AFTER FOUR full months of investing, the participants of this edition of Stock Challenge are making good returns, with Sebastian Chong solidifying his lead.

His gain of 111.6% puts him way ahead of neontet who has a respectable 66.5% gain on his stocks.

The market has softened in the past couple of days and it remains to be seen if the stocks gains can be maintained in the remaining two months of the Stock Challenge.

For details of the individual performances to date, read on.



Securities Number of sharesPurchase price ($) Sale price ($)Sept 30
closing price ($)
Value of holding ($)
Shares
Yanlord
  10,000  1.76   2.28  22,800
Straits Asia 15,000 
8,000
1.16
1.75
 2.13
2.13
31,950
17,040
Sinotel50,0000.205 0.6432,000
Guthrie GTS30,0000.28 0.37511,250
Warrants     
Yongnam wrt 1212141,000,0000.035 0.095 95,000
Shares + warrants    210,040
Cash    1,570
Total value of portfolio    211,610 (+111.6%)
  
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Sebastian Chong
 
Sebastian Chong has invested actively in equities since the 1970s. He is managing director of Financial Info Analysis Pte Ltd, a company he founded after he retired as an accounting professor at the National University of Singapore. He now runs his popular investing website, www.shareowl.com

Sebastian says:


On the last reporting date August 31, 2009, STI closed at 2,605.39. On September 30, 2009, the STI stood at 2,672.57 or up 2.6%. The portfolio value, however, slid 1.9% during the month from $183.040 to $215,700. The slight drop in value is due to the decline in price of Yongnam 2012 warrant from 10.5 cents to 9.5 cents but the decline is partly offset by the effect of the further jump in share price of Sinotel Technologies from 53 cents to 64 cents.

On the whole, the portfolio has appreciated by 111.6% from the seed capital of $100,000 at the start of this round of Stock Challenge on May 18, 2009.  Once again, I made no changes to the portfolio during the month. I am adopting a long term approach to investing.  

Yanlord should still enjoy good capital gains in the medium and longer term as housing and commercial property prices will have to rise on the back of strong growth of the China economy in the coming years even though the government would like to see prices stabilize in the short term after the very strong gains from March to June. Last week, Yanlord successfully acquired four new parcels of land from the China government in Pudong, Shanghai. The parcels were adjacent to their existing land bank in Pudong and the combined plot is huge enough for a proposed high value added project that includes international schools, residences for expatriates and shopping facilities etc.  

Straits Asia Resources has become even more attractive for the long term because the Indonesian government recently approved the geographical boundary extension of the Sebuku coal mining concession. The extension expands considerably the already vast coal reserves of Straits Asia.

Sinotel Technologies was the star performer in August and continues to outperform all the other portfolio components in September. It continued to attract even more institutional and retail investors after Nasdaq’s approval of their application for a listing of an ADR (American Depository Receipt). The price of the ADR is influenced by the share price in Singapore and vice versa. A strong demand for the ADR will lead to a rise in the Singapore share price. Tech stocks tend to be better understood and appreciated by American investors and the coming listing of an ADR on Nasdaq certainly augurs well for shareholders of Sinotel. Last week, Sinotel’s share price hovered around 70 cents but the last few days saw a correction that pulled the price back to 64 cents. The Dow is down 1% at the time of writing and if Sinotel trades at say 62 cents tomorrow (1 Oct), it would be a good buying opportunity for those who missed it at lower prices.

Guthrie GTS has no new developments but it is likely that any renewals of tenancies in the old wing of Jurong Point are likely to be contracted at higher rental rates in view of the strong demand for retail space in HDB heartland malls. It is also possible that Guthrie may make a bid for Clementi Mall redevelopment. In the meantime, their engineering services and retail mall management services is also enjoying good growth.  

Yongnam warrant expiring in Dec 2012 came down from 10.5 cents to 9.5 cents as the mother share declined slightly to 28.5 cents. Anyway, this gem is still priced nearly three times its purchase price of 3.5 cents. After the price correction, I would expect both the share and warrant prices to resume their climb in the next few months and years. The warrant will expire only in December 2012 and we can expect a steady stream of new contracts from the Singapore and overseas governments for steel struts and specialist engineering services on infrastructure projects like mass transit railways, highways, flyovers and tunnels as well as large commercial and residential building projects.  


                                                                                        *****






No. of unitsPurchase priceSept 30
closing
Value

Oceanus

100,00022 cents36.5 cents$36,500
Oceanus50,00031 cents36.5 cents$18,250
Sinotel Technologies100,00022.5 cents64 cents$64,000

Techcomp

110,00028 cents38 cents$41,800
Cash   $5,950

Total 

   $166,500 (+66.5%)
















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neontet

Neontet is inclined towards high-growth small- and mid-cap stocks, preferring to stay away from most blue chips. He has had a good time investing in small- and mid-caps despite being burnt by some S-chips and Singapore companies with corrupt management.


He says:


The month of Sept has been very kind – my portfolio increased significantly from a gain of 42.8% to 66.5 % because two core holdings (Sinotel and Techcomp) have done superbly.

The 3G network rollout in China has raised investors’ expectations of Sinotel’s near-term financial performance. Even at the current price of 64 cents, the stock looks cheap with a PE of 5-6 X forward earnings.

When US fund managers, who have expressed interest in the stock, start buying Sinotel’s American Depositary Receipts, the upward momentum for the stock price could resume following the recent correction.

Another core stock, Techcomp, finally made a significant move – from 30.5 cents to 38 cents all within a month. There’s more upside if Techcomp delivers a good set of results for the second half.

Oceanus has disappointed by not moving faster, despite the unveiling of its restaurant in Orchard Central. All eyes will be on its Q3 results.


                                                                                         *****

 
 No. of sharesAverage price bought at Closing price on Sept 30Value

Celestial

296,99818.49 cts8.5 cts *$25,245
Sino Techfibre167,00015 cts16 cts$29,225
Sinotel116,00021.5 cts 64 cts$74,240
Total    $128,710 (+28.7%)


* Stock suspended. 8.5 cts is an arbitrary 50% discount to last done price.


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Shuishui

Shuishui, who is in his mid-30s, has been a stock investor for many years. A Singaporean, he has close ties with China as his parents and relatives are living there. He has taught himself how to analyse financial statements. 











                                                                               *****

 Number of sharesAverage Short/Purchase price ($)Sept 30
closing price ($)
Value of holding ($)
Techcomp
2000000.24 0.38 76,000
STI 2200SGAePW091029 600000.245 0.045 600
DBS700013.3613.2818,284
Cash    24,746
Total   119,630 (+19.6%)
         















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Level13

Level 13 is a 31-year-old investor and a business analyst with 4 years of investing experience. Check out his 
blog for insights on financial matters (mainly equities).

Level 13 says:


There was no movement in my portfolio this month. Under the current market conditions, I don’t see any bargains. Most stocks are either fully valued or slightly overvalued. As such, I will continue to stick with the stocks in my portfolio and I believe it is the same case for the rest of the participants of this Stock Challenge.

In the near term, central banks in most countries will be keeping interest rates low. The very low rates are not designed to prop up the stock markets per se. It’s really to boost corporate borrowing and corporate lending, which is a much bigger concern.

Global stock prices should be well supported under this scenario. People will want to put their money in assets which can generate a higher return and the stock market is definitely a major consideration.

Whether a central bank starts to tighten rates is a clear indication of how confident central bankers are of the recovery in their country. The danger is that some could stay loose for too long, thus fomenting another bubble.

For past stories on Stock Challenge, browse through our archives.



Share Prices

Counter NameLastChange
AEM Holdings1.850-0.020
AusGroup0.031-0.002
Avi-Tech Electronics0.3750.005
Best World Int.1.360-
CEI0.9800.025
China Sunsine1.070-0.010
CNMC GoldMine0.255-0.005
CSE Global0.570-0.010
Eagle HTrust USD0.535-
Food Empire0.6150.010
Golden Energy0.1690.003
GSS Energy0.094-0.005
ISDN Holdings0.225-
ISOTeam0.240-0.005
JB Foods0.6500.015
KSH Holdings0.4750.005
Miyoshi0.034-0.001
Moya Asia0.067-0.003
Nordic Group0.270-
Oxley Holdings0.360-
Procurri0.370-
REX International0.192-0.004
Riverstone0.960-
Roxy-Pacific0.385-
Sing Holdings0.400-
SingMedical0.315-
Straco Corp.0.715-
Sunningdale Tech1.3000.020
Sunpower Group0.565-0.020
The Trendlines0.089-0.001
Tiong Seng0.2250.020
Uni-Asia Group0.740-0.005
Yangzijiang Shipbldg1.060-0.020

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