Monday, 16 May 2016

Dividend Knight Portfolio Update - Sell in May and Go Away? Not me!


No.
Company
No. of Shares
1.
AIMS AMP Capital REIT
30, 000
2.
Starhub
10, 000
3.
Singtel
8, 000
4.
DBS
2, 000
5.
Mapletree Logistics Trust
25, 365
6.
CACHE Logistics Trust
29, 000
7.
Frasers Centrepoint Trust
12, 000
8.
OCBC
2, 500
9.
SATS
4, 000
10.
CapitaLand Mall Trust
7, 000
11.
Raffles Medical Group
9, 000
12.
MGCCT
12, 000
13.
ParkwayLife REIT
5, 000
14.
Keppel DC REIT
10, 000
15.
Suntec REIT
6, 000
16.
UOB
400
17.
Sheng Siong
7, 000
18.
Mapletree Commercial Trust
2, 032


Dividends received in May 2016: S$3,153.87

Total dividends received since Jan 2016: S$5,873.37

Average dividends per month: S$489.45

Average dividends per day: S$16.09

Total portfolio market value: S$339, 000

Unrealised Profits: S$37, 280


For the month of May, I will be receiving a total of S$3,153.87 in dividends and distributions.
  • Starhub: $1000
  • UOB: $140
  • Sheng Siong: $122.50
  • CapitaLand Mall Trust (CMT): $191.10
  • Frasers Centrepoint Trust (FCT): $364.68
  • Suntec REIT: $142.26
  • CACHE Logistics Trust: $591.31
  • ParkwayLife REIT: $149.50
  • MGCCT: $452.52
I accumulated more OCBC and DBS with the intention of subscribing to their SCRIP dividends. OCBC's recent acquisition of Barclays' private wealth management business in Hong Kong and Singapore is expected to be immediately accretive to their bottom line. DBS is the only major bank in the world which still achieved revenue and earnings growth in a challenging environment. However, the banks need to meet stringent capital requirements (Basel III Tier 1) by 2019. Therefore, I expect OCBC and DBS to maintain their Scrip dividend programme until 2018. Well, I guess there will be more opportunities to get their shares at a discount! The three local banks will be here to stay and prosper for a long long time, probably long after all of us are gone. There is a saying..... 'If you have a gun, you can rob a bank. But if you have a bank, you can rob everyone!' :P

Next, I divested VICOM as its fundamentals is showing early signs of weakening. Revenue from vehicle-related inspection services has dropped, thus affecting earnings significantly.  An impending tsunami of car de-registrations will probably hit VICOM hard over the next few years.


Retail & Industrial sectors struggling
Almost all the industrial and retail REITs are facing increasing headwinds according to their latest quarterly results. Many malls in town are struggling to retain or attract tenants. The situation risks spiralling into a vicious cycle. When shoppers see lots of empty boarded-up units, they tend not to explore the mall further. A decrease in human traffic will then lead to worse sales for the remaining stores which are still operating.

An empty unit at The Mandarin Gallery
The silver lining is that sub-urban malls which mainly caters to the daily needs of masses are still resilient despite the challenges posed by e-commerce, high operational costs and manpower crunch. It is 'business as usual' for Causeway Point & NorthPoint, the twin crown jewels in FCT's portfolio.

I am cautiously optimistic that the major AEI at NorthPoint will reap long-term sustainable benefits from 2018 onwards. Phase 1 of the AEI has already begun and Phase 2 will be completed in September 2017, thus integrating the mall seamlessly with the new NorthPoint City and Yishun bus interchange. Just keeping my fingers crossed that the sponsor (FCL) will not inject Australian assets into FCT in a haphazard manner which harm the benefits of minority unit-holders.


Money can't buy happiness, but neither can poverty
DK

6 comments:

  1. Hi DK, moving forward will you still keep your reits at 50% of your portfolio? currently i am planning STI ETF 60% Reits 40% but thinking of 50%/50% to bring up the yield..

    ReplyDelete
    Replies
    1. Hi Justin,

      Yes, I intend to keep my REITs allocation to 50%. Banks 20%. Healthcare 10%. Stable bluechips 20%. In your case, do take note that sti etf already has a few REITs. Make sure u dun 'double invest'. I think 60/40 ratio is better.

      Delete
  2. Hi DK

    Good buy there recycling your capital from Vicom into the banks. I'm also eyeing banks especially on OCBC but am still waiting for a lower price.

    Oh well, I guess awaiting for now.

    ReplyDelete
    Replies
    1. Hi B,

      2016 is becoming a year of bank accumulation. The main reason is their cheaper valuations compared to their historical trading figures. Especially DBS. It has the lowest PE and pb ratio compared to its peers. I hope u get the chance to enter OCBC too. All the best!:)

      Delete
  3. It's a bad year for industrial and retail Malls right now. DPU fell for most hospitality REITs and industrial REITs.

    ReplyDelete
    Replies
    1. Hi Sweet Retirement,

      These sectors are definitely facing strong structural headwinds. Manufacturers are shifting out of Singapore to cheaper places like Malaysia and Vietnam. Malls have competition from e-commerce. However, I still believe logistics sector will remain resilient as the oversupply issue should ease by 2018. As for malls, strategic premium locations and tenancy mix will be crucial for their survival.

      Delete