September 2008 Portfolio Summary and Review

From this portfolio update onwards, I will be changing the format of the portfolio review to make for easier reading. Instead of everything being text-based (which can be hard on the eye especially when it concerns numbers), I have resorted to using an Excel spreadsheet (see below) to document the key aspects of my portfolio. Of course, some details have been left out such as averaging dates, but these are not as important as the first date of purchasing a company. I have arranged this in order to when I bought the company.

The main change to the portfolio since the mid-September 2008 update is the addition of Tat Hong Holdings Limited on September 18, 2008. The US$700 billion bailout has NOT been approved by Congress as at the time of this writing but the Democrats are purportedly working on another bailout plan to be tabled to Congress; voting can only take placed earliest next week so the market will, as usual, be on tenterhooks. The good news is that the DJIA and S&P 500 crashed about 7% and 9% respectively, which means valuations are getting increasingly attractive as the days go by.

Separately, Singapore is also expected to enter a technical recession once the 3Q 2008 GDP figures are released, due to a sharp drop in manufacturing output. This was not entirely unexpected as our economy is very open and thus prone to such global “shocks”. Other vulnerable countries will include Malaysia and Hong Kong as well.




There was not much news regarding the companies I own, and I will give a quick summary below. The STI stood at 2,358.91 points on September 30, 2008.

1) Ezra Holdings Limited - There was no news for Ezra for the half-month ended September 30, 2008. The Group’s FY 2008 results are expected to be released on Tuesday, October 21, 2008.

2) Boustead Holdings Limited - There was no news from Boustead for the half-month ended September 30, 2008. FF Wong’s total purchases thus far from the open market amount to 701,000 shares at an average price of S$0.98 each.

3) Swiber Holdings Limited – There were no updates from the company regarding the Equatorial Driller, and the Company did buy back more shares to the tune of 2,195,000 at an average cost of S$1.2454. This cost the Company about S$2.73 million.

4) Suntec REIT - There was no news for Suntec REIT for the period ending September 30, 2008, except for the fact that the REIT will change their year-end to December 31 instead of the current September 30.

5) Pacific Andes Holdings Limited - There was no news from PAH for the half-month ended September 30, 2008. A total of about 41 million new shares (at S$0.44 per share) were issued as a result of the scrip dividend scheme. I chose to receive the dividend in cash at the market price of PAH is much lower than the scrip dividend price, thus it would be more prudent to accept cash which can be reinvested for higher returns.

6) China Fishery Group Limited - There was no news from CFG for the half-month ended September 30, 2008.

7) First Ship Lease Trust –FSL Trust is proposing a dividend reinvestment scheme (similar to a scrip dividend scheme) whereby shareholders can choose to receive their dividends in cash or in the form of new shares. The new shares are subject to a maximum discount of 10% off the last traded market price. There will be an EGM convened to address this issue and it will be held on October 7, 2008 (Tuesday) at 3 p.m. Marina Mandarin (the venue for their last AGM).

8) Tat Hong Holdings Limited – There was no news for the company for the half-month ended September 30, 2008.

Portfolio Comments

There are no immediate pressing problems or issues with the companies I own, other than those with high leverage (Pacific Andes, China Fishery, Swiber and Ezra) which may prove a problem in the current credit crunch. However, with Ezra getting a recent S$500 million loan approved, Swiber using their third wave of sale and leaseback and China Fishery generating strong operating cash inflows, these worries have been somewhat mitigated. However, as an investor, it will still be good for me to remain vigilant and to track the companies’ quarterly reports to identify potential problem areas.

With an imminent recession and global slowdown, it is also prudent for me not to expect overly strong earnings growth for the companies I own. Tempered expectations always lead to much better outcomes as one is emotionally prepared. I am also of the view that steady, consistent growth over a period of years is much better than explosive growth which fizzles out after a brief sporadic period.

With a total portfolio return of -3.7%, the portfolio is still showing resilience during this time of turbulence, and deep into the bear market.

My next portfolio review will be on Friday, October 31, 2008 after market close, but note that I will provide a summary of my companies’ updates during the middle of the month (i.e. Wednesday October 15, 2008).