Recent Actions- Sell/Buy

Hello,

Just thought that I should share some of my recent stock actions.

Summary:
1. Bought Ascendas reit @ $2.22
2. Bought Frasers Centrepoint Trust @ $1.81
3. Bought STI ETF @ $2.86.
4. Bought OCBC @ $8.72

The Fed has increased its interest rates by 0.25% , citing an improvement in the US economy and business confidence.
Stock prices are the NPV (net present value) of its future free cash flow, a higher interest rate will mean a higher discount rate and that translates to lower NPV (lower stock price). This is the reason why stock market in SG went a nosedive last week.

Although business borrowing costs would increase due to a higher interest rate and that translates to possibly lower returns for Reits, I still went ahead to purchase Ascendas Reit @$2.22 and Frasers Centrepoint Trust @ $1.81.

These 2 Reits have a strong rental occupancy portfolio.

A-Reit has a well diversified portfolio, with 5 main property segments and situated at well located areas. It has a stable portfolio with 89.8% of portfolio revenue committed for FY15/16 and a portfolio average lease to expiry of about 3.6 years. They have also acquired One@Changi business park recently.

Frasers Centrepoint Trust has very well located shopping malls in the heartlands such as Causeway point and it enjoys consistent high occupancy rate.

I also bought STI ETF at $2.86
What I observed was that before a major announcement is to occur, Singapore's stock would experience a major fall on the day before. I grabbed STI ETF at $2.86 on 15.12.2015, the day before FED announced its IR decision. (Considering US time zone)

Lastly, I bought OCBC at $8.72
Well, I am not some finance economy expert but my observation is that bank stocks do generally better in a higher ir environment, possibly due to a myriad of many many factors. (Business confidence, better IR spreads to profit from)

In 2007, when the US ir was a crazy 5%+, OCBC stocks were at its highest (then) of $8+. When the financial crisis came about and ir suddenly took a nose dive to 0.2%, OCBC stock went tumbling down to $4+. Of course, there are many other reasons accounting for this so my addition of OCBC is more of a hedge to my portfolio.

Although the US has cited sustainable business growth, better economic performance and more jobs in the US, Singapore's economy does not look promising at the moment.
Economists have trimmed Singapore's growth forecast to 1.9% with the manufacturing sector faring the worst.

With that, I say, hold up your war chest and acquire some good business or ETF along the way :)

QnM Dental - Potential growth stock?

QnM Dental posted a very positive financial results ending 1st Qtr 2015.

1. Big jump in profit before tax 
The Group’s 1Q15 profit before tax rose by 173% to $4.5 million from $1.6 million in 1Q14.

173%!! The increase was mainly due to contributions from acquisitions of their China investments.

2. Current Holdings
They have 60 dental clinics, 1 mobile clinic, 3 medical outlets, and 1 aesthetic clinic in Singapore.
In Malaysia, 3 dental hospitals.
In China, 4 dental outlets.

My take is that dental healthcare is a consistent sustainable business to be in, as many companies in Singapore provides dental benefits to their employees. In addition, when one ages, it becomes a need to see the dentist more often.. Just look at my parents, at the age of 60+, they have spent thousands on dental care!

3. Ambitious expansion plans
Now this is the exciting part. QnM has requested for a trading halt earlier this week and yesterday, they have announced their proposition to acquire 8 dental clinics located island wide.

Their profit target amounts to approx. $16.10 million.

Key dentists to be in charge to sign long term service agreements.

Apart from this, they have plans to expand into private dental healthcare in the PRC, Malaysia and through other acquisitions.

Conclusion:

Although I do have a little concern on over aggressiveness of expansion plans, at this moment I think QnM is promising.

Vested at $0.81 today when market open. :D


 

Fraser Centrepoint Trust Stock Analysis

This is a follow up of the review of FCT's 2Q2015 financial results originally posted here .

1. Operational performance
The remaining renewals in FY2015 are mainly at Northpoint, Causeway Point (CWP) and Yew Tee point. Yew Tee point forms the bulk of the renewals.

I do not have much concerns over CWP. Personally, as someone staying in the North and then having moved to the West recently, CWP has been a very bustling mall since years ago and is always packed with people in the weekends. It is not a surprise because at Woodlands, this is the one and only shopping mall to go. Many republic polytechnic students also go there to shop or dine after their studies. The next nearest is either SunPlaza which is really crap or Lot1. Lot1 isn't that popular compared to CWP too.

As for Yew Tee point, I can relate it as a small Plaza in a suburban area fulfilling a myriad of basic needs for the people living around there. Having been there several times, I do think the shopper traffic there is relatively good.

Fraser Centrepoint has strategically locate their retail malls at the suburban areas and most are doing well, except pehaps for BedokPoint.

2. Gearing ratio
Gearing has reduced from 29.3% to 28.6% and % of borrowings on fixed rates or hedged via interest rate swaps has increased by 12%. This means that their debt and risk management is improving.
Interest rates, however, has increased.

3.Outlook
Some of the challenges include manpower shortage, competition from online sales and slowing retail sales growth. However, rising average household income and population coupled with low unemployment rate, I think one can expect a sustainable performance for FCT.

Fraser Centrepoint Trust 2Q2015 distributable income rose 14%

With the increase in net income of 3% by Capitamall Trust for 1Q2015 (mentioned here), it is not a surprise that Fraser Centrepoint Trust (FCT) results were positive as well ^^

FCT did better as its increase was a whooping 14.4%! Distributable per unit increased by 6.2%, a pretty good figure.

"FCT’s property portfolio comprises the following suburban retail properties in Singapore: Causeway Point, Northpoint, Anchorpoint, YewTee Point, Bedok Point and Changi City Point..The Properties are strategically located in various established residential townships, and have a large and diversified tenant base covering a wide variety of trade sectors. "

And with that, I totally agree.

If you are looking at a good source of passive income, this is a stock to consider :D

CapitaMall Trust Financial Results 1st Qtr 2015 Stock Review

Capitamall Trust has released their 1st Qtr 2015 Financial Results. Trusts and Reits are a good source of dividends as they have rather consistent payouts.  However, their stock prices do not fluctuate much so do not expect much capital gains.

Most buy Trusts and Reits to park money into it and leave it there for a long long time. They then enjoy the dividends payout and return of about 4.7% which is pretty good.

Anyway,a good sign that Capitamall Trust's Net property income has increased by 3% and DPU (Distribution per unit) is 2.68cents per share (annualized as 10.87 cents) which means it has increased.

Their shopping malls such as Plaza Sing, IMM, Junction 8 are always packed with people and have high occupancy rates.  Well I enjoy shopping and I tend to think that Singaporeans will continue to shop during weekends as long as the economy is not facing a drastic recession.  Look, there aren't many places to go in Singapore and with Singapore's very hot climate, I would think that majority of the people prefer air conditioned places like Shopping Malls.

Yes, I think can buy, ideally at $2.21 (today's lowest price).