November 2017 Singapore Savings Bonds is 2.07%

There was a significant drop in November’s effective interest rate as compared to October’s effective interest rate for Singapore Savings Bonds. If you held the bond for ten years, October’s effective interest rate was 2.13% while November’s effective interest rate is 2.07%.

Recently, I have bought more of Singapore Savings Bonds. As such, Singapore Savings Bonds currently makes up 14% of my stock portfolio. Different people will have different reasons for buying Singapore Savings Bonds. As the current stock market is expensive and most REITs are yielding 6% or less, I find it non attractive to buy into the stock market right now. As such, I have treated the Singapore Savings Bonds as a savings account and also sort of an emergency fund if in event I do get retrenched.

Here is my previous post of Singapore Savings Bonds where I compare it with our savings account or fixed deposits.

Singapore Savings Bond versus Savings Account versus Fixed Deposits

Summary of September 2017 Transactions

There is no change to my stock portfolio this month. Although the stock market has retraced slightly this month, I still think most of the companies are still expensive to buy. A recently article published by The Fifth Person has enlightened me which is to avoid buying a stock at the wrong price. I remembered the saying goes “A good stock purchased at the wrong price can be a bad investment” thus we should always be patient to wait for the right price and not rush into a hasty investment.

While waiting for an opportunity to divest Soilbuild Business Space REIT, bad news pop up again. Another tenant has default on its rent ( Another Tenant Default for Soilbuild Business Space REIT ). This will unlikely to impact its upcoming quarter financial results as Soilbuild REIT has called on its insurance guarantee but Soilbuild REIT better find a new tenant soon else it may have an impact on its distributions in subsequent quarters.

There are a few stocks I am currently watching. They are Frasers Commercial Trust, SPH REIT, Starhill Global REIT and Capital Commercial Trust.

HP recently announced they will not be renewing their lease at Alexandra Technopark. This opens an opportunity to buy more into Frasers Commercial Trust should the price comes down.

As for SPH REIT, I like the stability of this retail REIT however, the sponsor SPH is doing badly right now and I am worried about its SPH cash running out. This will have somehow an impact on SPH REIT. The dividend yield is pretty non attractive at less than 6%.

Starhill Global REIT remains my favorite pick due to its high dividend yield among other retail REITs right now. As Starhill Global REIT is in my spouse’s stock portfolio, I shall not be adding it to my stock portfolio but if opportunity arises, I may add more of it to my spouse’s stock portfolio. My preferred entry price is S$0.73.

The last REIT I am looking at is Capital Commercial Trust. I came to know about this trust due to Golden Shoe Carpark. The manager is good at recycling capital assets. At current S$1.66, it looks expensive to buy into this REIT. A good entry price is S$1.45 to S$1.51 but as I have not done any further personal analysis, this is just my rough feel.

Hewlett Packard Vacates Alexandra Technopark

Frasers Commercial Trust Logo

Previously, I wrote about the investment risk of Frasers Commercial Trust which is the lease expiry for Hewlett-Packard ( Frasers Commercial Trust Long Term Play in Office Rental ). The fear has turned into reality. Frasers Commercial Trust has announced that it has been informed by Hewlett-Packard Enterprise Singapore Pte Ltd (“HPE”) that they will vacate their space at Alexandra Technopark upon the expiration of relevant leases on 30 September and 30 November this year.

The rental income for the space to be vacated makes up 6.6% of FCOT’s total gross rental income for the month ended 30 June 2017. In the announcement, the manager revealed that they have already secured a new tenant for 13.4% of the space to be vacated. Read More