Performance Highlights
Despite the surprising Brexit event, the markets were unfazed and our portfolio made gains of 5.7% in Q2, compared to the STI which was up a mere 0.7% (a large potion was thanks to CMP divestment). With this recovery, our overall portfolio is now almost in the green.
In 2nd quarter, we paid out a record dividend of over $1300 - highest amount ever since inception. Who says financial freedom is a dream?
Operating Highlights
Income for the quarter were up slightly (about 5% more), largely due to an increase in passive income and dividends.
Expenses skyrocketed in May due to a critical mismanagement event. The board unreservedly apologize to the shareholders for this loss. Other major contributors includes Mayday Concert ($290) and multiple unexpected costs such as SSD Replacement ($250), IEM Cable Replacement ($70) & 2 Dental Visits ($100 after subsidies).
Overall, expenses for the quarter were up 65% compared to last year. Moving forward, we foresee the possibility of a phone replacement, and to a lesser extent some computer components, as potential major expenses in the 2nd half of the year.
Takeover of China Merchant Pacific (CMP)
We divested CMP at the takeover price of $1.02, over 20% premium over the trading range of 80c and 85c. This was entirely pure luck.
Regardless, the company made over $1500 from this unexpected takeover. While we are pleased, do keep in mind that this is an one-time income. At the same time, the company lost a dividend cash-cow and we will look to redirect the monies into other companies.
Financial Statistics (SGXCafe)
We setup account at SGXCafe to further analyze our portfolio. Base on our current holdings, here are some statistics:
Beta - Surprisingly, our portfolio is less volatile than the STI, standing at 0.71.
Value at Risk - We are 99% confident that we will not lose more than 9% of our portfolio.
Expected Shortfall - How bad can things get when terrible things happen? Put another way, in 1% of the time, how much drawdown do we expect? We stands at -17%.
Financial Accounts Changes & Outlook
SIBOR rate retracts slightly to around 0.75%. Our Maxigain account will start accumulating 0.4% bonus interest in July and should start surpassing CIMB starsaver very soon. Going forward, we would look to transfer any long-term cash into this account.
In other news, SCB announced the removal of its minimum commission scheme. Our audit team also discovered that CIMB Cash Upfront custodian account charges $3 for dividend processing. Given this, we are no longer interested in performing any transactions using these accounts.
We eagerly anticipate the following events in the 2nd half of 2016:
1. Smartly, a robo-financial advisor who is gearing for launch.
2. 8 Securities, a potential alternative for much lower brokerage fees.
3. Singapore first ETF REIT
Outlook
With the divestment of ST engineering and CMP, our cash holdings are getting too high for our liking. While we would love to get more equities, the strong rally is not favoring it.
We look forward to growing our revenue and re-balancing our portfolio in the upcoming quarter.
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