Saturday, March 14, 2015


Hi all, happy to say learning programming does have its benefits; managed to get Google spreadsheet to work now. Go ahead to view the current holdings; sorry to say Im boring...nothing much has changed with the holdings.

1Q2015 is littered with events. 

The precipitous drop of oil price from $100+/bbl to currently $44/54 for WTI/Brent followed by re-surfacing of Greek and Spanish woes. Russian issues stemming from 2014 also looks to be a repeat of prior conflicts like the Chechnya wars, rather interesting to note the global political game that revolves the axis of powers and correlation with commodities, in particular energy.

US dollar rose in strength whereas everywhere else ex US has been performing monetary easing, including Singapore.

The Swiss Bank (SNB) also removed a currency cap of 1 Euro to 1.2 Francs that was there since 2011. The cap was to protect Swiss exporters in event of rise in Francs versus Euro (which did occur when people flock to Swiss banks as safe havens in times of crisis). However with a large ECB easing impending with all the old country issues resurfacing, the act of even more buying of the Euro and selling Francs to maintain the peg seems a little out of this world and made everyone in Switzerland alot poorer overnight. Interestingly people in Poland, Hungary and Greece have their home mortgages denominated in Swiss Francs, ouch! SNB has doubled their foreign reserves since the peg started in 2011, making it one of the top 5 largest holders of reserves globally. SND also lowered their interest rate to negative 0.75% levels, i.e. you have to pay interest to deposit in a Swiss bank to avoid a massive influx of foreign assets. Denmark's Krone was also mentioned as a "next target".

Im a bit concerned where US equities and credit markets are heading. It was great a while ago when shale was booming and they turned in a massive trade surplus for a few years. Now that oil is at 40+, marginal cost producers will definitely be sidelined, especially the geared ones. Overall competitiveness of US will be impacted. 

Amidst all the craziness, China is still hot on heels of corrupt officials. Gaming stocks were affected, especially those in Hong Kong. Some are looking a little interesting though. Kaisa, 1638 HK: a real estate company also saw a roller coaster ride as their Chairman suddenly left the post, firm went into technical default. Bonds went to 20s at one points and now back to 60s/70s. However a offshore debt swap (with less favorable terms) now pushes it lower. Its white knight Sunac China, another levered real estate company set a 31 July deadline to settle outstanding negotiations with noteholders. There were talks that Chairman Kwok's departure was related to fallen politburo honcho, Zhou Yong Kang. Several Kaisa projects in Shenzhen (largest exposure by land area) were frozen.

Will write more about some ideas Im working on  once I have more time on hand. Again drop me a message if you want more discussion(s) on companies.

2013 and 2014 performance.

Sorry for the delay. Some quick updates.

Work has been crazy and haven't had much time to go through everything on my plate but am still talking and discussing about companies and all so feel free to drop me a note if you have any you wish to discuss about. 

#NameBusinessListingTicker+/- ex divs +/- with divs
1Roxy PacificReal Estate / HotelSGXE8Z-4.42%8.77%
2AEI Corp Aluminium extrusionsSGXA18-13.24%-9.56%
3World PrecsionPrecision MachinerySGXB49-12.00%-8.67%
4Nanyang HldgsConglomerateHKSE21242.86%45.51%
5Haw Par CorpConglomerate SGXH025.16%7.62%
6Real Estate CoReal EstateHKSE
Negative / Shorts
1OlamAgri - commoditiesSGXL28-37.37%-37.37%
2Dapai IntlBag makers SGXFP156.00%56.00%
3Eratat lifestyle ltdSports goods SGX F0854.55%54.55%

I exited World Precision in 2014 and added a real estate company in HK. Reason why I bought it was simple:

  1. Owner owns a significant majority and were aggressively buying back
  2. They own a significant portion of land in Macau and stand to benefit from the linkage of HK/Macau/Zhuhai bridges and the lack of hotels around that area
  3. The owners are astute real estate investors and operators and watches cost like a hawk
  4. The only risks are owners do a "take-under" or severe contraction in real estate market of which the latter is already happening but the firm remains resilient.

Olam is interesting. 2014 saw an acquisition from Singapore's sovereign wealth fund and hence the price increase. Im not vested in Olam since 2012 as its not cost efficient to maintain the short. Same goes for the other shorts, so the prices are for display. Eratat went bust despite having a huge cash hoard. See my previous posts here and here.

A quick post on 2013 results as I realized I have not posted it up.

2013 was interesting as I literally sat on things, there was no action on my part for 2013 at all.
Gains were mainly for Nanyang (management did a partial tender, of which I did not tender since it would result in odd lots and these have a discount in the HK market) as well as Haw Par. Haw Par gains were oddly not in line with its portfolio companies, namely UOB, UIC and UOL. Also exited Koon in 2013.

#NameBusinessListingTicker+/- ex divs +/- with divs
1Roxy PacificReal Estate / HotelSGXE8Z25.00%28.68%
2AEI Corp Aluminium extrusionsSGXA1812.40%20.66%
3Koon Mix EngineeringSGX5DL-28.57%-26.19%
4World PrecsionPrecision MachinerySGXB49-7.41%17.28%
5Nanyang HldgsConglomerateHKSE21242.42%44.85%
6Haw Par Conglomerate SGXH0234.10%37.40%
1OlamAgri - commoditiesSGXL288.93%8.93%