Friday, February 28, 2014

Financial Review - February, 2014

February  was a great month for my investments.

Net worth jumped sharply due to gains in the equity portfolio which were supplemented by favourable FX movements and rental income. Expenses were high.

Here are the details:

1. my Hong Kong equity portfolio recovered sharply from the fall in late January and early February. The only dealings this month were an investment in CMOC (HK:3993) and a very small one in China Starch (HK: 3838);

2. my AU/NZ equities appreciated - with most shares being up a bit. I made a small investment in Cellmid (ASX: CDY); equity ETFs were up in line with the local markets. There were no new purchases;

4. my commodities were higher. Silver is my only position;

5. all of my properties were occupied with all tenants paying on time. There was one minor repair bill on commencement of a new tenancy this month and will be several in March (either related to buildings which received notices for a mandatory window inspection or remedial work on a change of tenancy). One tenant has given notice to terminate his lease effective mid-March and I am advertising for a replacement tenant;

6. currency movements were positive, with small increases in the NZD and the AUD;

7. my position in bonds remains small;

8. expenses were high due to medical bills and course fees;

9. I increased my provision for future tax obligations and transferred some money to Mrs Traineeinvestor this month.

My cash position fell slightly due to the new investment in CMOC. I currently hold 44.0 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.

For February, my net worth rose by 2.15%. The year to date increase is 1.39%.

Thursday, February 27, 2014

Cellmid purchased

I have added a few shares in Cellmid (ASX: CDY) to the portfolio. Cellmid is a biotech company with several projects at various stages of development. As far as I am aware, none have reached the stage where they can be commercially exploited. There is an issuer sponsored research report here. Needless to say, this is a highly speculative investment.

I paid AUD0.033 per share for a small investment.

Friday, February 21, 2014

CMOC purchased

This morning added CMOC (HK:3993) to the portfolio. The company's production guidance and subsequently issued broker forecasts provide support for my view that the company's shares represent good value at current price levels (one broker used the term "compelling"). I have also been influenced by watching the recent uplift in the Australian listed mining companies such as BHP, RIO and FMG.

I paid HK$3.08 per share.

Wednesday, February 19, 2014

Hong Kong Property - Tai Kok Tsui

On Tuesday, I had the good fortune to be provided with a brief tour of Tai Kok Tsui/Olympic area by Dr Bubb from GEI. While I had some familiarity with the area, it was a very informative tour and I have a much better understanding of how rapidly the area is gentrifying and the potential for that process to continue.

From an investment perspective, if it were not for the double stamp duty, I would have been sorely tempted to do further due diligence into some smaller residential units and smaller street level retail units   in older buildings. The combination of affordability in absolute terms and the process of gentrification are very appealing. Unfortunately, at this time the combination of low yields and punitive stamp duties are something of a deterrent.

I will be keeping a close eye on this area. If prices revert to levels which provide decent real returns and/or the anti-investment stamp duties imposed by the HKSAR government are removed, I would put this area at the top of my list of places to invest.

For those interested in this area, Dr Bubb has created a thread on the GEI website.

China Starch purchased

I have topped up my small shareholding in China Starch (HK:3838) at HK$0.212. I'm viewing this as a short term trade and would exit at least part of the holding should it bounce back to HK$0.23 levels.