First REIT

(15-01-2015, 04:12 PM)zerobeta Wrote: just a question, I don’t understand why gearing can increase when you buy properties… if gearing is calculated as total debt over the value of investment properties, shouldn't the ratio go unchanged if you raise debts equal to the value of properties? you buy 10 mln properties with 10 mln debts, inv properties up by 10 mln, debts also up by 10 mln.... so net net no change in gearing...

then the rental yield is usually >10% while their financing cost is about 4-5% that gives them 5% excess return so acquisition with debt will most likely be yield accretive... is my thinking correct?

Property: $100 million
Debt: $30 million
Gearing: 30 / 100 = 30%

After acquiring an additional $10 million worth of properties with debt:

Property: $110 million
Debt: $40 million
Gearing: 40 / 110 = 36%

So gearing will increase. Typically, 100% debt financed acquisition should be accretive to distributable income.

i just realized my above question about gearing was quite embarrassing...

I think the market is buying too much on the idea of growing healthcare sector in Indonesia... Siloam Hospitals are targeted for middle to upper society... these people already spend a lot on their health... Indonesia's low healthcare spending per capita is due to the millions of poor people who can't even afford a basic living... so when Indonesia accelerates its insurance program/healthcare spending, it's these poor people who will contribute the most and where will they go? of course not Siloam Hospitals, but the public/ cheaper hospitals....

Moreover the sell side report is being very generous on the discount rate they use... 6-7% cost of equity for an Indonesia-based operation is way too low... they are assuming no FX risk as well which is incorrect as the hospital operators still receive their income in IDR...

I think at current price, it has already factored in all the growth potential and the rosy pictures that may happen... upside potential is limited but downside risk is huge...

One of the directors, Mr Cheok, bought 100,000 shares at S$1.31825.
http://infopub.sgx.com/FileOpen/_eFORM1V...eID=333298

This is one of best performing reit. But the prices are at all time high! So, I have done a quick analysis to see if I should sell. Check it out here:

http://wealthdirections.asia/first-reit-...o-say-bye/

Hopefully STI pulls the REIT down a little for us to buy some into it.

http://www.sharesinv.com/articles/2015/0...care-play/

First REIT reacted badly this week to news that Lippo group were planning moving the listing of First REIT and Lippo Malls REIT to Indonesia from Singapore.

http://www.straitstimes.com/business/lip...-Indonesia

However, the REIT manager, Bowsprit Capital say they are not aware of any such plans:

http://infopub.sgx.com/FileOpen/First%20...eID=375486

(31-10-2015, 06:07 AM)Dosser Wrote: First REIT reacted badly this week to news that Lippo group were planning moving the listing of First REIT and Lippo Malls REIT to Indonesia from Singapore.

http://www.straitstimes.com/business/lip...-Indonesia

However, the REIT manager, Bowsprit Capital say they are not aware of any such plans:

http://infopub.sgx.com/FileOpen/First%20...eID=375486

Do anyone know how the two REITs to be moved? Lippo to buyout and delist from sgx then relist in indon? Or do a dual listing and make Singapore secondary and eventually delist from sgx?

According to SGX rulebook:

[*]1307

The Exchange may agree to an application by an issuer to delist from the Exchange if:—
(1) the issuer convenes a general meeting to obtain shareholder approval for the delisting;
(2) the resolution to delist the issuer has been approved by a majority of at least 75% of the total number of issued shares excluding treasury shares held by the shareholders present and voting, on a poll, either in person or by proxy at the meeting (the issuer's directors and controlling shareholder need not abstain from voting on the resolution); and
(3) the resolution has not been voted against by 10% or more of the total number of issued shares excluding treasury shares held by the shareholders present and voting, on a poll, either in person or by proxy at the meeting.

SGX rulebook

even though last thur and fri got spike in their trading volume, but still have much to consider at this point
http://sdb.theedgemarkets.com/2015/SMR/S...k42xxv.pdf

http://infopub.sgx.com/Apps?A=COW_CorpAn...019Nov.pdf