Lippo Malls REIT (LMIR)

[butcher]

Just curious to know if LMIRT hedged its IDR income? (No vested interests)

[SpeedingBullet]

Just curious to know if LMIRT hedged its IDR income?  (No vested interests)

Yes they have, close to 90% of income is hedged. The contracts expire end of 2016.

[punklitez]

Just curious to know if LMIRT hedged its IDR income?  (No vested interests)

Yes they have, close to 90% of income is hedged. The contracts expire end of 2016.

Hi SpeedingBullet, I read from an analyst report that 90% is their target. Have they already done the hedging? And if so, do you know the rates and the type of instruments used?

Thanks

[tanjm]

Just curious to know if LMIRT hedged its IDR income?  (No vested interests)

Yes they have, close to 90% of income is hedged. The contracts expire end of 2016.

Hi SpeedingBullet, I read from an analyst report that 90% is their target. Have they already done the hedging? And if so, do you know the rates and the type of instruments used?

Thanks

There's no point to hedge your next dividend or even your next few dividends. When it comes time to roll over your hedges, you are still stuck with the prevailing FX at the time of the roll. At most, you'd have smoothed out the FX fluctuations.

Most of your FX risk is either in the NAV or in the long term cashflows (not just the next 1,2 or 3). LMR (and others doing similar "hedges") should leave any FX hedging or risk to its shareholders unless they intend to really hedge (e.g. enter into a long dated cross currency swap). Anything less is window dressing.

[stam]

is country risk of this counter high?

[fundamentalman]

is country risk of this counter high?

political situation has stabilised in indonesia in the past few years. The riot in 1998 was pretty bad (lots of properties got burned by mobs). Chances of that happening again, I would say, is still quite high in the future, given the low income of its population. Hungry people are angry people.

Don't forget the currency risk too. Indonesia runs persistent current account deficit since 2012 due to commodity price crash. The currency depreciates vs strong currencies (e.g. sgd, usd, jpy, euro) in the long run.

[ksir]

is country risk of this counter high?

political situation has stabilised in indonesia in the past few years. The riot in 1998 was pretty bad (lots of properties got burned by mobs). Chances of that happening again, I would say, is still quite high in the future, given the low income of its population. Hungry people are angry people.

Don't forget the currency risk too. Indonesia runs persistent current account deficit since 2012 due to commodity price crash. The currency depreciates vs strong currencies (e.g. sgd, usd, jpy, euro) in the long run.

Based on my several years investing in Indo market and hence research on the grounds (yeah i paid visit occasionally to malls when i visited Indo).

My assessment is that the risk is alot more on the integrity of the Management (not shareholders friendly) and not so much of the Country risk.

<small stake in Lippo's higher holding company - Lippo Insurance>

[specuvestor]

Lippo's integrity is well known. Even Ananda is no exception.

To be fair I think Indonesia country risk came down a lot during SBY's tenor.

[ksir]

Lippo's integrity is well known. Even Ananda is no exception.

To be fair I think Indonesia country risk came down a lot during SBY's tenor.

Indeed, although he is commonly known as do-nothing or sit-on-his-hand president. Amid spreading and deeper corruption & cronies culture during his terms, the stability and democracy are underrated.

The relative smoothness of his coming down and handling over to current president is not well appreciated.

It took a lot of mos for me to invest in Lippo Insurance (which is holding big stakes in First reit, lippo karawaci - lippo major holding co etc).

The investment portfolio itself is 50% more than market cap.
So talking about integrity, that is as much as i am willing to bet on them.

[laksaman57]

Slow and steady breaking new high 😆