Tuesday, April 30, 2019

Financial Review – April, 2019

April, 2019 produced a small in net worth with small gains across most assets classes  partially offset by adverse currency movements. The end result was a 0.75 percent increase in net assets.

For the year to date, the portfolio is up 7.30 percent. The adjusted change from when I retired in September 2013 is a 31.01 percent increase. Hong Kong liquidity stands at 41.27 months of estimated outgoings, up from the start of the year's 39.90 months due to sale proceeds being higher than new investments.

Here are the details:

1. my Hong Kong equities were more or less flat. I sold my shares in China Dongxiang (HKX: 3818) after a the company suspended its dividend following a disappointing result. I added a few more shares in a very small GEM listed company (still a very small position) and took out the scrip option for Hua Xian REIT's dividend (HKX: 87001);

2. my AU/NZ equities were were up with gains in both New Zealand and Australia. There were no transactions this month;

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

4. my position in silver was up slightly;

5. all tenants are paying on time and all properties are let. One lease has been rolled over for the same rental;

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

7. my position in bonds increased sharply – and not by design. I have attempted to subscribe for new issues of bonds on five occasions so far this year without receiving any allocation in spite of gearing up my application well above the level I wished to invest. At the end of last month I made my sixth application this year and ended up with a full allocation with the result that, come settlement, on settlement I ended up with more of a single bond issue than I am comfortable with (all purchased with borrowed money). It's a nice spread but it's bad portfolio management;

8. expenses were low.

My HK cash position increased significantly during the month due to sales of investments. I currently hold 41.27 months of expenses in HKD cash or equivalents (up from 39.9 months on 1 January). It makes little sense to hold large amounts of cash while also having outstanding borrowings on which we pay interest. Absent new investments, we will be paying down some of our debts during May.

Total household gearing ((debt+accruals)/assets) is 10.61% of total assets – with the unexpectedly large purchase of bonds being responsible for most of the increase. Property prices are as at 1 January, 2019 and will not be marked-to-market until year end and I do not net off cash. With a mark-to-market of equities, bonds and FX this number will fluctuate even if the amount of debt is being slowly amortised.