Hello all,
A belated happy 50th National Day to all Singaporeans!
August has been a pretty exciting month for the markets. The local economy has not been doing too good, and GDP projections have been revised downwards once again. Coupled with the sudden and rapid devaluation of the Yuan, oil prices trending lower, and an anticipated rate hike by the US Federal Reserve, caused a spike in volatility in equity markets worldwide as well as a general selloff in the local markets.
In view of all this, I have deployed more of my cash reserves to pick up a few more stocks locally, and right now unfortunately am more or less out of dry powder for the next couple of months. I increased my stake in ST Engineering on price weakness, and doubled my stake in Capitaland Commercial Trust, as its prices have been depressed due to the trend of lower office rentals, and anticipated interest rate hikes which would squeeze it on both its asset values and interest expenses. I picked up more of it due to it being priced at a good discount to its net asset value, relatively low gearing, stable occupancy and decent yield on cost. As always, only time will tell whether this is a good buy or not.
Most of my holdings have been reporting pretty flat earnings, and interestingly, noticeably higher finance expenses. Boustead has posted quite a large decline in its quarter on quarter net profit (61%), in part due to the demerger of its real estate division Boustead Projects, resulting in a large rise in profit attributed to non-controlling interests. If it was adjusted to take that into account, it would be a more palatable 11% reduction. That aside, management did state that profits in FY16 would still be considerably lower due to a challenging business environment, in particular the oil and gas sector.
The newcomer to my portfolio, Super Group, also posted a decline in earnings this quarter, due to a decline in Eastern European and South East Asian sales in its Branded Consumer segment, as well as the expiry of a tax incentive enjoyed by an overseas subsidiary. This is slightly offset by the increase in revenue from its Food Ingredients segment. It did however report an increase in its EBITDA, as well as positive cash flow and remains in a net cash position.
As a result of mostly flat earnings and some declining earnings, increased market volatility and a general equity selloff, my portfolio value took a pretty big hit this month. You may notice that even though my holdings have increased, the portfolio value is still lower than it was last month.
On a brighter note, the local portfolio did churn out a good S$2347.90 in dividends this month, which makes me a happy camper. In addition, Sembcorp and Super Group are maintaining their dividend payouts for September, and ST Engineering increased its interim dividend 4 to 5 cents. All this, coupled with my additional holdings, bring up the local portfolio's average monthly dividends to S$628. No changes in terms of my foreign holdings since the last update.
Current standing of the local portfolio:
| Stock | Shares | Market Value (S$) | % of Portfolio |
| SingTel | 5000 | 20,300.00 | 13.27% |
| SATS | 4000 | 15,200.00 | 9.93% |
| Keppel Corp | 2000 | 14,700.00 | 9.61% |
| SIA Engineering | 4000 | 13,920.00 | 9.10% |
| ST Engineering | 4000 | 13,080.00 | 8.55% |
| Sembcorp Ind | 3000 | 10,770.00 | 7.04% |
| Ascendas Reit | 4000 | 9,160.00 | 5.99% |
| CapitaCom Trust | 6000 | 8,040.00 | 5.25% |
| CapitaMall Trust | 4000 | 7,900.00 | 5.16% |
| ComfortDelGro | 2000 | 6,220.00 | 4.07% |
| SingPost | 3000 | 5,730.00 | 3.74% |
| Keppel DC Reit | 5000 | 5,450.00 | 3.56% |
| Boustead | 6000 | 5,340.00 | 3.49% |
| Suntec Reit | 3000 | 4,950.00 | 3.24% |
| Cache Log Trust | 4000 | 4,200.00 | 2.74% |
| Super Group | 4000 | 3,600.00 | 2.35% |
| Keppel Reit | 3000 | 3,045.00 | 1.99% |
| Boustead Proj | 1800 | 1,404.00 | 0.92% |
| Portfolio Value | $153,009 |
| Dividends (Aug) | $2,347.90 |
| Average Monthly Dividends | $628 |
Cheers!
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