Monday, February 20, 2023

Inside The Bedokian’s Portfolio: Frasers Logistics & Commercial Trust

Inside The Bedokian’s Portfolio is an intermittent series where I will reveal what we have in our investment portfolio, one company/bond/REIT/ETF at a time. In each post I will briefly give an overview of the counter, why I had selected it and what possibly lies ahead in its future.

For this issue, I will discuss about the locally listed real estate investment trust (REIT), Frasers Logistics & Commercial Trust (FLCT, ticker: BUOU).



FLCT held a total of 105 properties across five countries (Australia – 50.9%, Germany – 24.1%, Singapore – 9.8%, United Kingdom – 9.6% and The Netherlands – 5.6%) and spanning logistics and industrial complexes (68.3%), offices and business parks (22.5%), and central business district commercial properties (9.2%)1.




FLCT, or rather one of its predecessors, Frasers Commercial Trust (FCOT), is the longest holding in the Bedokian’s portfolio, starting in 2009, way before my “great awakening” in 2013. I initially bought FCOT for trading, but as time goes by it survived its position in the portfolio, with additional purchases, to the present day. The reason for its retention was FCOT’s commercial play and I felt it suited an inclusion.


Before the merger with Frasers Logistics & Industrial Trust (FLIT), FCOT had one of the lowest gearing amongst the REITs at 28.6%, a respectable dividend yield of 5.75% and a reasonable price-to-book (P/B) value of 1.04 (all figures were as at Oct – Nov 2019). In early 2020, FCOT merged with FLIT to form FLCT (I had written about this here and here).


After the merger, and besides rounding up the numbers to make it a multiple of 100 by buying a few 10s of FLIT shares, there is no further additions to the counter. As of the latest financial information, FLCT is still one of the lowest geared REIT at 27.9%1, with a current dividend yield of around 6.145% with a P/B ratio of 0.952. This presented a good opportunity to average up the REIT, albeit the current rising interest rate environment. 

What’s Next?


The prevailing macroeconomic factors are tilting in a positive favour for logistics, with the resumption of supply chain flows expected to improve after the recovery from COVID-19 disruption (especially China, dubbed as “the factory of the world”), and the continued uptrend of e-commerce. The commercial side of things, however, is still dampened by the trend of working from home, though we are seeing an increasing inclination of workers returning to the offices. Rising interest rates would also hamper the yield, with a projected SGD 0.06 drop for every 50 basis points of rate increase1. Still, FLCT’s low gearing and high interest cover ratio would mitigate somewhat the risks highlighted above and proved to be an attractive REIT for me to add on. 




Bought FLCT at:


SGD 0.165 at Aug and Sep 2009 (as FCOT)

SGD 1.51 at Apr 2015 (as FCOT)

SGD 1.255 at May 2016 (as FCOT)

SGD 1.24 at June 2016 (as FCOT)

SGD 1.26 at Mar 2017 (as FCOT)

SGD 1.47 at Mar 2019 (as FCOT)

SGD 0.975 & 0.98 at Apr 2020 (as FLIT)




1 – 1QFY23 Business Update. Frasers Logistics & Commercial Trust. 1 Feb 2023. (accessed 19 Feb 2023)


2 – (accessed 19 Feb 2023)


Saturday, February 11, 2023

The Great Search AI Race

The previous big news was the emergence of an application which can answer almost all questions under the sun (and space if need be). And the last big news about this application was that Microsoft had invested (rather heavily) into it.


Unless one is a bit detached from the internet (or undergoing a digital detox), the application I am mentioning is a chatbot called ChatGPT. Created by an artificial intelligence (AI) research laboratory OpenAI, it was launched in November 2022, and immediately it took the world by storm in its ability to reply to questions in detail and could pass it off for essay answers in school assignments.


Things got serious when news of Microsoft investing billions into ChatGPT in late January 2023, and within a couple of weeks, they announced the new Bing browser powered by ChatGPT AI. Suddenly, the definition of searching the internet had taken a whole new meaning; no longer searches produce just sites and suggestions (which a user may find it more "tedious" in needing additional manual intervention of clicking the mouse), but it could also give detailed results, answers and more "suggestive" suggestions. 


A race was triggered; Google, long being the undisputed champion in (and getting the most money from) its search engine technology, suddenly felt threatened, and a few days ago announced the launch of Bard as a counter, though it got hiccuped with displaying a not-so-factual information with regards to the James Webb telescope. Across the Pacific Ocean, China's Baidu had also said it would launch their own ChatGPT-ish project called Ernie by around March 2023. In other words, ChatGPT or other iterations of it would revolutionise how the internet would be used and structured.


To quote a famous phrase seen in many internet forums:


"The internet is serious business." – Unknown


Alphabet, the parent of Google, dropped almost 9% during the course of the past five days, clearly affected by the goings-on described above. Talk of Google going to be dethroned by Bing in the upcoming search engine wars exacerbated the share price situation. Let us now look at three main points on whether Alphabet is still, in my humble opinion, a long term play.


Point #1: Google Is Still Dominant In The Search Engine And Internet Usage Space


In 2022, Google’s global market share of search engines for desktop and mobile were 84.7% and 95.6% respectively, compared to second-placed Bing’s 8.6% and 0.6% respectively1. It is due to this dominance that allowed the word “googling” to become synonymous with the phrase “internet search” (and GIYF: Google Is Your Friend or LMGTFY: Let Me Google That For You).


Do not forget that Google still has other services around which are dominant, such as YouTube and Google Maps, and they earn fees and advertising revenues through them.


Point #2: The Competition Is Still There


Microsoft’s integration of ChatGPT and the deemed imperfections of Bard were, in my view, nothing but “flash in the pan” headlines. Honestly, having AI in search engines is nothing new, just that the investing and trading public were suddenly inundated with a surge of such news, good and bad, for both ends. Google’s quick response, albeit seen as reactive, demonstrated that they are not going to take this lying down. Time is needed to take down a giant, but if the giant is continuously improving itself then the chance of an overnight failure is super-duper rare.


During an interview with CNBC2, Microsoft CEO Satya Nadella stated that the largest software business is search, and that gave them the drive to go for this area. He even acknowledged that Google “…makes more money on Windows than all of Microsoft”. So an usurping moment is still very far away.


Point #3: The New Norm Going Forward


When the iPhone was first unveiled in 2007, it was seen as revolutionary, with the removal of mobile keyboards and capacitive touchscreens seen as cool by users. Today this type of mobile device is in almost everyone’s hands. Search AI engines such as ChatGPT, Bard and Ernie will become the new norm in the future once they are integrated with their respective search portals and/or browsers, and adopted for use by the general masses.


Going back to the dominance and user preferences, Google would still be in the game. The main risk of Google (and big advantage to Microsoft) would be a defection of users to the other side either via user experience and/or (the bigger one) better integration of applications and services across the entire Microsoft ecosystem, where they have an almost monopolistic hold in the corporate world.




To say about Google (and Alphabet) getting doomed because of this ChatGPT is a result of recency bias, which definitely is a no-no when looking at things from an investor’s perspective, i.e. multi-faceted and long term. The current price weakness presented an opportunity for me to consider adding in more Alphabet.




The Bedokian is vested in Alphabet directly and Microsoft indirectly via a S&P 500 exchange traded fund.





1 – Fleck, Anna. Google’s Search Dominance. Statista. 9 Feb 2023. (accessed 11 Feb 2023)


2 – First on CNBC: CNBC Transcript: Microsoft CEO Satya Nadella Speaks with CNBC’s Jon Fortt on “Power Lunch” Today. CNBC. 7 Feb 2023. (accessed 11 Feb 2023)

Monday, February 6, 2023

I Feel Good, Or Should I?

In the month of January 2023, we had seen the markets reversing itself after the doom and gloom that ended the year of 2022. To start off, for year-to-date (till 3 Feb 2023), the S&P 500 had recovered around 8.2% and the NASDAQ 100 had recovered even more at 15.7%. Our local STI, while being one of the better performers for 2022, had gained 4.3%. To add, our local S-REITs (using the iEdge S-REIT Index) had seen a rise of 8.5%. Just a few days ago, the Federal Reserve had announced an increase of 25 basis points, which was lower than the previous hikes, indicating an assumed (emphasis mine) pivot position by them.

With all these happening, it is easy to have the impression that the good times are rolling in again, and all the talk about doomsday and recession effects would be dampened, if not, very optimistically, non-existent.


Depending on who you had read from or listened to, there is still a range of outlooks with regards to the coming times, ranging from those that emit ultra-positive vibes to the ones still giving the dreary-looking auras. However, as always emphasized, the future is difficult to see. Who is right and which is accurate, no one knows for sure, and only time will tell.


In the meantime, it is easy to be drawn into this current market excitement and the feeling of FOMO (fear of missing out) is strong especially when share prices are going up. The first reaction to these is not to have any reaction at all. Getting carried away is the last thing on your mind, and instead take a step back and focus on what is at hand, i.e., your investment portfolio.


To me, maintaining the balance of our preferred asset allocation mix in the investment portfolio trumps all other things, being a believer of diversification. This might be a good time to take in the current values of the assets, financial instruments and securities, and see if rebalancing is necessary. Rebalancing does not necessarily involve buying and selling with what we have, and we could add in additional capital to carry out the rebalancing with our capital prepped for injection into the portfolio.


The next question is what to get. There are two main ways to go about this: the first is to see which asset classes, regions/countries, sectors/industries and/or companies are “out of flavour and favour” for the moment but there is a very strong chance of them turning around, and we could channel the capital towards them. The second way is to do an averaging up, especially on individual counters; this may sound a bit of a paradox of my advice not to go FOMO but there are some counters’ prices, though rising, are still probably within your “buy” parameters, e.g., the counter is still below your calculated valuation, there is a potential growth in the sector of which the company is in, etc.


For passive investors and those who carry out dollar-cost averaging (DCA), just maintain your course and continue to do the necessary in your investment journey, i.e., carry out periodic rebalancing according to your schedule, and/or keep on contributing the same amount per period for your investments.


Keep calm, stay safe and stay invested.