Posted on November 2, 2009 - by musicwhiz

October 2009 Portfolio Summary and Review

Musicwhiz - Portfolio - Oct 31, 2009

I would describe October 2009 as the month in which I had the most portfolio changes since a long time ago! This was due to ongoing additional purchases of MTQ in early October 2009, a full divestment of Ezra due to the aforementioned reasons as stated in my previous 3 posts on Ezra; as well as the addition of another company called GRP Limited in late October 2009. The latter was a result of the deployment of funds from the divestment of Ezra and was researched by me in the last 2 weeks of October 2009. Fundamentally, GRP’s business was simple, easy to understand and the financials were clean. I will be posting a detailed analysis on the rationale for purchase of GRP, and it will be simpler than the analysis for MTQ though no less detailed; but because the company has a cleaner balance sheet and simpler to understand structure (and long operating history), it should take much time and effort to post up.

October 2009 was also the month where USA companies released 3Q 2009 results; and most of them were above expectations. Oil had also hit a new year to date high of US$82 per barrel, but is still way down from its peak of US$140+ last year. High oil prices will spur oil majors to make more investments in oil rigs and O&G projects and this will eventually flow down to benefit MTQ as they are in the oilfield engineering segment. In Singapore, most of the news flow was positive as well; but since Mr. Market had already factored most of the optimism in a few months back, there was low trading volume and nary a movement in market prices. This actually represents an opportune time for an investor to collect shares in the companies he is eyeing.

US GDP also reported surprisingly strong growth of 3.5%, officially ending the recession in which the USA reported four consecutive quarters of negative growth. Still, many obstacles remain as growth is expected to be bumpy and unsteady even as the economy lumbers along.

Property prices had increased 15.8% quarter on quarter for private properties in Singapore, while resale HDB flat transactions also saw a marginal increase in prices to a new record high. COV (Cash Over Valuation) also increased from $3,000 to $12,000, according to the newspaper. Scarily, COE for cars also hit a 4.5 year high of about S$19,000 for cars below and above 1,600cc; and this is testament that prices seem to be rising even though we had just been through the worst recession in 70 years. This is indeed uniquely Singapore! Read more…

Related posts:

1. August 2009 Portfolio Summary and Review
2. December 2009 and FY 2009 Portfolio Summary and Review
3. May 2009 Portfolio Summary and Review