Portfolio Summary for July 2023

As of 31 July 2023

CDP

Security	# shares	Price S$	%
DBS	400	34.26	3.89
UOB	400	30.10	3.42
OCBC Bank	700	13.30	2.64
SGX	2,700	9.71	7.44
ST Engineering	6,900	3.73	7.31
CapitaLand Investment	7,400	3.40	7.14
SATS	8,200	2.80	6.52
Powermatic Data	8,500	3.05	7.36
TheHourGlass	5,000	2.08	2.95
Micro-Mechanics	14,200	1.89	7.62
VICOM	14,000	1.70	6.76
Sheng Siong	13,000	1.64	6.05
Nanofilm	15,400	1.14	4.98
Genting Singapore	11,700	0.94	3.12
Credit Bureau Asia	14,300	0.915	3.71
HRnetGroup	21,900	0.73	4.54
TalkMed Group	14,500	0.42	1.73
China Sunsine	41,800	0.41	4.87
HC Surgical	35,500	0.41	4.13
Kimly	27,000	0.335	2.57
Silverlake Axis	15,000	0.29	1.24

Portfolio Market Value = $352,215
YTD Dividends Received = $6,974
YTD SBL Fees Received = $770

Trades
- Sold 5,700 shares of iFast.

SRS

Security	# shares	Price S$	%
DBS	100	34.26	2.47
UOB	200	30.10	4.33
OCBC Bank	900	13.30	8.62
SGX	1,300	9.71	9.09
ST Engineering	3,000	3.73	8.05
CapitaLand Investment	2,600	3.40	6.36
SATS	3,800	2.80	7.66
Powermatic Data	3,400	3.05	7.46
Micro-Mechanics	5,400	1.89	7.35
VICOM	5,500	1.70	6.73
Sheng Siong	8,700	1.64	10.27
Nanofilm	5,500	1.14	4.51
Credit Bureau Asia	5,700	0.915	3.75
TalkMed Group	5,800	0.42	1.75
China Sunsine	10,800	0.41	3.19
HC Surgical	19,500	0.41	5.75
Kimly	5,800	0.335	1.40
Silverlake Axis	6,000	0.29	1.25

Portfolio Market Value = $138,931

Trades
- Sold 2,100 shares of iFast.

Singapore Savings Bonds

Security	Amount ($)	Avg Yld %
GX18070N	12,500	2.63
GX22120S	14,000	3.47
GX23010Z	15,000	3.26

Portfolio Market Value = $41,500

Commentary:

The U.S. Federal Reserve raised the Federal Funds Target Rate by another 25 bps recently. It was the highest level in more than 22 years [news]. Yet, the market hardly flinched. In fact, the local Straits Times Index climbed over 5.2 percent in July alone. Word on The Street is about how the U.S. may be able to skirt around a recession [news]. To think the mood was more pessimistic at the start of the year. Investors are a fickle bunch.

Nonetheless, the relief rally was welcomed by many. iFast Corporation caught a tailwind as the company reversed from loss into profit in 2Q2023. I sold off my position as the share price rocketed nearly 17 percent. The rationale is to consolidate my capital into fewer (but higher conviction) stocks.

On the flip slide, Nanofilm released its 1H2023 profit guidance on 10 July, indicating that the company will report a revenue decline of approx. 34 percent to S$73M and a net loss of approx. S$8M [announcement]. The next day, the stock crashed and burnt, dropping a whopping 15 percent.

It was a good lesson in human psychology, contrasting the market reaction between these two stocks. I suspect the short sellers were hard at work. As a buy-and-hold investor, I'm not too concerned on the price volatility, as long as the company fundamentals remain sound. Nanofilm struck a hopeful tone that 2H2023 revenue ought to be higher than 1H2023 and FY2023 should be profitable.

We shall see.

On the home front, nothing much transpired. July was a lull month. With the hot summer sun blazing, my family wasn't inclined to participate in any outdoor adventure. My kiddos caught the occasional flu bug one after the other. Thankfully, their recovery was smooth.

August will be a happy month, since my wife, my elder son and I will be celebrating our birthdays. (Yes, we are all Leo babies!) Looking forward to the celebrations.

Signing off for now. Until next time!

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Portfolio Summary for June 2022

As of 30 June 2022

CDP

Security	# shares	Price S$	%
DBS	300	29.68	3.04
UOB	300	26.25	2.69
OCBC Bank	700	11.39	2.72
SGX	1,200	9.46	3.88
iFast	5,700	4.14	8.06
SATS	3,900	3.90	5.19
ST Engineering	4,100	4.08	5.71
Micro-Mechanics	8,400	2.90	8.32
Powermatic Data	8,500	2.68	7.78
TheHourGlass	5,000	2.32	3.96
Vicom	11,800	2.02	8.14
Sheng Siong	13,000	1.52	6.75
ComfortDelGro	11,200	1.40	5.36
Genting Singapore	11,700	0.72	2.88
HRnetGroup	21,900	0.775	5.80
HC Surgical	35,500	0.495	6.00
China Sunsine	41,800	0.44	6.28
TalkMed Group	14,500	0.385	1.91
Kimly	27,000	0.38	3.50
Silverlake Axis	15,000	0.395	2.02

Portfolio Market Value = $292,785

Trade Actions
- Bought 300 shares of UOB.
- Bought 500 shares of iFast Corp.
- Bought 500 shares of Micro-Mechanics Holdings.
- Bought 11,800 shares of Vicom.
- Bought 3,500 shares of Powermatic Data Systems.
- Bought 14,500 shares of TalkMed Group.
- Sold 10,600 shares of Silverlake Axis.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.39	8.43
SGX	1,300	9.46	10.12
iFast	2,100	4.14	7.15
SATS	2,200	3.90	7.06
ST Engineering	3,000	4.08	10.07
Micro-Mechanics	3,100	2.90	7.40
Powermatic Data	3,400	2.68	7.50
Vicom	4,700	2.02	7.81
Sheng Siong	8,700	1.52	10.88
ComfortDelGro	6,900	1.40	7.95
HC Surgical	19,500	0.495	7.94
China Sunsine	10,800	0.44	3.91
TalkMed Group	5,800	0.385	1.84
Silverlake Axis	6,000	0.395	1.95

Portfolio Market Value = $121,551

Trade Actions
- Bought 3,400 shares of Powermatic Data Systems.
- Bought 4,700 shares of Vicom.
- Bought 2,100 shares of TalkMed Group.
- Sold 9,100 shares of Silverlake Axis.

Commentary:

The Straits Times Index (STI) has completely eliminated its year-to-date gain. Although the local market is still far from bear territory, stock prices have started to slide, similar to other markets.

Worry of inflation has finally crept into Singaporeans' mind, according to separate surveys by DBS [here] and YouGov [here]. The government has taken preemptive action by announcing a surprise S$1.5b budget to help families and businesses tide through this challenging period [news].

I went on a spending spree in June. Fine-tuned my positions in iFast Corp, Micro-Mechanics Holdings and Powermatic Data Systems as their prices retreated.

I also built a stake in two new counters - UOB and Vicom. Banks are big beneficiaries of interest rate hikes, although there is the concern that a recession may bump up nonperforming loans. UOB's acquisition of Citibank's consumer assets in Malaysia, Thailand, Indonesia and Vietnam provides hope that the bank now has a meaningful avenue to expand its business in ASEAN [news]. Vicom is a relatively well-known vehicle inspection company in Singapore. I like the consistency in Vicom's double-digit ROE and margins.

I have managed to add TalkMed Group to my CDP portfolio too. I further reduced my position in Silverlake Axis as its price rallied near month end.

I am gradually tilting my portfolios towards more liquid holdings. Current cash stands at 30% of total portfolio value. I hope to scoop up more shares as they approach my preferred entry level.

July marks the beginning of Q3, which also heralds the start of the earnings reporting season. As investors buy and sell based on actual results versus estimates, volatility is going to be high. A U.S. Fed interest rate hike of 75 bps in July is almost a given. Any economic data that paints a better picture is likely to spark a relief rally. Overall, a wild ride is expected.

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Portfolio Summary for May 2022

As of 31 May 2022

CDP

Security	# shares	Price S$	%
DBS	300	30.94	3.52
OCBC Bank	700	11.83	3.14
SGX	1,200	9.53	4.33
iFast	5,200	4.88	9.61
SATS	3,900	4.38	6.47
ST Engineering	4,100	4.11	6.38
Micro-Mechanics	7,900	3.05	9.13
Powermatic Data	5,000	2.81	5.32
TheHourGlass	5,000	2.34	4.46
Sheng Siong	13,000	1.53	7.54
ComfortDelGro	11,200	1.44	6.11
Genting Singapore	11,700	0.78	3.48
HRnetGroup	21,900	0.725	6.02
HC Surgical	35,500	0.47	6.32
China Sunsine	41,800	0.45	7.13
Kimly	27,000	0.38	3.89
Silverlake Axis	60,800	0.31	7.14

Portfolio Market Value = $263,928

Trade Actions
- Bought 5,200 shares of iFast Corp.
- Bought 6,600 shares of Micro-Mechanics Holdings.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.83	9.67
SGX	1,300	9.53	11.26
iFast	2,100	4.88	9.31
SATS	2,200	4.38	8.76
ST Engineering	3,000	4.11	11.20
Micro-Mechanics	3,100	3.05	8.59
Sheng Siong	8,700	1.53	12.09
ComfortDelGro	6,900	1.44	9.03
HC Surgical	19,500	0.47	8.33
China Sunsine	10,800	0.45	4.42
TalkMed Group	3,700	0.40	1.34
Silverlake Axis	21,300	0.31	6.00

Portfolio Market Value = $110,060

Trade Actions
- Bought 2,100 shares of iFast Corp.
- Bought 3,100 shares of Micro-Mechanics Holdings.

Commentary:

It has been a brutal month for tech stocks and markets in general. The selloff amplifies whenever a megacap reports worse-than-expected result. Any relief rally dissipates quickly the following day. The S&P 500 Index is hovering just above bear market territory. Interestingly, the STI is holding up well with a positive 3.5% YTD return amid a sea of red. Post-pandemic reopening optimism trumps recession fear at the moment.

Slowly but surely, Singapore is facing the onslaught of global inflationary headwinds. The MAS reported a 3.3% YoY increase in Core Inflation for April 2022, up from 2.9% in March. [data] India, Indonesia and Malaysia have implemented export bans to cater to their own domestic demand. I wouldn't be surprised if more food exporting countries follow suit. So far, I haven't read of any local listed company being affected, but SMEs like chicken rice sellers are feeling despair. [article] We will likely see the adverse impact materialise in 2Q2022 earning results.

I built a stake in iFast Corp, the fintech company that suffered a massive selloff recently. I understand market jitters may cause the stock to decline further, but I feel $4+ is a fair price to pay for the earnings potential of the company.

I have also added Micro-Mechanics Holdings during the recent share price weakness. I like the company's net cash position, compared to other local semicon plays like AEM Holdings and UMS Holdings.

Silverlake Axis extended the dateline for their Equal Access Offer, which gave me sufficient time to inform my custodial bank. I will tender the full allotment of 6,200 shares from my SRS account.

Wifey said I have been paying too much attention to the stock markets lately. I would wake up around 4 plus and check how the U.S. market closes for the day, and which company is the latest victim of The Big Sale. This has become a habit. 

Latest Fed minutes suggest the Fed is prepared to hike interest rate further than expected. [news] At this juncture, it is hard to say whether the Fed will succeed in containing the runaway inflation without causing a recession. The current situation is exacerbated by issues beyond the Fed's control, namely supply chain bottlenecks, the Russo-Ukrainian war and China's draconian COVID-19 lockdowns. The economy and company earnings remain under pressure.

So far, the market downturn has been pretty orderly. I do not see any sharp spike above 40 in the VIX, which is a pseudo indicator of widespread panic. Nonetheless, pockets of opportunity have started to appear in the local stock market. I will deploy my cash accordingly.

Chart of CBOE Volatility Index (VIX). (Source: Yahoo)

Speaking of waking up early, I was amused by my boss' surprised look when I told her I wake up at 5am to exercise, bathe and head to office. I start work at 7am when the sun has just risen. The quiet ambience is perfect for clearing my urgent priorities, although I sometimes get instant messages from my San Francisco colleagues for help, which add tasks to my To Do List. (Oh well.) This routine fits rather well to my Lion chronotype. [link] I am most productive in the morning. (Coincidentally, my Zodiac is Leo.)

How fast time flies. We are now approaching mid 2022. I read that many families are planning to travel abroad during the June holiday. Given the pandemic is still ongoing, my wife and I have opted to stay in Singapore. That said, we have booked another cruise in November. (Yes, I like the sea very much.) Looking forward to that.

Until next time, stay vigilant for buying opportunities, my friends!

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iFast shows how fast brokers can flip on a stock

I came across an article on The Edge Singapore titled, "DBS downgrades iFAST to 'hold' with lack of near-term catalysts; Citi keeps 'sell' call with lower TP of $4.20" [news].

I remembered iFast, the fintech company because it was touted by a members only website as an example of their excellent stock picks. I also remembered some months ago how brokers were fawning over the company, EXCEPT Citi.

Citi Research analysts were the only ones who dared to stand against the crowd and recommended a "SELL". I was quite impressed with their guts.

How fast (no pun intended) the company's fortune has turned.

DBS has changed their recommendation to "HOLD" and slashed their Target Price (TP) from $8.75 to $5.42. That is an abrupt 38 percent drop.

At time of writing, Jefferies also cut their TP from $6.30 to $4.60, a 27 percent downward adjustment.

And I suspect more broker analysts will be pushing out changes to their recommendation, as soon as they are approved for release.

It is a timely reminder NOT to take brokers' TP lock, stock and barrel. As the stock climbs or falls, it is a known fact that broker analysts will adjust their TP accordingly, and you will see different sorts of reason to justify the change.

No analyst really wants to be seen standing alone. There is comfort in consensus. The lone ranger will be seen as crazily out of touch with reality, or branded as a psychic with incredible foresight.

I was not comfortable investing in iFast because I find that the company has grown too fast, too furious. Thus, it is completely normal to experience a reversion to lower numbers. I don't think iFast's operating environment and prospects have changed drastically.

However, it is evident how bullish the market was on the stock to the point of euphoria. iFast's stock price was pushed to a lifetime high of $10.10 before it started its fall from grace.

Price of iFast Corporation Ltd over past two years (Source: Yahoo)

The sharp rise and fall tells me spectulators were punting on the stock, hoping to earn a quick buck from the upward momentum. Sadly, the party is over and many headed for the door. The genuine investors in the company had to endure the roller coaster ride.

There may be more pain (i.e. upfront costs) as iFast tries to assimilate the acquired UK-based BFC Bank, now renamed "iFast Global Bank". A bank is a tightly regulated entity with many compliance rules to adhere. It is a stretch to expect a fintech company to transit successfully to managing a bank overnight.

But we shall see.

iFast management will need to manage investors' expectations carefully. Otherwise, even the genuine investors will also head for the door.

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