Portfolio Update - January 2020

It looks like I am ready to return to doing Portfolio updates on a monthly basis!

See: Link to Main Portfolio page

For a period of time, my portfolio updates had transitioned to a quarterly basis primarily due to real-life commitments (buying a new home in mid-2018, job change mid-2019, traditional marriage and wedding dinner) taking up headroom in my mind (see what I did there?), combined with lack of my participation in the market.

Without further adieu, let's dive to the contents!

1. Portfolio (31 January 2020)
2. Transactions and Dividends
3. Going Forward
   

Portfolio (31 January 2020)

Notes
1 - Forex rate is based off indicative conversion (actual values will differ)
2 - Alita Resources was previously known as Alliance Minerals Assets Limited.
3 - I had written Alita Resources to 0. Unless some miracle happen to revive the company, I expect to remove from my portfolio sometime within March 2020.

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Transactions and Dividends 

(a) Transaction Summary

• Sold my position of 3000 units in Cromwell European REIT (CEREIT)
• With the proceeds from selling CEREIT, I topped up some capital and initiated a position of 11000 units in Fu Yu Corporation (SGX: F13)

(b) Sale of Cromwell European REIT
I decided to sell my position in Cromwell European REIT to lock in capital gains. This has been on my mind for quite some time even before 2020 came. The diminishing EUR/SGD conversion also contributed to my decision.

(Source: Yahoo! Finance)

Thanks to participation in the rights issue, I had been sitting on some capital gains for quite some time, but it was not quite high enough for me to want to lock in gains until recently. Even with the private placement done, the share price recovered gradually from bottom of 0.460 to hover above 0.500 before appreciating further to hang around 0.530 - 0.55.

To give some perspective to the diminishing conversion rate:

It debuted on the market at EUR 0.55.

Its IPO pricing was at about SGD 0.88.

The conversion rate used back then was ~1.60.

If I converted this back to EUR at present conversion rate, I have paid EUR 0.59 for each IPO units.

Rights issue unit was at EUR 0.373. Given the Forex Rate of ~1.56, This was approximately SGD 0.582. Converting with present-day conversion rate, I have paid about EUR 0.388 per rights issue unit.

Current conversion rate is about 1.50. It had briefly drop before this number for the month of January 2020.

2-Year Chart is attached below.

2-Year Chart for EUR-SGD currency pairing. (Source: XE website)

(c) Purchase of Fu Yu Corporation
The locking in of gains from CEREIT meant I can diversify my positions beyond the property sector. I felt it was the right time I diversify my portfolio to take up shares in a fundamentally solid  company that is still reasonably priced, able to regularly give dividends in excess of 4%. The targets on my watchlist back then simply did not meet my criteria.

• For example, Shares of company such as UMS among them were and still is not at or below my comfortable price to entry yet.
• I do not think it is the right time to buy bank stocks despite being keen on getting exposure to the banks.

It was then I chanced upon Fu Yu Corp and studied their financials as well as the announcement. I concluded that, despite the  premium in P/B back then, I would be happy to buy in and gain some exposure to the manufacturing sector.

Unfortunately, a mistake was made. I bought in at a high as I did not see any catalysts for a sell-off to put it closer or below book value, despite its operations exposure to China. It was at a high due to the news for redevelopment of their Tuas premises. Subsequently, the Wuhan coronavirus selloff decided to rear its ugly head, so sitting on a bit of paper loss.

See: General Announcement - Redevelopment Project at 9 Tuas Drive 1, Singapore

Despite that, I am comfortable holding onto my position, given the plan to embark on growth via the redevelopment and their cash holdings. Should the share price drop further, I probably will open my wallet to add position barring other better opportunities.

(d) Prime US REIT
Previously, I wrote my intention to get Prime US REIT primarily as a means to inject capital and compounding dividends (actually, this is what I usually go for with any REIT IPO I like). Even if USD/SGD conversion goes down, I believe the quality of its yield is worth holding onto.

See my previous posts:

• Prime US REIT - Applied for small number of IPO shares
• Prime US REIT (SGX: OXMU) - Got my small parcel of IPO shares / Opening day performance

Prime's Share Price Performance since IPO Listing (Source: Yahoo! Finance)

Currently, I am sitting on some paper gain, thanks to not only capital appreciation since listing, but also forex exposure - USD/SGD is currently ~1.364 (indicative conversion).

I am just sitting down and... primed (forgive the bad pun) to get its maiden distribution, and waiting for opportunities to partake in rights issue. The REIT is scheduled to release its upcoming financial results on 12 February 2020, before Singapore market opens.

See: SGX - Financial Statement and Related Announcement

(e) Dividend Summary

• No dividends received for the month of January 2020.

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Going Forward
With my priority this year to further build up my emergency funds, I expect to still not be adding too much position (not very disciplined of myself but I will give myself a bit more leeway given the right opportunity :P). I'll be happy enough to take my portfolio value above 10K by end of year. Even then, going back to monthly updates gives me an opportunity to improve on my analysis. This will in turn improve the quality of my contents in the future. After all, practice makes perfect.

Aside from this and writing on Alita Resources, I am looking to do some more work on my blog. It's still too early to reveal in more details as I am still doing the planning, but it will be along the lines of enhancement to presentation of existing "permanent pages" (you see these as tabs on the desktop website) as well as having new pages where I share resources such as Excel-based calculation tools.