Trades Executed: Frasers Logistics, APPT, Lendlease

Earlier today, Mr Budget executed three trades in his Singapore portfolio, and I thought to document down the various reasons why.

Frasers Logistics And Industrial Trust

First, Mr Budget sold off Frasers Logistics and Industrial Trust.

Mr Budget holds a relatively small position in FLT and over the past one and a half year holding it, I recorded a 25% increase in gain including the dividend.

As the position is small, the profits were less than S$1000. 

FLT is a strong and stable counter, with properties mainly in Australia.

Their financials looked ok and has been increasing steadily. However, while the company recorded an increase in DPU, when translated the gain from SGD to AUD, the DPU actually dropped. Because of the worsening of the currency, the saw a declined in DPU in terms of SGD terms.

AUD vs SGD Forex Rate over the past 5 years
Source: FLT Annual Report
FLT share price on 7th November 2019

However, the share price has rallied much this year, and is now trading at a premium.

I think the market is pricing in all the plans the management has made (Frasers is a strong sponsor with good track record). Because of the worsening of the currency (external market force), I foresee that the REIT will have a challenging time keeping up with the numbers.

Other financial bloggers have also exited their position:

  1. Kyith from Investment Moats – Partial exit on 2019-05-03 and then 2019-07-12 (still holding to 33000 units)
  2. Fifth Person – Exit full position few months back

DBS Treasures also reported a TP at S$1.27 before revising the TP to S$1.4 today.

With all the bad signals, I took profit on the position so that capital can be deployed on other opportunities.

Asian Pay TV

Asian Pay TV is a counter that I bought without much research when the price came down after the trust announced a cut in dividend. 

I believe that the market oversold the counter and hence I jumped on the ship. You can say that we took a small gamble position on this and it didn’t pay off much.

I have been waiting for an opportunity to offload this seeing that the price doesn’t move much.

Although the management has good plans to rejuvenate the business, with insider stock buying giving off good confidence, I realised that I am not very excited about the space that the business is in. It’s a sunset industry and I don’t think we will see a huge business turnaround.

Mr Budget sold off the position at break even point, and only made his gains from the dividend, translating to about 5-6% in gain in one and a half year. 

As the year end approaches, its a good time to tidy up the portfolio and clean up some messy early day trades I bought.

Lendlease Global Commercial REIT

Finally, with the proceeds from FLT and APTT, Mr Budget picked up Lendlease REIT.

Mrs Budget has a sizeable position in Lendlease already, and Mr Budget decide to add onto this position as it might be a long term multi bagger. 

Lendlease is notably the REIT behind 313 Somerset, and with a strong sponsor, there are future opportunities for the sponsor to inject more properties into the REIT. 

I will not touch about the fundamentals of the REIT as I am not an expert (there are many other financial bloggers who wrote great analysis on the REIT along with the risks), but will share some signals that gave me the confidence to jump on the ship.

Signal 1: Earlier last month on 14th October, Temasek announced that they are adding on their position on the REIT, from 4.98% to 5.01%. 

Signal 2: Earlier yesterday too on the 6th November, BlackRock also announced that they have taken more positions on Lendlease, now holding 5.01% of the REIT.    

Temasek is probably the largest fund in Singapore, and BlackRock is the 8th largest fund in the world, and they probably know more than I do. The fact that they are adding onto their position probably means that they agree that the REIT will only continue to go up. 

With this addition, Lendlease will form the core position in Mr Budget’s Singapore portfolio – 10% of Singapore’s equities, or about 2.6% of Mr Budget’s overall net worth. 

In my earlier post, I did mentioned that I won’t be making any investments soon, but it seems that I’ve decided to do an annual portfolio clean up. The net cash flow from these is zero hence I’m still happy with the % cash in my net worth.

So here’s hoping that Lendlease will continue to HUATS all the way!

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