As mentioned in this post, I have sold half of my holdings of CapitaLand China Trust. With the sales proceed, I decided to add more UOB shares at $27.9, bringing my average price to $27.72. No change to the reasons for purchasing as written in this post on UOB when I initiated a position in September.
“The final transaction with UOB this month is to purchase the counter! With the recent price weakness, its historical annual dividend of $1.20 would give me a yield of 4.4%. With the higher rate, the banks are getting tailwind for its NIM. The recent acquisition of Citigroup’s Indonesia, Malaysia, Thailand and Vietnam consumers banking accounts should serve it well in the mid term. Finally, its recent attraction of deposits might have a positive impact on its earning and balance sheet. So there is high likelihood that it can at least maintain its dividend.“
Additional information from then was its report on its Q3 results. And indeed the bank has benefitted from the increase in its NIM and reported a record net profit which 34% higher YOY and 26% higher QOQ. Given that it has been pretty consistent in its dividend payout, it is very likely that it will maintain its final dividend of $0.60 with a possibility of special dividend.
In another recent announcement, it completed its acquisition of Citigroup’s consumer banking in Malaysia and Thailand. It will take a few years for the group to digest the acquisition and reap the benefits. As shown in their presentation slide, there is good potential growth in the ASEAN market. There is execution risk but I am cautiously optimistic that they will get it right.
I was also toying with the idea of buying Frasers Logistics Commercial Trust too but decided to wait for its report of their latest quarter. It turned out to be a good quarter but the market picked up too fast and emotionally I was reluctant to buy. Going to carry on to KIV this buy for the moment.
On the cash front, I did not buy T-bills for this month. The headline of course was that it was oversubscribed and its yield has dropped to 4.0%. Nonetheless it is still a very good rate and my next tranche on it will probably be next January. In the mean time, I will be redeeming my June and July tranches of SSB and continue to buy the new tranches for the next few months.