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Opportunity in Brexit Crisis

Opportunity Crisis

Stocks are generally classified into small cap, mid map and large cap. Market capitalization (“cap”) is the total value of the issued shares of a publicly traded company. This is also equal to the share price times the number of shares outstanding.

Category Market Capitalization
Large Cap Over $5 billion
Mid Cap Below $5 billion and above $1 billion
Small Cap Below $1 billion

With the recent “Brexit”, I have done a screening on the large cap stocks using Google Finance Stock Screener. Large Cap stocks are mainly know as “Blue Chips” and if opportunity arise, it is a good chance to accumulate them for stable dividend yield in the long term.

The criteria I input into Google Finance Stock Screener are market capitalization above $5 billion with above 4% dividend yield.

Stock Market Capitalization Dividend Yield 52w Price Change (%)
Singapore Telecommunications Limited 66.01B 4.23 (2.59)
Oversea-Chinese Banking Corp. Limited 36.70B 4.11 (13.79)
Singapore Airlines Ltd 12.84B 4.21 (2.28)
Keppel Corporation Limited 10.02B 6.17 (32.89)
Singapore Exchange Limited 8.19B 4.06 (5.45)
Capitaland Mall Trust 7.69B 4.32 2.36
Ascendas Real Estate Investment Trust 6.58B 5.21 2.18
StarHub Ltd 6.55B 5.29 (3.57)

This blog post is not a buy recommendation for the above stocks. Further analysis should be done before buying.

Brexit Impact On My Stock Portfolio

brexit

During my holiday trip in Taiwan, I read about the news that British is departing the EU (European Union).

I believe many readers should have known that on Friday, 24th June 2016, Briton votes have concluded Britain shall leave the EU (European Union). Prime minister, David Cameron resigns as results are final.

Impact on Tourism

As a result of weaker sterling pound, we may expect less tourist from the UK. Based on March 2016 statistics, UK contributes around 3.9% of international tourist arrivals. As a result of lesser tourists, stocks in my portfolio that has dependency on tourism that may be impact are OUE Hospitality Trust, Far East Hospitality Trust, Suntec REIT, Mapletree Commercial Trust and The Hour Glass.

Weaker Sterling Pound

The value of the pound sterling has fell against the US dollar and you may have read about news many flock to money exchanges to buy the sterling pound.

 

“Brexit” impact on my Straits Times Index

The Straits Times Index plunged by 2.09% in a day.

STI Brexit

“Brexit” impact on my portfolio

On Friday, after stock market close, the total value of my sweet retirement stock portfolio fell by 1.42%.

OUE Hospitality Trust owns Mandarin Orchard Singapore, Mandarin Gallery and Crowne Plaza Changi Airport Hotel. Lesser tourists arrivals may mean lesser hotel rooms will be taken up. Mandarin Gallery which is in the prime Orchard area may be impacted as well due to less spending by tourists from UK.

Far East Hospitality Trust which is a pure hotel and residence play will be impacted as well due to lesser tourist arrivals.

Suntec REIT which owns Suntec City and Mapletree Commercial Trust owns Vivo City mall be impacted in a way or another. However, I believe the impact may not be that significant depending on their shoppers profile.

The Hour Glass which is already impacted by current weaker tourist spending, may further be impacted due to more weaker spending by UK tourists.

Bus and taxi operations in the United Kingdom account for around 20% of ComfortDelGro’s operating profit. Thus, I am expecting the weaker sterling pound to have a financial impact on ComfortDelgro’s earnings for FY16.

The impact may be felt in the upcoming months. I shall keep a lookout to see if the above will happen in the upcoming months.

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