Croesus Retail Trust

Saizen already become the victim of weakening Yen, will Croesus be exempted from this?


(Not Vested)

(10-05-2013, 05:49 PM)desmondxyz Wrote: Saizen already become the victim of weakening Yen, will Croesus be exempted from this?


(Not Vested)

Many people cannot get, try to talk this one down. But reality is that bank interest is near 0, so everyone is forced to chase after yields or watch their money shrinking by the day, so guess what happen when you have an IPO offering 8% yield?

Friday, May 10, 2013
Croesus Retail Trust up 23%!
News:

SINGAPORE — Croesus Retail Trust, which holds shopping malls in Japan, climbed 23.1 per cent over its initial public offering price on its first day of trading as investors turn to higher-yielding assets.

The shares closed at S$1.145, from the 93 Singapore cents offer price, and were the second-most-traded counter, with about 138 million units changing hands. They started trading at 2pm.
Croesus Retail is backed by Japan’s Daiwa House Industry and Marubeni Corp, which have contributed assets to the trust.

“This type of yield is very attractive in this environment,” said UOB Kay Hian analyst Vikrant Pandey. “There is some interest from the Japanese side as well, so vehicles that have exposure to Japan are also in favour.”

The trust opened strongly at S$1.12, a 20.4-per-cent premium to its offer price, and reached an intra-day high of S$1.18.

The IPO with gross proceeds of about S$395 million is Singapore’s second largest this year, after Mapletree Investments’ US$1.3-billion (S$1.6-billion) March offering for a China-focused real-estate investment trust. Croesus — whose holdings were valued at about ¥52.5 billion (S$640 million) as of March — offered 21.5 million shares to the public in Singapore, out of a total of 229 million shares, and the public offering was 48.8 times oversubscribed, it said.

The firm’s portfolio is concentrated in Japan, but it plans to invest in other parts of the Asia-Pacific region. Proceeds from the offering are earmarked to finance the acquisition of properties as well as working capital and future capital expenditure. AGENCIES

View:

As said in my previous 2 post, yield hungry investors scoop up CRT for its 8% yield. At the current price the yield has fallen to 6.5%, which is in line with what investors are getting from other reits. Like I mentioned before, CRT is a good short term play but a bad long term hold, we shall see in a couple of years time.

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http://www.todayonline.com/business/croe...ding-debut

(10-05-2013, 11:32 PM)MINX Wrote:

(10-05-2013, 05:49 PM)desmondxyz Wrote: Saizen already become the victim of weakening Yen, will Croesus be exempted from this?


(Not Vested)

Many people cannot get, try to talk this one down. But reality is that bank interest is near 0, so everyone is forced to chase after yields or watch their money shrinking by the day, so guess what happen when you have an IPO offering 8% yield?

My humble advice is dun gauge your skills / judgements in investing by just looking at current performance. Unless you are a trader. The truth is it is quite meaningless. I think the mindset that because of the strong one day performance ( many more days of running up still possible, I admits) , u brush aside all very insightful anaylsis of the business as highly dangerous.

MHOO

yeah, as value investors we must see long term~ ^^

(11-05-2013, 09:27 AM)Greenrookie Wrote:

(10-05-2013, 11:32 PM)MINX Wrote:

(10-05-2013, 05:49 PM)desmondxyz Wrote: Saizen already become the victim of weakening Yen, will Croesus be exempted from this?


(Not Vested)

Many people cannot get, try to talk this one down. But reality is that bank interest is near 0, so everyone is forced to chase after yields or watch their money shrinking by the day, so guess what happen when you have an IPO offering 8% yield?

My humble advice is dun gauge your skills / judgements in investing by just looking at current performance. Unless you are a trader. The truth is it is quite meaningless. I think the mindset that because of the strong one day performance ( many more days of running up still possible, I admits) , u brush aside all very insightful anaylsis of the business as highly dangerous.

MHOO

Fully agree with 'Greenrookie'.

Further, I don't see *quote* "Many people cannot get, try to talk this one down." *unquote* kind of posts in this forum. What I do see are posts pointing out red flags and supporting it with facts and figures, most of which were posted before balloting results were announced.

In times like now, it's kind of sad to see FA "failing" as many listco with poor fundamentals seemingly defying the laws of gravity as prices shoot for the sky... But, it's times like these that are the most dangerous as it makes many think money is easy to be made in stocks - anyhow whack, the more you put in, the more you'll make, to heck with fundamentals.

A last word of caution here (don't want to be called a party-pooper) for those newly minted gurus. Just make sure you're playing (you probably think it's investing) with money you can afford to lose. The party is not gonna last forever. Is it possible for Cinderella to leave the ball before MN when she's so busy enjoy herself? Worst still, she can't even see any physical clock...

For the record, I didn't apply for this IPO. Neither did I apply for the high yield IPOs of MGCT & Religare, all of which are trading above IPO price right now. Very funny (stupid?) for someone who loves a good tikam...

(11-05-2013, 09:27 AM)Greenrookie Wrote: My humble advice is dun gauge your skills / judgements in investing by just looking at current performance. Unless you are a trader. The truth is it is quite meaningless. I think the mindset that because of the strong one day performance ( many more days of running up still possible, I admits) , u brush aside all very insightful anaylsis of the business as highly dangerous.

MHOO

Haha, well said. During every bull market, there will be a group of people who mistake a bull market for brains; and therefore feel that they have the Midas Touch - literally everything you touch turns to gold, stuff you buy goes up 20%-30% within a few months (or even weeks).

This breeds a new batch of "geniuses" who probably feel that doing research and focusing on margin of safety is simply a waste of time. As other forumers have correctly observed, new investors who are minting it at the moment either have no concept of risk/reward, or are blissfully ignoring it and indulging in the moment.

As prudent investors, we should always watch our downside and ensure we do not overpay for investments. I am glad there are forumers who continue to focus on the facts/figures and pepper their analysis with good insight!

(11-05-2013, 10:12 AM)KopiKat Wrote: Very funny (stupid?) for someone who loves a good tikam...

What you modestly call a tikam is actually a value arbitrage with margin of safety. I wrongly referred to it as yield arbitrage previously but realised my error after reading the book you recommended.

Back to Croesus, extract from Wall St Journal article:
Croesus Draws Yield, Japan Investors For Singapore IPO Debut

Quote:But not everyone is bullish on the listing. Tim Gibson, head on property equities in Asia for Henderson Global Investors, says he isn’t buying the stock, viewing it as too “financially engineered” with a somewhat risky structure.

“The music is clearly playing for yielding assets as this is a classic carry trade, with low debt costs and high yielding assets,” said Mr. Gibson, whose firm has GBP65.6 billion under management, and isn’t planning to buy Croesus units. But he adds, “if we look at similar deals across the world in the past, over the long run, these strategies have tended to come unstuck, so investors should exercise caution.”

(11-05-2013, 10:12 AM)KopiKat Wrote:

(11-05-2013, 09:27 AM)Greenrookie Wrote:

(10-05-2013, 11:32 PM)MINX Wrote:

(10-05-2013, 05:49 PM)desmondxyz Wrote: Saizen already become the victim of weakening Yen, will Croesus be exempted from this?


(Not Vested)

Many people cannot get, try to talk this one down. But reality is that bank interest is near 0, so everyone is forced to chase after yields or watch their money shrinking by the day, so guess what happen when you have an IPO offering 8% yield?

My humble advice is dun gauge your skills / judgements in investing by just looking at current performance. Unless you are a trader. The truth is it is quite meaningless. I think the mindset that because of the strong one day performance ( many more days of running up still possible, I admits) , u brush aside all very insightful anaylsis of the business as highly dangerous.

MHOO

Fully agree with 'Greenrookie'.

Further, I don't see *quote* "Many people cannot get, try to talk this one down." *unquote* kind of posts in this forum. What I do see are posts pointing out red flags and supporting it with facts and figures, most of which were posted before balloting results were announced.

In times like now, it's kind of sad to see FA "failing" as many listco with poor fundamentals seemingly defying the laws of gravity as prices shoot for the sky... But, it's times like these that are the most dangerous as it makes many think money is easy to be made in stocks - anyhow whack, the more you put in, the more you'll make, to heck with fundamentals.

A last word of caution here (don't want to be called a party-pooper) for those newly minted gurus. Just make sure you're playing (you probably think it's investing) with money you can afford to lose. The party is not gonna last forever. Is it possible for Cinderella to leave the ball before MN when she's so busy enjoy herself? Worst still, she can't even see any physical clock...

For the record, I didn't apply for this IPO. Neither did I apply for the high yield IPOs of MGCT & Religare, all of which are trading above IPO price right now. Very funny (stupid?) for someone who loves a good tikam...

I agree that one should not get carried away and ignore all the risks. But if you want to make some money, you need to take on some risks, at the end of the day, if you are comfortable with the risk reward, then you buy. I believe many would be more than happy even with 6% yield, compared to the 4+ % yield from the Sriets now or the < 1% FD rate, hence I believe CRT's share price still have room to run.

(11-05-2013, 12:29 PM)swakoo Wrote: What you modestly call a tikam is actually a value arbitrage with margin of safety. I wrongly referred to it as yield arbitrage previously but realised my error after reading the book you recommended.

For me, the sudden realisation was that we were happily employing a crude and tiny subset of his bigger repertoire of "tricks"!

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MINX Wrote:I agree that one should not get carried away and ignore all the risks. But if you want to make some money, you need to take on some risks, at the end of the day, if you are comfortable with the risk reward, then you buy. I believe many would be more than happy even with 6% yield, compared to the 4+ % yield from the Sriets now or the < 1% FD rate, hence I believe CRT's share price still have room to run.

Was it Warren Buffett who says that "The greatest risk comes from ignorance" ? You're using only Yield as your only/main screen?? I used to be overly focussed on Yield as the key screen prior to the '08 major correction. Some of the High Yield stocks (8% to 10%) I happily accumulated were FSL, Rickmers & MPS. Although I did get to enjoy the high yield for a few quarters and did see some Capital Gains (mostly unrealised) for a while, all of them dropped and never recovered from the '08 market correction. They never really recovered and dropped even further during the next market correction in '11. Along the way, Dividend payout was slashed and some even stopped. By the time I sold, I could only roughly recover back 10% to 20% of my original amount, even after factoring in the high Yield collected in the 1st few periods...

Even for REITs, I had Allco (now FCOT), MIREIT (now AIMSAMPReit), Cambridge,... (all of them were amongst the highest yielding REITs) which dropped to a fraction of my original purchase price during the same period...

The key lesson I'd learnt from this painful (and stressful) episode was that Yield should not be used as the main deciding factor in any investment decision. Rather, look at the fundamentals first...

<Refer to the quoted article posted by 'swakoo' below>

Quote:“The music is clearly playing for yielding assets as this is a classic carry trade, with low debt costs and high yielding assets,” said Mr. Gibson, whose firm has GBP65.6 billion under management, and isn’t planning to buy Croesus units. But he adds, “if we look at similar deals across the world in the past, over the long run, these strategies have tended to come unstuck, so investors should exercise caution.”

I have no doubts that many of the recent High Yield IPOs will continue to do well for a long while more and make people like me look stupid. But, who cares... As long as I sleep well... There're always many other safer tikam opportunities out there... Those I won't lose sleep even if I have to hold long term...

Good Luck!