Monthly Review - July 2012

July was a month of solid financial progress with value of the portfolio increasing with gains in my Hong Kong equities and favourable FX movements accounting for most of the increase. Positive cash flow from the properties and positive savings added to the increase in net worth.

Here are the details:

1. my Hong Kong equity portfolio appreciated. I made small additions to my positions in CCB, China Blue Chemical, Hang Seng Bank, Sinopec and China Metal Recycling. I sold my shares in Varitronix;

2. my AU/NZ equities appreciated;

3.my ETFs rallied in line with the local markets;

4. my commodities were flat with a small gain in silver being offset by falls in NICK and HOGS;

5. all of my properties were occupied with all tenants paying on time. There were two small repair bills and one tenant reported a leak during the typhoon which will require some sealing work to be done;

6. currency movements were positive, as the NZD and AUD rose against the HKD/USD;

7. my position in bonds remains small. I purchased some RMB sovereign bonds;

8. There were no open derivative contracts;

9. savings were solid with good income and moderate expenses. A family holiday in Thailand came in under the accrued expenditure.

My cash position increased due to new investments being less than savings, cash flow from properties and dividends received. I currently hold 43 months of expenses in HKD cash or equivalents. This is above my target floor of 24 months.

For the month, my net worth increased by 2.5%. The year to date increase is 15.0%. I remain on track to retire at the end of 2012.

China Metal Recycling purchased

This morning I added a few more shares in China Metal Recycling (HK:773) to the portfolio. The company offers a reasonable balance sheet, good operating cash flow, nice dividend yield on around 5.5% and has a good story to tell (industry consolidation and national expansion). I also like that the controlling shareholder has been topping up his investment either by new purchases or through the dividend elections.

I paid HK$5.77 for the additional shares.

RMB sovereign bonds purchased

Having been on the road for most of the last two and a half weeks on a very hectic schedule (three countries, four cities and more air miles than I care to think about), I took a short break from a few things, including updating this blog. That said, there wasn't much to report.

The only investment related activity (apart from a few dividends hitting the bank account) was the subscription for a small quantity of RMB sovereign bonds. These will not be a great investment (2.38% is a negative real return) but it's better than putting the money on deposit with a bank in Hong Kong and, although I could get a bit more if I opened an account across the border, the additional costs and the inconvenience of doing so would outweigh any benefits.