Financial Review - August, 2014

August was another neutral month for my investments.

Net worth dipped slightly. With almost no change in equities and commodities, unfavourable FX movements and expenses were slightly more than the net rental income received. Expenses were high due to our family holiday and additional expenses associated with school holidays.

Here are the details:

1. my Hong Kong equity portfolio was more or less unchanged. I purchased a few additional shares in China Blue Chemical, sold some shares in Sinolink Holdings and added some units in the CSOP A50 tracker fund today at HK$9.43;

2. my AU/NZ equities appreciated. There were no purchases this month;

3.my equity ETFs were largely unchanged (India, Vietnam, Hong Kong and China) in line with the local markets. There were no new purchases;

4. my commodities were flat. SIlver is my only position and I added slightly to that position;

5. the properties are at full occupancy and all tenants are paying on time. There were no repairs this month;

6. currency movements were slightly adverse with a small fall in the NZD. The AUD was flat;

7. my position in bonds remains small;

8. expenses were high due to our summer holiday;

9.I made a transfer to Mrs Traineeinvestor this month.

My cash position fell slightly. I currently hold 46.6 months of expenses in HKD cash or equivalents.

For July, my net worth fell by 0.19%. The year to date increase is 6.29%.

Frustration with iBonds

Well, I got the standard allocation of HKD20,000 in the latest issue of HKSAR Government iBonds. It's a trivial sum and the only reason I bother is that it's better than leaving cash in the bank and it only takes a few clicks of the mouse to subscribe.

But I wish, really wish, I could park a lot more of my cash balance in iBonds. Unfortunately, I don't think it's going to happen.

Mrs Traineeinvestor goes shopping

Mrs Traineeinvestor (aka my better 99%) purchased a carparking space yesterday. While the price of carparks is (IMHO) very expensive, in relative terms, she got a very good deal. Carparks in our building rarely come on the market - the last transaction was in 2013 at $X and the vendor of the only one currently offered is asking $X+25%. Mrs Traineeinvestor's purchase was in a good building in the same area at about half $X.

While I still view the price paid as high, current changes in the neighbourhood will likely make the supply shortage even more accute in the not too distant future.

The net yield on gross cost is about 2.2% - not great but better than bank deposits.

Silver purchased

In the quest for a little more portfolio diversification, I added a little more silver to the portfolio yesterday. I paid the equivalent of USD19.83 per oz.

Sinolink Holdings - partial sale

Before heading off on our summer holiday in northern Hokkaido (very beautiful), I placed a few small out of the money sell orders on Sinolink Holdings (HK:1168). Both orders were triggered at HK$0.70 and HK$0.72 respectively generating a modest profit. While I was reluctant to sell these shares given the size of the discount to NAV (they are actually trading at a material discount to cash backing), I would like to take a little bit of money off the table as the market rises and a small cap company which does not pay dividends was my choice.

I still hold most of my position in Sinolink Holdings which was purchased at an average of HK$0.64.

China Blue Chemical purchased

This morning I added a few more shares in China Blue Chemical (HK:3983) to the portfolio. I have held these for some time and, while they have paid out a steady stream of dividends, the investment as a whole has been disappointing and I am slightly behind on my original investment.

In any event, the share price has come back to the point where the value looks attractive with a cash rich and debt free balance sheet and a 4.5% dividend yield on offer. There is also the possibility that the auction of the assets of a defaulting JV company on 15 August will remove some uncertainty.

I paid HK$3.97 for the additional shares.