Monday, January 31, 2022

Portfolio Summary for January 2022

As of 31 January 2022


Security# sharesPrice S$%
OCBC Bank1,50012.476.22
ST Engineering6,8003.738.44
CapitaLand Invest5,4003.456.20
Powermatic Data5,0002.864.76
Sheng Siong13,0001.496.44
Genting Singapore11,7000.7352.86
China Sunsine31,0000.4654.80
HC Surgical35,5000.516.02
Silverlake Axis60,8000.2354.75
CL Int Com Trust3,4001.942.19
Portfolio Market Value = $300,612

Trade Actions
- Bought 2,700 shares of ST Engineering.
- Bought 2,565 shares of CapitaLand Integrated Commercial Trust.


Security# sharesPrice S$%
OCBC Bank90012.4713.16
ST Engineering3,0003.7313.12
Sheng Siong8,7001.4915.20
HC Surgical19,5000.5111.66
Silverlake Axis21,3000.2355.87
Portfolio Market Value = $85,276

Trade Actions
- Bought 3,600 shares of ComfortDelGro Group.
- Bought 1,300 shares of ST Engineering.

After a stellar performance in 2021, the strong momentum continued in the local bourse till mid-January when the jubilant mood started to fizzle. The Straits Times Index managed to clock a respectable 4.0% return for the month of January, even though the S&P 500 Index is down 7.6% YTD.

With interest rate hikes poised to happen this year, analysts are saying the U.S. Fed will likely adopt the Kokomo treatment (from the classic song with the lyric, "we'll get there fast, and then we'll take it slow.")

A higher interest rate means heavier debt servicing for companies, and a bigger discount rate for stock valuations, both of which are supposed to be bad for equities.

Then, there is the sabre-rattling between NATO countries and Russia over Ukraine, sending war jitters all over Europe.

Investors are starting to find reason to take money off the table.

I added positions in ST Engineering and ComfortDelGro in January as their stock prices retreated. I also took a stab in the odd lot market to round up my position in CapitaLand Integrated Commercial Trust. This should make my disposal easier at a later time.

It is earnings season, but not many companies on my watchlist have reported yet. Micro-Mechanics Holdings turned in a decent 2H2021 report card, which was expected, given the red-hot demand for semiconductor chips. A 6 cents DPS was declared (same as previous period).

Up north, Genting Hong Kong Ltd, parent company of cruise operators Star Cruises and Dream Cruises, filed for provisional liquidation. The company had become insolvent under the burden of its debt and liabilities. Dream Cruises itself filed a winding-up petition on 27 January.

World Dream (Photo credit: Dream Cruises)

My family had just taken a trip onboard World Dream last December. We enjoyed the food, performances and activities onboard the majestic liner. While it has programmes catering to families, the ship is really a floating gambling den in thin disguise, with jackpot machines everywhere on the main deck and poker tables in plain sight.

Locally listed Genting Singapore isn't adversely impacted by the above event, as it has no cross-holding with Genting Hong Kong. With a $3.1 billion cash buffer and liabilities at a third of that, Genting Singapore isn't in danger of the same fate. That said, the company isn't faring well either, with limited tourist arrival via the VTLs and SMM requirements restricting its operating capacity.

January also saw OCBC Bank suffered its worst PR nightmare in recent years. Some of its customers had lost their life savings to sophisticated phishing scams within minutes. CEO Helen Wong likened the whole experience to 'fighting a war' [news]. There doesn't seem to be major reputational damage though, and OCBC stock price had stayed mostly intact. Altogether, OCBC completed goodwill compensation of $13.7 million to 790 victims [news]. A painful episode for all stakeholders.

As a OCBC customer, I did receive a strange SMS two weeks ago, prompting me to login. The sender name was OCBC in round brackets. It seemed innocent enough. But the text message came with a questionable link, which aroused my suspicion. I deleted the SMS after some thought. Better be safe than sorry.

Recently, my spouse broached the topic of paying down the mortgage on our 5-room HDB flat. We still have about $350,000 outstanding. Given the potential for multiple U.S. Fed interest rate hikes this year (which Singapore tends to follow in lockstep), this issue has taken on additional significance. Currently, our mortgage is pegged to DBS FHR6 plus a step-up rate. While my spouse and I are confident we can handle the increase in accrued interest comfortably, whether this is a good use of our money is another matter. Unfortunately, we had just repriced our mortgage late last year. This means we are locked in commitment for the next two years. Nonetheless, I have opened a POSB Save As You Earn (SAYE) account, which will automatically debit $3,000 from my salary account each month. The benefit is 2% interest earned on accumulated funds for the first two years. When our mortgage lock-up period is over, we should have sufficient savings to pay down the loan completely. That will truly be the moment when we can call ourselves debt free (short of the money we 'owe' ourselves in CPF.)

Two weeks into the new year, I came down with a bout of flu. Thankfully, it wasn't COVID-19. But still, it felt terrible and I was confined at home for five days. During this period, I binged on books that I kept in my cabinet. One of which is "The Instant Millionaire" written by Mark Fisher.

If you hadn't read it before, I recommend you take a look. It may bring about a mindset change.

Having pumped up with motivation, I realized I am too 'timid' in my asset allocation. At this rate, I will likely fail to hit my retirement goal. Henceforth, I shall adopt a more aggressive posture and build up my portfolios at a faster clip. I won't divulge my interim stretch goal here, but I will reveal in a year's time whether I accomplish it or not. Fingers crossed.

Have a wonderful and prosperous Lunar New Year, my friends!

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