Henderson Far East Income Share Discussion Threads

[skinny] 13/11/2022 10:10

Slightly off topic, this article may be of interest :-

[mister md] 13/11/2022 10:04

Polr, Abdn, Jup, Mrch .. so many high yielders now beginning to recover - hopefully the start of a trend with people moving away from 'exotic' investments, Bitcoin, etc

[mister md] 13/11/2022 10:01

Skinny - yes that's the article - was looking at the paper version

[skinny] 13/11/2022 10:00

I assume that's down to the fact that the article was published on the 9th?

On edit :- "Source: AIC/Morningstar, data to 31/10/22."

[masurenguy] 13/11/2022 09:52

The FT is wrong - currently HFEL yields 8.8% at Fridays closing Offer of 265.7p while Polar Capital yields 9.2% at Fridays closing offer of 500.0p.

[skinny] 13/11/2022 09:33

Is this the article (from the 9th)?

[wskill] 13/11/2022 09:31

I require income so have built up a decent holding here and a few others CSH,SOHO,for their inflation proof element it will not suit everyone, ten percent yields wont be around for ever after this yield drought we have had the past years a welcome change.

[mister md] 13/11/2022 00:33

HFEL is mentioned in the weekend FT supplement on Investment Trusts, stating it offers the highest yield.

[sll] 11/11/2022 18:04

Will digest all of the above (doubtless good) points, asap, meanwhile - just have to state how impressive it is (in this hugely uncertain world) that HFEL can pull in (yet another) £645k - via yet another equity issue raise. Looks well-timed by the subscribers, given today's price action.

[2sporrans] 08/11/2022 06:44

Hi mjames

Please see post 1187 for the Geo. split at 30Sep22.
The table pasted is still the same on the HFEL website.
So, ~26% China incl. HK and ~7% Taiwan.

On the high divi please see post 1173, noting the contribution from option writing and other factors.

For me, another feature, arguably more concerning than the 2 above, is that HFEL trades at a small premium to NAV.
Given it's poor Total return performance the past 3 years, a substantial discount seems to me to be more in order.
Peer ITs generally trade with discounts, 10%+ typically.
e.g. AAIF recently with discount of 11<>14% and a consistently superior TR past 3 years.

Seems investors will pay a modest premium for enduring [thus far] high income streams, going by FTSE100 based ITs, City of London and Merchants.

The HFEL divi isn't under immediate threat; but were it to even be chiseled down a tad, a substantial [15+% ? 20%?] discount would likely ensue.

The debacle of the Shell divi, 2020, salient experience.
The divi was never cut since WW2.....BoDs took the long view and 'looked through' cyclical troughs as they repeatedly came and went.
Then it was slashed, consequent to the oil price implosion H1 2020. Pared down to 30% of previous. Share price cratered, similar magnitude.
Great buying opportunity though.

fwliw, i think there's a better than evens chance HFEL will raise the divi again next August; just a tad.

[gateside] 07/11/2022 23:14

And their domicile is Jersey - so there is no Stamp Duty to pay.

[aleman] 07/11/2022 23:13

Also be aware that the 2021 report showed China and Taiwan were 34.0% of assets but 49.5% of income. They are now 25.3% so maybe around 37% of income?

[mjames20] 07/11/2022 19:07

Hello everybody,

I don't hold this share but am considering it due to the attractive yield which is around 9% and almost covered. Exposure to China has been reduced to 18% so even if China has a rough time HFEL should be able to cope. The share price has fallen 33% over the last five years so share price performance has been poor but dividend appears sustainable so perhaps a buying opportunity as price won't remain at this level if dividend is sustained. What am I missing? Why is the yield do high?

[2sporrans] 07/11/2022 14:59

kiwi

On China and that FT article you kindly posted, my tardy response:

Yeah, well worth the read.
When i did so, the day the art. came out, i also browsed the FT comments section, to look for differing takes, as i find that even the FT leans rather to a Xi phobic take and also tends to overlook the provocative stance of US [hegemonic] containment policy.
While on board with the concerns over China and Xi's consolidation of power + shift of priorities towards 'security', [maybe insularity], i do question some of the criticisms leveled.
The ongoing push for a sort of leveling up of income/wealth over outright GDP expansion could be a good thing, not only for folk in general but for many companies too.

For example, notwithstanding Xi has appointed a raft of 'loyalists' to top positions, does it necessarily follow that they are no more than 'Yes men', lacking any great capacity for constructive contributions, maybe even suggesting some alternative tweaks?

This article, cleaned from my FT comments browse, suggests that those appointed do possess good technocratic credentials:


The extent to which they are free to exercise them is of course something else.
Time will tell.
Just as it will wrt to evolution of PRC Covid policy.
[China is i think, well into trialing its own MRNA vaccines and Shultz has broached the idea of Biontech providing them - via licenced production perhaps?]

Whatever, while it looks a tad premature for a 'Covid pivot' rally in Chinese and China related stocks - just as has been case for the 'Powell pivots' to date for Western equities - looking through and beyond the current headwinds is in the nature of the investment game.

[petewy] 05/11/2022 18:26

This a board bout HFEL shares not tax and payments

[pvb] 05/11/2022 11:33

Superiorshares 5 Nov '22 - 04:31 - 1227 of 1230

Pvb
Your correct. All gains inside a Isa are Tax free.
My point on these proposed Tax increases on dividends .

And my point is, whether inside or outside an ISA, for ~25 years there have been no taxes taken from UK dividends on ordinary UK shares before payment. That's just how it is and has been for about a quarter of a century (though an unbelievable number of people spent decades denying this simple fact - that I don't deny!).

There are no 'witholding taxes' on UK dividends.

Personal "dividend taxes" are taxes you owe/pay on received dividends - after payment - in line with whatever the current tax regulations say. If received in a tax free/privileged environment, e.g. an ISA, these taxes are not charged, due, or paid.

Of course, the government can change future legislation however it wants. But the above is the current general dividend taxation situation, as it has been so far for ~25 years.

Eg the Government introduces a 5 per cent Tax on dividends .
Are you telling me the Government will chase that 5 per cent Tax of each In dividual recipient ?

Currently - outside an ISA - there is the personal dividend tax allowance (£2000). You only need to pay dividend taxes on amounts above that.

N.B. The existing dividend tax rate is 8.75% for BR taxpayers, 33.75% for HR taxpayers.

[superiorshares] 05/11/2022 11:13

wllmherk.

I think people are missing my point .

for those that own shares in Hfel and its in your ISA. you dont actually own a portion of HFEL. you own a piece of paper known as a share.

its not a share of the company . The share should rise or fall with company fortunes or market expectations .

shareholders in companies that go bust ( ive had a couple of those } realise that you actually own zero of the company .

let me try BP as an example to make my point .

example The government says it will put a 10 per cent tax on dividends. bp is yielding 10 per cent and they announce that dividend will be paid.
So the government taxes BP directly 10 per cent of the total dividend payment .

in effect it would reduce the dividend shareholders receive . it wouldnt even get to
ISA, it would be taxed at source .

[wllmherk] 05/11/2022 10:42

I think it would be highly unlikely and very unpopular if they tax investments held within ISA's, someone once said a desperate Government is a dangerous Government so one never knows, but, I'd bet heavily the Government will leave ISA's alone, but, investments outwith is low hanging fruit. We will see in a couple of weeks.

wllm :)

[superiorshares] 05/11/2022 04:37

Pvb
And I been right on just about everything I've posted on Advfn .

So hypothetically HFE.l is going to pay £1 million In dividend. The government says we are going to introduce a 5 per cent Tax on that .
So does the Government take £50,000 direct from Hfel or allow that dividend to be payed into individual peoples Isa accounts and then try to claim the 5 per cent. And say " oh cripes we can't have that Tax because all gains in an Isa wrapper are Tax free ""
Really?

[superiorshares] 05/11/2022 04:31

Pvb
Your correct. All gains inside a Isa are Tax free.
My point on these proposed Tax increases on dividends .
Eg the Government introduces a 5 per cent Tax on dividends .
Are you telling me the Government will chase that 5 per cent Tax of each In dividual recipient ?

[pvb] 04/11/2022 22:38

Superiorshares 4 Nov '22 - 21:31 - 1223 of 1225

Goldpig
I have seen the reports of rumoured Tax increases on dividends . I read the headline and didn't bother to read any further.
You say that ISA held will not pay the tax ?
I thought these taxes were done at the point of payment. Ie the company pays the dividend and the Tax man takes their portion directly out of the dividend.
So the Tax in effect would be taken before the money even reaches your ISA .
Am I wrong here ?

Yep. You've been wrong for about 25 years.

[panshanger1] 04/11/2022 22:30

Don't think they will do that SS would be considered as very regressive Keep your div payers in an ISA or Sipp and keep you growth/ ab return stuff outside

[wllmherk] 04/11/2022 21:51

Your wrong SS, my ISA holdings are not taxed, hence my portfolio holdings outside our ISA's will be sold down in the coming years and moved inside the tax wrapper. I think the dividend allowance will be axed altogether, the Government is desperate to make savings and increase revenues and they are unlikely to get much flack for what will be portrayed as taxing the rich.

wllm :)