Tuesday, April 15, 2008

Mid-April 2008 Portfolio Summary and Review

The first-half of April 2008 was peppered with news bits from the companies I own, including the release of 1H FY 2008 financials by Ezra Holdings Limited. The fact that Management of these companies is taking a pro-active approach to grow the business is indeed encouraging, and supports my view that such companies will prove to be good long-term strategic investments which are able to grow my money above the inflation rate.

As of today, I am still waiting for the Annual Reports of both Swiber and China Fishery. With about two weeks to go before the actual AGM, I will have a lot of reading to do to familiarize myself with the details of each AR. I will usually follow-up with a list of questions and points to discuss with Management on the actual day, as a form of preparation to understand the company’s strategies better. In the second half of April 2008, I will be expecting financial results releases from Suntec REIT and FSL Trust.

Below is the summary of my investments and related news as at April 15, 2008 (STI at 3,056.49 points).:-

1) Ezra (Vested since October 6, 2005) - Buy Price $0.645 (bonus adjusted), Market Price $2.16, Gain 234%, YTD Loss 34.9%. Ezra released their 1H FY 2008 results on April 8, 2008 along with a ppt presentation for their future plans. Part 1 of my review was released in an earlier post, and I will be working on Parts 2 and 3 after digesting the information provided by the company. An article from The Edge Singapore highlighted increasing risks for the company moving forward, and I will also highlight this when reviewing the company’s prospects. The company declared a tax-exempt special dividend of 5.0 cents per share, representing a yield of 7.75% at my purchase price.

2) Boustead (Vested since September 13, 2006; averaged down November 13, 2006) - Buy Price $1.295 (average), Market Price $1.98, Gain 52.9%, YTD Loss 17.8%. On April 9, 2008, Boustead announced their first batch of contracts for their engineering division worth S$25 million from the oil and gas industry, marking their first contracts announced for FY 2009. The Company should be expected to release their FY 2008 results by late May 2008.

3) Swiber (Vested since February 14, 2007) - Buy Price $1.01, Market Price $2.49, Gain 146.5%, YTD Loss 27.4%. There was no significant announcement by the company other than the sale of shares in subsidiary and giving notice of their AGM and EGM to be held on April 30, 2008 at 1 p.m. at their office premises. I suspect this is one way of reducing costs as booking a conference room at Raffles Hotel (as they did last year) would definitely cost more than having the AGM at their own conference room. Kudos to the company for this cost-saving measure !

4) Suntec REIT (Vested since December 9, 2004) - Buy Price $1.11, Market Price $1.41, Gain 27.0%, YTD Loss 17.1%. There was no news on Suntec REIT in the half-month ended April 15, 2008.

5) Pacific Andes (Vested since March 29, 2006; Rights Issue July 11, 2007 at S$0.52 per share; averaged down August 17, 2007) - Buy Price $0.655 (rights-adjusted), Market Price $0.515, Loss 26.0%, YTD Loss 23.0%. There was no news on Pacific Andes during the period ended April 15, 2008.

6) China Fishery Group (Vested since November 20, 2007) - Buy Price $1.50 (average), Market Price $1.51, Gain 0.7%, YTD Loss 18.4%. Just yesterday, CFG announced the acquisition of their eighth fishmeal plant in Pisco, on the southern coast of Lima. The purchase consideration was US$19.9 million to be satisfied by the payment of US$2.9 million on signing of the S&P agreement, and the rest in 7 equal installments from June 2008 till December 2009. Importantly, this new plant is able to process steam-dried fishmeal with a capacity of 110 tonnes per hour, which will increase CFG’s fishmeal processing capability to 655 tonnes per hour. Steam-dried fishmeal can command better prices than standard flame-dried fishmeal and thus higher margins as well. The new plant will also enhance the geographical spread of CFG’s fishmeal plants by reducing the amount of time for vessels to unload their catch; thus improving efficiencies. CFG’s AGM will be held at Raffles Hotel (4 p.m.) on April 28, 2008 Monday and it will be a good chance to question Management on the pro-active steps they are taking towards building the business.

7) First Ship Lease Trust (Vested since January 14, 2008) - Buy Price (Averaged Down) $1.105, Market Price $1.09, Loss 1.36%. There was no significant news from FSL Trust for the period ending April 15, 2008.

Overall Portfolio

My overall portfolio has increased by 50.1% without taking into FSL Trust’s cost. If included, the gain is 35.9% from a cost of S$80.4K as at April 15, 2008. The market value of my portfolio without FSL Trust is S$87.5K, and if FSL Trust is included then the portfolio value is S$109.2K. Realized gains remain at about S$4.9K until the ex-dividend date for China Fishery comes along, and also because Ezra has yet to announce their dividend payment details.

Comparison against STI

The FTSE STI had declined by 12.2% since the start of 2008. Without FSL Trust, my portfolio has declined 25.0%.To date in 2008, my portfolio has under-performed the new benchmark FTSE STI by 12.8 percentage points.

My next portfolio review will be on Wednesday, April 30, 2008 after market close.

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