BHG Retail REIT

Investors to SGX and new listings... we are no Stupid...

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

Yesterday (11th) DBS Bank, the underwriter, had to step in and buy 1.2373 million units at 80c to stabilize the price. Based on an announcement of 10th, support can continue for up to 30 days or the purchase of 24.6363 million units.

Be interesting to see what happens in early/mid January, when the support action runs out.

According to 'Today' the chairman of the trust manager said that:

'..investors in Singapore will probably appreciate the value of the REIT more than other places'. Which is one way of putting it. My opinion is that most investors in Singapore considered the IPO seriously over-priced, and as a result stayed away in droves.

The volume on Friday was 23.836 million, which means that normal buyers were willing to buy 22+ million units at 80 cents.
Quite surprising, considering the low yield.

So now the question in most minds is:

Who is buying them? Institutions or retailers? Surely they're aware of the risk involved.... price will trend down once stabilization end. Also, I/r starting to trend up. I thought one should 'short' indeed.

Really, cannot fathom this kind of market.

(12-12-2015, 06:28 PM)hh488 Wrote: So now the question in most minds is:  

Who is buying them?  Institutions or retailers?   Surely they're aware of the risk involved.... price will trend down once stabilization end.  Also, I/r starting to trend up.   I thought one should 'short' indeed.

Really, cannot fathom this kind of market.

Agree, particularly as most of the REITs on SGX have been on a strong down trend since the beginning of August 2016, with many down 10% to 25% since the start of the year (even more since April this year). The trend has been persistent, and has resulted in ballooning yields. In the context of increasingly higher yields on mature REITs that do not rely on the short term and artificial boost to yield seen in BHG, BHG looks less and less attractive.

Stabilizing action on Monday 14th involved buying 831,800 units:

http://infopub.sgx.com/FileOpen/BHG_Stab...eID=382344

That was out of a total daily turnover of 939,900 units, i.e. the stabilizing action involved over 88% of the day's turnover. Someone other than the stabilizing manager (DBS) bought some units at 80.5 cents (!)

Simply amazing!

Price never drop below IPO price.

No panic sellers?
Many more hungry buyers (those who can't get in at IPO)?

Look like this Reit cornered?

If there is a trade done, means someone is buying. THis guy either very rich and believes in BHG retail reit.

> DBS Bank, the underwriter, had to step in and buy 1.2373 million units at 80c to stabilize the price.

DBS is a big name underwriter. So to take this Action, I wonder what fees they charge to agree to buy this huge number of units.

Looking at the table of yields in SGX Reit data, this one sticks out like a sore thumb, with the lowest yield except for Saizen, which is a special case as it is subject to an offer. Based on the low yield, this is the highest rated Reit on SGX - for retail malls in China, where the stock market is having to be artificially propped up by the government.

All trades this year, and almost all since the Christmas break, have been due to the stabilizing manager stepping in to buy at 80c.

I am very tempted to short this stock as it has a support of 80 cents. Just curious is there any CFD platform that allows the shorting of BHG?

This is because i believe at the price of 80 cents, the price does not match the value proposition of BHG.