2019 Review

Its that time of the year again, when the year comes to a close with the merry festive seasons; except this time its not all that merry with the shocking 0.1 month year end bonus announced by Singapore Government. Been the largest employer, the announcement is closely watched by private sectors not to mention its influence on the rest of companies whom now have a "valid reason" to moderate the year end bonus for prudence. The shock was felt throughout the workforce (public or otherwise) not only the low 0.1 month which also translate to 3 days in a calendar month (typically 30 days); but its also rare when the economy is forecast to grow between 0.5% to 1% for 2019. The last round when total bonus hit 1.25 month (including 13th month) was 2009 when the great recession plunged the global economy into decline.

Nevertheless, Singapore's open economy has been resilient in the past when both economy bounce back strongly in 2010 with total bonus bounced back to 2.5 month (including 13th month). Lets hope 2020 will be a better year ahead for the working class and also for our investments / trading.

On to the review of 2019 trades

The realized gains for 2019 year to date was okay in absolute amount, almost equal to one month bonus, though in percentage term it fail to beat neither the S&P500 or STI index nor the retirement CPF's return (2.6%-4%).

As I look back on the trades in the year (click to enlarge)

2 colossal losses came from my hedging attempts with Put warrants on OCBC in June 2019 and the Eagle Hospitality Trust's gap down in October 2019. Both losses of $2039.79 and $4633.24 exceeded my risk limit per trade of $1500 or 1% of my trading portfolio.

My current portfolio

My current holdings (as of 20 Dec 2019) are entirely in the red, although I am holding a mid to long term view for them to materialize my initial investment thesis. Below I am going to share briefly on my reasons for buying & holding them (not an investment advice, caveat emptor):

1) SPHREIT had gradually grew its distribution per unit in the past 5 years, a distribution history table is reproduced below (source: Shareinvestor)

Distribution Per Unit For Each Calendar Year (based on corresponding Financial Periods) in SGD (Cents)

The DPU yield at $1.08 is about 5% in 2019 and beyond, thus I am quite fine to hold it. Furthermore, the Fed interest rates that were cut in 2H2019 had yet to reflect in the financial statements, with 2020 Fed's dot plot forecast to remain, there's still upside to SPHREIT and other REITS earnings out there.

2) Silverlake Axis had reached the multiyears low support of $0.40 area, furthermore its Independent Non-Exec Director Lim Kok Min had bought 300,000shares around $0.415-$0.4175 with the majority of its revenue now on a recurring basis, earnings surprises may come from any major upgrades or systems overhaul in fintech software as business confidence recover from US-China phase 1 agreement and gradual removal of partial tariffs. While waiting, Silverlake Axis distribute about 4.5% of dividend yield in March, June, November and December.


3) Duty Free International is the fallen from glory retail play where its "duty free" attraction has given way to savings from online shopping. Furthermore, the custom bill that is struck at Malaysia's Appeal court since 13 March 2019 without a decision has been weighting it down all the way its peak of $0.46 to current $0.15 with occasionally illiquid volume and wide bid / ask spread. I went in this based on crowd psychology speculation which was my previous play style in 2013 & 2016 when I bought counters with outsized dividend announcements and wait until EGM then ex-date when dividend hunters slowly come in to drive up the price. I'm glad it did not retest the recent low of $0.143, and seem to firm up around $0.148-$0.154 area. At more than 20% yield, 3.5c distribution; I'm hoping dividend crowd may drive it back to $0.17-18 area for yield to fall below 15% to become saturated.

4) Ascendas India Trust had issued placement shares at $1.508 to private investors to raise fund for a business park in Bangalore If you see my trade records, I took the the advance distribution 1.48c, exit at a recent high before I bought back at $1.52 when REITs pullback recently after Fed announced no further cuts in interest rate in 2020. Similar to SPHREIT, I think after some consolidation, REITS especially the quality ones will rise gradually. Even if it don't, the current yield 4.383% (from Shareinvestor) plus yield accretive acquisition to materialise, it might rise gradually to 5% over next 3years. If you look back distribution history table (source: shareinvestor), its DPU has been consistently increasing in the past 5 years.

Distribution Per Unit For Each Calendar Year (based on corresponding Financial Periods) in SGD (Cents)

Year on Year Comparison since 2013

I am glad that my return % has reversed its downtrend since 2016, beating the Fed interest rate & fixed deposit rates for 2019 is a small achievement in the positive direction. While the unrealized loss are not included, I do feel over the next month or so, most of the counters would become green then.

Supplementary Retirement Scheme (SRS)

I decided to open an SRS account with OCBC after the government announced the increase of retirement age from 62 to 63 in 2022. This added time pressure on top of the tax saving incentive offered under SRS, one way to fix the retirement age of your SRS withdrawal is to make your first contribution to your SRS to lock in the prevailing retirement age (which is 62 now). See MOF details on SRS here.

The tax saving that I estimate for 2019's income after offsetting SRS contribution is close to $1000 for me. Not to mention the $50 cold storage voucher that I will be getting for contributing at least $10k to it. In fact, my Ascendas-iTrust is my first investment with my SRS, just 2 days after I contributed to it (sorry OCBC your 0.05% interest is really too low to keep monies there for too long, but hey thanks for the $0 fee for share sale, dividend and other transactions (except for $2 transaction fee for Singapore Savings Bond). I also wrote in to confirm this, thus far no charge from OCBC for my Ascendas-iTrust purchase (I believe OCBC is the only bank without fees for transactions though I come across one under DBS without fees too, POSB & UOB both have, $2-$2.50 charge; thanks OCBC!). I hope the competition will even drive it to $0 fees for shares transaction and handling of dividends; otherwise its a slight additional slippage cost to investing using SRS.

Lastly, I also hope to segregate my trading portfolio from my longer term investing portfolio, lets hope I can split my mindset & separate both trading / investment philosophies with separate accounts (LimTan & SRS).

Wish all my readers