a revamp of shareholders or, more drastically, delisting of the most sensitive firms -- moves that could revive fears of decoupling between China and the U.S. in areas like technology. Details of the proposed rules are still being discussed and could change."

Guess the only option to mitigate all these external / systematic risks is to have a more diversified portfolio with a mixture of income and growth stocks. While waiting for the recovery in certain sectors/markets, we may continue to receive dividend income from sectors like REITs/ Banks/Utilities / Commodities etc.

This so-called  "barbell strategy" will allow you to adjust your position according to your risk profile, whether to increase your exposure in growth stocks or income-generating stocks. 


Till next update ... Cheers!


Stay Safe and Stay Healthy !!


STE



Comments

  1. Hi STE,

    Just wondering which broker you are using to purchase UK stocks? Do you know of reliable brokers that is cost efficient (i.e. competitive fees and no inactivity fees)

    ReplyDelete
    Replies
    1. Hi Nigel,
      For LSE market, I mostly use SCB ( Standard Chartered Bank), the commission is 0.2% ( no minimum charge ) and no dividend handling charge , but this for Priority banking , for normal account, I thinks is 0.25%. I also use POEMs for bigger amount as they charge 0.12% ( with minimum GBP10 ) for AUM above $250K, for normal act, I think is 0.18% ( min charge of GBP20).
      Hope this assist.
      Cheers !

      Delete
    2. Tks STE. Very helpful info for me as I am in the midst of looking for a reliable and affordable broker for UK stocks

      Delete
    3. Hi Nigel
      Unfortunately there are no really good and affordable brokers in SG for UK stocks. I use Saxo and they are certainly not competitive plus we lose out in FX conversion at bad rates
      However, remember that we incur significant stamp duty for most UK stocks. This makes it still worse for retail investors
      Some of the prominent UK stocks like BP RDSB ULVR DGE SN etc can be instead bought as ADR in the US cheaply and that is what I am doing recently
      STE- Your comments, if any?
      Regards
      Garudadri

      Delete
    4. Hi Garudadri,
      Thanks for the comments and further info which is much appreciated. Yes, I thought of that idea to buy UK stocks via ADR with cheaper commission. I am not sure about the tax ,such as any withholding tax for dividend received under ADR ? and do we need to pay the 0.5% stamp duty like we we trade via LSE ?
      Appreciate your advise and comments for our better understanding and info.
      Thanks.

      Delete
  2. Great post STE
    Happy new year
    Garudadri

    ReplyDelete
    Replies
    1. Hi Garudadri,
      Thanks for the comments and wish you A Happy and Prosperous New Year 2022 !!
      Hope we will have a better result for our stocks performance in 2022 ! :D
      Cheers !!

      Delete

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