Monday, March 31, 2014

Financial Review - March, 2014

March was an awful month for my investments.

Net worth slumped as a decline in equities was only sightly offset by favourable FX movements and rental income. Expenses were moderate.

Here are the details:

1. my Hong Kong equity portfolio slumped. The only dealings this month were purchases of Dynam Japan (HK:6889), Sinolink Holdings (HK:1168) and CCB (HK:939) and the sale of Sinotrans Shipping (HK:368);

2. my AU/NZ equities appreciated slightly - with most shares being up a bit. I have applied for shares in Genesis (NZX: new listing). My position here is slightly understated as several shares are trading ex-dividend but I have not yet received the dividends; equity ETFs were up (India and Vietnam) or down (Hong Kong and China) in line with the local markets. There were no new purchases;

4. my commodities were lower. Silver is my only position;

5. one property is now vacant. There are several repair bills payable this month and next (either related to buildings which received notices for a mandatory window inspection or remedial work on a change of tenancy);

6. currency movements were positive, with small increases in the NZD and the AUD;

7. my position in bonds remains small. I added some more units in an RMB bond fund to the portfolio;

8. expenses were moderate due to a collection of small unbudgeted expenses (i.e. a purchased a few cases of wine);

9. there were no transfers to Mrs Traineeinvestor this month.

My cash position increased due to net sales of investments. I currently hold 46.5 months of expenses in HKD cash or equivalents. This is now calculated on a different basis from last year - I have included the principal component of the mortgage on our home as an expense and added some additional near cash items to the cash side of the calculation.

For March, my net worth fell by 1.36%. The year to date increase is 0.01%.

Thursday, March 27, 2014

Dynam Japan purchased

Dynam Japan (HK:6889) has been on a wild ride. Since I purchased at $16.86 last year the shares have traded as high as $36.70 and fallen sharply since then. This morning I added a few more shares to the portfolio at HK$22.00 per share.

The story remains largely unchanged - strong cash flows from the Japanese pachinko business (a shrinking industry), a small shareholding in Macau Legend (HK:1680), a question over the impact of an increase in Japan's consumption tax and the potential to be one of the early movers as and when Japan legalises casinos. The only recent developments appear to be (i) an arrangement for the distribution of pachinko machines in Macau and (ii) a lawsuit which does not appear to be material to shareholders in the company.

With a dividend yield of 4.8% (less Japanese withholding tax), this is essentially a case of being paid to wait for Japan to legalise casinos.

Friday, March 21, 2014

iShares RMB Bond Fund - R purchased

This week I scooped up my small balance of RMB and purchased a few more units in the iShares RMB Bond Fund - R. I view this as a lower risk substitute for direct investment in RMB denominated bonds (as well as offering better returns than the deposit rates which HSBC is offering).

I paid RMB34.65 for the additional units.

CCB purchased

This afternoon I added some shares in CCB (HK:939) to the portfolio. I have held CCB for a few years and, while the dividends have been good, the shares have been sold off heavily on concerns over exposure to local governments, investment products and real estate developers.

My guess is that, as ugly as the banking sector is likely to get in China, most of that must surely be in the share price by now?

I paid HK$5.02 for the additional shares.

As an aside, I tried to buy some additional shares in Sinolink Holdings (HK:1168) at HK$0.62 earlier this week but missed out. I will keep watching.

Sinotrans Shipping sold

Following a disappoint earnings result, I have sold off all my shares in Sinotrans Shipping (HK:368) at prices ranging from $2.37 to $2.26. It was a decision reached with some hesitation as (i) the company continues to have a very strong balance sheet and (ii) the Baltic Dry Index has been edging up recently as the US and Europe continue their recovery. There was also a broker report released post-results which rated the company a sell with a price target of $1.85. In any event, I decided that my money was better invested elsewhere.

This was one of my larger investments and I made a net profit of 39%.