Wednesday, May 03, 2017

Financial Review - April, 2017

April was another good month for the portfolio with small gains across the board producing a 0.99 percent increase in net assets for the second month in a row.

For the year, the portfolio is up 6.14%. The adjusted change from when I retired in September 2013 is an 12.79% increase. Hong Kong liquidity stands at 27.5 months of estimated outgoings, well down on January's 38.6 months due to new investments + a transfer to New Zealand. 

Here are the details:

1. my Hong Kong equities increased. I have taken the dividend reinvestment option on my shares in NWD (HK:17), NWS (HK:659) and Huaxian Reit (HK:87001) and invested the proceeds of redemption of a small RMB bond in more Huaxian Reit units on the belief that being paid a yield of over 8% instead of 3% is adequate compensation for the risks of choosing a Reit over a bond;

2. my AU/NZ equities appreciated slightly. I purchased shares in two small companies, Augusta Properties (NZX: AUG) which offers a net yield of over 5% and Marsden Maritime Holdings (NZX: MMH) which only offers a net yield of around 3.2% but has a good track record of growing its distributions and a favourable macro environment;

3.my equity ETFs were up very slightly (India, Hong Kong and China) in line with the local markets;

4. my position in silver fell;

5. all tenants are paying on time and both vacancies have been filled. One tenant has given notice to vacate at the beginning of June;

6. the AUD and NZD were down slightly against the HKD/USD. I transferred some money from HK to NZ to pay for the new investments mentioned in #2 above which accounts for most of the fall in my HK liquidity;

7. my position in bonds remains small;

8. expenses were moderate with a pre-paid air ticket for visiting my daughter in boarding school later in the year paid for.

My HK cash position fell during the month due to the transfer of funds to New Zealand. I currently hold 27.5 months of expenses in HKD cash or equivalents (down from 30.6 months).

I would like to make some additional investments but am struggling to find good value in the markets I follow. With expectations of further rises in interest rates muted, I am starting to get tempted by the carry trade.

Friday, March 31, 2017

Financial Review – March 2017

March was another good month for the portfolio with small gains across the board producing a 0.99 percent increase in net assets.

For the year, the portfolio is up 5.18%. The adjusted change from when I retired in September 2013 is an 11.74% increase. Hong Kong liquidity stands at 30.6 months of estimated outgoings, well down on January's 38.6 months due to new investments. 

Here are the details:

1. my Hong Kong equities increased. I made a very small speculative investment in a microchip stock but otherwise there were no changes to the Hong Kong equity portfolio this month;

2. my AU/NZ equities appreciated slightly. There were no changes to the AU/NZ equities this month;

3.my equity ETFs were up very slightly (India, Hong Kong and China) in line with the local markets;

4. my position in silver fell;

5. all tenants are paying on time and both vacancies have been filled. I rolled over a lease to an existing tenant for an unchanged rental;

6. the AUD was more or less flat and the NZD down slightly against the HKD/USD;

7. my position in bonds remains small;

8. expenses were at the low end of expectations with no travel costs or other large items to pay.

My HK cash position fell during the month due to the prepayment of some invoices and the timing of deposits repaid and received on the rental portfolio. I currently hold 30.6 months of expenses in HKD cash or equivalents.

I would like to make some additional investments but am struggling to find good value in the markets I follow.

Wednesday, March 01, 2017

February was another good month for the portfolio with small gains across the board producing a 1.69 percent increase in net assets.

For the year, the portfolio is up 4.22%. The adjusted change from when I retired in September 2013 is an 10.69% increase. Hong Kong liquidity stands at 32.5 months of estimated outgoings, well down on last month's 38.6 months due to new investments. 

Here are the details:

1. my Hong Kong equities increased. I added some additional shares in HSBC (HK:5) at HK$64.20 in February and opened a position in New World Development (HK:17) at 9.09. Trailing yields on purchase price are about 6% and 5% respectively and I expect the former to be sustainable given the share repurchase and the latter to grow slowly as new revenue streams come on line;

2. my AU/NZ equities appreciated slightly. I added a few more shares in Skellerup (HZX: SKL) to the portfolio. I am still looking for more investments in New Zealand to get a better match between income and expenses in that currency;

3.my equity ETFs were up (India, Hong Kong and China) in line with the local markets;

4. my position in silver rose;

5. all tenants are paying on time and both vacancies have been filled with one new tenant moving in last week and the other moving in this weekend;

6. both the NZD and thee AUD were more or less flat against the HKD/USD;

7. my position in bonds remains small;

8. expenses were at the low end of expectations with no travel costs or other large items to pay;

9.there were no transfers to Mrs Traineeinvestor;

10. there were no derivative transactions this month.

My HK cash position fell during the month due to the new investments in HSBC and NWD. I currently hold 32.5 months of expenses in HKD cash or equivalents.

I have spent more time thinking about total household gearing. Total liabilities (including accruals) is less than 10 percent of total assets but this is not calculated precisely because (i) one of my portfolio investments which involves the use of a margin facility is included in the balance sheet on a net basis and (ii) accruals for things like taxes and longer term expenses are included in liabilities. The 10% is a back-of-the-envelope number which I should track more closely. There is obviously plenty of capacity there to increase debt levels if I could find the right opportunity. Alternatively, if the right investments come along, I shouldn't be shy about reducing my HK liquidity number to something closer to 12 months of anticipated outgoings.