The cash levels in the simulated portfolios were raised last month, given the redemption of the retail corporate bond CMA (3.8 per cent January 2022) - contained in all three portfolios - by the issuer on Jan 12. In addition, the panel decided to deploy the additional $20,000 top-up investment from Ms Chee.
The following portfolio adjustments took effect on Feb 1:
•Ms Chee: sold Singapore Airlines (SIA) and bought OCBC, Singapore Exchange, First Resources, Keppel DC Reit, Gold ETF, CMT 3.08 per cent Feb 21 bond, iShares JPM USD Asia Bond ETF and Singapore Savings Bond (on March 31).
•Mr Goh: sold SIA and CapitaLand Mall Trust (CMT); bought OCBC, Keppel DC Reit and CMT 3.08 per cent Feb 21 bond.
•Mr Wang: sold SIA and CMT; bought OCBC, Keppel DC Reit, CMT 3.08 per cent Feb 21 bond, FCL 3.65 per cent May 22 bond, DBS 4.7 per cent Perp (call Nov 20) and OCBC 5.1 per cent perpetual (call Sept 18).
The CFAS panel explained that the decision to buy OCBC shares was based on a few factors. First, banks are likely to benefit in terms of better interest margins from impending rate hikes expected this year. Also, OCBC is moving strongly into North Asia and wealth management via its Bank of Singapore unit.
The panel also saw potential in Keppel DC Reit because of the excellent fundamentals for data centres. These are specialised and secure facilities, designed and constructed to house and reliably operate mission-critical networking and computer equipment.
"Barriers to entry for this asset class are significantly high, due to substantial upfront costs. Robust underlying demand for data centre space is supported by increasing mobile penetration, e-commerce, video/media applications and cloud computing from diverse companies including IT/internet firms, financial institutions, media and government.
"Near-term supply pressure in Singapore should be more than offset by high utilisation rates in excess of 75 per cent and longer-term demand growth," said the panel.
In contrast, with high oil prices and a global slowing in tourism expected, SIA has limited upside potential. As such, the panel recommended exiting the stock.