Portfolio Summary May 2010

Depends on how you look at it, this month proved either hard to stomach for investors, or provided a good buying opportunity. For me, I saw this month as a buying opportunity as I deployed my remaining cash. I still have the ability to use other cash that I have saved up but have not factored into the cost.

Over the month of May, the S&P500 shed about 100 points off its value (8.4%). The same stories arose this month, with debt being the main focus. This week however, renewed doubt over the recovery, with private hiring not up in the US.

Doubts over China's growth also took place in May, with a slowdown in the manufacturing sector reported.

My porfolio took a hit last month, and as of the end of May, I am 2.9% in the red.

First Resources

No news was reported for First Resources this month. Dividends was received on the 18th of May 2010 for Year End 2009

China Telecom

At the AGM, all motions were duly passed. This includes a HKD0.085 dividend per share to be issued on the 30th of June 2010

Novo Group

Novo disposed of its downstream subsidiary to its partner. The disposal is not expected to have any material impact on its results.

The reason given is as follows,

"In view that the definitive terms and conditions imposed bythe relevant authorities are more stringent than the original understandings of the Company, inparticular, in respect of the investment commitment requirements, the Company has decidednot to participate in the Project at this stage... JV Partner has already signed a legal binding MOU with the Group, offering a first right of refusal to subscribe for up to 60% of the equity in the investment holding company controlled by the JV Partner that will be undertaking the Project."

In my opinion, this is a step back for the company. Firstly, it has underestimated the problems that it may encounter when setting up a subsidiary in China. Next, in my opinion, it is a blow to the company that it has failed to expand its downstream operations.

However, as the project has not started, and as such is not expected to have any material impact, I would still be interested to see where Novo Group heads.

Soilbuild

Soilbuild announced its 1Q2010 results this month. Although sales were down, due to a decrease in revenue from property development, rental income increased by 40% year on year. This is positive for the company as it strives to achieve its 40million revenue from rental income.

NAV increased by 5 cents to 1.29, in spite of an increase in number of shares (1,516,000) due to exercise of warrants.

China Star Entertainment

A bonus issue of warrants is slated to be done, pending shareholder approval. The subscription price is HKD0.193. For foreign shareholders, the warrants will be sold at the first possible opportunity, and the proceeds will be credited to the shareholder account

Courage Marine

I purchased Courage Marine at SGD0.185 on the 22nd of May. I previously looked at the Shipping sector, and as the turnaround in container shipping is expected, the dry bulk shipping sector would typically be correlated to the turnaround in container shipping, albeit a little slower.

Courage Marine has a very strong balance sheet, and by purchasing 2nd hand ships, they would obtain a higher return on investment. The fact that Courage charters out ships typically using spot prices, means it would gain the full benefit on the turnaround of container shipping.

Its revenue has increased not only year on year, but also quarter on quarter, and gross margins have been improving. This points to a possible turnaround in shipping.

I did not over BGEM and YRCW, as I am still in the process of redoing my portfolio.