OUE Hospitality Trust - OCBC Investment 2016-03-10: Lower DPU forecasts by 15% to 17%; Maintain HOLD

OUE HOSPITALITY TRUST SK7.SI 

OUE Hospitality Trust: Lower DPU forecasts by 15% to 17%; Maintain HOLD 

• Rights issue to fund CPEX acquisition 
• Extension of a prime asset at Changi 
• Acquisition is DPU-dilutive 

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Knowing my willingness and ability to take risk

In finance world, willingness and ability to take risk belong to 2 different concepts. Willingness to take risk refers to one’s character, education, investment experience, culture and even religion. 

For instance, many colleagues around me are high income earners. However, they only invest in time deposits as they are either conservative, have poor experience in investment or simply cannot invest due to religious constrains. They are unwilling to take risk for mainly emotional reasons. 

On the other hand, ability to take risk refers to quantifiable criteria like level of wealth, investment horizon, liquidity preferences and investment objectives. A investor with $5M in his account will most likely not hesitate to invest $250k into a high yield bond. His ability to take risk comes from his ability to lose (more) compared to the investor with a much lower level of wealth. 

Similarly with a lower liquidity preference and longer time horizon; investors are recognised as having higher ability to take risk and hence often advised to invest in riskier asset classes to enhance returns. 

In a bullish market, investors’ ability to take risk increase dramatically as their wealth increase in tandem with the rising market; the euphoria sets in, reinforcing their positive experience and thus raising their willingness to take higher risk. Unfortunately, all bull markets will eventually lead to high levels of speculation towards the end cycle of bull markets. For instance, the China market rallied more than 50% within 1 year of mutual fund investment. I took profit then, realising close to a 50% gain as seen below due to the unsustainable yearly returns. 

Vice versa, a falling market will always lead to lower stock trading volume as investors become poorer and reduce their ability and willingness (due to poor experience) to buy risk assets. 

However, the above definitions are purely academic. Ability and willingness to take risk, really, is subjective and varies for an investor sometimes even at different times of a day!

Nobody truly knows their willingness and ability to take risk until going through at least one bull and bear market cycle. Suitability tests on investments are just a rough gauge at best to determine one’s risk profile. 

This is the same concept for inflation figures. Our official figure for inflation is between 2%-4% over the past few years. However, the inflation figure is only true for us if we consume products in the exact same composition of the basket of goods used to calculate inflation. 

In reality, every one’s inflation figure is subjective; by the same token, every individual’s risk profile is unique and cannot be measured using standard questionnaires. 

The current bear market is into its 11th month. Till date I have reinvested all the dividends (for funds) and traded bank bonds (which have rallied due to risk aversion) to higher yielding bonds. At times, I do have regrets of not selling EVERYTHING at the peak (who doesn't!) and purchasing now instead. However, every bear market I experience will only reinforce my mindset to stomach risk, enhancing my willingness to take risk. It also serves as a test of my current portfolio's Value at Risk and its ability to resist market shocks like now. In fact I have a better idea of how my portfolio will behave during stressful market conditions. 

Thus, in order to maximise your return on investment given your risk profile, stay invested in bear markets and lime me, you will know yourself better on your ability and willingness to take risk! 

My Investment Portfolio (February 2016)

STI ended the month at around 2666 points, a little bit better than last month but confidence is still weak. Markets had been digesting the full year results for companies with financial year ending December 2015. Overall, it had been mostly a weak set of numbers especially for companies in the Oil & Gas sector. Companies had also painted a cautious outlook but I guess the market might have discounted most of these bad news.

For this month, I have attended the following AGMs/EGMs/briefings - Zagro Asia, A-REIT and Petra Food.

For my top 30 holdings, United Engineers moved back to the top of the list after it announced the sale of MFLEX. Another major mover is CapitaMall Trust after investors bought back REITs in anticipation of lower possibility of interest rate hike. Isetan disappointed with a poor set of results and also cut its final dividend payout. Tat Seng is a new entry in the list after it announced a decent set of full-year results and also rewarded shareholders with a special dividend.

I have bought the following companies from the market this month - A-REIT, Bonvests, CapitaLand, Chuan Hup, DBS, Federal, GLP, Hiap Seng, Hong Kong Land, Isetan, Keppel Corp, Koyo International, SembCorp Industries, Shangri-La Asia, Sing Investment & Finance, ST Engineering, UIC and UOL. No sell trade was done.

I have accepted the following voluntary delisting/cash offers this month - Texchem-Pack and Zagro Asia. I have also participated in the following scrip dividend schemes - Cambridge, First REIT, Frasers Commercial Trust, Keppel REIT, MapleTree Commercial Trust, MapleTree Industrial Trust and MapleTree Logistics Trust.

Next month will be the start of the AGM season and some companies with financial year ending 31 December 2015 will be holding their AGMs. As usual, I will attend some of them to get some updates from these companies. I will also be looking to buy some undervalued blue chips as the recent market downturn had presented some opportunities to buy quality stocks at a decent price.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 29 February 2016)

Top 30 Holdings (Sing$ Denominated shares)
1. United Engineers
2. Jardine C&C
3. Metro Holdings
4. Bonvests
5. Haw Par
6. A-REIT 
7. Hotel Grand Central
8. Singapura Finance
9. SGX
10. Hong Fok
11. ComfortDelgro 
12. Sarine Technologies
13. Hotel Royal
14. The Hour Glass
15. Keppel T&T
16. Old Chang Kee
17. GK Goh
18. Bukit Sembawang Estates
19. CapitaMall Trust
20. Hotel Properties
21. Hong Leong Finance
22. Far East Orchard
23. UOL   
24. Isetan
25. Sing Investment & Finance
26. Hiap Hoe
27. VICOM
28. CapitaLand
29. Stamford Land
30. Tat Seng

Top 5 Holdings (US$ Denominated shares)
1. Jardine Strategic
2. Hong Kong Land 
3. Mandarin Oriental  
4. Dairy Farm
5. Jardine Matheson

Top Holdings (HK$ Denominated shares)
1. Fortune REIT
2. Tan Chong International

Top Holdings (Aust$ Denominated shares)
1. AV Jennings

Top 5 Holdings (CPF OA investment)
1. Keppel Corp
2. Streettracks STI ETF
3. CapitaMall Trust
4. A-REIT
5. Challenger Technologies

My Hong Kong Stock Portfolio
1. Peace Mark Holdings - Under Voluntary Liquidation

My Australia Stock Portfolio
1. GPS Alliance Holdings Limited

My Unlisted Company Portfolio
1. Automated Touchstone Machines Ltd
2. Iconic Global Limited
3. Greatronic Limited
4. General Magnetics
5. Fastech Synergy
6. Beauty China- Under Liquidation
7. Memory Devices
8. Jurong Tech - In liquidation - Compulsory winding up (Insolvency)
9. FM Holdings
10. Japan Land - In liquidation - Members' voluntary winding up
11. Zhonghui - In liquidation - Compulsory winding up (Insolvency)
12. FerroChina - Under Liquidation
13. FirstLink Investments
14. NEL Group
15. Jets Technics
16. Guangzhao Industrial Forest - In liquidation - Compulsory winding up (Insolvency)
17. Hongwei Technologies Limited (In Provisional Liquidation)
18. FDS Networks Group
19. Aussino Group - In liquidation - Creditors' voluntary winding up
20. China Oilfield Technology

My Unit Trust Portfolio:
http://www.fundsupermart.com/main/community/Portfolio_View.svdo?id=P199

Secura - Peter Lim and Co Selling?

I had been covering Secura since the day it went IPO last week. I also had been warning not to touch this counter because it's Peter Lim's stock with many uncertainties. And true enough, the stock performed accordingly to what I predicted, the prices depressed with declining price. Read all my Secura post below to see how I did my forward prescient prediction.

http://stockmarketmindgames.blogspot.sg/search/label/secura

As of now, the price is trading at 0.198 from the high of 0.255 since IPO. It was scary to see how no buyers were supporting the stock. I am not sure if Peter Lim and Co cashed out but from the chart wise, I know the stock has not yet turned.

Ronald K - Market Psychologist - A Stock Market Opportunist

Noble Group - Sold wtih 550 Lots

Noble continued it's heavy sell down as of now. From yesterday after unloading the 550 lots currently, the prices retraced from 0.33 to 0.30 with a huge amount of sellers.

http://ronaldkstockmarket.blogspot.sg/2016/02/noble-group-it-was-good-contra-trade.html

At the meantime, I am rotating to other counters for the next opportunities. The plan is not to stick on one stock for a long time.

Ronald K - Market Psychologist - A Stock Market Opportunist

Secura - Depressing Stock Price

Secura hit a low of 0.21 as per my bearish post last week. The stock is currently in an oversold region where I would not look for any buying opportunities now until the penny season.

http://stockmarketmindgames.blogspot.sg/2016/01/secura-consistently-sellers.html

http://stockmarketmindgames.blogspot.sg/2016/01/secura-sold-down-with-big-sellers.html

To beat the stock, one must know the intentions behind the operator and I will reveal how they play this counter in my workshop tomorrow.



Ronald K - Market Psychologist - A Stock Market Opportunist

SMRT - Uprising Prices Today

SMRT is currently rising and the stock price as predicted after the magazine report is on an uptrend. As warned yesterday to the shortist to be alert, the buyers were strong.

http://stockmarketmindgames.blogspot.sg/2016/01/smrt-good-news-into-charts.html

If you are into buying a good stock or looking to long stocks for investment, I have a few up on my sleeve. Tomorrow I will be sharing more on how to spot those.



Ronald K - Market Psychologist - A Stock Market Opportunist