Portfolio Review June 2020



Please click and read this disclaimer if you wish to continue with the contents below.


Bench marking myself against STI and World Index:

For last month's portfolio review click here 

Year to date:
STI Index: -12.19%
World Index: +0.35%
My Portfolio: -6.6%

Three years trailing:
STI Index: -10.84%
World Index: +15.54
My Portfolio: +10.7%




Year to date, I outperformed STI by 5.59% and under performed the World Index by 6.25%. Three years trailing, I outperformed STI by 21.54% and under performed the World Index by 4.84%.

Portfolio composition:

Transactions:

Added more APT Satellite(HK:1045), Dream Intl(HK:1126), Tracker Fund(HK:2800), SwireProperties(HK:1972), FSY(HK:1448) and Alibaba(HK:9988)

Commentary:

STI ETF(SG:ES3) saw a 27% rise from the March lows likely due to iShare MSCI STI demand(link here). This is likely due to the close correlations that our local banks have with the US banks and also funds showing interest in Singapore after the Hong Kong new security law and continued protest. 


The stock market is a pricing in machine and should be decoupled from the real economy. Many would be surprise by the recent bullishness even though our economy is still on shut down mode till end June. I am guessing the market is pricing in the declining global covid death rate and the potential for a vaccine(thanks to Moderna and CansinoB).

Great Eastern(SG:G07) saw a 26.52% rise from the March lows. GEH had achieved CAGR of 7.5% in its GWP, growing to S$11.77 billion in 2019 from S$ 6.6 billion in 2012. 

GE is a cashcow, its FCF, that comprise of its operating cash flow and investing income(dividend and interest income) is around $14.32 per share on a four years annualized basis. That is around 1.45x Price/FCF. The bulk of its FCF is reinvested into investment assets first before paying out the rest to shareholders. That is why their investment assets and income have been growing steadily over the years.



OCBC owns almost 88% of GE and Samuel Tsien the CEO of OCBC has always been willing to buy more GE whenever the bank has the chance(link here). OCBC have tried to privatize GE three times already since 2004, either via share swap with OCBC or a full cash offer valuing it at 1.51x embedded value in 2006.

Portfolio Review May 2020



Please click and read this disclaimer if you wish to continue with the contents below.


Bench marking myself against STI and World Index:

For last month's portfolio review click here 

Year to date:
STI Index: -18.83%
World Index: -9.13%
My Portfolio: -7.72%

Three years trailing:
STI Index: -17.48%
World Index: 6.06%
My Portfolio: 9.58%


Year to date, I outperformed STI by 11.11% and World Index by 1.52%. Three years trailing, I outperformed STI by 27.06% and World Index by 3.52%.

Portfolio composition:
Transactions:

Sold off my Prada(HK:1913)(20% gain) 
Purchased Fu Shou Yuan(HK:1448) and Alibaba(HK:9988). 
Added more Sinopec(HK:386) and APT Satellite(HK:1045)

Commentary:

Apt Satellite(HK:1045) will be launching their Apstar-6D satellite into space orbit by mid June 2020(link here and here). In April 2020, The Long March 3B launcher, that will be used to launch Apstar-6D, failed to launch an Indonesian satellite en-route to space(link here). Apstar-6D is the first HTS satellite optimized for satellite broadband mobility service in the Asia Pacific region, this is a "growth satellite" that APT needs in order to diversify out from the competitive transponder market. Interesting to see how it pans out.



Took an initial position in Alibaba(HK:9988) at HK$187.60. Alibaba has a 7 years FCF CAGR of 33.23% with current trailing FY price to fcf of 18.5x. Trustworthiness of Chinese accounting aside, its valuation is still cheap. Its cloud computing segment top line is growing at 62% yoy and is currently the largest in China. Alibaba is putting a large portion of their cash into scaling their Ali Cloud technology(link here). They are trying to play catch up with Amazon and Microsoft. Why are all the tech giants scaling their cloud business at such a fast rate? Large scale integrated cloud and data services give access to quantum processing and ultimately AI machine learning. This might be the direction they are heading.



Hong Kong has done everything right so far in controlling the spread of Covid19. Businesses are now reopened with social distancing rules loosened(link here). Resurgence of large scale protest is still a possibility. 

The probability of a hostile trade war between US and China may be reduced, due to the fact that the unemployment rate in America is staggering and businesses there are struggling to keep themselves afloat. With the presidential election coming and with the virus still spreading actively in the country, it is unlikely that US would wants to further strain its own companies. 

A global effort to sanction China cannot be ruled out, due to their refusal to let any international body into the country for investigation.(link here)

My thoughts on Singlife 2.5% Insurance Savings Account


A friend on telegram introduced this insurance savings account to me. I have used it for three days and here are my thoughts. This post is not sponsored, just my own personal opinion.

Singlife Account is an insurance savings plan that credits interest and offers flexibility to make top ups and withdrawals with no lock in and charges. It is a savings plan where you can fund your account and start earning approximately 2.5% pa interest for the first $10k and 1% pa for the next $90k.

Singlife is one of the emerging 50 on the Fintech100 list, They make everything from opening and registering an account, to topping up cash easy. All using their app at extremely fast and streamline ways. It took me less than 10 mins to get everything done.

It feels like a normal savings account, you can FAST in and FAST out anytime and the cash is custodised by DBS. If you have any queries, they have a whatsapp number for you to text your questions to.

I messaged Singlife to check on the applicable caps for the SDIC guarantee and this is what they say, "The capital or funds that you fund into your Singlife account is guaranteed by SDIC up to $75k". The company is also licensed by MAS. So like any SDIC insured savings account in Singapore, this is pretty safe if you keep your money in it below $75k. For me I max it at $10k only, to get the 2.5%(thereabout) interest. Do note the 2.5% is not guaranteed and it could be slightly lower.


As you can see, I have used it for three days now. I recorded a 67cts for the day I transferred in $10k that means the annualized rate is around 2.45% pa. (67cts x 365)/10,000. Interest is recorded on a daily basis but the cash interest will only be credited by the end of the month. So you can roughly check how much you are getting per day.

A few negative so far. I notice that once you added the bank account to FAST out to, you cannot remove or edit it anymore. When you FAST out your cash to your other bank account, the wait is about a few minutes long, not immediate.

I feel saving accounts are better alternative to retail bonds because you get accrued interest on a daily basis. This means you can use the money anytime without the fear of capital or interest loss. Even comparing to SSB it is better, as SSB starts off at a very low base(0.57% currently) and moves up slowly every year. You also need to wait till month end in order take out your money.

With the current low interest rate environment, there are still avenues for you to park your cash. I recently wrote about BOC smartsaver 3.55% which you can read it here. My list of preferred savings accounts in descending priority are:

BOC smartsaver 3.55% $60k (with hurdle)
Singlife 2.5% $10k (no hurdle)
CIMB Fastsaver 1.26% $100k  (no hurdle)

All three cash value can be doubled if you ask your wife to open as well.