... cont'd

(My communication with Warren continued.)

Dear Warren,

I agree CKI is, at the moment, the least over-priced blue chip that pays a reasonable dividend. As discussed, the long term outlook of China Light seems not favorable, but I am not optimistic with the successor of Superman either. Seriously I have no ingenious advise, but my own practice now is to put half of my dividend generating portfolio for Link, and the other half for the Bank of China - until the latter decides to change its dividend policy, or I could find a reliable international cash cow selling at a reasonable price.

(For the latter point, I must confess I did have some hope on HKB until recently.)

Sincerely,

Szeto

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Thanks Szeto. Perhaps many people share your worries and that’s why 1038 remains cheap.

I did have serious consideration of 823. I have made numerous visits to its malls and car parks. While I agree that it is a reliable choice for dividend, I have doubts whether its dividend can be increased in the long run…… a good topic for discussion on the future of HK economy!

Are you talking about BOC or BOCHK? I sold BOC and switched to 939 and 2888 for the same reason but I guess 939/1398 won’t be immune from the policy risk of dividend cut.

I will consider buying back HSBC if its expected dividend rate rise back to 4%. As I have mentioned before, it is still worthwhile to invest on HSBC…… provided that the opportunity cost is low.

Warren