成也风云，败也风云

The movie, "The Storm Riders (风云)" was an awesome movie which was produced in 1998.

It tells the story of Lord Conqueror, who desires to conquer the pugilistic world and a prophecy foretold that two of his disciples, 风 and 云,would help him greatly in his ambitions.  However, it was also the same two disciples who would also lead to his eventual downfall.

Relating this back to investing.   How much of a single stock or investment should it comprise as a percentage of your total portfolio?   My personal sense and gut feel is 10%, so I tried to validate this to see if I could find supporting facts or evidence over the internet.   The estimates seem to range at about 5 to 10%.   25% was cited in one case as the absolute maximum (only with very very strong justifications and even then, not recommended).    A very good blog post that I found on this topic is given below.  It basically highlights the risks to being too heavily invested in one stock:

What is the maximum portfolio allocation for a single stock?


One of the stocks in my current portfolio alone accounts for 30% of my entire portfolio (of about 30 to 40 stocks).   It is therefore a substantial investment and considered risky (portfolio-wise) as any strong movements up or down will significantly affect the value of my overall portfolio.   I will have to monitor this stock very closely and hope that it provides good upside in the coming months.

The situation that Koon Yew Yin faced when he, as a substantial shareholder of V.S. Industry, while trying to dispose of his shareholdings in the company recently will also highlight the problems when trying to dispose of a significant stake.  Disclosure proved to be very difficult for him.   News article link is below:

The Star Malaysia on Koon Yew Yin

Jumbo (Jumbo Group Limited) - SGX, Singapore

Company Background

Jumbo is a local restaurant group that specialises in Seafood.   Jumbo Seafood, a Singapore-style seafood restaurant is known for its chilli and black pepper crabs.  From a single seafood restaurant, the company has grown to over 20 restaurants in Singapore, China and Japan.

Other brands by Jumbo Group include JPot, Ng Ah Sio Bak Kut Teh, Chui Huay Lim Teochew Cuisine and Yoshimaru Ramen.

For more information, see company website at:

http://www.jumboseafood.com.sg/en/


Recent Positive Signals

1. Company reported good quarterly results in its latest quarter
2. Analyst reports generally upbeat about the company
3. More imporantly, Jumbo broke a 49-cent resistance level today, touching a high of 51 cents before coming back to close and rest at 49 cents.   This is now a support level instead of a resistance level.

Market Action

19 May 2016 (Thu) - Bought Jumbo at 49 cents.

Long Suspended Companies on SGX, Singapore

Singapore Exchange (SGX) is introducing a half-yearly report to update shareholders on companies with shares suspended for 12 months or more.

The initiative is one of several SGX is planning to improve regulation of listed companies’ continuing obligations as well as at the listings admission stage.

The first report covers 20 companies and sheds light on their developments, particularly if they have not made company disclosures for some time. In the report, SGX provides information on actions it has taken, and its engagement with the companies, directors, special auditors, judicial managers and/or liquidators.

SGX’s engagements with the companies were aimed at achieving a share trading resumption proposal, or extracting an exit offer for minority shareholders should a delisting occur. Some of these engagements were also long-drawn due to difficulty in establishing contact with, or eliciting a response from, board directors.

Of the 20 companies in the report:

a. 11 companies are exploring trading resumption/ reverse takeover.

• Fibrechem, Sino Techfibre, PT Berlian, Sinopipe, Eratat, Fung Choi, Fujian Zhenyun, Swee Hong, JES, Golden Energy, Changjiang Fertilizer

b. 2 companies are pursuing court action against individuals.

• Celestial, DMX

c. 1 company was recently placed under judicial management.

• Anwell

d. 4 companies are in the delisting process, of which 2 are exploring to provide an exit offer.

• China Milk, China Hongxing, Sunmart, Lankom

e. The remaining are pending responses to the exchange’s queries.

• China Paper, China Sun

See the full report below:
SGX Long Suspended Companies

Source: SGX website 

BioAlpha Holdings (Bursa, Malaysia)

Company Background:

Bioalpha Holdings Berhad (BHB) (Stock Code: 0179) is principally involved in the manufacturing and sale of semi-finished and finished health supplement products, as an ODM, as well as under the Company’s proprietary house brands.

Its health supplement products comprise processed herbs, formulated ingredients, functional foods as well as herbal and non-herbal supplements which offer a variety of health benefits including detoxification, immune system health, blood glucose regulation and brain health, as well as beauty benefits such as weight management and anti-aging.

See company website for more information:
http://www.bioa.com.my/

The company is currently in expansion mode and expanding downstream into retail pharmacy operations.

Being a relatively newly listed company, the stock does not have much coverage but the long-term prospects look good.    One research report by CIMB  recently gives  a target price of 65 sen.   See attached:

CIMB research report on BioAlpha


Market Action:

6 May 2016     Bought Bioalpha at 35.5 sen
9 May 2016     Bought Bioalpha at 36 sen

Singapore Banks

The Edge Singapore, in its May 9, 2016 edition, highlighted DBS Bank and also covered the other local banks in their Cover Story.

The feature covered DBS Bank and questioned if the worst was over?  For our local banks, the current main negatives are as follows:

1.   Exposure to offshore and marine sector.
2.   Declining commodity prices and possible exposure
3.   Rising NPLs (non-performing loans)
4.   Capital Requirements risk

Source:  The Edge Singapore (Bloomberg, Company Reports), May 9 2016

The views for DBS Bank seem to vary among research houses ranging from "underweight" to "buy". So, as you can see, even the experts have very different views.

My thoughts: On a more positive side, at least the banks pay decent dividends and long-term investors can take comfort in the fact that banks are still the most solid of all companies.  Accumulating the dividends over the years would pay off and at some stage in your life result in the shares bought becoming "free shares" over the long term.