Friday, May 31, 2019

Portfolio Summary for May 2019

As of 31 May 2019

Cash Equity

Security # Shares
DBS Group 400
OCBC 900
LHT Holdings 15,500
AIMS APAC REIT 2,189
Old Chang Kee 100
Portfolio Market Value = $31,185

SRS Equity

Security # Shares
SGX 1,300
OCBC 900
Sheng Siong Group 8,700
Frasers Centrepoint Trust 3,000
SingTel 2,000
CapitaCommercial Trust 3,000
Frasers Commercial Trust 2,408
Portfolio Market Value = $51,652


It is no wonder the clique goes, "Sell in May and go away". The Straits Times Index suffered a 8.3% drop for the month. While the benchmark is still up 1.6% year-to-date, there is scant comfort in the global economy. The US and China have yet to iron out a trade deal, so tariffs will continue to eat into corporate profits. US President Donald Trump's latest tweet threatened to raise tariff on Mexico, if the country fails to stem illegal immigrants from crossing the border (news). Looks like "tariffs" has become the new weapon of mass (economic) destruction.

In my previous summary, I mentioned that I was keen to take on some new positions. A few micro caps on my watchlist had released favourable annual results. Unfortunately, those stocks were also monitored by others in the market. On the day after the result announcement, those stocks jumped in price significantly. Oh well, such is life. I'd be patient and wait for another buying opportunity.

I did load up on two bank stocks though, taking advantage of the selloff in the last week of May.

Trade Actions

DBS Group
Finally, I had succumbed to temptation and bought 400 shares of DBS Group at $24.25 apiece. The price is still high in my opinion. Would have preferred to load up at the 52-week low. Nonetheless, I believe the business is still intact. An annual dividend of $1.20 is a good aspirin for the volatility in its share price.

OCBC
I added 900 shares of OCBC at $10.84 apiece. The Business Times recently quoted a Citibank report stating, "OCBC appeared interested to raise its 20 per cent stake in Bank of Ningbo over time as and when regulations allow." (news) This could potentially explain the rationale behind the lower-than-peers dividend payout. The article echoes the same sentiment shared in my earlier blog post (here), that something - positive or negative - may be brewing for OCBC that requires significant capital outlay. Taking a longer term perspective, I am confident the local banks will continue to be profitable, and the dividend will be increased or sustained.

Savings

Next month's Singapore Savings Bond (SSB) has an average yield of 2.13% p.a. which is on the low side compared to historical precedents. I have decided to stay out, in favour of the stock market.

Looking Ahead

June will be a 'dry' month for me, as I need to pay income tax and my insurance policies. Most probably I will only be a spectator in the stock market.

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