Henderson Far East Income Share Discussion Threads

[exel] 21/2/2020 16:28

Spoke too soon! Note to self - time to buy this stock is 16.25 hours on a Friday pre-close.

[exel] 21/2/2020 15:34

NAV per share nudging up slightly - and ‘just above’ the present offer - is a mildly encouraging sign.

[rcturner2] 21/2/2020 11:06

This is the important point. The UK emergency plans for a pandemic are based upon 50% of the population getting the disease.

The problem with this is that you then have a very large number of people who need hospital admission at the same time and so the mortality rate goes up as the hospitals cannot cope.

[caradog] 21/2/2020 10:43

Kenmitch, I think it is simply that reliable mortality data take weeks to accumulate, by which time any chance of limiting the spread will have been lost. It is only wise to try to contain any new infection until you know what you are dealing with.

The current mortality rate seem to be around 2.5%. That may seem low, but would mean that an average GP would lose around 20 patients to the virus if 60% of his/her patients caught it. It would also mean the death of around 1000 GPs.

The problem with pandemics is that everybody gets sick at the same time, including health staff. When the average waiting time at casualty is already over 8 hours in some departments, it is hard to imagine the ensuing chaos, caused not only by the virus, but also by fear of it.

It would be a superhuman achievement to contain this virus, but we can hope for a slowing of the spread, so that a vaccine can be developed.

Unlike the human effects, the economic effects will be transient, taking the long view. Small consolation for the bereaved.

[kenmitch] 21/2/2020 09:26

EssentialInvestor

Don’t see how large scale breakouts in multiple other Countries can be avoided. China can’t remain in near total shutdown much longer. But key question is on its severity. Based on only 2 of the 700+ catching it on that cruise ship dying, and both were elderly and had other medical problems, and some with it not even felling unwell, it could be a case of so what if it spreads rounded the world.

BUT if it is so mild then why is Chinese Government going to such extraordinary lengths to keep it in check?

I’m looking to get in to HFEL as an ideal longer term buy and hold for the good dividend but will wait and see how Coronavirus news pans out. Could well be a better buying opportunity ahead.

[essentialinvestor] 21/2/2020 08:13

Is the virus beginning to break out beyond China?,
rather than just small scale sparodic outbreaks.


Sold a few HFEL over 3.46, hopefully an opportunity to add back on a bad day.

[essentialinvestor] 20/2/2020 17:45

On a 10 year view, if you can live with some volatility, should do nicely.
Buying a few on a bad day and selling some on excitement can sometimes pay nicely.
Although, a straightforward buy and hold is easier and more suitable for most.


Asian markets have about priced in China imv, what may not be priced in are
large scale breakouts in multiple other countries.

[drradcliffe] 20/2/2020 17:19

I invested today as well, for the same reasons.

[steve c1] 20/2/2020 12:15

I totally agree with you thats why i have a substantial % of my portfolio in asian funds. Also a lot of these funds have decent yields.

[essentialinvestor] 20/2/2020 11:53

My take fwiw is Asian markets (in general terms) will trounce the US
and much of the developed world over the next 10 years.

If you look at bubbles over the past 30 years, we had a bubble in the Japan equity
market, the 1999/2000 tech boom, a US housing bubble which burst in 2007/8.
Where is the current boom?, arguably in US equities. That may peak later in 2020.

[exel] 20/2/2020 11:46

Thanks EI, have done that on some past occasions. Meanwhile I'm growing/trading it through this period of relative weakness.

A couple of other points.

HFEL has seemingly paused 'new issues' for the past fortnight (last one circa 5/2/20). While probably understandable, in view of increased volatility, it means that the demand that had been getting filled through that route may (marginally) help prop the share price via direct purchases? At the recent AGM, the point was made that 'new issues' help to keep the (usual) share price premium down - something deemed good for all shareholders - while spreading central fixed costs over a wider portfolio base. To date, this financial year, they've raised £26.9m at average issue price of circa 359.5p.

Did I read that HSBC are scaling back various operations to focus more on the FE zone? The long-term macro story, here, still looks good - subject to all the known downsides, and the unknowns that have yet to emerge (as applicable to most markets).

[essentialinvestor] 20/2/2020 11:09

exel, just in terms of your comment on online selling limits yesterday,
it's sometimes possible to divide a trade in to lots and get the same price,
all be in there are extra transaction changes and it's a bit fiddly.

[aleman] 20/2/2020 08:47

126 new cases outside China yesterday and 4 new deaths says the problem is getting worse and it depends on how East Asian governments choose to try contain it. It's hitting consumer demand in Japan and S.Korea already and they just got worse.

[essentialinvestor] 20/2/2020 01:07

May reflect anxiety about holding overnight positions given possible virus news flow,
so online limits tighten up nearing the close?.

Thursday may be a decent day, markets buying the China case reduction narrative for now. Hopefully it's accurate, at least to a degree. Precise figures would be impossible.

[exel] 19/2/2020 22:52

ps - Did a few dummy trades (small & large, both buys & sells) just before the closing drop, and found these were easy to buy but hard to sell. Did no deals. But, given that NAV dropped back, on the latest disclosure, I don't see these rising by much more tomorrow, if at all? Could be wrong, but sense that 'fear' will probably re-assert a bit, coming through the lower NAV - but medium term, it looks as if Coronavirus may be nearing its peak? Saying that, I could be so wrong, but the rate of rise seems to have been slowed by the measures taken so far. The secondary impact, beyond the medium term, is harder to assess.

[exel] 19/2/2020 11:02

EI - looks like you'll be getting a further buyback opp fairly soon! I may be tempted if it drops much more? edit: Now sensing that 339p will re-emerge again, before too long, so have placed a limit buy order accordingly.

[essentialinvestor] 19/2/2020 08:20

Yup, agree with the longer term HFEL assessment, particularly on further
weakness.

Most people probably have better things to do with their time, but the
current volatility is giving some tradable opportunities. Just sold a few
bought yesterday at 3.42.

I'm still none the wiser if this is going to break out in to global pandemic,
or will be confined to sparodic outbreaks ex China - the later would appear on
the optimistic side, however remains to be seen. Cases ticking up in Japan, Singapore, HK, but atm not explosive increases (excluding the Diamond Princess).

[kenmitch] 18/2/2020 22:37

There is air conditioning throughout a cruise ship, including balcony cabins. And balcony cabins are mostly kept shut whenever the ship is at sea, and also at night. So all passengers and crew, who sleep in small often inside cabins are breathing air conditioned air supply most of the time. And yes, it seems obvious that Coronavirus has been spread on that cruise ship via the air conditioning.

As for HFEL....further share price fall will make it look a very good long time buy for great dividend and decent capital gain too.

[exel] 18/2/2020 21:45

EI

- "Surprised yesterday as markets were so becalmed, had expected today's
price action to start the week." -

Me too! bizarre? As was some of the deal/spread pricing today. We're now pretty much priced on/at the stock's net asset value, so how/if that moves will probably guide the share price back up or down. I find it impossible to call. Maybe Coronavirus has served to eliminate any premium, for now?

pvb

- Wild horses wouldn't get me on a big cruise ship, so I can't comment on air con et al, in that scenario, but I do recall that things like legionaires disease often used to spread through air con systems? Air travel is also notorious for spreading illness around by the same means. Would guess today's events will deter at least some!

[pvb] 18/2/2020 19:18

exel 18 Feb '20 - 19:06 - 461 of 461

Think crowded cruise ship, think diahorrea and/or food poisoning outbreak, think close proximity of bodies, eating the same food, breathing the same air, think thousands of people (many quite elderly!!) then throw in Coronavirus!

I wondered about that "breathing the same air". Many cabins in lower decks don't have portholes, so must have ventilators. I don't imagine the ventilation systems in these ships have virus filters (or am I wrong?), so what would stop them spreading such an infection around the ship?

[exel] 18/2/2020 19:06

Think crowded cruise ship, think diahorrea and/or food poisoning outbreak, think close proximity of bodies, eating the same food, breathing the same air, think thousands of people (many quite elderly!!) then throw in Coronavirus! There are only so many such ‘holidays from hell’ one could actually take. There but for the grace of God.....

[aleman] 18/2/2020 17:14

I saw a report that said staff serving food to passengers in cabins were infected.

[essentialinvestor] 18/2/2020 12:32

Added a few back.


Surprised yesterday as markets were so becalmed, had expected today's
price action to start the week.

I've not seen any comment on the rapidity of virus transmission on board
that cruse ship, re potential ease of transmission in the wider outside community?.

Wondering if the conclusion is that is a unique set of circumstances without
a wider read through?.

[aleman] 18/2/2020 10:04

Maybe it's responding to weather. Mean temperature is about 4C in Wuhan in January. It's about 18C in April. Daily highs are now about 12C and rising. They can probably open windows through the day now and not be too cold.

[andyj] 18/2/2020 09:32

It is still very early days. On one hand we have a definite slowing down of new cases in Hubei. Yet given the draconian measures to prevent people contacting each other, it is surely to be expected. How long they can impose those measures and what happens when they relax them, remains to be seen. On the other hand the Diamond Princess cruise ship shows how incredibly contagious it clearly is and is indicative of it being able to spread through means other than sneezing or coughing. Indeed it suggests that it is far more contagious than seasonal flu.Weighing up the evidence so far, it seems we have an extremely contagious virus that appears to lessen in severity as it spreads from its origins in Wuhan. My opinion, for what it's worth, is that we will need to live with this virus, at least until a vaccine is found. I suggest that in countries where it takes hold, there will be a prolonged impact on how we lead our lives, restricted social contact, schools resorting to distance learning and restaurants, travel and leisure suffering. For although the rising recovery rates offer reassurance and will lessen panic, most have elderly relatives or friends that have health problems that are vulnerable to such an infectious disease. From a market perspective, I think the market will begin to differentiate between those sectors most at risk of longer term pain.