Posted on September 4, 2009 - by musicwhiz

August 2009 Portfolio Summary and Review

Musicwhiz Portfolio

August 2009 was the month in which many countries reported that they were out of the long recession caused by the sub-prime fallout in 2007. Among the countries to emerge from recession were Japan, Hong Kong, Germany and Singapore. This still qualifies, however, as one of the longest recessions since the post World War II era, and is also one of the deepest in terms of the magnitude of GDP decline. Economists are now saying that recovery will be very weak and tentative and is likely to take up to 5 years or more for global trade to resume its 2007 level. It is also one of the rare instances where global growth was negative, dragged down by the developed economies of USA and UK.

Valuations have continued to normalize in the stock market, as can be seen by the gradual increase in market price of blue chips across the Board. Although the sentiment on the ground is still wary and fragile, the stock market had managed to make a remarkable recovery from its March 2009 low of 1,456 points; and the surprising thing that the property market in Singapore had taken a surprising twist and headed up to new record highs, defying expectations and stunning the “experts”. As we see mid-level and mass market condominiums hitting new highs (in psf basis), including those selling beyond the city fringes, one wonders if Singapore may be subject to the same kind of sub-prime type crisis which hit USA (the USA housing market had been booming since 2002 as a result of cheap credit which the Federal Reserve had initiated to recover from the dot.com crash). In Singapore, banks are all too ready to lend and interest rates are at record lows; plus schemes such as interest-absorption has made it very attractive for people who are not willing to stump up money and yet be able to secure a unit. Whether prices can continue to scale the stratosphere is another question though – this sounds uncannily like the Greater Fool Theory in play, but in the property market this time instead of the Stock Market.

This month saw many interesting corporate events, as well as my divestment of Swiber Holdings Limited, an investment which I had held for 2.5 years. There were results releases by Swiber, Tat Hong, Boustead and China Fishery and I had provided an analysis of both Swiber and China Fishery in previous posts. I also received dividends from Tat Hong, Boustead, FSL Trust and Suntec REIT.

September 2009 is likely to be a very quiet month as no corporate results are expected for the companies I own, until mid-October 2009 when Ezra releases its FY 2009 results. In the meantime, I shall hunt for suitable investment opportunities using the proceeds from recently divested Pacific Andes as well as Swiber.

For August 2009, corporate updates and result announcements for my companies are as follow:- Read more…

Related posts:

1. June 2009 Portfolio Summary and Review
2. July 2009 Portfolio Summary and Review
3. May 2009 Portfolio Summary and Review