Portfolio Review

15 June  2019

Dear Fellow Investor,

Portfolio Review

I have been reviewing our holdings and do not see any problems with trade war/ tariff  issues. Our Hong Kong shares as represented by EWH, Link Reit, and Hong Kong Land and have  corrected but as they are high quality blue chip issues they should recover.

Now Hong Kong is caught up in a frenzy of fear and hysteria  as demonstrators flood the streets protesting the government’s new  extradition policy   and the initial Hang Seng market drop was over 2 ½% but on Friday the selling abated.

This may carry on for a few more days but I am not concerned. Business and the pursuit of profits are the main focus of citizens there.   Participating in a demonstration does not put food on the table or pay the rent.

Our Singapore shares are not affected as they are mostly domestic issues.  Vicom, a major holding of ours is a taxi inspection business and its business is 100 % local.  

 Our Sing REITS are also domestic and do pay us good income.  We  hold SATs, an airline catering business  who hold an 80 % market share in Changi airport with exposure to fast growing Asian economies.  We hold Riverstone, a rubber gloves company listed in Singapore. It has the lowest valuation of all the rubber gloves companies including those in Malaysia and has potential for recovery.  The owners have not been selling their shares.  Thai Beverage, listed in Singapore is also domestic as they do not export their spirits and beer.  

Our holding in Japan is Nidec which is the world’s largest manufacture of micro electric motors. They have plants throughout Asia and earn their revenues in USD.  Many of their motors are not available anywhere else. Some are used by US defense contractors so this company should be safe from Trump’s tariffs. So far they are not affected by global stock market fear and uncertainty.

The company has been heavily buying back their shares on the recent correction.

Our  blue chip dividend paying Malaysian shares are weathering the storm but I intend to exit  the under-performers and replace with better opportunities.  I recently purchased United Plantations for some of our managed accounts. This is a quality well run company in an unloved sector. It has been congesting for several months but pays a reliable 5 ½ % yield.  We get a nice pay day while we wait for the crowd to get interested. I attended the UP  AGM  last month and gained an understanding of the plantation sector and the current challenges. I believe these challenges will be overcome  and that is why I invested.

Invest well and grow your wealth
Bill

Critter of the week is a bloodhound

What a nose! Thanks to her super sniffer, heroic search dog, Deja, saves a kidnapped girl’s life. In Cucamonga, California, a child was kidnapped and a K9 bloodhound  found the girl. She was chained in the basement of the house.  3 kidnappers were arrested.