Foremost on the list is that USA’s economy has rebounded and it definitely on the mend, even as unemployment rate continues to creep up and housing starts continue to drop. Lagging indicators are often used to determine if the recovery is truly under way, and if an investor is trying to pre-empt the recovery by watching out for such news in order to determine when to purchase shares, he will feel left out and sorely disappointed. As we have witnessed, both USA and Singapore had exited the recession in 3Q 2009; but the stock market rebound occurred in May 2009 and was sharp and sudden; hence the idea of properly timing the market as to when to enter is again rendered moot and futile. Nevertheless, I do know of friends and peers who continue trying, and I wish them luck in finding the “Holy Grail” in market timing.
In Singapore, it was reported that sales of private residential properties hit just 811 units for October 2009, down from 1,143 units in September and 1,805 units in August. While market watchers agree that October is usually a slow period, I cannot help but wonder if the recent measures taken by the Government to cool the market by increasing supply had anything to do with it. It is also in my interest to see prices for HDB resale move downwards as I have friends and relatives who are searching for an affordable HDB to buy but are being priced out of the market by the high COV levels. Higher private residential property prices also means that buyers who purchase such units have to take up higher leverage and financing, which may lead to problems 5-10 years down the road should interest rates rise. An article in the Sunday Times November 22, 2009 highlights this issue of affordability and prudence in purchasing a home, which many young and excited couples may not have planned or considered before-hand.
Just to comment on cars, COE prices have remained super-high (in my opinion at least), with cars up to 1,600 cc ending at S$17,189 and for cars above 1,600 cc ending at S$18,389. This makes it quite impossible for me to even consider a buying a car as the prices are simply amazingly high. I recently read about the newly launched and heavily promoted Volkswagon Polo, which is a 1.4L car and selling for a hefty S$63,000+. It seems Singapore continues to hold the record for being one of the most expensive countries to own a car. In line with my strategy to watch my cash flows, I am unable to reconcile (to myself) how I can own such cars as the cash flow drain would be enormous.
Anyhow, my portfolio did not see any changes for November 2009, as I was busy building up more cash through dividends while continuing my research for a suitable investment opportunity. I received dividends from MTQ, GRP, Suntec REIT and FSL Trust this month, amounting to about S$1,500 in total. Next month, dividends from Tat Hong and Boustead are due and will provide a boost to cash flows as well.

For November 2009, corporate updates and result announcements for my companies are as follow:-
1) Boustead Holdings Limited – I am in the midst of doing a detailed analysis on Boustead, part 1 of which was posted 5 days ago. Parts 2 and 3 should follow-up soon so watch out for it, but I may blog about other issues along the way as well. An interim dividend of 1.5 cents/share was declared.
2) Suntec REIT – There was no significant news for Suntec REIT for November 2009. The dividend of 2.92 Singapore cents per share was received on November 26, 2009.
3) China Fishery Group Limited – China Fishery released their FY 2009 results ending September 28, 2009 on November 26, 2009. I will be doing a detailed analysis and review but only after I finish up with Tat Hong and Boustead (too many things on my plate haha). In other related news, Pacific Andes International Holdings (PAIH) listed in Hong Kong mentioned that finishing touches were being put on their new super-vessel The Lafayette, and it was ready to set sail to the South Pacific along with 5 super-trawlers and seven catcher vessels. It is able to operate all-year round as it can freeze the fish on board once the vessels bring in their catch, and can re-fuel itself too. According to estimates from PAIH, profit margins for CFG may increase from 35% to 50% as a result of the increased efficiencies. The Group had spent US$100 million on the vessel, so I’d say it better be as good as they claim! There is also the question of sustainability of fish resources in the South Pacific once this vessel is deployed there, and in the interests of conservation and “saving the earth”, I may also have to consider if this could be a potentially “non-green” initiative which the Group has taken on.
4) First Ship Lease Trust – On November 23, 2009, FSL Trust (FSLT) announced a proposed issuance of US$200 million in senior notes due 2016. They are using the rest of the month to market the notes to international investors, and will keep shareholders updated on material events. The dividend of 0.23 US cents per share was received on November 26, 2009. There are some sources which state that FSL Trust is asking for "just below 12%" yield on the bonds, which are supposedly callable after 4 years.
5) Tat Hong Holdings Limited – Tat Hong released a very dismal set of 2Q 2010 results during the month, and saw their Balance Sheet and Cash Flow Statement deteriorate further. I guess it was quite a tall order for me to expect them to be immune to the financial crisis, but the drop in revenues and even larger fall in earnings was shocking and bewildering, to say the least. I had expected them to be able to hold up better as they had invested in a “rental” business model and were supposed to have learnt their lessons from past financial crises. An interim dividend of 1 cent/share was declared for ordinary shareholders and for holders of the RCPS. I shall be doing a review of the 1H 2010 results in subsequent posts.
6) MTQ Corporation Limited – There was no news from MTQ for November 2009. The interim dividend of 1 cent/share was received on November 24, 2009.
7) GRP Limited – There was no news from GRP for November 2009. The dividend of 1 cent/share was received on November 19, 2009.
Portfolio Comments – November 2009
November 2009 saw no changes at all to my portfolio, and I have been happy to remain vested and building up cash in the meantime. Realized gains have increased from S$26.6K to S$28.4K as a result receipt of dividends from Tat Hong, MTQ, GRP and Suntec REIT. Unrealized gains remain low at +7.5% as a result of recent purchases, but overall gain has remained steady at +28.4% of adjusted cost of S$135.4K. This was mainly due to increases in realized gain due to dividends which offset the drop in unrealised gains due to market weakness across second-liner companies.
My year-end portfolio review will be done on Thursday, December 31, 2009. At the same time, I will also be doing a special full-year review of my investment decisions and comment on the investment performance of my portfolio. It’s time to get candid and honest about my mistakes and misconceptions.