Saturday, January 28, 2012

My portfolio addition - Dec 2011 - Jan 2012

I will like to sincerely wish all my faithful readers a "Happy & Prosperous Lunar New Year".

~~~~~~~~~ GONG XI FA CAI !!! ~~~~~~~~~~~~

Late last year and into early 2012, I bought and sold the following shares:

1) Sold Noble Group
2) Sold AIMS AMP REIT
3) Bought SIA Engineering
4) Bought Keppel Telecommunications & Transport

On my objective to grow my dividend portfolio, I have decided to reduce my exposure to REITS, recycled my capital and divested to SIA Engineering - the possibility of the local manufacturing sector to slow this year, the weak rental climate of industrial properties and the current uncertainty of Singapore economic situation.

The positive results of AIMS AMP REIT drove the price up, helped me made a decision to sell AIMS AMP REIT and forgo the quarterly dividend of 2.6 cents per share.

After selling, I still managed to acquire considerable dividends earned in the past few years. Net-net amount is profitable.

Should the price of AIMS AMP REIT falls after ex-dividend and remains attractively priced, I may consider acquiring the shares again. For now, I am looking forward to the dividend payout of SIA Engineering this year.

SIA Engineering is in the net cash position, has a regular and stable MRO business, offers more than 80% payout for the last 2 years and provides an average of 5.1% yield over the past 5 years with double digit ROE.

For Keppel Telecommunications & Transport (T&T), to make it brief, one of the main primary reasons for my purchase is the attention towards data centres while reducing their exposure to non-core investments. Logistics has always been a revenue pillar, especially the upcoming Tianjin Eco-city and the Nanhai Distribution Centre (NHDC).


Keppel T&T is keen to grow their revenue from renting out collocation serices in the data centre to end clients (banks, government organizations, corporates and other blue chips). The data centre offers Tier III, Tier IV - hosting mission-critical data computer systems. At the moment, Keppel Digihub and Keppel datahub contributes to higher revenue while the data centre in Dublin Ireland, through 50% owned by Citadel, provides another source of income to Keppel T&T data centre division.

There is potential to expand the divisional revenue; is in the infancy stage (data centre registers about 11% revenue). Plus, the demand for robust infrastructure, larger bandwidth and data stroage space - arising from the need for cloud computing, integrated apps via a central platform and the hunger to connect globally through MS Outlook, Skype, Linked-in etc. In other words, social connectivity, enhanced efficiency and digitial revolution.

If you recall, one of my past blogposts talk about the top 5 trends in Asia and one of them, in my opinion, is cloud computing.

I am also looking forward to the expansion of the data fund. The Securus Data Fund, a 50% JV with AEP Capital (owned by Saudi Arabia Al Rajhl), fuels the growth - the fund recorded US$100million in fund size and aimed to reach US$500 million in the longer term. Recently, the purchase of the DC (data centre) asset in Gore Hill, Sydney through the fund signified a strategic acquisition for Keppel T&T (Australia is one of the largest markets in Asia Pacific). On the other hand, Keppel T&T has mitigated the costs and risks involved via the 50-50 involvement in the fund with AEP (Alpine Equity Partners) Capital.

Keppel T&T would be my long term growth story in my investment portfolio based on my qualitative and quantitative findings.

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