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HFEL Henderson Far East Income Limited

221.00
0.50 (0.23%)
Last Updated: 13:47:34
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Henderson Far East Income Limited LSE:HFEL London Ordinary Share JE00B1GXH751 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.50 0.23% 221.00 220.00 223.00 222.50 221.00 222.50 122,399 13:47:34
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Trust,ex Ed,religious,charty -46.86M -56.24M -0.3451 -6.40 360.14M
Henderson Far East Income Limited is listed in the Trust,ex Ed,religious,charty sector of the London Stock Exchange with ticker HFEL. The last closing price for Henderson Far East Income was 220.50p. Over the last year, Henderson Far East Income shares have traded in a share price range of 197.60p to 266.00p.

Henderson Far East Income currently has 162,957,032 shares in issue. The market capitalisation of Henderson Far East Income is £360.14 million. Henderson Far East Income has a price to earnings ratio (PE ratio) of -6.40.

Henderson Far East Income Share Discussion Threads

Showing 826 to 850 of 1900 messages
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DateSubjectAuthorDiscuss
15/9/2021
19:39
Thanks for insight exel.
scruff1
15/9/2021
19:33
Far Eastern Market falls over last night (their wednesday 15/9/21) would be my guess, as these (repeated) pull-backs will kick into reported 'per share' LSE valuations of HFEL AAIF & SOI when reported tomorrow.
exel
15/9/2021
18:53
Only recently bought in. Notice mon and tues mainly buys and today virtually all sells. Is there a reason for the change of sentiment?
scruff1
12/9/2021
13:43
2sporrans - HUGE thanks for your post 823 (above). As a holder of AAIF, SOI and HFEL you'll readily see why your comments and graphic were SO helpful.
exel
08/9/2021
11:14
Covid falling in Japan and Vietnam and looks to be starting to level out in Australia.
aleman
04/9/2021
09:36
Actually writing covered calls to increase income could explain why the share price has remained low ,writing calls generally means you miss out on large moves up as the options are exercised.Like I said before it has advantages for increasing yield but at the potential cost of capital gain.
tim 3
03/9/2021
13:40
Just for further and hopefully final clarity on this:

"Post #810: "HFEL's portfolio generated an historic 4.8% divi. income at 30Jun21; hopefully growing to 5.2% a year hence."

This refers to the divi. income COMMING INTO HFEL, not the divi. it is paying out.

I posted a table from the Edison report referred to which states this fact.


On the matter of dividend yields paid out by other Asian income funds, the same table does provide some comparison guidance.

I'll concede that the table [see final column] states the HIGH Dividend Yield index "HDY" [earned, not paid out, if like for like] is given as 5.2% [historic] v 4.8% for HFEL.
However, it is not clear what the index comprises.
It has 203 constituents.
So, are these mostly 'standard' companies, with a score or whatever of funds in there?
The central column, the "Broad Asia Pacific" one, states an historic D. yield of 2.4%. 1850 constituents.
Seems to me this is comprised of dividend paying companies; most Asian companies don't pay out a bean.

Whatever, I've invested in Schroder Asian Income OEIC and AAIF investment trust and the former pays OUT divis of close to 4.0% currently, AAIF much the same.
I've looked at several others and of those, most pay out less than these 2.

In any event, it is clear that BOTH HFEL and the Asian HDY index have performed poorly over the past year v their lower divi paying income peers, as the graph below proves. It shows Total returns over past 3 year.
There are 3 indices for Asian Income Equities and I've thrown in HFEL, AAIF and Schroder's.

The general Asian Income Index is best represented by the paler blue line.

Up until July 20, there wasn't a huge disparity between the six funds/indices.
If one goes back 5 years, the performances were also pretty close to one another over the first 4 years.



HFEL has even underperformed the [Red] HDY index over the past year; last 6 months notably.

Question is, why such an underperformance, given HFEL has stood up well historically?
The answers to this question will hold the key as to whether HFEL will play 'catch-up' and when.
Hopefully, this won't be a case of HFEL merely falling less during a big correction or bear market and be essentially to do with a revival in "Value" stocks.

Perhaps, a genuine hunger for yield will emerge, rather than the absurdly named observation, relating to the 35 yr bond bubble: The relentless buying of fixed income securities driven by a host of hostage buyers: Pension funds, insurance Co.s, dedicated bond funds etc mandated to hold only FI securities, however crushed the yields and dear the prices; the Central Banks and their monetary largess being wholly insensitive to these prices.

If we end up with a dis-inflationary, low growth world, rather than a stagflationary or inflationary one, you'd think a high, sustainable divi income stream will be attractive. With limited incentives for high CAPEX, profitable companies returning value to shareholders.....

2sporrans
03/9/2021
09:29
2sporrans - my cumulative dividends in CLIG have recovered circa 90% of my total investment in that fund over that period. The 9% is based on the overall cost of my investment without taking those cumulative returns into account.

Edit: I was invested in HFEL but sold out @338.4p on 31/01/20. I re-entered a couple of weeks ago @292.5 and have topped up since taking my average cost to 295.2p. Hope to have caught a rebound close to the bottom.

masurenguy
03/9/2021
09:23
Masurenguy

OK.
I was referring to peers as a whole.
Basically, other Asian Income funds [ ITs, OEICS, ETFs, unit trusts etc].
Can you evidence to the contrary?

Besides, 6.3% - CLIG, though high, is considerably lower than a tiny tad under 8% - HFEL - at current prices.

Your current yield of 9%, excellent though it is, surely reflects income growth over the 11 years you've been invested; will be peculiar to the [lower]share prices/amounts you bought at and how many years/rate of divi growth since purchase.

2sporrans
03/9/2021
09:19
HFEL provides the certainty of income and the certainty of underperformance
danieldruff2
03/9/2021
09:10
Happy holding both
panshanger1
03/9/2021
09:09
Not really comparing like for like though !!CLIG is an asset manager not an asian focused investment trust
panshanger1
03/9/2021
09:00
Post #816: "While the HFEL divi income is way higher than that paid out by its peers [few pay out above 4%]"

Not so - I've been invested in CLIG for 11 years. My current yield there is over 9% and it should be circa 6.3% this year for any new investors at the current price.

masurenguy
03/9/2021
08:24
Post 812

"The current annual dividend is 23.4p, which therefore constitutes a yield of 7.7% on the current Offer price of 301.5p."

The dividend paid for August [XD 29Jul21] was 5.9p, having risen a tad from 5.8p.
It is a near certainty that for the next 3 payouts will also be 5.9p; hence the payout for the year to Aug22 will be 23.6p.
At a share price of 295p, that's a projected 8.0% income return.

This very high level of payout by HFEL is all very well, providing it is sustainable and preferably, not at the expense of capital appreciation, i.e. the growth of the NAV.

But is it?

Posts 804, 807, 809 and 810 attempted to gain insight into this and came up with some answers.

"HFEL's portfolio generated an historic 4.8% divi. income at 30Jun21; hopefully growing to 5.2% a year hence."

That's what the Edison report states.
At the date - 30Jun21 - all the data relates to, the dividend income coming into the HFEL coffers from the companies it was invested in was 4.8% over the previous year.
Over that same year, HFEL paid out 23.2p in dividends which at the 30Jun21 share price equated to a 7.2p yield.
The 2.4p variance is surely of interest, if not necessarily concern.

The free cash flow income of 9.2% yield and the continued growth in reserves [enough to cover ~3/4 of the coming year's divi. payout from memory] suggest that a 23.6p payout should not be concerning.

However, one should be aware that such a high payout, likely comes at the expense of some capital appreciation in the NAV - and hence the share price
That 2.4% variance between divi. income in and divis paid out indicates the magnitude of the sacrifice in NAV growth made to achieve the divi payout.

To the extent the 2.4p variance can be explained by factors such as the income from call options writing - i.e. independent of the portfolio valuation as such - the size of that sacrifice reduces.
Hence my interest in it.

Looking at the "sacrifice" issue another way:
While the HFEL divi income is way higher than that paid out by its peers [few pay out above 4%], the performance of it's share price over recent years has [reciprocally?] been well below the indices for Asian or Asian-Pacific income equities i've looked at.
Sure, much of this will be down to stock selection/weightings; the contribution of that 2.4% variance is i perceive [see below] to be modest.

I imagine the greater concern amongst HFEL investors is that their total return has been distinctly below par v its peer group over the past year; this underperformance being clear since July 2020.
Looking at 3 of the peer indices, over the past 12 months, the total return for HFEL is between 11 and 16% below them [so, that 2.4% variance is put into context].

Comparing with the one of these indices which is for HIGH dividend Asian income equities, HFEL total return is down about 5% since what was a high point about end Jan. 2020 [i.e. pre-pandemic] while that index is up, albeit a paltry 1%.
And it's not as if HFEL shares have suffered from a widening discount and the underlying NAV grown nicely.

Well, it concerns me as HFEL is actually the largest holding in my portfolio.

Obviously, growth stocks have been where to be over recent years and especially the past 18 months. The extent to which low discount rates have triumphed over their very high valuations wasn't something i had expected.
Meanwhile, the 'safe', "value" play on HFEL has only been rewarding in that there's been opportunity to add at low prices and very high income stream that comes with those.
To the extent the divis can grow sustainably at something close to inflation, guess this will pan out tolerably well over next few years.

2sporrans
02/9/2021
10:15
Delta waves of Covid now look like they might have peaked in Indonesia, Japan and South Korea. Maybe this accounts for NAV starting to creep up again. Australia is still rising, though. Is there only China left that has not had a major Delta wave?

Edit - It looks like Taiwan has also not yet had Delta.

aleman
01/9/2021
14:29
My trade at 303.22 in red was a buy so take it all trades at that price are buys?
dreno2
01/9/2021
10:36
small point - please don't slavishly follow the buy/sell analysis from Advfn. Not their fault, presumably, but the segregation of BUYS & SELLS is quite often (but not always!) erroneous & therefore misleading.
exel
31/8/2021
14:13
Post #810: "HFEL's portfolio generated an historic 4.8% divi. income at 30Jun21; hopefully growing to 5.2% a year hence."

The current annual dividend is 23.4p, which therefore constitutes a yield of 7.7% on the current Offer price of 301.5p.

masurenguy
27/8/2021
10:07
Thats really useful thanks.
tim 3
27/8/2021
09:51
On the underlying Dividend Yield generated by HFEL
x
From the last Edison note released on 23/7/21 that speedsgh recently posted and quoted from:



we find this fundamental metrics summary table:





So, HFEL's portfolio generated an historic 4.8% divi. income at 30Jun21; hopefully growing to 5.2% a year hence.

The Free Cash Flow yield [9.2%] suggests the cover is good enough, even for the 7.2% divi. payout HFEL was giving at end June. [bearing in mind some of the variance between the 4.8% and 7.2% was accounted for by option call underwriting fees: "Option premium income in H121 was also slightly ahead of H120, making up 11.4% of total income compared with 10.7% a year earlier." Also the gearing, if only around 4%, attributes a little.]
Indeed, if this FCF keeps up, the recent growth in the HFEL reserves can continue, if at a modest pace.

2sporrans
25/8/2021
09:51
Aleman

"4.5%? Can you elaborate? It seems too low."

I came across the figure when reading one of Mike Kerley's articles some months back.
It stuck with me.
Yes, it does look low, in relation to the HFEL dividend paid out.
Then again, the HFEL dividend has long been decidedly more generous than any offered by its peers, to my knowledge.

How many Asian income funds pay a dividend in excess of 4.5% now?

Also, how many of the HFEL constituents pay out divis significantly in excess of 5.5%, bearing in mind a few of the 'divi-growth' ones pay out under 3%; like Taiwan Semi. pays less than 2% now?

Thanks for the detailed explanation of how income funds use covered call writing to boost their income payouts. I had no idea it has been utilised to the extent BERI has. Like you say, best done 'playing the down-cycles', given the capital gain sacrifice when the calls get triggered; a lot during strong rallies/upsurges.

2sporrans
24/8/2021
21:16
Yes covered call option writing can be a useful source of additional income used to do it myself it is however no holy grail and limits your gains to the upside.
tim 3
24/8/2021
20:12
2sporrans
24 Aug '21 - 15:14 - 804 of 807
0 2 1
Thanks for posting the latest Edison take Speed.


"Option premium income in H121 was also slightly ahead of H120, making up 11.4% of total income compared with 10.7% a year earlier. "

From memory, the dividend income from underlying investments, is only about 4.5% for a share price of around 330p, ~7% divi yield out of HFEL. So, this options trading income explains a fair chunk of the balance.

4.5%? Can you elaborate? It seems too low. Investment income was £35m and option income £3.4m on investments valued at £424m at year end. Dividend was a little under £32m. I have to admit that I keep looking at their investments and wondering how they get income so high. But they've been doing it for years.

Writing covered calls is a common way for some income funds (and bigger private investors) to increase income. BERI do it a lot often approaching half income at times around the bottom of the economic cycle when some regular dividends get cut. Some investors there over the years have loved the bigger than sector income and then complained when its capital value did not follow it's sector upwards in upswings. Of course, their covered calls get crystallised when that happens, so much of the capital gain on some buoyant holdings then goes to the call holder and BERI then have to replace that income in a more expensive market. BERI did/do it a lot more than HFEL seems to do - maybe up to 3 or 4 times more. Presumably HFEL is boosting its income only modestly, and maybe risking only 1/4 or 1/3rd of the missed capital gain of sector rises that BERI has seen over the years.

(I've held BERI (BRCI as was) a few times. I recently sold above 100p as I felt new holders were chasing it too high as the sector did well and they hoped for a dividend rise and NAV gains but heavy call selling makes for a more stable income at the expense of giving up some gains in good times. Sure enough, BERI has underperformed and the shares fallen back a bit. Expect HFEL's income to be a bit higher and more stable than its sector but to underperform slightly in upswings - but to nothing like the degree BERI has done through its existence. I'm happy with that.)

aleman
24/8/2021
17:51
Benefiting from a rebound in the Far East overnight today.
tim 3
24/8/2021
14:36
Noting the comments on top holdings - thanks:

Earlier this year, M kerley decided to buy back into Chinese Banks - again, following an abandoned foray during 2020 - around Q3 from memory.
3 banks i think. 2 were top 10 holdings up until end of June this year.

So, at end of June, the largest HFEL holding was China Construction Bank with 4.8% weighting [rio 3.9%, BHP 3.8% next in line.] Also Bank of Communications with 2.9% weighting.

Come the end of July, nothing showed on those banks in the top 10 listing.
Hope the sale was as near end of june as possible; the banks fared badly during july.
All sold? Dunno, but strong hunch that's the case. The full listing dates way back, as ever. end of March still, when checked a few days ago.

There has been a portfolio shift from China into Taiwan - as Aleman's list picks up on - since end of June and note those banks replaced by Asustek Computer [3.87%] and CTBC Financial [4.04%]. Yet to evaluate these.

Taiwan has Covid well under control, as do the developed nations of East Asia generally....but i do worry about the Biden Admin. confrontation with PRC heating up.
Could easily show up badly in Taiwan's relations - trade - with the mainland.
At least the latest White house line is to not force the SE Asian nations to "take sides" between PRC and USA.
Maybe things can slowly calm down from here.
Bad news if they don't.

2sporrans
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