Monday, June 03, 2019

Financial Review - May, 2019

May, 2019 produced a significant decline in net worth with losses across most asset classes  compounded by adverse currency movements. The end result was a 3.34 percent decrease in net assets.

For the year to date, the portfolio is up 4.48 percent. The adjusted change from when I retired in September 2013 is a 27.49 percent increase. Hong Kong liquidity stands at 41.30 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 down. There were no transactions this month;

2. my AU/NZ equities were were mixed with gains in New Zealand offset by losses in Australia. I sold my shares in Automative Holdings (ASX: AHG) into the market rather than wait for the takeover offer conditions to be satisfied; equity ETFs were down (India, Hong Kong and China) in line with the local markets;

4. my position in silver was down slightly;

5. all tenants are paying on time and all properties are let. There were several minor repair bills this month;

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

7. my position in bonds remains unchanged;

8. expenses were low.

My HK cash position was largely unchanged during the month. I currently hold 41.30 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. I partially paid down one loan and switched the balance from USD to HKD to take advantage of the lower interest rate and better align the loan currency with the cash flows which will be used to pay it down.

Total household gearing ((debt+accruals)/assets) is 10.41% of total assets – with the effect of partially paying down one loan outweighing the effect of falling asset values on the calculation.   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.

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