Monthly Review - June 2012

After May's bloodletting, it was pleasing to see a solid recovery in the value of the portfolio with gains in my Hong Kong equities and favourable FX movements accounting for most of tthe 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 rallied strongly. I made small additions to my positions in Yanzhou Coal, GDI and Sinopec;

2. my AU/NZ equities were flat;

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

4. my commodities were flat;

5. all of my properties were occupied with all tenants paying on time. One property will be refurbished shortly and I had to pay the first installment of the levy;

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

7. my position in bonds remains small. I purchased some iBonds but was disappointed (but not surprised) at only getting three board lots. I would like to add some more bonds to the portfolio but am finding direct purchases of bonds through the banks I have accounts with to be something of an exercise in frustration in Hong Kong;

8. There were no open derivative contracts. My last AUD/HKD contract expired out of the money so I pocketed the premium;

9. savings were solid with good income and moderate expenses.

My cash position increased due to new investments being less than savings, cash flow from properties and dividends received. I currently hold 41 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 3.7%. The year to date increase is 12.2%. I remain on track to retire at the end of 2012.

GDI Purchased

Yesterday I added a few more shares in GDI (HK:270) to the portfolio. The utility company offers a modest yield of 3.2% with reasonable prospects for this to grow over time.

I paid HK$5.50 for the additional shares.

Yanzhou Coal purchased

This afternoon I added a few more shares in Yanzhou Coal (HK:1171) to the portfolio. The stock has been hammered by a combination of the general sell off in equities over the last few months, the fall in coal prices and concerns over the effects of fluctuations in the AUD on its investment in Australia. Whiel I expect that the trailing dividend will be cut, I am still expecting a yield of around 4.5-5.0 percent on current prices (and, yes, there is a substantial element of guess work involved).

I paid HK$11.80 for the additional shares.