Thursday, January 26, 2017

Happy Chinese New Year cum Portfolio Update

恭喜发财!As we welcome 2017 year of the rooster, I wish everyone good health and a happy and prosperous new year! HUAT AH!!

I will take this chance to do a portfolio update for the year too, since I missed doing one earlier due to my busy schedule and laziness! Haha. Overall, my AlcusTrader portfolio is still doing well. Existing holdings in the portfolio managed a 8% unrealized gain with 0.66% yield received so far (Hey! It's just the beginning of the year and companies' reporting session is still underway)

  • Note: P/L computation only takes into account the current holdings in the portfolio, and excludes capital gains/losses and dividends from divested shares, and commission charges/fee

During the past few months, I made a few changes to the portfolio. Firstly, I cut my O&G exposure with KepCorp and SembCorp and accumulated more M1, making it my top holdings. As a result, the portfolio is now heavy weighted in Telcos. As of now, I will not be looking to add any more exposure. On the hindsight, I missed out the O&G recovery.

I also initiated positions in IREIT Global and Sabana Reit. Wait.. what?! Yes, Sabana Reit?!

It is said that "All investments are good at the right prices". Sabana Reit was one of the "pioneer" stocks in my AlcusTrader portfolio when I started it in Jan 2013. It was even once my top winner. Today only Kep Infrastructure Trust (formerly known as CitySpring Infrastructure Trust) and UMS still remains. I have reduced my exposure in Sabana Reit 1st in Dec the same year and fully divested it in Jan 2014 after I was concerned with the poor management and disappointing stock performance. Thereafter, it had been suffering a prolonged and painful drop, backed by declining DPU.

Given the recent significant decline due to the rights issue, Sabana is probably now one of the most shunned S-Reit. I took calculated risk to initiate a small position in Sabana Reit at $0.35 on 12 Jan for turn-around yield play. The strategy is somewhat similar to Silverlake Axis, by having some exposure but at the same time keeping the risk small. At the current price, I think it presents some value with significant discount to book value, and compelling dividend yield in excess of 10% (even if current dividend were to reduced). I believe at the current price level, most of the impact of the rights issue should have been factored in by the market. The price seems to be stabilizing even with the Q4 announcing lower DPU and development in unitholders campaigning to have its managers removed. As of now, I will keep Sabana in the portfolio unless there is further severe deterioration in it's financials.

Hope this year will be better than the last!!

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