Global Logistic Properties (GLP)

kazukirai Wrote:Also, if so many of us retail investors are seeing the GLP IPO as a bad investment, then who's going to subscribe to it? Or will the greater fool theory prevail once again?

The readers of this forum are a very small percentage of the investor population at large. The majority of the individual investors who see the advertisements are highly likely to subscribe out of (i) greed and (ii) blind faith in the "gahmen".

And I am sure there are investors out there who are trying to stag this.

i tikam on the basis of pure mass psychological mayhem.

(14-10-2010, 11:36 AM)d.o.g. Wrote: The readers of this forum are a very small percentage of the investor population at large. The majority of the individual investors who see the advertisements are highly likely to subscribe out of (i) greed and (ii) blind faith in the "gahmen".
And I am sure there are investors out there who are trying to stag this.

most of my friends/colleagues are shunning the GLP but they applied for the Maple's..1 of my chinese friend had an interesting idea, he suggests one can collect the 2 thick heavy ipo prospectus from the booths and make some scrap paper value instant profit by selling it to garang guni..;p

Reminds me of 2006 all over again.......

Oct 16, 2010
Demand hot for Global Logistic IPO
96% of retail investors who applied allocated shares by ballot
By Gabriel Chen

ONE of Singapore's biggest ever public share floats has attracted huge interest from small investors, with over $2.2 billion chasing the shares worth $200 million reserved for retail investors.

The red-hot response to the initial public offering (IPO) for Global Logistic Properties (GLP) sets up a sizzling trading debut for the counter on the Singapore Exchange (SGX) on Monday.

The lion's share of this IPO went to institutional players and other larger investors, but 102 million shares were made available to retail investors.

At $1.96 a pop, when applications closed on Thursday, 88,393 retail investors had put in an application. Of this number, practically all investors got a bite of the cherry with a 96 per cent success rate, GLP said last night.

But even the successful ones had to ballot for their shares and they got far fewer than what they were hoping for. For those who applied for between one and 19 lots, they were allocated only one lot or 1,000 shares. Those who applied for between 20 and 49 lots got only two lots. And for those who opted for 50 to 99 lots, a paltry three lots was the result.

Many retail investors went to the ATMs yesterday evening to check if their money had been refunded into their bank accounts since they will not officially be informed until next week.

A disappointed Mr C.P. Tan found that he had ended up empty-handed even though he had applied for 10 lots.

'If it rose a lot on the first day of trading, I would have sold it,' he said.

Before the offer had closed, market watchers had expected a strong response. 'We had a lot of inquiries from our clients on this issue and there was generally good demand,' said Mr Loh Hoon Sun, managing director of Phillip Securities.

Mr Ding Hock Chai, Kim Eng's co-head of corporate finance, added: 'As laymen say, very hot, very hot.'

With a subscription rate of 11 times for the retail part of the offer, GLP gained a stronger response compared with the previous large IPO in November last year, when CapitaMalls Asia received just under $1 billion worth of retail money for about $200 million worth of shares, giving that a five times subscription rate.

With an overall subscription rate of 12 times for the entire IPO, market observers said that this was a well-received offer, given the huge size of the listing.

Investors said that they want a slice of GLP because it is a major player in the fast-growing modern logistics facilities market in China and Japan.

And with banks offering unappealing rock-bottom deposit rates, GLP is extremely attractive given that it is a unit of the Government of Singapore Investment Corporation (GIC) with a strong potential for capital returns.

Investors said they are aware GLP does not guarantee dividends, but that GLP shares still appeal to them anyway.

'Well, it's a government-linked IPO, so I feel that the opportunity for price appreciation is very strong,' said Mr M. Mohan, a 45-year-old real estate agent.

GLP states in its prospectus that 'we cannot assure you that our company will declare or pay any dividends'.

Parties who invested in GLP include China's National Council for Social Security Fund, e-commerce firm Alibaba Group, and Singapore's former 'remisier king' Peter Lim who has been in the news for his bid to buy Liverpool Football Club.

NetResearch Asia's executive chairman Kevin Scully expects the stock to rise by about 5 per cent to 10 per cent on Monday when trading starts, and then to stay at that level for the first month. This means GLP could jump to as high as $2.15 on its debut.

'How it performs after that will be based on fundamentals and market sentiment,' Mr Scully said.

GLP's prospectus highlights potential downsides from the concentration of all its assets in China and Japan.

GLP's IPO hits the market within days of another mega IPO, that of Temasek Holdings-linked Mapletree Industrial Trust's IPO, which begins trading next Thursday.

'The IPO fever has just staged a comeback. It's still early stages and there is much more to come,' said APS chief investment officer Wong Kok Hoi.

GLP is Singapore's largest IPO since SingTel went public in 1993 and will be among the top 30 SGX listed companies by market value after it lists.

gabrielc@sph.com.sg

rise 10%??? With punters added into the frenzy, I thought 20% will be more like it.

不 stag 白不 stag.

Hehe.. I checked the meaning of stag online..
# (n.) A castrated bull; -- called also bull stag, and bull seg. See the Note under Ox.
# (n.) The male of certain other species of large deer.
# (n.) The adult male of the red deer (Cervus elaphus), a large European species closely related to the American elk, or wapiti.
# (n.) One who applies for the allotment of shares in new projects, with a view to sell immediately at a premium, and not to hold the stock.
# (v. i.) To act as a "stag", or irregular dealer in stocks.
# (n.) An outside irregular dealer in stocks, who is not a member of the exchange.
# (n.) A colt, or filly; also, a romping girl.
# (v. t.) To watch; to dog, or keep track of.
# (n.) The European wren.

waos... everything also very hot vert hot... avoid!! :O

For those who got alloted 1 lot, they will need to make at least S$27 to just break even (brokerage of $25 + $2 application fee). This means they need at least a 27% rise in the price of GLP (27c) on the first day of trade, or a market price of at least $2.23 ($1.96 + 27c). And we're only talking about breaking even! Even if GLP rises to $2.50 and these people "stag" it, they only make about $27 which is about enough to buy you a nice meal in a mid-range restaurant.

Assuming you get alloted 2 lots, you'd need a 13.5% gain to break even, and for those who got 3 lots (you'd need to apply for 99 lots!), you need a 9c rise in the market price to at least $2.05 to break even.

All this effort for so little realized gains. Is it worth it?

Well, perhaps that is why Mapletree Industrial is more attractive?
It is a REIT..

7% annual returns..
Can just apply and hold for dividends...
1 lot also nevermind...

Better for long term holding..

Anyway, I just applied 10 lots for MIT instead of GLP..

Just sharing an article posted on the CNA Forum


(quote)

Saturday, October 2, 2010

Global Logistics Properties and MapleTree Industrial Trust do not look that great

I guess most people are talking about the upcoming IPOs by GIC (Global Logistics Properties) and MapleTree (MapleTree Industrial Trust). However, I am unsure why the choice was made to launch these 2 IPOs because based on their prospectus, the offers do not look appealing at all.

One thing for investors to note about the Global Logistics Properties (GLP) is that it is not a REIT. You're investing in a company that invests in/build logistic properties, that does not have any dividend policy. In fact based on the wording, I have the impression that there will not be any dividends issued because the funds will be mostly used to fund acquisitions in China. Personally, I feel that there are other better companies to invest in, especially of the fact that GLP's properties are all concentrated in China and Japan.

What that was shocking to me is that according to the prospectus, investors subscribing for and/or purchasing the Offering Shares at the Offering Price will experience an immediate dilution in net asset value ("NAV") per Share immediately after the completion of the Offering. The dilution percentage is approximately 29.2%.

Seriously, this is the first IPO I've seen in the last 5 years that will suffer an immediate NAV dilution upon completion of the IPO. Is that good? Not to me.


Next one I thought that I might consider is MapleTree Industrial Trust. This is a Singapore REIT consisting of industrial properties that MapleTree has acquired from JTC. Although the Sponsor is MapleTree, it is stated specifically that MapleTree Business Centre and Comtech will be excluded from the first right of refusal by the Sponsor over future sales of industrial properties by the Sponsor or any of its wholly-owned subsidiaries. Seriously though, I'm more interested in the MapleTree Business Centre than the other properties that are in the REIT.

One thing I also had an issue with was that out of the ~$1.1billion that is raised, only 183million will be used for the acquisition of the 6 properties held by MapleTree Singapore Industrial Trust (MSIT). The majority of the proceeds will be instead used for:

* payment of the MIT Private Trust Distribution to the Existing MIT Unitholders;
* partial redemption of the MIT Private Trust Units; and
* repayment of S$977.8 million of MIT's existing debt.


In fact, the majority of the proceeds will be used to repay MIT's existing debt. If the issue price is higher than expected, more payment will instead be given to the MIT Private Trust Distribution. I would have very much preferred that the extra amount raised will be put into working capital, which is not the case. This IPO to me seems to be an avenue for MapleTree to get a new debt facility. Furthermore, the REIT managers are the same as MapleTreeLog. Their track record isn't that great to me and they did commit a mistake initially that pushed the gearing of MapleTreeLog quite high just before the great recession.

All in all, my take is that both of these IPOs can be given a miss and will most probably drop below IPO price after 6 months. I do not see how the use of the proceeds of the IPO can aid the companies to grow post-IPO.


http://chantc.blogspot.com/2010/10/globa...s-and.html

(Unquote)

We all know 'tikum tikum' is a silly activity, where the winnings - whether or not one wins, and the size of one's winning - are based on pure chance. When I was a kid, I used to spend my school pocket money on 'tikum tikum' and lost them all.

For a 'hot' IPO like GLP which has attracted many to stag in a frenzy, the probability of GLP's share price going above $1.96 on opening day (next Monday) and a few more days that follow is higher than 0.5 (or 50%). And this will attract more speculators to buy and trade on the stock for a quick gain. At the same time, those who have secured allocations in the IPO - especially the big boys - will be happy sellers for a quick profit. Depending on the overall market sentiment and trading strategies of the professional operators and hedge funds working on GLP as a trading stock, a trading frenzy can last for sometime, before all involved in trading GLP have enough of it or have come to their right senses eventually.

I believe there is a good likelihood that GLP may go below its IPO offer price of $1.96 eventually, and I am quite sure at a certain price level, there will be hedge funds shorting GLP.

Let the party begins come Monday, and I shall be just watching it outside the ring with amusement!