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.

Sunday, February 05, 2017

Financial Review - January, 2017

January was a good month for the portfolio with small gains across the board producing a 2.61 percent increase in net assets.

For the year, the portfolio is up 2.61%. The adjusted change from when I retired in September 2013 is an 8.92% increase. Hong Kong liquidity stands at 38.6 months of estimated outgoings. 

Here are the details:

1. my Hong Kong equities increased. I added some additional shares in HSBC (HK:5) at HK$64.20 in January;

2. my AU/NZ equities appreciated slightly. I sold my shares in Hellaby Holding (NZX: HBY) at NZ$3.60 under a takeover offer for a nice profit (although I will miss the dividends). I purchased some additional shares in NZ Exchange (NZX: NZX) at NZ$1.06 and opened a position in Colonial Motor Company (NZX: CMO) at NZ$7.25. 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 but we have one vacancy and a second tenant moving out shortly. The current vacancy is in a building is currently subject to a lengthy renovation exercise. A new tenant has agreed to starting a new lease in three weeks' time at a rent which is above the discounted rate which the previous tenant was paying but below the level the property would achieve after the building renovation has been completed - a much better outcome than having an extended vacancy. The property needs to be to be redecorated (it has been several years since it was last done). I have already secured a new tenant for the property which will become vacant shortly and will only need to do minor touch up work before the new tenant moves in. The rent is about 4% lower than the previous rent;

6. both the NZD and thee AUD rose against the HKD/USD. I purchased some NZ$ @ 5.56 HK$;

7. my position in bonds remains small;

8. expenses were very high due to starting my elder daughter in boarding school (school fees, air tickets, hotel, hire car etc) but had been fully accrued;

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 high expenses and the remittance of funds to New Zealand. I currently hold 38.6 months of expenses in HKD cash or equivalents.

I also had another look at total household gearing. Total liabilities (including accruals) is less than 10 percent of total assets. There is obviously plenty of capacity there to increase debt levels if I could find the right opportunity.