Thursday, 30 April 2020

April 2020 Wrapup

I have become a little more cautiously optimistic as countries like South Korea and China reopen for business. Similarly, Australia appears to be reopening.

As STI had recovered from its lows despite the COVID19 situation not being as positive as other countries, my focus shifted to purchasing foreign stocks, particularly Greater China focused ETFs since China was reopening for business.

STI's rise may be due the market simply following the rally in other markets that are reopening, so I remain cautious on STI since I bought a fair amount of STI ETF already. I did pick up a little bit of Capitaland between 2.64-2.72 since those were attractive valuations and the WQDV as part of my monthly DCA though the price has run up quite a bit, perhaps due to its healthcare holdings.

I used FSMOne quite a bit this month to buy Asia and China ETFs 2805.HK and  2801.HK, together with the FSMOne RSP of 2800.HK. I did not buy my usual 3085.HK as oddly the liquidity and trading volumes weren't very good compared to the others. However, 2805.HK and 2801.HK sit well with the narrative that China is re-opening as they have major holdings of the Chinese e-commerce giants. It appears that e-commerce is a beneficiary of the closing of retail stores. Things may never be the same again for retail

Finally, REITs have not announced any fundraising through share offerings yet, though Fraser's Centrepoint Trust is issuing a 3-yr bond at 3.35%. Given that this is a lower interest rate than the Frasers 3.65% bond I am holding, it bodes well for strong REITs that are able to raise funds at such low interest rates even though most of their buildings are shut. On the other hand, I'm not sure whether the weaker REITs without strong sponsors can secure cash as cheaply as Frasers.

In summary, I put about S$57k into the market in April 2020  into foreign stock which was about half of my March outlay which was primarily focused on the STI.

While a retest of the lows appears less likely than it was a few weeks ago, I'm still not ruling it out. Nevertheless, valuations are still attractive and I'll still be buying in May 2020, preferably after a dip due to the "Sell in May and Go Away" phenomenon (if it occurs).

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