Wednesday, 14 September 2016

Dividend Knight Income Portfolio Update (Sep 2016)

No.
Company
No. of Shares
1.
AIMS AMP Capital REIT
30, 000
2.
Starhub
10, 000
3.
Singtel
8, 000
4.
DBS
2, 031
5.
Frasers Centrepoint Trust
15, 000
6.
Mapletree Logistics Trust
25, 365
7.
Raffles Medical Group
18, 094
8.
OCBC
3, 020
9.
SATS
4, 000
10.
CapitaLand Mall Trust
7, 000
11.
ParkwayLife REIT
5, 000
12.
MGCCT
12, 000
13.
Keppel DC REIT
10, 000
14.
Suntec REIT
6, 000
15.
Ascendas REIT
3, 000
16.
UOB
400
17.
Sheng Siong
7, 000
18.
Mapletree Commercial Trust
100
 
Dividends received in September 2016: S$1, 572.13
 
Total dividends received since Jan 2016: S$12, 030.46
 
Average dividends per month: S$1, 002.53
 
Average dividends per day: S$32.96
 
Total portfolio market value: S$353, 323
 
Unrealised Profits: S$51, 762
 
 
For the month of September, I will be collecting a total of S$1, 572.13 in dividends and distributions from my income portfolio. An improvement compared to last year's harvest.^^
  • Ascendas REIT: $174
  • Mapletree Logistics Trust: $433.13
  • AIMS AMP Capital REIT: S$825
  • UOB: S$140

Recent portfolio actions:
  • Total divestment of Frasers Centrepoint Limited
  • Accumulated Raffles Medical Group
  • Subscribed to preferential offering of Mapletree Commercial Trust
  • Subscribed to DBS's SCRIP
  • Subscribed to MLT's partial DRIP
 
The huge drop in my portfolio value was due to Fed rate hike jitters in recent weeks before the FOMC meeting later this month. Another contributing factor is the impending threat of the 4th Telco in the local market. The depressed oil price is not helping the banks either since their non-performing loans from the O&G sector will probably keep rising. Nevertheless, I shall stay mostly vested. Time in the market is better than timing the market. I know.....I sound like a broken record by now! hahaha :)

On the 1st September, 3 companies - MyRepublic, airYotta & TPG - submitted their interest in the bidding of spectrum in the local Telco market. The prices of the three incumbents (Singtel, Starhub & M1) have been on a downtrend ever since. M1 is heavily dependent on mobile revenue. Around 80% of its service revenue comes from mobile services, which is expected to be the segment most vulnerable to the 4th Telco. 55% of Starhub's service revenue comes from mobile data. Singtel is the most resilient as only 13% of its service revenue is attributed to mobile services. However, Singtel will soon be facing serious competition from Reliance in India.

The new challengers keep harping on building an innovative, exciting and data-led Telco instead of engaging a price war in the local Telco market. These positive, gung-ho talk is all good and nice but I have my reservations. Mobile services is rather straightforward and plain (maybe Starhub has the 'Hubbing' edge going for it). In general, when companies in an industry have difficulty differentiating their products/services from one another, a price war of some form usually erupts. Just look at Uber and Didi Chuxing in the cab-hailing market in China. In the end, Uber raised the white flag after a year of painful price war.


Assuming the 4th Telco provides the same quality of service as the incumbents (and that is a BIG 'if'), which Telco has the financial muscle to survive a prolonged price war? Singtel. More than 70% of its revenue is attributed to its overseas operations. If I am running Singtel, I would dig my heels in and seek to outlast the new competition. I would rather see my competitor lose than win myself. M1's revenue will probably be hurt the most if the 4th Telco moves aggressively to grab market share.

On the macro-economic front, I think the STI would remain pretty much in the doldrums for the rest of 2016. There is simply no upside catalyst at all for most of its heavyweights.
  • O&G sector is plagued by depressed oil price (Kep Corp & Semb Corp)
  • Banking sector has to contend with rising non-performing loans from O&G sector & declining housing & business loans (DBS, UOB & OCBC)
  • Telco sector facing competition from 4th Telco (Singtel & Starhub)
  •  Real estate sector is weak due to property cooling measures (CapitaLand, CDL)
  • REITs are facing pressure due to Fed rate hike & oversupply of rental spaces
Singapore's 'Committee of the Future Economy' really needs to pull a rabbit out of the hat by the end of 2016, otherwise the next few batches of graduates might become 'recession graduates'.


The sidelines is not where you want to live your life
DK

8 comments:

  1. Hi dividend knight
    Thanks for for sharing.

    Can u share why u sold Fraser centre limited so soon? U didn't buy it for long and the price didn't move much as well

    ReplyDelete
    Replies
    1. Hi Alfred,

      I did not expect the US economy & jobs market to improve in July & August. Inflation is also ticking up. The markets also recovered almost instantly after Brexit vote. There was no prolonged turmoil. All these developments led me to believe that the Fed will hike rates in Sep. FCL has a huge portfolio of REITs in commercial, retail, hospitality and industrial sectors. I am expecting them to take a hit. Since my portfolio is already heavy on REITs, I want to reduced my exposure.

      Delete
  2. Very impressive dividend portfolio. Remind me of mine back in the days.

    ReplyDelete
    Replies
    1. Hi DW,

      You were one of my role models on dividend investing (after Uncle ASSI >__<)

      Delete
  3. Hi Dividend Knight,

    Could you tell me your reasons for starting this blog?

    ReplyDelete
    Replies
    1. Hi FPL Warrior,

      Primary motivation is to chronicle my investment journey and kinda 'force' myself to keep track of the performance of companies I am vested in. Furthermore, it allows me to organise my thoughts and pen my opinions on the latest economic developments. Would be interesting to see my past posts few years down the road.

      Delete
  4. Replies
    1. Coming real soon. Waiting for the Q3 results of my vested counters.

      Delete