Monday, September 30, 2019

Portfolio Summary for September 2019

As of 30 September 2019

Cash Equity

DBS Group400$25.0023.38%
OCBC900$10.8622.85%
SATS2,000$4.8422.63%
ST Engineering2,500$3.8422.44%
Old Chang Kee5,000$0.7458.71%
Portfolio Market Value = $42,779

SRS Equity

Security# SharesPricePortfolio %
SGX1,300$8.4723.53%
OCBC900$10.8620.89%
Sheng Siong Group8,700$1.1120.64%
SingTel2,000$3.1013.25%
CapitaCommercial Trust3,000$2.0713.27%
Frasers Commercial Trust2,446$1.618.42%
Portfolio Market Value = $46,790


It was a quiet September month.  The STI had gone on a roller-coaster ride, and is nearly back to where it started the month.  Doomsayer calls for a recession next year have gotten louder, with nervous folks predicting terrible times ahead (see news and news).  The U.S. and China will resume their trade negotiations on Oct 10 (news), though it is anyone's guess whether there will be light at the end of the (tariff) tunnel.  Our leaders are certainly worried.  PM Lee had just reminded Singaporeans to 'be prepared for rough weather ahead' (news).  DPM Heng Swee Keat also noted that 'the Government is closely monitoring how the economy will pan out by the end of the year, and is prepared to take action when necessary' (news).

Amidst the gloomy atmosphere, I had managed to execute one trade.


Trade Actions

ST Engineering
I initiated a position of 2,500 shares in ST Engineering at $3.84 apiece.  I have been optimistic about the prospects of this company.  What began as a defence contractor for the fledgling Singapore Armed Forces in the 1960s has blossomed into a global technology and engineering group, with specialty in aerospace, electronics, land systems and marine.  The company has a healthy order book of S$15.6 billion, which includes a S$1.0 billion contract to build a heavy polar icebreaker for the U.S. Coast Guard (announcement).  ST Engineering has been generating positive free cash flow consistently over the years.  The stock price had taken a dip at month end, which I thought was an opportune time to acquire a stake.


Savings

In all honesty, I feel it is not worth talking about Singapore Savings Bonds (SSB) at this moment.  The low yield is comparable or worse than some of the fixed deposit (FD) products in the market.  We will be middling around 1.73% for next month's SSB.  If you have S$20,000 and one year time horizon, ICBC has a FD promotion that is better (link).  You may want to check out their website.


Looking Ahead

September marks the end of another calendar quarter.  Companies will be releasing their results between end October and mid November.  We will know which local companies are affected by the vicissitudes of the ongoing U.S.-China trade spat.  Earning releases tend to make stock prices volatile, as institutional funds buy or dump shares depending whether it is a 'beat (estimates)' or a 'miss'.  I will be wary to take on a position until the earnings reporting season is over, and the market has absorbed the full information bonanza.

That said, there may be special situations which cause a stock price to plunge without any major change in fundamentals (such as an analyst downgrade).  I'm keeping my powder dry and ready for such opportunities.

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“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”

― Mark Twain, Pudd'nhead Wilson

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