The uneasy peace in Hong Kong was broken yesterday. It just added more frost to the freezing winds that are blowing through the global markets since China and President Trump escalated the trade war tension in the last few days. (Sigh)
Anyway, this blog is not meant to be a pessimistic one. It is one to record my farewell to OUE Hospitality (OUE H) Trust and share my purchase of more Eagle Hospitality Trust and Raffles Medical Group shares this week.
OUE Hospitality Trust
I sold the last of my OUE H share on Friday after I gotten my last dividend from it and after seeing a slight uptick in its share price.
I always have OUE H shares in my portfolio from the very first day it was listed on SGX on 25 July 2013. Over the years, my holdings of OUE H expanded and shrank with market conditions as I traded around it but it has consistently delivered decent returns and passive income to me. It has never missed a dividend distribution. Although its annual DPU decreased from 6.7 cent in 2014 to 5 cents in 2016, it has since stabilised at this level in the last few years. At 5 cents DPU and 73 cents per shares, OUE H’s trailing dividend yield is a decent 6.8%. So thank you OUE H!
The merger terms between OUE Commercial (OUE C) and Hospitality trusts imply that I could get a slightly higher “value” if I have not sold but I wasn’t keen to add more OUE C which is already a sizable holding in my portfolio. Plus I would prefer cash in my hands now. So good bye OUE H.
Eagle Hospitality Trust & Raffles Medical Group
In contrast to the last few weeks, this past week has been a quiet one. Besides selling OUE H, the main trading activities I had were to buy Eagle Hospitality Trust when it went below 70 cents and Raffles Medical when it went sub $1, which I have not seen in recent years.
If Eagle Hospitality Trust performs as it promised at the point of its IPO, then I could be looking at a sustainable 9% dividend yield investment in my portfolio. And that’s the reason driving me to add more “Eagles” into my portfolio.
For Raffles Medical Group, I still believe that it can overcome the current startup challenges and cost with their new hospitals in China and start building up sustainable returns from their investments there. In Singapore, I think their business is relative stable and profitable.
Dividend yield wise, Raffles Medical used to declare about 5 cents but has since scaled down to 2 to 2.5 cents in recent years, as it diverted cash to fund their overseas investments. If dividend can return to 5 cents once things stabilize, at my current average cost of $1.02, it will be able to provide a yield close to 5%, which I am very happy to have.
Looking ahead, let’s see how things go on Monday.
For those of you who have deep pockets and ample warchest, you may find opportunities to buy good companies at a bargain price. So, good luck and all the best to all of us!
Have a great investment week ahead.