Market continue its upward trajectory for the year and our portfolio went up by 5.2% for the quarter, compared to 3.8% of the STI, thanks to a couple of purchases we made. Our assessment is that Singapore Market is quite fairly valued now.
We paid out dividends of over $1000, slightly lesser than the same period less year due to the absence of ST Engineering & China Merchant Pacific. It is incredible that we have grown our passive income from less than $1K per year in 2014 to $1k every quarter in just 3 years.
Operating Highlights
Income for the quarter was about 10% higher than last year due to higher revenue and couple of mini items such as credit card cashback.
Earnings is expected to improve significantly in the 2nd half due to presence of bonus items.
- Father's A&E cost in April
- Niece's birthday, good quality replacement chair in May
- Friend's wedding in June
We do not forsee any major expense coming up except for our traditional gift to parents.
We went on the biggest acquisition spree ever (as guided) - firing 3 bullets which all were profitable as of now.
Singtel: We doubled down on this "bluest of blue chips" Telco when it went on sale due to fear from their Australia operations and 4th Telco entry. This is one investment where we have no fear piling on and it has now become our biggest holding (20%). A solid 4.8% dividend yield with Netlink IPO as a major catalyst.
Far East Hospitality Trust: We fired a medium-sized bullet for this and it went up despite the less than stellar results. This is a speculative bet we added mainly to gain exposure to the hospitality sector (which we do not have) which is pose for recovery. We can expect 7% yield or at least 6.5% in the very bad case.
Capitaland Mall Trust: The boat returns again for the trust and we were able to top up our partial fulfillment last quarter to turn this into a full solid position. We have confidence in their grade A malls, all conveniently located beside MRTs. While the fear of online shopping (Amazon, Alibaba) taking over is real, we think Plaza Singapura, Junction 8, Bugis Junction, Westgate, etc... will always have a place in our society. Retail will be transform to become more F&B and service oriented, and friends will still meetup for KTVs, movies, dinner at shopping malls. The ultimate catalyst for this is the transformation of Funan shopping Mall in 2019. For now, we expect a stable 5.8% yield.
For the first time in 3 years, our cash holdings actually went down for a quarter and our equities portfolio have crossed a major milestone.
Financial Strength
We are extremely comfortable with our level of warchest now, and will try to channel as much as possible all future income to investments. We expect to recover 2 bullets from our parent company in the next quarter, and a minor bonus in July, which will help refill our ammunition.
We also just learnt that you can actually top up EZLink card using Credit Card. That's about $1.50 (enough for a free trip) every month, with even greater convenience. While people may laugh at this being negligible. remember that these are practically "free money" with almost no effort.
Outlook
The company will slowdown its expansion in the next quarter with at most 1 or 2 purchase. Currently, Netlink IPO, Comfort Delgro and SGX are on our watchlist.
August is another strong dividend month and Q3 will definitely be a great harvesting quarter.
