Thursday, November 30, 2017

Financial Review - November, 2017

November was another positive month for the portfolio with small positive movements in all asset classes offsetting small declines in the AUD/NZD producing a 0.98 percent increase in net assets.

For the year, the portfolio is up 18.21 percent. The adjusted change from when I retired in September 2013 is a 26.01 percent increase. Hong Kong liquidity stands at 27.37 months of estimated outgoings, well down on January's 38.6 months due to new investments + transfers to New Zealand.

Here are the details:

1. my Hong Kong equities increased. There were no new investments this month;

2. my AU/NZ equities were mixed with Australia being marginally ahead and New Zealand falling slightly. I sold my shares in PG Wrightson (NZX: PGW). PGW has been a good performer and pays high dividends but I have doubts about sustainability. As part of my review of the smaller investments in the portfolio, I sold my shares in Specialty Fashion (ASX: SFH), the worst performing share in the portfolio having finally lost any residual faith in the company's management. I should have sold years ago. I purchased some additional shares in Grange Resources (ASX: GRR) on the huge uplift in the premium iron ore pellets are receiving over fines. I currently have too high a proportion of my New Zealand assets in cash;

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

4. my position in silver rose and my small position in platinum recovered slightly;

5. all tenants are paying on time and all properties are let. Unusually, there were no repairs at all in November but I have received another irritatingly pointless mandatory window inspection scheme notice;

6. the AUD and NZD were were down against the USD/HKD;

7. my position in bonds remains modest. I have a margin facility in place and my carry trade is doing its thing and generating a small amount of additional income;

8. expenses were low.

My HK cash position fell slightly during the month. I currently hold 27.37 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 9.85% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio. With a mark-to-market of equities, bonds and FX this number will fluctuate even if the amount of debt is being slowly amortised.

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 remain tempted by the carry trade and would do one or two more should the right offers be available. I am reviewing some of the smaller investments in the portfolio with a view to either exiting or adding to my positions - too many very small investments are taking up a disproportionate amount of time to monitor.

Friday, November 03, 2017

Financial Review - October, 2017

October was another positive month for the portfolio with positive movements in Hong Kong, emerging markets and precious metals offsetting declines in New Zealand sharemarket and the NZD producing a 0.95 percent increase in net assets.

For the year, the portfolio is up 17.22 percent. The adjusted change from when I retired in September 2013 is a 24.71 percent increase. Hong Kong liquidity stands at 27.58 months of estimated outgoings, well down on January's 38.6 months due to new investments + transfers to New Zealand.

Here are the details:

1. my Hong Kong equities increased. I  purchased a few additional shares in CNOOC (HK:883), GDI (HK:270) and took the dividend reinvestment option on my shares in K Wah (HK:173);

2. my AU/NZ equities were mixed with Australia being marginally ahead and New Zealand slumping sharply on a combination of another earnings downgrade from Fletcher Building (NZX: FBU) and the election resulting in the centre-left government being replaced by an unstable far-left coalition;

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

4. my position in silver rose and my small position in platinum recovered slightly;

5. all tenants are paying on time and all properties are let. Unusually, there were no repairs at all in October ;

6. the AUD and NZD were were down against the USD/HKD. The NZD in particular slumped following the political pole-vault to the left;

7. my position in bonds remains modest. I have a margin facility in place and my carry trade is doing its thing and generating a small amount of additional income;

8. expenses were low.

My HK cash position fell during the month. I currently hold 27.5 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 9.97% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio. With a mark-to-market of equities, bonds and FX this number will fluctuate even if the amount of debt is being slowly amortised.

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 remain tempted by the carry trade and would do one or two more should the right offers be available. I am currently having a look at Singapore REITS and some of the smaller investments in the portfolio with a view to either exiting or adding to my positions - too many very small investments are taking up a disproportionate amount of time to monitor.

Saturday, September 30, 2017

Financial Review - September, 2017

September was another positive month for the portfolio with a cumulation of small gains in most assets and neutral FX movements producing a 1.60 percent increase in net assets.

For the year, the portfolio is up 16.27 percent. The adjusted change from when I retired in September 2013 is a 23.88 percent increase. Hong Kong liquidity stands at 27.70 months of estimated outgoings, well down on January's 38.6 months due to new investments + transfers to New Zealand.

Here are the details:

1. my Hong Kong equities increased moderately. I sold my shares in Xtep (HK:1368) after the company continued to disappoint and purchased a few additional shares in CNOOC (HK:883);

2. my AU/NZ equities were mixed with declines in Australia being less than a small gain in New Zealand. I added some more shares in Colonial Motor Company (NZX: CMO);

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

4. my position in silver fell. I opened a small position in platinum;

5. all tenants are paying on time and all properties are let. Unfortunately, I had a few repair bills this month, some of which are a result of the recent typhoons. One tenant has agreed to a new leas with a small increase in rent;

6. the AUD and NZD were were mixed with the AUD being down and the NZD slightly ahead against the USD/HKD;

7. my position in bonds remains modest. I have a margin facility in place and purchased one additional bond using the facility - a very small carry trade;

8. expenses were low.

My HK cash position rose during the month. I currently hold 27.7 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 10.04% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio.

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 remain tempted by the carry trade and would do one or two more should the right offers be available.

Wednesday, September 06, 2017

Financial Review - August, 2017

August was a marginally positive month for the portfolio with a mixture of small gains and losses and unfavourable FX movements producing a 0.62 percent increase in net assets.

For the year, the portfolio is up 14.62 percent. The adjusted change from when I retired in September 2013 is a 22.11 percent increase. Hong Kong liquidity stands at 25.74 months of estimated outgoings, well down on January's 38.6 months due to new investments + transfers to New Zealand.

Here are the details:

1. my Hong Kong equities increased slightly. I purchased a few additional shares in CCB (HK:939);

2. my AU/NZ equities fell with declines in Australia outweighing a small increase in New Zealand. There were no transactions this month;

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

4. my position in silver increased;

5. all tenants are paying on time and all properties are let. Unfortunately, I will have a few repair bills this month, some of which are a result of the recent typhoons;

6. the AUD and NZD were were mixed with the AUD being flat and the NZD falling in response to pre-election jitters. I made an additional transfer to New Zealand;

7. my position in bonds remains modest. I have a margin facility in place and am looking to by some bonds on margin as a carry trade;

8. expenses were moderate as I took a trip to New Zealand to visit family.

My HK cash position fell during the month due to another transfer to New Zealand. I currently hold 25.7 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 9.02% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio.

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 remain tempted by the carry trade and would do one or two more should the right offers be available.

Tuesday, August 01, 2017

Financial Review - July, 2017

July was another good month for the portfolio with small gains across the board and favourable FX movements producing a 3.93 percent increase in net assets.

For the year, the portfolio is up 14.00 percent. The adjusted change from when I retired in September 2013 is a 21.14 percent increase. Hong Kong liquidity stands at 28.5 months of estimated outgoings, well down on January's 38.6 months due to new investments + a transfer to New Zealand but ahead of last month's due to high levels of dividends being received.

Here are the details:

1. my Hong Kong equities increased. I purchased some additional shares in GDI (HK:270);

2. my AU/NZ equities rose slightly. I purchased some additional shares in Colonial Motor Company (NZX: CMO);

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

4. my position in silver was stable;

5. all tenants are paying on time and all properties are let;

6. the AUD and NZD were up against the HKD/USD. I made a small additional transfer to New Zealand;

7. my position in bonds remains small. I declined some offers as the spread between yield and cost of funds was too thin.

8. expenses were moderate as we took a short family holiday to Da Nang;

My HK cash position rose slightly during the month due to high level of dividends. I currently hold 28.5 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 9.06% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio.

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 remain tempted by the carry trade and would do one or two more should the right offers be available.

Friday, June 30, 2017

Financial Review - June, 2017

June was another good month for the portfolio with small gains across the board producing a 2.07 percent increase in net assets.

For the year, the portfolio is up 10.10%. The adjusted change from when I retired in September 2013 is a 17.12% increase. Hong Kong liquidity stands at 28.0 months of estimated outgoings, well down on January's 38.6 months due to new investments + a transfer to New Zealand but ahead of last month's after I sold some investments.

Here are the details:

1. my Hong Kong equities increased. I sold my shares in COSCO Ports (HK:1199) and a very small position in China New Economy Fund (HK:80). I reinvested some of the proceeds in Kowloon Development (HK:34) which offers a higher yield (around 7% on cost) and a significant discount to NAV which may or may not improve once legal uncertainty over a property development project in Macau is resolved. While I booked a profit on COSCO Ports, the company has been a serial underperformer which has failed to meet expectations either in terms of growth or dividend levels. The Fund was ditched at a small loss after it appeared in David Webb's list of "50 stocks not to own". This is a lesson in not doing sufficient due diligence - at the time I invested, NAV was above HK$0.80 and the shares were trading ago around HK$0.24. I did check the values of the listed shares in the fund's portfolio to ensure that their values had not fallen significantly but I did not look into the merits of those shares individually. As it turns out a significant number of the Fund's investments were also on the list and plunged spectacularly wiping out a significant amount of investor value;

2. my AU/NZ equities rose slightly. I purchased additional shares in Automative Holdings (ASX: AHG), believing the market had over-reacted to a slowdown in Australian car sales + potential changes to the way car's are finance in Australia. My expected yield on purchase price is above 6%;

3.my equity ETFs were up 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 all properties are let;

6. the AUD and NZD were up against the HKD/USD;

7. my position in bonds remains small but improved this month when I purchased some 1 year notes issued by part of the Hainan Airlines group using a margin facility - this is a carry trade.

8. expenses were low with no travelling and no other non-regular domestic bills incurred;

My HK cash position rose during the month due to sales of HK equities mentioned above. I currently hold 28.0 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household gearing ((debt+accruals)/assets) is 9.28% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio.

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 was tempted by the carry trade, and purchased the Hainan Airlines notes using a margin facility.

Monday, June 05, 2017

Financial Review - May, 2017

May was another good month for the portfolio with small gains across the board producing a 2.02 percent increase in net assets for the second month in a row.

For the year, the portfolio is up 8.08%. The adjusted change from when I retired in September 2013 is a 14.92% increase. Hong Kong liquidity stands at 25.4 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 purchased a small position in Honma Golf (HK:6858);

2. my AU/NZ equities fell slightly. No transactions this month;

3.my equity ETFs were up slightly (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 all properties are let. I secured I slight increase in rent on leasing one property to a new tenant;

6. the AUD and NZD were down slightly against the HKD/USD;

7. my position in bonds remains small;

8. expenses were moderate after replacing an aircon unit in our home and taking a short trip to New Zealand;

My HK cash position fell during the month due to expenses and new investments. I currently hold 25.4 months of expenses in HKD cash or equivalents (down from 38.6 months on 1 January).

I have revamped my spreadsheets to capture all debt (previously some accounts were entered on a net basis). Total household liabilities (debt+accruals) is 8.79% of total assets. Property prices are as at 1 January, 2017, so this overstates the gearing ratio.
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, although the rise in funding costs currently makes this less attractive than it was a few months ago.

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.

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.