How fast time flies. Since 30-Mar (Good Friday) is a non-trading day for Singapore and USA, 1Q 2018 has officially drawn to a close. As predicted in my previous posts in 2017, the market has increasingly looked overheated and is posed for a long delayed correction. This officially came in Jan 2018, where DJI dropped 2756 points (-10.35%) in 2 weeks, partly sparked by a fear of faster Federal Rate increase due to the good economic data the USA is posting and rising bond yield. Since then, the market has recovered partially and was trading sideways until the Facebook Cambridge Analytica scandal and President Trump's attacks on Amazon where he wanted to increase the tax Amazon pays. This led the market to sell off FANG (Facebook, Amazon, Netflix, Google) counters, causing DJI to shed 1413 points (-5.66%) following a few days of selling. But wait a minute, why is President Trump attacking Amazon? Wasn't he supposed to be pro-America? From rumors, this seems to be a personal agenda against Jeff Bezos, who happened to be the CEO of Amazon and owner of The Washington Post, whose articles are not friendly to President Trump. For this quarter, DJI ended at 24103, a drop of 616 points (-2.49%) compared to 4Q. For Singapore, STI ended 1Q at 3427, an increase of 25 points (+0.73%) compared to 4Q.
Looking ahead, there seems to be more uncertainty in the market. We are not sure how fast Federal is going to increase their lending rate given the red hot USA economic growth. So far, they are sticking with 3 rate increases in 2018, but the market has started to price in 4 rate increases instead. President Trump, on the other hand, is still going on his rhetoric and seemingly changing his inner circle of advisers to people who are like-minded to him. So far, the policies and actions he has taken seems to do more harm than good. I genuinely pray for the future of USA. A storm may be coming. Nonetheless, below are my 1Q transactions:
Following the privatization of GLP in January, my portfolio balancing has been on-going.
Transaction 1: Bought in a batch of Mapletree Industrial Trust in January.
Strong pipeline growth, strong tenant retention rate, good Assets Enhancement Initiatives. This is simply a darling not to be missed. Looking forward to their two upcoming projects:
- AEI – 30A Kallang Place and Kallang Basin 4 Cluster. Expected Completion: 1Q 2018.
- BTS Project – New Data Centre. Expected Completion: 2H 2018.
Transaction 2: Bought in a batch of Fraser Centerpoint Trust in January.
Same reason as previous quarter. The new Northpoint South Wing has officially opened and the take-up rate seems good. The mall manager has re-balanced its tenants to include more eateries. I have a gut feeling that once the new South Wing has stabilized, they will be injecting into FCT. Buying now to prepare for future opportunities.
Transaction 3: Bought in a batch of Marriott International Inc in February.
Marriott has increasingly been the business choice of hotel during travels and after the acquisition of Starwood Hotels into its portfolio, it is now the 4th largest hotel chain in the world by properties and the largest (1st) hotel chain in the world by rooms. I simply invested into Marriott because I like the Marriott brand and I see it continuing its dominant position going forward. I don't mind the $0.33 quarterly dividend either.
Transaction 4: Subscribed to Sasseur Reit IPO in March.
Sasseur Reit China outlet mall business structure interest me. Instead of the traditional brick and mortar monthly rental lease structure, they opted to charge the tenants by % of their sales income. They claimed that they are the leading outlet mall operator in China and the outlet mall industry in China will be seeing tremendous growth. Well, that remains to be seen if what they claimed is true, I will be closely monitoring their future financial data. At least, the sponsor has guaranteed a 7.0% yield for 2018 and 7.5% yield for 2019 based on $0.80 IPO price. If the results fall short, it is not too late to exit before the guaranteed yield falls away.
Transaction 5: Sold a batch of Noble Group in February.
Well, bad news one after another for Noble Group. Managed to sell off some shares to lock in profits before the price crashed. There is no further hope for the existing company. All that is left to be seen is if Goldilocks Fund managed to negotiate for a better deal for all shareholders and in the process, kick the incompetent management out of the board. If what the presentation slides hold true, existing shareholder can only look to the New Noble after restructuring as a going concern. I shall remind myself not to invest in low profit margin company in the future.
That is all for now. See you all in Q2 2018 update and thank you for staying with me. =)
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