Cory Diary : Recent Trade Actions 20180130

2018 January is I feel a more memorable day for my portfolio other than in the black. Is the first time I have a proper clean up state of my Reit counters that is much better balanced to form a better core. Few things I did. Sold AGT moons ago. Sold SPH Reit some time back. And today, sold remaining lots of LMIR as well. Bought back Ascendas Reit and Ascendas HT.


LMIR

The more I learn about LMIR the more I am a little worried. The perpetual shares it has issued is a relatively huge burden. This obscure the gearing which I do not like at all. It would be much better if they are able to get private placement. Then the recent rating downgrade warning kind of sink in. With the current yield of more than 8%, they would need to find some way to raise money ( probably expensively ) this year or to further their acquisition. This is a red flag to me. Since I have achieved 15% returns since 2017 on this counter, is time to say good bye. I do love the yield. Sad.


SPH Reit

Negative revision is the outlook. It may get better but i do not like the few properties or the play on seletar mall to keep the price up. If the stock market is to turn, this won't be my core holding. The yield around 5% doesn't look so good despite the low gearing not gearing up.


Ascendas Hospitality Reit Trust

The plan to sell the two hotels look good considering the impact to dividend is minimal but the value unlocked is more than 10% of it's Nav. Furthermore, FHT results may have help my confidence a little.


Current Reits allocation is around 36% of  Equity Portfolio.


Cheers

Cory
20180130

Cory Diary : Treasury Bills , Low Return Safe Havens

Equity is a practical way to generate good returns for myself being a "kaisu" of me. However "kiasi" of me, no matter how good equity is, I need emergency fund and reserve fund for my property installments if I am unemployed permanently.

After maximizing Singapore Saving Bond ( SSB ) in the range of 2%+, I start to explore ways to optimize my cash other than fixed deposits. One way is Government Treasury Bills which I can apply locally through internet banking easily. The recent allocation is 1.35%. For people who is unfamiliar, here's the information I tried to get from the web. So dyodd. Easy money for me !


Treasury Bills

When I applied say $50K, the gov pays me for this example 1.38% returns for 1 year tenor bill, $690 ( coupon ) upfront immediately into my saving account ( below table ). After one year, they return $50K back to me. Internet application through internet banking account is a fly. MAS has done a good job in this area.

MAS Auction Result

There are few other things to know before applying.

1. Competitive and non-competitive bids.
As individual investor, use non-competitive. What this mean is that I will be allocated whatever the auction result is, to make my life simple. Is like a blind bid. So far I know, the return coupon is reasonable.

2. Government Security
Treasury bill is one of government security. So is safer than bank

3. Returns
Much better than Fixed Deposit for similar terms.

4. Coupon Payment
"Interests" are paid upfront. Principal return to you after period is up. Do note carefully the lockup term.
(You can sell in secondary market but could be a hassle to explore)
(Treasury bills are sold at a discount to face value, and the investor receives the face value when the T-bill matures)

5. Priced Local Dollar
S$ exposure when applied Singapore Gov Treasury Bills.

6. Quarterly Application
Bidding is open only on certain date quarterly

7. Tax
" Capital gains are not taxed in Singapore, and SGS interest income accrued to individual investors is currently exempt from tax. Furthermore, for all SGS issued after 28 Feb 1998, interest on SGS earned by non-residents who do not have any permanent establishments in Singapore is also tax-exempt. "


This is good place for parking money temporary as war chest as part of portfolio allocation. Is also a good way to have them tuck here for my property installment reserve.

This is Not emergency or immediate fund which I can tap. For long term, this is nowhere near CPF which maybe much better, and consideration of higher allocation for legacy and retirement needs.

Recently, I heard about Maxigain from Citibank which I can get 2% after lock up period like a year with some fine prints. I will research later.


Cory
20180128

Cory Diary : Ascendas Reit Third Quarter Results

DPU 3.97 cents. A reduction of 0.6% QoQ without Tax Exempt. The result is pretty decent if we take it as one-off of prior year. To be frank, there are many other positives and negatives adjustments, and risks in the financial. Is quite hard to assess whether this is the only main difference even if we are to run the Reit ourselves.

Below Chart is manual collection of the quarters result of Ascendas Reit. As you can see the distribution looks fair enough. 

The Reit occupancy at high 80 percent range for Singapore and 90 percent for Australia. I feel this is something we need to watch. Number of property managed 132. The gearing creeps up some but still relatively low. 70% of the loan is fixed rate.

Manager has elected to receive 20% of the base management fees in Units and the other 80% in cash. So if we want to do Reit comparison, this maybe a critical factor we need to compute as this can  inflate DPU result.

@2.75 price, yield is 5.8%. Surprise price up @2.84 yesterday. If the resistances are broken,  @3.17, yield will be 5%.

Cory

20180127