Friday, November 19, 2010

DBS Pref Shares

I applied for 500 lots of DBS Pref Shares. I allocated 20 lots. Right now, I own Pref Shares for UOB. OCBC and DBS. Together, they make up about 30% of my portfolio. I treat them like bonds as I am not looking at the capital appreciation but rather the regular interest payment bi-annually.

I have look at the balance sheet of local banks and come up the conclusion that they are still conservatively managed. Right now, the local banks cannot pool mortgages into collateral debt obligations that can be sliced into multi-tier bonds and offloaded from their balance sheets. During March 2009, during the depths of the recession, NPL peak around 3%.

These Pref Shares may not be risk free but they are probably the "best" fixed income instruments you can get locally next to holding SGS bonds. I do own some SGS bonds but the yields have come down quite a bit over the last one year. In addition, at least I am not exposed to currency fluctuations as opposed to holding fixed income instrument denominated in other currencies.

I should be receiving dividends for the following this month:-

China Merchant Pacific
First Reit
Suntec Reit
Starhill Global

1 comment:

  1. im surprised that i find another person into China Merchant Pacific. I like ur holdings of LMIR and China Merchant Pacific and it will be great to see further writeups on managing risks in these 2 investments.