This will be a quick update to the portfolio as I made another divestment, this time Ho Bee Land for 22,000 shares at a price of $2.13.

I started accumulating Ho Bee during late last year and even more earlier this year with the thesis of a strong recurring income play, particularly in the UK where they have geared up to buy one after another in quick succession. Based on the recurring income alone, they should be able to pay dividends of up to 7 cents to its shareholders which is what they have been doing in 2015. At current closing price of $2.13, this represents a decent yield of 3.2% for the shareholders.

The Brexit event turned out to be one of the factors that influenced my decision to divest the company at this point as there will be more uncertainty towards both how the UK and EU will operate and function in the future. For a start, the sterling pounds are getting hammered which means that for every 10% sensitivity downside to the currency, Ho Bee earnings will be impacted by 3.2% respectively. In terms of balance sheet, Ho bee has a natural hedge against the assets it owned ($1.3 Billion) by borrowing in pounds as well ($1 Billion), so the NAV would get less affected.

For those who are looking at long term play, property developers like Ho Bee or CDL, who are affected by these events, could turnaround and provide an opportunity for them to grow their exposure in the UK by having a cheaper pounds sterling. The investment horizon has to be far because these are not events that you can forget a month or two. In fact, the whole procedure of the UK negotiating the exit clause with the EU will take years to solve, so a lot of uncertainty will be in play here.

Given that they only yield 3.2% at the moment, and with the ongoing uncertainty clouding the picture for the company, I chose to exit my position at this point as first I needed a greater returns on investment on my capital and second a greater margin of safety should my thesis was incorrect. At this time, I just feel that the risk outweigh the reward at this point.

The divestment at $2.13 means that I netted a 14% gains (including dividends) on this investment on a time span of 6 months. They are not as great as what I was expecting but given the climate I'll take it for now.

I'll continue to save the proceeds into the warchest portion, which has now grown to 44% as of writing. This will only be deployed when I have identified an ideal opportunity to go in.