Cory Diary : Portfolio update 20151012

If someone has said in the beginning of the year that China will be the main reason that STI enters correction territory it will be quite hard to accept. Such is the market dynamic. Hard to anticipate even for expert.

Is the correction over with recent days run up ? Well just looking at the 1 yr and 2 yr charts, seems so. However 5 yr and 10 yr charts are yet confirm. That's my own view. Time will tell !

My portfolio ytd went down -5% at the worst period and recovered to -2.6%. STI still at -10% today.
Relative wise i am doing ok but i could have done much better if i have cut loss faster as said in my earlier article.

For those data craze, Equity at 37%. Cash/FD 39%, Structured Investment/Bond 11% and others.
China could have cause another major crisis. It didn't so far. Else i could have tap my war fund.

Decided to sell Saizen Reit as i feel the Japanese yen will continue it's weakening mid term and this gives me some anxiety despite all those hedging in place. Hope to find a replacement soon. Still holding to some Starhub shares though no increase. I feel the impact of 4th Telco will be mitigated by immigration long term.

I sleep well with current portfolio set up and that's all matter. cheers.


Cory 20151012

Cory Diary : SAIZEN REIT

In my quest for yield, a reit that caught my eye again is Saizen Reit. What's interesting is the recent softening of it's price due to the depreciation of the Yen mainly. 6 cents move is a year dividend ... oh a little pain..

Few questions come into my mind. Is there opportunity to gain/recover from this ?

Impact to S$ returns

"Hedged the distribution payments for the six-month financial period ending 31 December 2014 and for the six-month financial period ending 30 June 2015 at JPY81.9/S$ and JPY85.6/S$ respectively."

This hedging is rather important though not cheap. Looks like they did it well considering rate is about 91 currently. I do not see dividend issue for Mar'15.

Property Yield
About 1/4 of the portfolio in Sapporo: Prices known to increase in that area but Cap Rate maybe mute.

Age of the Reit properties are not young so i would perceive rental yield stable considering the net property income in last report shows slight decrease in JPY Q/Q not proportional to Revenue decrease.
S$- denominated bank balances help a little from the Warrant proceeds leftover.

Trend
Revenue has been decreasing about 2% quarterly. Operating expenses increased slightly from the net property income of lQ'15 report.

"The decrease in gross revenue was due mainly to a year-on-year decrease in occupancy rates."

Leverage Potential
Ability to access low fixed loan rate is a plus for higher leverage considering their returns are relatively stable.

Moving Forward
One thing to watch is the the weekend election and what this means to Saizen. Abe wins mean more weakening of the Yen therefore more hedging needed. Delay in consumption tax hike is good news.


Cory
14th Dec 2014