Wednesday 3 April 2024

Singtel Trading HALT and The Perpetual Rumour of Optus Sales.

This is really weird. Singtel actually needs to call for a trading halt this morning (3 April 2024) to tell investors again that it is not in talk or discussion to sell Optus. Earlier this year as well as recently on 13th March 2024, Singtel had already vehemently denied that it was in a deal discussion with Canadian private equity firm Brookfield to sell away its strategic stake in Optus. 

The strange rumour is being perpetuated by the Australian media on an impending sales of Optus to a Canadian Private Equity firm and the eventual "latest breakdown" of the deal during negotiation is kind of absurd.  

Parting thoughts
For the past few weeks, a number of investors seemed to believe and harbour hope that there is "no smoke without fire" and Singtel is going to announce a big surprise with a sales of Optus. Singtel price declined by <-3.15%> from S$2.54 as at 2 April 2024 to S$2.46 at of 12pm, 3 Apr 2024 after the trading halt was lifted.

Monday 1 April 2024

Investment Portfolios Updates (28 March 2024) - Net S$594K and Projected Annualised Passive Income of S$41K.

Gross investments (including deployable cash) is at S$880K. Net investment value is currently at S$594K (after margin financing) with projected passive income of only S$41K due to Keppel Pacific Oak US office REIT suspending dividends for 2 years. SREITs have again sunk to the bottom of the ocean after rising up in earlier part of the year. Going forward, I have included a "Portfolio Allocation" pie chart to keep track of my current shift away from intense SREITs focused investment portfolios.  I have been busy investing and diversifying into Bond Funds via Endowus before the official announcement of the widely anticipated interest rate cuts by the US Fed in 2nd half of 2024. 
(Note: Please also refer to my other Family Portfolio which is projected to yield +S$20K of passive income per annum).

1. Portfolio 1- Stocks held in SGX Central Depository 
(Note: This portfolio is designed to provide immediate dividends for use as it is under my own CDP account and the dividends credited goes directly to my bank account.)
I have sold off part of my DigiCore REIT units to buy into Mapletree Logistics Trust. In addition, I have also sold off all my holdings in Capitaland Integrated Commercial Trust and bought into United Overseas Bank when there was a decline in its price. 

2. Portfolio 2- Margin purchased securities
(Note: My margin purchased securities has grown to a sufficient scale to sustain itself and can pay off annual financing charges as well as to gradually pay down the margin loan through dividends generated.) 
(a) Bought into 3,0000 shares of China Ping An insurance group as its price has reached one of its all-time low. Bought it more for capital appreciation recovery play and its attractive 8% dividend yield (albeit a 10% withholding tax). I think that the high dividend yield will more than compensate the possibility of long waiting time for its stock price to recover by at least 50%. 

(b) Have also paid back some margin loan as well as converting more expensive USD loans to SGD denominated since my natural forex hedging strategy against USD assets held is no longer effective with the huge drop in valuation of US Office REITs. 

3. Portfolio 3 (with Tiger Brokers)- Venture into higher risk as well as capital growth stocks here
(a) For the last 1 week, I have been using Tiger Brokers and this portfolio to do some short term trading between UOB and Mapletree Logistics Trust and managed to make some side income of S$400. Will probably be taking this money out for spending on food. Inflation has been crazy for the past year.

(b) Added Ping An insurance group to this portfolio too.

(c) Added more into Alibaba when its price dropped below HKD70 a share. 

4. Portfolio 4 (Endowus & Other Investments)
(a) While others folks have bought into more REITs to exploit on their extremely low market prices, I have been building up my stake in bond funds via Endowus. The high interest rates lead to many bond trusts paying out higher distribution as interest rates rise. If interest rate were to be cut, bond prices should further appreciate. In addition, have also been buying into global equities fund for further diversification and long term capital appreciation.  

Summary
I used to have more than 90% of my overall investments concentrated in SREITs. It is still a long way to push it down further to my own targeted reduced allocation of 50%. With the expected cuts in interest rates by the Fed since the last Powell announcement, SREITs valuation are currently rallying again which is like a game of see-saw. It is also a long long way to go to re-build up my annual passive income distribution from the SREIT cut in dividends and higher borrowing costs. 

Saturday 23 March 2024

2024 Dividends Receipts as at 20 March 2024- based On Ex-Dividend Date Occurrence (S$16.8K).

I thought it would be useful for myself to have a summary by months (instead of the exact payment dates listing in StocksCafe) of the dividends received thus far as well as future dividends that will be received to plan for re-deployment.

Key Highlights:
1. As alluded to the above illustration, most of the Q1 dividend receipts are actually in the month of March 2024 whereas Jan and Feb have just a couple of hundreds of dollars. 

2. StocksCafe unfortunately only has data from the main stocks markets on dividends distribution. So for folks using Robo advisor platform like Endowus or Syfe, there are no integrated Income funds monthly distribution data being input into StocksCafe for automated tracking. It has to be done manually in StocksCafe system to reflect the payout from those unit-trusts or Income Portfolios. But I am happy enough with the former, that is, the automation at least for HKEX and SGX based dividends payment which has already significantly improved my life from the days of super tedious excel tracking of all dividends for each and every stocks in my portfolio. In short, I am not presenting the monthly distribution received from my Endowus Income Portfolios for now- this portfolio is still immaterial in size but I plan to build it up till S$200K eventually in the next few years.

3. I am currently in the midst of rebuilding my amount of yearly dividends which has been greatly impacted by the self-implosion in the US Office REITs. For example, Keppel Pacific Oak US REIT decided to stop paying any distribution for 2 years. The rapid increase in interest rates also mean higher margin financing cost and reduces the net dividends available. 

Parting Thoughts
There seems to be some detractors online who frowned down on REITs which hold a significant part of their investment properties in China and Hong Kong (even for Temasek sponsor held REITs) such as Mapletree Pan Asia Commercial Trust and Mapletree Logistics Trust. My personal take is that China and Hong Kong will eventually recover from its current headwinds if one is taking a long term view. There are abundance talented smart, resourceful and hardworking Chinese and Hong Kongers colleagues that I have known and met…some of the finest people out there. So don’t be too quick to belittle and discount China and Hong Kong.  

Wednesday 20 March 2024

Mapletree Logistics Trust Plummeted Close To Another 5 year low of S$1.410 Per Unit.

This is a short post for my own reference and also sharing. Today, Mapletree Logistics Trust ("MLT") has plummeted to an astonishing low point of S$1.410 per unit as of 20 March 2024. The only worse period than this is during the COVID crisis in March 2020 (S$1.362 per unit before a V-shaped recovery in unit price then). There seems to be an abundance of extreme pessimism permeating throughout the current SREIT stock market segment. Based on its last quarterly DPU of S$0.02253 per unit and annualising it, we will get a distribution yield of 6.4% now based on S$1.410 per unit. This is way better than the beginning of the year 5.3% at the price of S$1.710 as at 2nd Jan 2024.  


1. SG 10 year risk free bond for benchmarking of premium
The current 10 year bond rate is 3.114% as at 20 March 2024. Hence the current distribution yield of 6.34% is approximately +3.23% higher than the risk free rate. Personally, I thought this is a more decent return relative to the 5.3% yield in earlier part of the year.

2. Script dividend election price for recent distribution is S$1.524 per unit.  
Another interesting point to note is that the re-investment price for those who opted for the script dividend are getting new units at S$1.524 per unit. With the weak market price of S$1.410 per unit, this is a further 7.4% discount to the re-investment plan price.

3. Aggregate leverage ratio of 38.8% and 83% of debt hedged with fixed interest rate.
MLT leverage ratio for Q3 FY23/24 is at a healthy 38.8% (below my personal 40% red line as well as MAS 45%) . Moreover, 83% of its debt are hedged into fixed interest rate which gives stable and clear visibility for the next 3.7 years. 

Parting thoughts
In view of the above plus points and also the indisputable fact that MLT has a very strong sponsor in Temasek Holdings, I have taken up additional 4,000 MLT units @ S$1.42 per unit this week using my Tiger Brokers account. I have an upcoming S$12K dividends by end of March 2024 for adding on to MLT next week if the price were to suddenly plunge further after the Fed Reserve meeting. 

Monday 18 March 2024

Betrayal by Friends and Spouse and Handling Dispute At Work.

The former Night Owl Cinematic ("NOC")  Sylvia Chan is back and hitting hard. Unless you have been living under a rock, the NOC saga has been dragging on for 3 years now. For those wondering what this is about, I will leave the link to her latest YouTube videos here. Today's post is not about the NOC saga, rather, it is on dealing with similar situation in commercial or voluntary organisations where you have Party 1 and Party 2 going after each other throats and where you are being drawn into the "Dirty Messy Fiasco".  I will just share my thoughts on the handling of such situation in event that you are being drawn into the quicksand or is actually part of the warring party. 

1. If possible, don't get drawn in at all.
Avoid taking sides or joining any camps if you encounter such disputes/fights going on between Party 1 and Party 2. Don't ever just listen to one side, always listen to the other side also for their version of what actually happened. You will find that most of the time, there are no obvious right and wrong over what had happened. 

The only thing of certainty is that those participating (and if you are caught in it) in such fiasco end up either worsening the already ugly situation or making even more enemies. 

2.  鹬蚌相争,渔翁得利 (The fisherman takes advantage from the fight between the snipe and the clam).
I have seen this happened in my home's residential committee. 2 groups of residents levying breach of statutory act by the other group or accusation of fraudulent use of funds or abuse of power. The 2 groups were so busy fighting one another that the subcontractors/vendors got away with slacking on the job as the committee overseeing them were too busy with infighting. End of the day, it is a lose lose situation for all.

3. The Narcissist will not listen- His/Her viewpoint is always supreme and right over others.
If you are dealing with a narcissist out on a war path against you, don't waste your time. Try to avoid that person or speak directly to his/her boss to directly override him/her. If unfortunately the person with narcissism is your boss, then maybe better to just resign and look for new job as nothing much you can do.

Note: Narcissistic personality disorder ("NPD") is actually a mental illness which involves a pattern of self-centered, arrogant thinking and behavior, a lack of empathy and consideration for other people, and an excessive need for admiration. Others often describe people with NPD as cocky, manipulative, selfish, patronizing, and demanding.

Parting thoughts
A lot of time, lack of communications or misunderstanding lead to many conflicts. In addition, always show proper respect to ensure that the other party does not lose too much "face" during communication even if the other party is "wrong" in your own opinion. Sometimes, ego is the root of all evil. 😎 

Saturday 16 March 2024

Frasers Logistics and Commercial Trust Acquisition of Germany Logistics Assets From Sponsor- My Quick Thoughts.

Frasers Logistics and Commercial Trust (“FLCT”) announced on the morning of  March 15, 2024 that it will be acquiring 4 logistics properties in Germany from its Sponsor, Frasers Property at a 5.1% discount to professional valuation at a purchase consideration of S$189Mil. However, FLCT price dropped by close to 2% from previous day in line with the rest of the general SREIT market price upon the announcement. I was a a bit surprised at  the decline in market price despite the deal being yield accretive since it will be 100% financed by debt. Nevertheless, this reflects investors current risk appetite and sentiment towards SREITs.

Aggregate Leverage Ratio Analysis
I did a quick high level check to find out whether this deal has a severe detrimental impact on FLCT leverage ratio. The S$189Mil deal makes up around 2.8% of its current investment properties portfolio. Its aggregate ratio would have grown from 32.4% as at September 2023 to 34.3% as at end March 2024 (expected completion date). This is still way below my personal conservative red line of 40% (the MAS one is 45%). There is thus still adequate debt headroom for buffer against further economic shocks from falling properties valuation as well as further yield accretive acquisition.

Parting Thoughts
I thought that the long WALE of 6.1 years and also reputable 3PL tenants such as Schenker for the 4 properties are an arguably good buy. Saying that, interest rate risk as well as stubborn inflation that are still above the Fed target are still downside factors to watch out. In addition, management of FLCT could have been more investor friendly to work out the details of the exact yield accretive impact for more transparent disclosure in their presentation materials. 

Wednesday 13 March 2024

Prudential Dividend Funds- Weird Sales Cold Call By Personal Assistant of Unknown Agent.

Dividend paying funds seems to be the rage these days. Out of the blue, I suddenly got a cold call earlier this week from a personal assistant ("PA") of an unknown agent who asked me whether I want to find out more about their Prudential dividend fund. She is trying to fix me up on an appointment with her financial advisory agent to find out more about dividend paying funds. It was a bizarre and hard conversation with this curt PA:

Prudential PA: "Sir, have you heard of Prudential dividend investment fund?"

BK (me): "Sorry, may I know who's on the line and what is this call about?" 

Prudential PA: "Sir, what's your name, is it a good time to talk to you?" 
(Hmm, why she keep asking my name when she herself has not introduced herself or shed light on what this is all about?)

BK (me): "May I know who's on the line and what is this about?" 

Prudential PA: "Have you heard of Prudential dividend investment fund? Can you spare me 5 minutes?"

BK (me): "Nope, never heard before.  I got a meeting. But I can spare you a minute." 

Prudential PA: "WHAT's your name? HAVE YOU HEARD OF Prudential dividend investment fund? I will get my agent Sam to contact you. "

BK (me):" I already got a Prudential Agent lah".

Prudential PA: "But has your agent brief you on anything about our Prudential dividend investment fund? It also offer you insurance protection at the same time."

BK (me): "Nope, my current Prudential agent never brief me on this product."

Prudential PA: "Great. Then I will get my agent, Sam, to call you. WHAT's your name?!" 
(I can sense the lady getting impatient and irritated with me as her voice was raised".)

BK (me): "Ok, your agent can call me."

Prudential PA: " I will get my agent to call you". (Next moment, she just put down and cut off her phone abruptly without even saying goodbye).

Well, strange that the personal assistant is getting so desperate to want to get an appointment for her boss via cold calling but her brusque attitude over the entire tele-conversion is really out of the world. Also, is making a living so cut-throat now that they can just target a customer who already has an existing Prudential agent that has remain close in contact with me over the years? What makes this weird PA thinks that she can just wrest the business relationship away from the existing agent that easily?