AUD/HKD FX contract

Yesterday I entered into an AUD/HKD FX contract - essentially writing a put option on the AUD.

Here are the details:

Prevailing spot rate: 7.5578
Strike price: 7.5578
Settlement date: 26 October
Fixing Date: 25 October
Implied annualised interest rate: 24.5775%
Break even if the option is in the money: 7.40815
Absolute return if the option is out of the money: 2.02%

China VTM Purchased

This morning I added some more shares in China VTM (HK:893) to the portfolio. With a trailing PE of less than 5x and a trailing dividend of above 4% the current share price offers attractive fundamentals which are expected to improve further. The balance sheet is sound with a net cash position (although that is likely to change as further investment is made). The fact China VTM supplies raw materials which are of strategic importance to the PRC and in respect of which three global mining companies are industry dominant is an added attraction.

I paid HK$1.52 for the additional shares.

Jiangsu Expressway purchased

This morning I added some more share in Jiangsu Expressway (HK:177) to the portfolio. With a trailing PE of around 9.2x and a yield of more than 7.5% the company offers sound value. While the toll road sector has been something of a victim of the PRC government's anti-inflation measures (i.e. reduced tolls), the net profit attributable to shareholders still rose slightly in the last interim reporting period. Gearing is moderate.

I paid HK$5.52 per share.