Sunday, 2 May 2021

Equity Portfolios Updates (30 Apr'21)- The Return of Increasing New COVID Clusters And Will It Lead To Another Singapore Lockdown?


It is worrying when the Singapore government starts to talk about a second circuit breaker is on the table if current measures to tighten the surge in local COVID does not curb it successfully.  Based on current cases, it may get worse over the next few weeks. I am awaiting the release of more findings by the Ministry of Health with regard to how effective is our COVID vaccines and how the virus managed to "break through" doctor and nurses who already got 2 full shots of the vaccines. Is it due to mutant strains whereby current vaccines are no longer effective? There is a high chance that upon the first trading day in May'21, the SGX might see a huge drop in prices due to concerns over a 2nd lockdown. I also think that various government agencies are tightening anti-COVID control measures and there will be more government announcements next week. It maybe a good idea to take some profits or do some switching into safer class of assets.

1. Portfolio 1- CDP held stocks
For my cash portfolio, not made much changes since last update. 

2. Portfolio 2- Margin purchased securities
With the announcement by DBS of a record breaking S$2 billion dollars profit, all bank counters benefitted and increase last week. I have taken advantage of this surge to sell off more of my DBS and UOB holdings to take profit and also switched into Mapletree Industrial Trust ("MIT") which is suffering from a momentary price weakness. 

MIT is targeting to grow its data centres high tech portfolio. Hence there will be more acquisition coming up. Also the Singapore government is backing MIT. I foresee further capital growth and potential of MIT to appreciate beyond S$3.30 per unit.

As for our local banks, I think OCBC is still undervalued hence I am still holding on to them. If the next week results from OCBC quarterly report is just as good as DBS and price shoot up further, I will be paring OCBC down and re-invest the proceeds into other stocks.

I have also paid down some margin to reduce the use of leverage here in view of the increasing COVID cases which have increased the macro-economic risk of our local scene.

3. Portfolio 3 (with Tiger Brokers)- Venture into high risk stocks here
The damn low commission fees of 0.08% allows investor to take up tiny bite size high risk counters at a fraction of the normal brokerage commission. This allows better risk management in the event of bankruptcy or huge capital losses of the investments. I have thus made additional investments into FSL Trust, Sabana REIT and Oceanus Group but only taking up tiny portion and diversifying them.  

The best performing counter in this portfolio is FSL Trust which has returned over 20% profits (including upcoming hefty dividend payout) in just 2 months.

For Sabana REIT, the key risk here is that the much anticipated acquisition by ESR never materialize. 

For Oceanus, the pricing of S$0.039 per share is overvalued if we looked at the historical results. However, if you believe in the 4 pillars strategy marketed by their CEO (which seems to be turning around the business with new growth segments), then there is actually tremendous growth potential here. Again, too many variables here hence I only intend to take a bite size stake in this counter. I will do a further post on Oceanus group in the future. It has a very intriguing and colorful history including possible internal sabotage which had led to the death of many of its farmed abalones and financial crisis previously.

Parting thoughts
I am looking forward to the upcoming dividends from Global Investment, FSL Trust as well as the 3 local banks in May'21 and June'21 for re-deployment.  Let's keep our fingers crossed that the COVID-19 situation can be well contained over the next few weeks to avoid another economic lockdown which will derail our recovery.   

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