Portfolio – Q115

Portfolio Breakdown

My portfolio (at cost) of S'pore stocks for Q115 close,

Note : Stocks are arranged in descending order of % holdings

 
 

Summary

The STI closed at 3447.01, +2.43% from end 2014. Using cost as a reference, my portfolio stats (vs 2014),

• Size (Stocks Only) : +5.24% (Cost) / +6.68% (Market Value)
• Portfolio Performance (Includes Cash) vs End-2014 Mkt Value : +0.70% (Unrealised) + 0.18% (Realised) + 0.32% (Div) = +1.20%
• Further Breakdown of Realised P&L : 0.00% (Stocks Bought before 2015) + 0.18% (Stocks Bought in 2015)

So, +1.20% vs +2.43% (STI), worse than STI… I continue to underperform the STI… since FY14… L

For Q115, I finally decided to reduce my stake in UMS. Despite declaring a better than expected Div for FY14, the CEO continued to reduce his holdings (now reduced to 20.01%). It's a huge dilemma for me as P/L is healthy, Industry remains strong (BB remains >1), Balance Sheet is Healthy (Cash / Share Improved from 7.68ct to 7.87ct) for a PE = 9.12 & Yield = 11.321% (9.434% if Exclude Special Div). But, I have finally decided that having a too huge % of my portfolio in UMS is presenting me with a huge risk. As such, I plan to further reduce in April, during CEO Blackout Period (within 1mth of Q1 results – 8-May last year) as there'll be a better chance for prices to go up (before xd).

I have also substantially reduced my stake in King Wan. The main reason for my stake in King Wan is their holding in KTIS (listed in SET), which is in the Sugar Industry. As such, I have been tracking KTIS share price, Sugar prices & THB Exchange Rate. Unfortunately, Sugar prices had continued to remain weak and with that, KTIS share prices, although THB remains strong. King Wan core biz of M&E stays weak and adds to the risk. 2H will be in end-Mar and last year, Div = 1.5ct. I may buy some back before that.

I have increased my stake in ARA substantially. Prices had been weak due to sustained selling. I have computed and posted on kinv blog previously that ARA Q1 Earnings will be quite good. Let's hope there won't be any negative surprises due to my homework being not thorough enough…

At the macro level, Oil Price remains weak although there were sporadic recovery attempts due to fears of disruption caused by the war in Yemen. But, it looked set to stay weak as all storage tanks in US are now full ie Surplus Supply got nowhere to go… My SembMarine looked set to be a very long term hold if I plan to ride the cycle. SembMarine have the added problem of the Corruption investigation into Petrobas (Brazil)….

Other uncertainties are,

• The problem of Greece (may be forced to exit EU)
• US Rate Hike (likely aro' Jun but at a more gradual slope)

My likely strategy for Q2 will be to increase my level of free cash as market is likely to stay volatile and this will present opportunities.

 
 

Portfolio Changes (vs Q414)

• New Additions : A-Htrust
• Increases : ARA, FCOT
• Decreases : UMS, King Wan, Kingsmen
• No Change : Genting, SembCorp Marine, F&N
• No More : Starhill Global

 
 

Exchange Rates

• IDR (Indonesia Rupiah) -1.04% : LMIR – Slightly weaken after +1.58% in Q414. Looks stable since Jun-14
• AUD (Australia $) -3.31% : AusNet, A-Htrust, Singtel – Continue to worsen, after -5.07% in Q314 & -3.10% in Q414
• JPY (Japanese Yen) +3.51% : Saizen – Slight recovery, after -5.69% in Q314 & -5.23% in Q414