Thursday, January 5, 2017

Portfolio Review 2016: Portfolio + 28.0% vs STI - 0.2%

The Straits Times Index ended 2016 at the same level it started. After dipping to 2,500 in the January and February, the index recovered to 2,880. This was despite a Trump election victory, which many in US media and Asia expected an end-of-the-world scenario.

The portfolio gained 28.0%, ending the three year streak of underperformance against the STI. Excluding dividends, it would have gained 24.4%. Most of my holdings advanced in price. This was unsurprising given their previous years losses. The biggest percentage loser was Hong Leong Finance. The finance stock lost 8.2% in price. This was followed by F&N, down 2.8%.

Colex and Super Group each post slightly more than 50% year on year increase in share price. Colex remains a very thinly traded stock. Super Group on the other hand, was boosted by the acquisition of the Dutch firm JDE. This will eventually lead to the privatisation of the company.

The portfolio cost now stands at 111.5K and I am in the black by 14%. I collected dividends of 2.3k, excluding the capital reduction paid out by Delfi, and this implies a yield-to-cost of 2.0% which is poor. For CY2017, my yield to cost will likely drop given the poor outlook and that Super Group is put in the freezer.

For CY2017, I intend to buy another 10k plus any remaining cash in the portfolio, just before or after Chinese New Year. I will also need to be on the lookout for places to park the monies eventually received from the delisting of Super Group. I expect the market to go up by at least 5% 12 months down the road. That said, I expect the local economy to be very weak in the coming 6 months. The oil and gas and property sector are not doing well and I cannot see any drivers of growth coming from international trade.