Boring Weekend Musing: Rights and Wrongs

Keppel DC Reit is on a buying spree this year.  The Milan DC, the Cardiff DC and now a Singapore DC (Keppel Datahub 2).

A rights issue for Keppel DC Reit is coming in November.  It is a preferential offering of 274 new units for every 1,000 units held for an issue price of $1.155. 

Initially there was not much "meat" in the offer as it is just about 5% discount to its current price then.  But Keppel DC Reit's price has gone up since the news and now the discount is closer to 10%.

I have collected $300+ dividends from Keppel DC Reit, but I guess I have to return all and more for this rights issue.  Well, I am on the accumulation phase, so it is alright for me.  You always need to prepare for such event holding a REIT.  

Looking back on the rights that I have participated in the past:

1. Starhill Global Reit: 1-for-1 at $0.35 in 2009.  During the great Global Financial Crisis.  Probably right and VFM considering current price at $0.81.

2. AIMSAMP Cap Indust Reit: 7-for-40 at $1.08 in 2014.  Probably right considering current price at $1.37.

3. Keppel Infra Tr: 1-for-13 at $0.515 in 2015.  Jinxed by "13".  So, wrong for this counter considering current price at $0.50.

4. Mapletree Com Tr: 17-for-100 at $1.42 in 2016.  Probably right considering current price at $1.54 and the need to pay for the brand name of Mapletree. 

As you can see, it is not always right when buying the rights.

After the Keppel DC Reit rights issue, I am also expecting a Saizen Reit rights as it will need to bring its price up to a respectable level.

Is the SPH dinosaur facing extinction?

SPH reported a 17.5% fall in FY16 earning and my Christmas present gets smaller again. (SPH pays its final dividend on 23rd Dec every year).

SPH has been a very good dividend master for a long time.  However, the declining trend of dividend payouts is hard to ignore and worrisome.  Like the Antarctic glaciers' gathering pace towards the ocean in this global warming era, SPH's declining dividend is also gathering pace:
2011 - 24c
2012 - 24c
2013 - 22c
2014 - 21c
2015 - 20c
2016 - 18c

The core business of SPH, media business, is simply a sunset industry with circulation readership and advertisement income on a persistent downhill slide over the years.

SPH needs to transform at an accelerated pace to survive this new digital era.  The SPH dinosaur has to evolve fast or face extinction.

I think it is time to review the continuing relevance of SPH as one of my foundation stocks.  Perhaps I should get a REIT to accurately reflect the setup of my portfolio?

In terms of market cap, history, prestige and consistent increasing trend of dividends, I think there is only one REIT that is capable of replacing SPH.  The only issue is that it is now trading at a premium to its NAV.  Well, I have to be patient and wait for better opportunity to get more of it.

Phillip SGX APAC Dividend Leaders Reit ETF -- Picking my own cherries

My POEMS broker contacted me regarding subscription for the new Phillip SGX APAC Dividend Leaders Reit ETF.  0% commission fees for the new launch of the ETF.

No. I will give this ETF a miss.  The ETF may be good, but it just does not suit my investing style.  I do not like bundle.

I do not have STI ETF.  I do not have the full set of 3 Telcos.  I do not have the full set of 3 Banks.  And I will not have this Reit ETF.

Especially the yield of the bundle is much less than that of the individual constituents.  And for diversification purposes, A-Reit, Suntec Reit, Starhill, Cache, CDLHT and the new Saizen Reit all have exposure to Australia already.  So, I prefer picking my own cherries.

However, the components of the Reit ETF can be good reference for cherry picking.  The Singapore Reits constituents and their weightages include:

8.  Ascendas Real Estate Investment Trust (5.07%)
10. CapitaLand Mall Trust (3.97%)
11. Suntec Real Estate Investment Trust (3.36%)
12. CapitaLand Commercial Trust (2.81%)
13. Mapletree Commercial Trust (2.03%)
14. Mapletree Industrial Trust (1.95%)
15. Mapletree Greater China Commercial Trust (1.89%)
17. Keppel REIT (1.80%)
18. Mapletree Logistics Trust (1.63%)
24. Starhill Global Real Estate Investment Trust (1.09%)
25. Ascott Residence Trust (1.07%)
27. Cache Logistics Trust (0.99%)
28. Frasers Centrepoint Trust (0.97%)
29. CDL Hospitality Trust (0.97%)

Hmm, I am a bit surprised that Cache Log Tr is included.

Oh, the whole set of Mapletrees and CapitaLand Reits are included.  Need some cherry picking again... 

My Stock Portfolio @ end Sep 2016

No.	STOCK NAME	No.of SHARES	PORTFOLIO%	MARKET $
1	SGX	4,000	12.76	7.41
2	Starhub	7,000	10.33	3.43
3	SPH	6,000	9.84	3.81
4	SATS	3,000	6.43	4.98
5	OCBC Bank	1,438	5.35	8.65
6	UOB	613	4.97	18.83
7	Suntec Reit	5,800	4.28	1.715
8	AIMS AMPI Reit	6,800	4.11	1.405
9	SingTel	2,190	3.74	3.97
10	CapitaMall Trust	4,000	3.74	2.17
11	Keppel Corp	1,600	3.71	5.39
12	FCT	3,800	3.60	2.20
13	Starhill Global Reit	8,900	3.14	0.82
14	SPH Reit	6,700	2.88	1.00
15	CapitaLand	2,000	2.75	3.20
16	Keppel DC Reit	4,500	2.36	1.22
17	Mapletree Com Tr	3,000	2.07	1.60
18	ParkwayLife Reit	1,800	2.01	2.60
19	Sembcorp Indust	1,800	2.01	2.59
20	CDL HTrust	3,000	1.81	1.40
21	FCOT	2,800	1.69	1.405
22	SIA Engg	1,000	1.60	3.71
23	Keppel InfraTr	6,000	1.30	0.505
24	ST Engg	800	1.11	3.23
25	Cache Log Tr	2,700	1.04	0.895
26	FE HTrust	2,800	0.73	0.605
27	FCL	900	0.58	1.49
28	Saizen Reit	1,800	0.05	0.059

Movement in my portfolio in September:-
Sold:- Nil
Bought:- OCBC, Starhill Global Reit, UOB (DRIP).

Dividends collected in Sep: $560.28
2016 avg dividends/month: $1,098.72 [56.4% up at this stage cf. 2015]

Boring process of building up my passive income portfolio brick-by-brick (bit-by-bit).

Comments:
1. Received a few drips from re-investing UOB's dividend. Second counter that I have added to DRIP.

2. Current worst performing counter: Sembcorp Indust (23.2% unrealised loss).

Alternative Investment X 3

This week received 3 alternative investment offers.

1. JJ Poor to Rich

A friend introduced this to me.  Just invest minimum amount USD 50, maximum USD 1,000.  Do nothing else and get 20% monthly returns and so 100% return of investment capital after just 5 months.  And you could speed up the ROI process by introducing friends/clients and get 5% per person introduced.

In this super low interest environment, is there such a "big toad jumping down the street"?

My friend tried to convince me that it is only USD 1,000, not that I can't afford and it is just 5 months and I could get back everything. And a lot of people joined and earning already.

I told him this is dangerous thinking that the ROI is short and the investment amount is low. The risk could then be escalated if one asks family members to join and thinking that the scheme would not collapse in the short 5 months' time. 

I will not take part in this investment as I just have no idea how long the JJ bunny could keep on drumming...

2. Casino shares in Cambodia

A casual friend offered an opportunity to invest USD 1,500 and get some shares in a Cambodia casino operation.  I do not need to do anything (again) and the small shares will just snowball every month and get larger and larger.

According to him, it is 100% safe and no risk at all.  "You ever see casino goes bankrupted?"

I told him that even the banks will not guarantee 100% my bank deposits and seeing that I am not too interested, he refused to disclose the name of that investment opportunity.   

3.  Coal mine in Indonesia

I also got a cold call from Black Mineral to invest in a coal mine in Indonesia for a so-called "great opportunity" in this energy thirsty world.

I was in front of my computer then and I googled "MAS Investor Alert List" while talking to the person on the line, and I found the company on the list.

The person said being on the list does not mean that the company has issues or the investment is not safe.  But I said I am a fool if I am to invest in a company on the list.


For recap purposes:

The MAS Investor Alert List 
From time to time, Monetary Authority of Singapore (MAS)  receives information on unregulated persons who have been mistaken as being licensed or authorised by MAS.  Consumers should exercise care when dealing with these persons or with other persons acting on their behalf.  Overseas consumers who receive solicitations by persons who claim to have an operation in Singapore should also exercise care and check if they are in fact dealing with persons who are regulated by MAS.

The MAS Investor Alert List is a list of unregulated persons who, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS.  The list is not exhaustive and will be updated regularly. 

Link to MAS Investor Alert List

Companies that are in the above list meant that they are not regulated by MAS and the products that they carry are non-regulated products.

Boring Weekend Musing: The Small Bricks of 2015

A couple of changes in my boring portfolio last week.

In 2015, I started using small bricks (100 shares) when they became available in the market.  My OCBC Tower and Keppel Commercial Tower were built using small bricks. But they were bombed and became leaning towers in the Bear Army attack.

In 2016, I used small bricks for my UOB Tower and these small bricks were much better than the 2015 batch.  Just the very bad timing.  If only they start making small bricks in 2016!

OCBC has stayed red since forever and Keppel Corp was always the worst performer in my stock portfolio.

However, a few stars aligned in the Universe last week and:

- After a mini rally, OCBC finally turned green.

- Keppel Corp has been dethroned. Perhaps weighted down by SMM being kicked out of the STI component index, SCI takes over the title of the Worst Performer.    

My Stock Portfolio @ end Aug 2016

No.	STOCK NAME	No.of SHARES	PORTFOLIO%	MARKET $
1	SGX	4,000	13.21	7.56
2	Starhub	7,000	11.19	3.66
3	SPH	6,000	9.88	3.77
4	SATS	3,000	6.17	4.71
5	UOB	600	4.72	18.01
6	OCBC Bank	1,238	4.65	8.59
7	Suntec Reit	5,800	4.24	1.675
8	AIMS AMPI Reit	6,800	4.14	1.395
9	SingTel	2,190	3.85	4.02
10	CapitaMall Trust	4,000	3.77	2.16
11	Keppel Corp	1,600	3.62	5.18
12	FCT	3,800	3.59	2.16
13	Starhill Global Reit	8,000	2.81	0.805
14	SPH Reit	6,700	2.81	0.96
15	CapitaLand	2,000	2.68	3.07
16	Keppel DC Reit	4,500	2.40	1.22
17	Sembcorp Ind	1,800	2.14	2.72
18	MapletreeCom	3,000	2.04	1.56
19	ParkwayLife Reit	1,800	1.97	2.50
20	CDL HTrust	3,000	1.82	1.385
21	FCOT	2,800	1.67	1.365
22	SIA Engg	1,000	1.67	3.82
23	Keppel InfraTr	6,000	1.31	0.50
24	ST Engg	800	1.13	3.23
25	Cache Log Tr	2,700	1.08	0.915
26	FE HTrust	2,800	0.73	0.595
27	FCL	900	0.59	1.51
28	Saizen Reit	1,800	0.10	0.129

Movement in my portfolio in August:-
Sold:- Nil
Bought:- MapletreeCom (rights), Starhub, Suntec Reit, Keppel Corp.

Dividends collected in Aug: $2,502.97
2016 avg dividends/month: $1,166.02 [56.9% up at this stage cf. 2015]

Boring process of building up my passive income portfolio brick-by-brick (bit-by-bit).

Comments:
1. Bumper month in August.  New second highest record dividend fruits harvested (highest in May 2016), as 20 from my 28 counters paid dividends.  Looking forward to the day when my monthly dividends exceed $3K.

2. Did not anticipate that I could get all excess shares applied for MapletreeCom.  On hind sight, perhaps I should apply more?

3. Added Starhub to the nearest thousandth. Think Starhub can weather the uncertainties created by the 4th telco and I have sufficient safety margin.  But I will "close shop" on this counter for now and see what happens next?

4. Current worst performing counter: Keppel Corp (23.2% unrealised loss).  Added a little of Keppel Corp.  Hopefully is not throwing good money after bad, but this action did bring down my holding cost for Keppel Corp from $7+ to $6+.