Summary of October 2019 Transactions

Besides the regular monthly purchase of Singapore Savings Bonds, I have made no other buy or sell transactions. The effective interest rate for Singapore Savings Bonds is falling and I am expecting it to fall further. Fixed deposits are offering better interest rates as much as 1.7% p.a. for a 12 month fixed deposit but of course the minimum amount is much higher as compared to the minimum amount of S$500 for Singapore Savings Bonds.

I am looking forward to the preferential offering by Mapletree Commercial Trust. Today, I received the following notification:

  1. Launch of Preferential Offering and Despatch of Instruction Booklet and ARE to Entitled Unitholders Pursuant to the Preferential Offering
  2. Instruction Booklet dated 30 October 2019 in connection with the Preferential Offering

If you didn’t know yet, Mapletree Commercial Trust is acquiring MBC II and thus the preferential offering. Mapletree Commercial Trust currently makes up 9% of my stock portfolio. I shall be taking up the offer and thus you shall see the reflected changes in my stock portfolio the next month.

If you didn’t know, I have been diligently contributing to my Supplementary Retirement Scheme (“SRS”) for the benefit of tax rebates. Since the monies in SRS also earn very low interest, I also invest my SRS monies into Singapore Savings Bonds since I am unable to withdraw from SRS until my retirement age.

As the year is coming to an end in two months, I am looking forward to December whereby I shall be receiving my Annual Wage Supplement. This should give my war chest a boost. I have been performing routine screening for stocks but found nothing worth investing into yet. Even though the old saying “There is no right time to buy”, I believe in buying the right stock and at the right price.

That’s all for my October updates. See you next month!

57 Years Old and Currently Still in The Rat Race

One of my readers asked me for advice on the below scenario that he is facing.

Chance upon your blog since you had one of the REITs that long disposed of but yet I’m still keeping till date (i.e. SoilBuild Business Space REITs). Really enjoy reading your blog and analysis.

I’m 57 years old and currently still in the rat race, having a job that isn’t passionate about and feeling the anxiety and pressure despite already pass the benchmark 55th. I’m not good in investing but saving prudently and working hard, having a bit of equities in CASH, CPF, SRS. Yet the worst performance are those parked in SRS, guess it’s more than 50% lost. The psychologically not willing to let go, couple with the emotional fear of further losing, had since been holding me back from reshuffle the portfolio.

Appreciate any advice you can share.

The first problem that he is encountering is that the REIT that he is holding on is actually on a downtrend which is Soilbuild Business REIT which I have sold long ago. Believe me, it was a hard decision to make when I sold off Soilbuild Business REIT at a loss of 11% and I can understand the feeling of holding a REIT whereby you do not know how much further the value will drop. Like I have mentioned in my previous post, Soilbuild Business REIT is in a risky business whereby 11% of its tenants are in the Marine Oil and Gas Business. This puts SoilBuild Business Space REIT in a high risky position should more tenants default their rent.

My advice is to sell off Soilbuild Business REIT and reinvest the monies into something more stable such as healthcare REITs or retail REITs. Avoid industrial and office REITs as these industries tend to be cyclical. There are plenty other REITs out there such as SPH REIT, CapitaMall Trust and Mapletree Commercial Trust whereby there is still further room for growth.

The second problem is what to do with extra Cash, CPF and SRS? Given his age of 57, I would not put my cash into fixed deposits as this will lock down the monies. I will place the extra cash and SRS into Singapore Savings Bond as there is no lock down period which means you can redeem Singapore Savings Bond any time you want without any penalty. I know the interest rate for SRS is petite and if you didn’t know yet, you can invest in Singapore Savings Bond using SRS which should give you an interest rate of 1.62% for a period of 1 year.

Singapore Savings Bond is an extremely safe investment and I hope the above advice helps!

Frasers Commercial Trust Continues to Maintain DPU of 2.40 Cents For 4QFY19

One thing I liked about Frasers Commercial Trust is that it has been maintaining its Distribution Per Unit (“DPU”) over the past quarters and past years. On 22nd October 2019, Frasers Commercial Trust announced its 4QFY19 financial results. Compared to 3QFY19, the financial results have improved slightly.

In 4QFY19, gross revenue increased by 1.7% to S$32.9 million as compared to 4QFY18. Net Property Income (“NPI”) increased by 0.5% to S$21.7 million while Distributable Income increased 2.3% to S$21.9 million. The Distribution Per Unit (“DPU”) remains unchanged. Depending on how you view this, DPU remaining unchanged can be a good thing or bad thing for investors. In my opinion, a good REIT is one that can grow its DPU year on year. But given the lower occupancy at Alexandra Technopark, divestment of 55 Market Street and weakening Australian Dollar, it is already a miracle that Frasers Commercial Trust is able to maintain its DPU pay out of 2.40 cents for each quarter. Read More