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31-08-2015, 11:19 AM
Been looking at Global Investments and concluded (in my opinion 
) that it is undervalued at current price of $0.134. Based on the latest 2Q result, the assets are worth: -
Ascendos Investments Ltd: $0.014
RMBS: $0.013
US CLO: $0.023
EUR CLO: $0.014
Listed Equities: $0.058
Bonds: $0.074
Cash On Hand: $0.017
TOTAL: $0.213
The unlisted portfolio are not junk assets and in fact generate pretty decent returns. I'm also quite sure they are sufficiently impaired as ST Asset Management is conservative and the value is not artificially inflated. Hence, the market is grossly undervaluing these assets based on the current share price.
Another thing I noted is that Global Investments had disclosed taking positions in Shanghai listed equities in 4Q14 and 1Q15 results (Oct 14 - Mar 15). Shanghai Composite Index was 2364 - 3336 during that period. In their latest result announcement, it was disclosed that subsequent to 30 Jun 15, Global Investments had sold off its Shanghai listed equities with a negligible position remaining by 7 Jul 15. Between 1-7 Jul 15, the Shanghai Composite fell from 4054 to 3727. Nevertheless, based on their purchase levels earlier, I am assuming that there should be a gain on the sale. Kudos to the Management on selling off their entire position as we all know that the Shanghai Composite has since fell to 3100+ levels.
Its difficult to say whether the dividend of $0.015 (11.2% yield) is sustainable but one thing I know for sure is even if dividend is reduced to a very achievable $0.01, the yield on this unlevered fund would still be around an attractive 7.5%.
) that it is undervalued at current price of $0.134. Based on the latest 2Q result, the assets are worth: -Ascendos Investments Ltd: $0.014
RMBS: $0.013
US CLO: $0.023
EUR CLO: $0.014
Listed Equities: $0.058
Bonds: $0.074
Cash On Hand: $0.017
TOTAL: $0.213
The unlisted portfolio are not junk assets and in fact generate pretty decent returns. I'm also quite sure they are sufficiently impaired as ST Asset Management is conservative and the value is not artificially inflated. Hence, the market is grossly undervaluing these assets based on the current share price.
Another thing I noted is that Global Investments had disclosed taking positions in Shanghai listed equities in 4Q14 and 1Q15 results (Oct 14 - Mar 15). Shanghai Composite Index was 2364 - 3336 during that period. In their latest result announcement, it was disclosed that subsequent to 30 Jun 15, Global Investments had sold off its Shanghai listed equities with a negligible position remaining by 7 Jul 15. Between 1-7 Jul 15, the Shanghai Composite fell from 4054 to 3727. Nevertheless, based on their purchase levels earlier, I am assuming that there should be a gain on the sale. Kudos to the Management on selling off their entire position as we all know that the Shanghai Composite has since fell to 3100+ levels.
Its difficult to say whether the dividend of $0.015 (11.2% yield) is sustainable but one thing I know for sure is even if dividend is reduced to a very achievable $0.01, the yield on this unlevered fund would still be around an attractive 7.5%.