Wednesday, November 20, 2013

Thoughts on Nokia EGM

Yesterday I attended the extraordinary general meeting of Nokia corporation. It was my first general meeting of any kind. I attended because it was historical meeting and certainly very widely watched and reported one - at least in Finland where Nokia easily brakes the news barrier whatever it does.

As you may know by now, the Nokia EGM decided to confirm and approve the sale of substantially all of Nokia's Devices & Services business to Microsoft in line with the proposal and recommendation of the Nokia Board of Directors. 

More than 99 % of the votes cast at the EGM were in favor of this proposal. If I recall right, it was only some 8 million votes out of 1,7 billion that were supporting either dismissal or the alternative proposal that was made. Surprisingly many votes were disqualified or blank (some millions).

So no surprises there.

The level of Q&A was disappointing not because of answers provided (often by Chairman of the board of directors Risto Siilasmaa), but due to the questions and comments being made. Lots of commentary and opinions. Many of them unnecessary or outside of decision at hand. It took ages to go through the Q&A part, but apparently there was some kind of agreement to allow gross overruns of budgeted 2 minutes per question or comment. 

Good experience, but I think I'll continue skipping most of GMs.

Saturday, November 9, 2013

Changes in portfolio

I decided to let go of the following stocks:
  • Baidu
  • China Mobile
  • Sanofi

Dividends from China Mobile and Sanofi are being treated unfavourably by Finnish tax authorities in comparison to other foreign companies. Dividend from a company in Hong Kong (China Mobile) is treated as regular income and thus subject to much higher tax percentage than normal dividend or capital gain. Dividend from France (Sanofi) on the other hand is supposed to have zero withhelding by broker. Since my broker withhelds part of the dividend and this is not taken into account by Finnish tax authorities, I am being taxed partly twice.

As I was looking for passive ETFs where to put the money I came across an interesting ETF (PowerShares Golden Dragon China Portfolio; NYSE: PGJ) that had big exposure to Chinese technology companies like Baidu and also to China Mobile. Thus, I dediced to take the profits from Baidu which has risen nicely lately and spread also that money around more evenly. 
I don't like the big exposure to banking sector of ETFs like iShares China Large-Cap (NYSE: FXI). Nor I wanted to put all money from China Mobile and Baidu to PGJ so I selected another ETF to maintain our exposure to China. Guggenheim China Small Cap ETF (NYSE: HAO) invests into 241 companies like BYD which I had a direct investment in some time ago. Sector exposure is quite balanced (industrials 19%, consumer cyclical 17%, technology 14%, real estate 11%, basic materials 11%, consumer, non-cyclical 10%...).

To maintain some exposure to Telecommunications Service Providers beyond our position in TeliaSonera some our our money went to iShares Global Telecom ETF (NYSE: IXP). Three biggest holdings are AT&T, Vodafone and Verizon. Naturally China Mobile is within top 10 holdings as it is one of the biggest operators in the world by any measure.

From the pharmaceutical / healthcare sector I selected iShares Global Healthcare ETF (NYSE: IXJ). Sanofi is there within 10 largest holdings. Top 3 being Johnson & Johnson, Novartis and Pfizer.