It has been a long time since I last updated my investment portfolio. The March'20 market crash was very sudden. I have remained invested mostly throughout this dark period. The major change I made was to shift out more of my more stable REITs from my CDP account into the margin account to avoid the possibility of a margin call in the event of a sucker's rally and to prepare for another potential market crash.
1. Retail REITs
The retail REITs which I am holding in the margin account such as SPH REIT, Frasers Centrepoint Trust and Lendlease right now are still down by 20% to 30% from the pre-market crash. Dividends have been cut drastically also. I remain cautiously optimistic that once the COVID-19 vaccine become successfully rolled out by end of the year or early next year, the devastating effects of future economic lockdown can be eliminated with more certainty to businesses. I have placed a significant investment stake into Lendlease as I am convinced that it has a strong sponsor in Lendlease Group and is severely undervalued such that it will rebound in price after the pandemic is over.
2. Switching to more quality counters
I have took advantage of this crisis to also made a few switches out of some weaker counters and purchased DBS & OCBC bank stocks as well as Mapletree Commercial Trust in both my cash purchase and margin portfolio respectively. Going forward, I will be reducing the variability of the Margin account portfolio by dealing with only companies with strong financial and preferably with links to the Singapore government.
3. Eagle Hospitality Trust and First REIT
EHT went basically close to bankruptcy and is undergoing MAS and Singapore Police Force investigation and is still being suspended by SGX. It is currently undergoing restructuring and a request for proposal from some renowned hospitality players. Hence there is hope that some value maybe salvaged.
(Please refer to Eagle Hospitality Trust- Updates On Projected Salvageable Hotel Properties Value from Fire-sales)
First REIT performed badly. I have to remove it from my investment portfolios as Lippo Karawaci (the main sponsor) is in great financial difficulties due to the current COVID-19 situation in Indonesia. The commercial charging mechanism where up to 80% rental subsidy by its sponsor for the Siloam hospitals is also clearly not sustainable in the long run.
(Please refer to First REIT Share Price Crash Again- Sudden Announcement of 2 Months Rental Relief to Hospital Tenants)
4. Singapore Press Holdings became "Singapore PROPERTIES Holdings"
SPH dropped out of the MSCI and STI index. Its media segment profit contribution has now dwindled into only a faint shadow of its former self. SPH had also made huge investment into Student Accommodation business in particularly in the UK. From the huge price drop, I have started using my margin account to accumulate additonal positions in SPH. From my perspective, SPH is now effectively a properties management and development group. There may also be possibility of SPH unlocking the intrinsic value by future listing of the Accommodation business into another REIT or injecting Seletar Mall and the future Woodleigh shopping Mall into SPH REIT.
From its net asset value of S$2 per share relative to the current market price of S$1.10 per share, I also think that we cannot discount the possibility of Corporate action by the Singapore Government (via Singtel & DBS) along with major shareholders OCBC/Great Eastern Life from privatizing SPH for a few years before repackaging it for re-listing in a new form on SGX later.
(Please refer to Singapore Press Holdings Severely Undervalued- Possible New Growth Engine Into Fast Growing High Tech Industry Data Centres)
Last but not least, I do hope that the phase 3 clinical trials for Moderna and AstraZeneca Oxford produce successful results by October'20 for the vaccines to start rolling out by end of the year. The resurgence of COVID-19 in Australia Victoria state, China and Hong Kong is worrying. Similarly, Singapore could be under another 6 weeks economic lock-down.
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