Portfolio - June 2018

It has been a while since I blogged. My time has been taken up by wedding preparation + mostly the World Cup (I have been watching almost every 8/10pm matches). Nope, I did not bet on any of the matches, just enjoying the game and drama every 4 years. Hahahaha. On a side note, it will be < 100 days to our wedding! Like those days when the students would countdown to PSLE/O-level.

Our portfolio decrease by -0.19% to $333,410 - $11,544.89 of capital injection and $12,190.54 of capital loss.

SOLD
- None

BOUGHT
- Frasers L&I Trust (2,200 units) @ $0.967
- Capitaland (1,000 units) @ $3.480
- Capitaland (1,000 units) @ $3.330

- STI ETF (1,000 units) @ $3.380

- Lion-Philip S-REIT ETF (1,000 units) @ $0.975

We bought 1,000 units of STI ETF when the market was down and bought 1,000 units of Lion-Philip S-REIT ETF as part of our new strategy - New Singapore Budget, New REIT Strategy!

I blogged about Frasers Logistics & Industrial Trust Preferential Offering previously. I had 800 rights, oversubscribed for it and was given 1,400 more.

Capitaland was doing share buy-back since 4 June at $3.5X and we thought we managed to undercut them at $3.33 until we got undercut by the market. lol. Technically, the fundamentals are still the same and only the market price has changed/declined.

On a side note, the STI has fallen more than 10% since the high of 3,600+ on 2nd May 2018 for whatever reasons - Trump's tweet, trade war, flattening yield curve, etc. No idea what is going to happen in the near-term but there will always be opportunities if you dare. Hahahaha.

Dividends
The total dividends collected this month is $220. The breakdown is as follows:

Company	Symbol	ExDate	Shares	Total
Accordia Golf Trust	ADQU	08-Jun-18	10,000	$220.00

Total dividends collected for 2018: $6,985.11
Average dividends per month for 2018: $1,164.18

StashAway

Capital: $9,000.00
Current: $9,203.59 (IRR: 5.3%)

Health - KPO Needs to Lose Weight
I will not be updating this going forward as I have achieved my goal!

I have lost > 15kg in ~9 months and am now in the healthy BMI range :)

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

Frasers Logistics & Industrial Trust Preferential Offering

Frasers Logistics & Industrial Trust just concluded its private placement (KPO did not get an offer this time round unlike Keppel DC REIT Private Placement which was a pleasant surprise!) and provided more information on the preferential offering to fund its proposed acquisition of 21 prime industrial properties in key global logistics hubs in Germany (17) and the Netherlands (4). You can find the official announcement here.

Some of the readers may know that KPO secretly loves rights issue as it provides an opportunity for existing shareholders to increase their investment at a much lower cost and without any commission as compared to buying off the market. Having said that, not all rights issue is good and there is a need to evaluate whether the cash call is beneficial to the existing shareholders.

Current/Latest Numbers
Price: $1.09
Dividend/Distribution Per Unit (DPU) for FY2017: $0.0701
Dividend Yield (Assuming DPU remain constant for FY2018): 0.0701 / 1.09 = 6.43%
NAV (2QFY18): S$0.91 (Based on exchange rate of A$1.00 : S$1.0125)
PB: 1.198 (19.8% premium!)

Gearing: 30.5% (MAS limit is 45%, the lower the better)
WALE (Weighted Average Lease Expiry): 6.75 years (the higher the better)
Total shares based on 2QFY18 (including manager's fees): 1,523,985,999

Private Placement:
333,199,000 units at an issue price of S$0.987 per unit (initial issue price range: between S$0.962 and S$0.987)

Preferential Offering:
A pro rata and non-renounceable preferential offering of 152,153,437 new units on the basis of 1 new unit for every 10 existing units at an issue price of between S$0.942 and S$0.967. Given that the issue price of the private placement was priced at the upper bound, we can expect the same for the preferential offering.

Do note that the numbers are just estimated and the assumption is that the acquisition happened since listing/IPO date to 30 September 2017. Looking at the DPU in Australian cents, the acquisition is probably (remember the numbers are just an illustration) slightly yield accretive. They have also conservatively kept the exchange rate at A$1 : S$1.

The NAV remained roughly the same after the acquisition based on the provided illustration. What I do not like is that the gearing ratio would increase from 30% to 36% for a measly increase of 1.7% in DPU and no change in NAV. On the bright side, WALE will be increased to 7.1 years and the acquisition is not diluting the yield while a preferential offering allows existing shareholders to join in the fun.

We have 8,000 shares currently at an average price of $0.962. As a result, we would have 800 non-renounceable (means it cannot be sold - either exercise it or let it expire) shares.

If the issue price is S$0.942, we will be looking at:
Dividend Yield (Assuming DPU remain constant for FY2018): 0.0701 / 0.942 = 7.44%
PB: 0.942 / 0.91 = 1.035 (3.5% premium)

Average Price: (0.962 * 8,000 + 0.942 * 800) / 8,800 = $0.960
Average Yield: 0.0701 / 0.960 = 7.30%

If the issue price is S$0.967, we will be looking at:
Dividend Yield (Assuming DPU remain constant for FY2018): 0.0701 / 0.967 = 7.25%
PB: 0.967 / 0.91 = 1.063 (6.3% premium)

Average Price: (0.962 * 8,000 + 0.967 * 800) / 8,800 = $0.962
Average Yield: 0.0701 / 0.962 = 7.28%

If you are not an existing shareholder and are thinking of joining the fun, you will be looking at the following numbers instead:
Average Price: (1,000 * 1.09 + 100 * 0.967) / 1,100 = 1.079
Dividend Yield (Assuming DPU remain constant for FY2018): 0.0701 / 1.079 = 6.50%
PB: 1.079 / 0.91 = 1.19 (19% premium)

You will be entitled to S$0.043 dividends but do take note of the potential capital loss at an average price of $1.079. The price would definitely drop significantly by 18th May when it goes XD and XO.

Regardless, with the preferential offering, CZM and I will be looking at a sustainable (long WALE, high occupancy) dividend yield of > 7% which is pretty decent. The fun part which I love is the ability to oversubscribe, the more the merrier!

Update on 25th May 2018: Subscribe to 800 and oversubscribe by 6,200!

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

Portfolio Update - Mar 2017

March did not turn out as bad as I expected it to be. The Fed rate hike did not have much of an impact this time round, I guess it has already been price in. Our portfolio increased by another 6.68% from both capital injection and capital gain to $216,083. This month, we saw a lot of green green for our daily PnL from the report sent out daily by SGXcafe :)

There was quite a bit of actions/transactions that happened during March. KPO decided to sell 2 stocks (SHS and Viva Industrial Trust) away to make room for newer better one. I bought SHS when I first started investing purely based on recommendation by someone from a forum (not a wise thing). Viva has already hit its NAV ($0.7661) and my idol published an article - VIVA Industrial Trust more attractive with 9% yield?. KPO wants to hold stocks for a long long time which makes 14 years a short time and the thought of half of the distribution income disappear is a very scary thought.

SOLD
- SHS (19,000 units) @ $0.215 (PnL: $416.46)
- Viva (4,000 units) @ $0.785 (PnL: $475.99)

With the sale of the above stocks, KPO became cash rich again and I immediately deployed it by purchasing another REIT that has been on my watchlist for a long time - Starhill Global REIT. Starhill has a NAV of $0.92 and even at its current price, there is a 20% room for capital growth with 6-7% dividend yield while waiting. At a price of $0.73, it was very near its 52 week low, hence KPO pulled the trigger. KPO also purchase Frasers L&I Trust because it is one of the lowest geared REIT with potential to growth in the future. There is also a rights issue by Ascott REIT where I fully subscribed 1,450 units and over subscribed by another 4,550 units. Based on my previous analysis and the current price of Ascott REIT, I believe its PnL has already turn positive but I shall confirm that on April update.

BOUGHT

- Frasers L&I Trust (8,000 units) @ $0.96

- Starhill Global REIT (5,000 units) @ $0.73 [Total units: 12,000 units]

The total dividends collected this month is $161.25. Feb was a more exciting month. The breakdown is as follows:

- Asian Pay Television Trust - $81.25

- OUE Commercial Real Estate Investment Trust - $80.00

Total dividends collected for 2017: $2092.61
Average dividends per month for 2017: $174.38