Thanks to d.o.g for another piece of quality (but free!!) advice.
Consider all other factors like stock allocation % or transaction fees as absent, another litmus test to decide whether to take up the scrip dividend, is to simply ask oneself whether will you use your EXISTING cash hoard to make the purchase of the stock at the scrip issue price? If the answer is not a definitive YES, then the answer is very clear - Take the cash!
(23-04-2012, 10:57 PM)weijian Wrote: Thanks to d.o.g for another piece of quality (but free!!) advice.
Consider all other factors like stock allocation % or transaction fees as absent, another litmus test to decide whether to take up the scrip dividend, is to simply ask oneself whether will you use your EXISTING cash hoard to make the purchase of the stock at the scrip issue price? If the answer is not a definitive YES, then the answer is very clear - Take the cash!
To me the action is neither. You should sell the mother share if you don't think the share is worth purchasing.
(23-04-2012, 11:01 PM)Jacmar Wrote: To me the action is neither. You should sell the mother share if you don't think the share is worth purchasing.
not vested
Subscribing for scrip is just similar to buying on the open market - A good company just may not have the margin of safety in the scrip price - Price is what you pay.
(23-04-2012, 11:01 PM)Jacmar Wrote: To me the action is neither. You should sell the mother share if you don't think the share is worth purchasing.
There's a big difference between 'Worth Purchasing' and 'Worth Purchasing More' eg. via DRP.
In my case, having evaluated the risk-rewards for AIMSAMP, I'm willing to take only a smaller risk, say, max. 5% of my portfolio. So, I'd unlikely want to subscribe for more via DRP (or open market purchase), besides other reasons cited earlier.
My action of not taking up the DRP doesn't mean it's not 'Worth Purchasing'. Rather, it's not 'Worth Purchasing More' based on my own risk profile. So, there's no need to sell the mother share unless the DRP discount is huge enough to do a mini-arbitrage ie. Sell Mother Share, Buy via DRP. But, the discount is typically not attractive enough and/or my total Qty (of DRP) not large enough to do that.
Talking about AIMSAMP, the recent BT interview with their new Chairman has lowered my 'alert' status one notch. Extracts,
AIMS AMP Capital Industrial Reit intends to "sweat" its assets over the next few years by raising the overall quality of its portfolio to provide better returns for its shareholders, said Andrew Bird, director of AMP Capital's property and management business.
With more than 20 per cent of its current portfolio in Singapore undergoing asset enhancements, the industrial real estate investment trust (Reit) intends to focus on improving the quality of its overall assets this year, instead of acquiring new properties.
In particular, Mr Bird, who was also newly appointed as chairman of the board of AIMS AMP Capital Industrial Reit Management (the Reit's manager) yesterday, said that with the completion of the group's $155 million development at 20 Gul Way later this year, the Reit's portfolio – comprising mainly warehouse and logistics assets – which currently stands at around $940 million, is expected to cross the $1 billion mark.
ie. Chances of Rights Issues is low for this year.
i don't think you can safely say that chances of rights issue is low.
the more the ceo/chairman tries to promote his reit, the more i would suspect that he is doing it to raise the share price and issue rights later.
happens all the time...
(24-04-2012, 04:53 PM)wozhaodaole Wrote: i don't think you can safely say that chances of rights issue is low.
the more the ceo/chairman tries to promote his reit, the more i would suspect that he is doing it to raise the share price and issue rights later.
happens all the time...
IMO, the real reason is the current Yield = 9%+ is too high and doing any Rights Issues / Placements is going to be Value Destructive (bad PR, assuming they care) to existing shareholders. Still, good enough for me to hear that from the horse's mouth (assuming not misquoted by BT) so I can lower my 'Alert' status by one notch, for this year.
The FY2012 annual report is very comprehensive and contains a lot of useful information. Another source of information is the reserach report issued by S&P on 20 July 12.
I am not familair with Reits and has not owned any. However, I decided to to dwell into this one in search for some high yield stocks for my portfolio. At present, the only high yield stock in my portfolio is NeraTel. Other stocks in my portfolio are mostly growth stocks that provide reasonable yield of 3% to 6%.
1QFY13 DPU is 2.5cents; if i annulaize it, it will be 10cents. Based on the last closing price of $1.265, the extrapolated yield is 7.9%. Of course the yield will be affected by a number of factors:
+ lease renewal -- the manager strives to improve return by converting master leases to multi-tenancy leases – 6 properties will be converted to multi-tenancy in FY2013
+ occupancy rate -- It is already quite high at 99.1% occupancy rate
+ Redevelopment to fully utilize the plot ratio -- The manager estimates 50 percent of the portfolio has underutilised plot ratio that could be developed. At present, 10 Gul Way is being re-developed. It will be fully leased to CWT after the redevelopment in December 2013. This will result in an increase of 1.465 cents DU per share per annum.
+ Re-financing - It has issued $100M 4.9% fixed-rate notes due 2016. I have yet to analyze the interest rates of its existing loans and their expiry dates to fully assess whether this will have a positive or negative impact to the earning.
My preliminary research shows that this is NOT a compelling buy for myself at the present price; however, it will remain in my watch list. I welcome comments and views from other forumers.
18-04-2013, 03:34 PM (This post was last modified: 18-04-2013, 03:35 PM by a74henry.)
Private placement of units at $1.60 oversubscribed 3.5x. Issued more units to raise more funds. This is positive for AIMS AMP as it does not need to go to its existing shareholders for funds and serves as a war chest for acquisition should opportunity arise.
As its fund raising is above its NAV, this is positive for unitholders who bought these units below $1.60.
Going forward, DPU may be lower as its distributions are spread over more units unless its earnings can be raised significantly from rental reversions, etc.
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