March Portfolio Review
Just when everyone thought February was bad, March turned out to be a worse month with the global stock markets suffered a double-digit drop due to the spreading of Covid-19 outbreak. WHO has declared a global pandemic. The world is still busy fighting the Covid-19 pandemic. The numbers continue to rise on a daily basis, crossing the million mark last week. In the recent weeks, we have seen more countries, including India, UK implementing nationwide lockdowns as the outbreak escalates.
The Singapore stock market ended March on a very weak performance with the Straits Times Index (STI) dropping 17.6%. Year-till-date, the STI incurred a total loss of 23%. This was largest drop since the 2018 Global Financial Crisis (-25%) in one quarter. Most of the index component stocks took a hard hit in the first three months of 2020.
Last Friday, PM Lee declared Circuit Breaker for the next 30 days, which effectively step-up the safe-distancing measures and close down all non-essential services. On top of the $48 billion package to fight against the Covid-19 outbreak, DPM Heng Swee Keat is going to announced additional support package on Monday in the parliament.
Not surprisingly, our REIT portfolio was down by 17.5% year-till-date. The advanced strategy with leveraging was down by 35%.
Dividend wise, we received a total dividend of $2.2k. The annualised dividend yield of the portfolio was about 9.1%!
With all the received dividends and recent correction, we have made more purchase this month, for premium subscribers, please refer to the monthly newsletter. The gearing of the portfolio went up to 1.8 times.
The market sentiment is still negative, except China which starts to show the signs of recovery. We expect the stock markets to continue with short-term volatilities. Hospitality and retail REITs would likely to take biggest hit. In particular, SPH REIT has announced a 78% drop in DPU on a year-on-year basis despite of the spike in net property income. The intention is to preserve the cash to prepare for this challenging period.
Nonetheless, we still believe that this provides a good opportunity for long term investors to pick deep value stocks with good dividends.
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