My thoughts for the month of June

Time flies. And the month of June is around the corner.

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Portfolio wise there has been some minor changes. You can check out the list of stocks in my portfolio in the articles below.

  • Plan forward for Month of May (read here)
  • Portfolio Update (read here)

For instance, I have purchased some more of Alphabet & Mapletree Logistic Trust shares and built up my war chest (from active income and dividend payouts – which is as planned.

Overall, the portfolio value dropped slightly.

My Singapore Portfolio has whipsawed in the month of May, but basically remain almost the same or slightly higher. The REITs have performed better compared to the rest. Even Ascott Residence Trust posted unrealised gains. And I am bemused by the strong performance of Mapletree Commercial Trust share price. The month of May saw more dividend income compared to previous months, having received dividends from Hongkong Land, Dairy Farm, Golden Agri, DBS, Mapletree Commercial Trust, ParkwayLife Reit and ST Engineering.

My US portfolio (consisting of just Mastercard and Alphabet) and Malaysia portfolio (consisting of just Heinkein) has been on the green side. The US portfolio, in particular, has been the out-performer. Tech seems to be lifted by the coronavirus related disruptions and global lockdown. Reading the revenues of some Taiwanese semi-conductor companies, there seemed to be an uptick in the months of March, April (compared to the same months last year). Quite a no. of tech stocks have rebounded and are reaching new highs (Facebook, Amazon, Netflix, etc).

Hong Kong (HK)

On the other hand, it is the Hong Kong Portfolio that has proved to be a let down.

I think we are all aware of the recent news. After months of Covid-19 hogging the headlines, we are now back with HK in the limelight again.

  • US move to end Hong Kong’s preferential status and cut ties with WHO ‘extreme, suicidal’: Chinese state media (read here)
  • China says U.S. action on Hong Kong ‘doomed to fail’ (read here)

I have been following the news from Hong Kong, and these days when I read the news of the actions by China (and subsequently by US), I just can’t help reflecting on the words by this British Professor to a bunch of students on rioting, and the students’ reaction to someone who mentioned that HK youngsters are destroying more than constructing. Looking at the date of the video, it was sometime back in Sept 2019 (and as what was mentioned by the Professor, it was week 17 of the protest).

The professor’s talk (like my lecturers during my Uni days) is strong on ‘lecturing’, but fell short on solutions. No student would like being lectured. Then again, that isn’t the point I reckon.

Yes, as a Singaporean living in peaceful Singapore knowing nothing about HK and what Hong Kongers are going through, I don’t think I am qualified to say anything. This is just my personal thoughts.

In the video, the professor was stating that Democracy in China (HK) is an illusion, what they are doing (rioting, defecating, beating people up, graffiting the walls, vandalising the streets) is stupid. Weeks after weeks of protesting is not going to yield any results. It is disrupting the lives/livelihood of their peers (countrymen). It is exactly what China wants. Their freedom (social media – Facebook, etc) will be taken away from them. What happened in Mainland China (I reckon he meant the Tiananmen massacre / crackdown) will happen in HK. He urged them to be more intelligent in their ‘revolution” (He mentioned Mr Robot and Cyber-attack – being anonymous, instead of buying products from China to riot). It is disruptive in the Wrong way.

Guess from an investor’s point of view… Sometimes the hardest thing to do.. is to Do Nothing. Will we see a HK version of Gandhi? Joking.

Here we are now, weeks after weeks, months after months of protesting, rioting….Albert Einstein is widely credited with saying, “The definition of insanity is doing the same thing over and over again, but expecting different results.”

As we approach June 2020, the professor’s premonition seems to be coming true. With the recent news, there seem to be no winners. And the biggest loser seems to be Hong Kong.

To quote the article below: “After 1997, if there are people in Hong Kong who scold the Communist Party of China, scold China, we will allow them to scold. But if it becomes action to turn Hong Kong into an anti-mainland bastion under the guise of ‘democracy’, what then? Non-intervention would not be feasible,” Mr Deng told members of the committee drafting Hong Kong’s Basic Law, or mini-constitution, in 1987.

  • Fear of foreign interference looms large in China’s version of Hong Kong law (read here)

It is really none of my business. However, I can’t help feeling for those working-class Hong Kongers with families to take care of / feed. After all, I am also a family man.

Yes, Democracy is important, but why are these people (who are not even protesting) suffering?  Can there be true democracy and independence without social stability or economic prosperity (even as simple as putting food on the table)? The video below was dated 7 Aug 2019. Wonder how is he and his family now…

With the world in recession due to the Covid-19 virus, it has been a double whammy for HK. Caught between 2 giants (often stressing that they have little to lose), HK itself a small pawn in the whole scheme of things.

HK itself seem to be trapped in a quick sand. The more it struggles the deeper it sinks, the more China tighten its grip on it. The more reasons China can find to do so.

With the world re-opening after the Covid-19 lockdowns, and economies set to recover (albeit slowly) for many countries, I can’t really say the same for HK.

And after months of rioting (coming to a year), what have HK rioters got to show? Any progress made in democracy? A country where the economy is at a standstill (earlier than most others), with no tourism revenue to speak of, hospitality, F&B, retail sector near collapse, unemployment rate hitting 9 years’ high.

  • Coronavirus: most Hong Kong hotels record single-digit occupancy as industry faces ‘life or death’ struggle to survive (read here)
  • Hong Kong outlook ‘pathetic’, ‘dire’ in near term, mall and hotel operator Wharf REIC says as it reports drop in revenue, profit (read here)
  • Hong Kong Disneyland’s Latest Losses Blamed on Politics, Not Virus (read here)
  • Hong Kong unemployment rate hits highest in more than 9 years (read here)

Even Jimmy Lai (founder of Hong Kong’s pro-democracy newspaper The Apple Daily) recently mentioned “I hope, for example, that the United States government does not completely lift Hong Kong’s privileged economic status. The city needs those special ties, so it can keep standing apart from the mainland and have at least some economic edge over it. Removing those privileges would only make Hong Kong more dependent on China.” 

The above is extracted from the article below.

  • Do My Tweets Really Threaten China’s National Security? (read here)

And the prolonged unrest has pushed six Hong Kong tycoons (including Li Ka-shing) to be supportive of the national security law.

  • Tycoon Li Ka-shing throws weight behind Hong Kong national security law, suggests it will ease Beijing’s ‘apprehension’ about city (read here)

The fact that I am still invested in Hong Kong stocks (of companies, many with businesses in Hong Kong itself), is that I have not lost hope for Hong Kong. And yes, I am really tired of reading news saying that Singapore stands to benefit with the ‘fall’ of Hong Kong. Instability in HK / China (and Taiwan) will only do more harm than good.

  • Hong Kong tensions unnerve world stock markets, oil tumbles (read here)

If I am to use Sun Hung Kai Properties stock as a barometer, the last time I saw SHK shares at this price (eg. HKD 90 on 29 May 2020) was in May 2012 (and then Feb 2016). The prices then in 2012 were depressed due to the saga of the Corruption trial involving Thomas and Raymond Kwok, the billionaire co-chairmen of Sun Hung Kai Properties Ltd. After so many years of progress, we are now back to 2012 (and even lower).

Well anyway, after tracking SHK share prices for years.. it seems like the prices just oscillate around a datum.

  • Sun Hung Kai Properties Limited shares (Time to buy?) (read here)
  • Hong Kong landlord stocks trade like it’s 2009 all over again (read here)

Funny, a few years back, I was talking to my dad about properties. I made a ‘joke’ about properties in Singapore (just joking so don’t hold me to it :p), was saying in Singapore, people should buy when the government ‘tells’ them to buy. For example, there were periods (often during a recession, market crash) when restrictions are lifted and borrowing limits are loosened to encourage people to buy properties. But when properties prices are overheating, restrictions (cooling measures) are imposed discouraging speculation.

The thing is people are often reluctant to buy in the former situation due to fear. But often rush to buy (in the latter situation) when prices are overheating and huge penalties are imposed due to FOMO.

To put it simply: Buy property (for investment) when the government wants you to buy.

 

Moving Foward…

Yes, for the month of June, hold on tight.

I will still be looking to add more to my US & HK portfolio. Just the usual DCA. Holding on to my warchest. Yes given the valuation of many stocks in the HK portfolio, it does look tempting (esp. the stronger counters).

The tech stocks and the innovation subject is an evergreen theme (be it a recession or not). Valuations for many seem rich, still, the sector is growing, and the strong will keep growing. Why punish the overachievers? Nevertheless, I am not going to go crazy about it though.

Beyond Tech (the FAANG or BAT stocks), there are other fields of innovation. Just reading up on ARK Investment Management, you will find companies leading in Genetic sequencing (eg. Illumina, CRISPR Theraputics), industrial innovation in energy, automation and manufacturing (eg. Tesla), technologies that make financial services more efficient – blockchain (eg. Square Inc), etc…

With the Covid-19 cloud lifting, and the HK riot cloud not abated… HK would take time… so also not going crazy about it.

About apenquotes

Born in 1976. Married with 2 kids (a boy and a girl). A typical Singaporean living in a 4 room HDB flat. Check out my Facebook Page: https://www.facebook.com/apenquotes.tte.9?ref=bookmarks
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