I think what monkeyking said is to give it for FREE. Since the profit for each unit has been diluted because of increment of units, the company suppose to give for free to existing holders such as free BI or RI offers to shareholders on good performing ordinary stocks.

And ya, I also quite piss off as so far I see ALL reits don't give free gifts to shareholders.

This post has been edited by yok70: Sep 8 2010, 12:49 PM

Cheers guys, I think I've used the word FREE inaccurately. Sorry.

What I actually mean was, when a company wants to increase their capital, they sometimes do BI. And when they increase unit of shares to increase capital, existing shareholder's shares will be diluted. And how they treat shareholders fairly is that they offer the same amount of extra units to the shareholders. ie. 1 on 1 BI ends up shareholders holding double of shares they used to have, so that the dilution of EPS does not affects their total profit from the shares they own.

Now comes to the case of REITs. When they increase capital, they DON'T offer BI. So the EPS of existing shareholders' shares becomes diluted immediately. Of course, the new assets may provide more profit in the future, but at the moment, they may not too. For non-Reit companies, after they increase capital, they also use those extra capital to gain more income in the future too. But at the moment, they offer BI to their shareholders so that the profit of their owning shares remains the same.

I hope this explanation is clear enough.
Cheers.

ps: I used the word "FREE" because in chinese, they wrote something like this:
手套股建議以1送1比例派送1億5986萬6976紅股。
"送" in English is "free gift".

This post has been edited by yok70: Sep 10 2010, 08:17 PM

Please correct me if I was wrong.

ie.

Before BI:
par value: 1.00
share issued: 10 million
share price: 3.00
market cap: 30 million
eps: 0.10
cash: 15 million

After BI of 1 on 1:
par value: 1.00
share issued: 20 million
share price: 1.50
market cap: 30 million
eps: 0.05
cash: 15 million - 10 million (the increase shares) * 1.00 (par value of 1.00) = 5 million.


Is the above correct? Especially the cash part.

Another question is,
If X = share issued * share price,
what do we call this X?

Thank you!


This post has been edited by yok70: Sep 12 2010, 01:01 AM

Thanks Cherroy!

Please allow me for further exploration on this.

1. So BI's expenses derive from retained profit, the same case as when offering cash dividend?

2. When BI time, the company need to pay for per par value(1.00 in my example) or market value(1.50 in my example)?

3. In Balance Sheet, the retained profit does not sit under Cash column?

4. When a company IPO, is it possible that not all shares were purchased by investors? If that happened, what will happened to the rest of the shares?


Thank you!

This post has been edited by yok70: Sep 13 2010, 02:28 PM

what that means? mind tell more? thanks!

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Added on September 14, 2010, 9:58 pmHere's a reit website that you can look into their financial reports and properties own through links from there.
http://mreit.reitdata.com/

I like Arreit and Hektar.
I also like Cmmt. But it's new and without any historical numbers to reference, and it's also the lowest yield reit at current price. But I see many people buying it. Maybe they are long for its growth potential.
If you are looking for growth potential, you may look into Axreit too. They grow all the time.

good luck!





This post has been edited by yok70: Sep 14 2010, 09:58 PM

I don't know what date. Sorry.

I'm here to ask(curious to know), for you, do you mind to buy it with 6.8% yield as for today's price?

dividend per unit.

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Added on September 15, 2010, 10:10 pmya. so expensive, hesitate to buy even though got high hope for their management.
however, i think very difficult to drop big in price though. Since for institutions, they need to buy big lots, which other small reits tak ada enough quantity.






This post has been edited by yok70: Sep 15 2010, 10:10 PM

Why?
SG reits yield is lower.

I see. Thanks for the info.

Did they calculated on today's price and the past 4 quarters properties income? That would be very misleading since lot10 and starhill is already gone. And when the reit inject new hotels in, another different story increase income+eps dilution. So, what's that forecast represents actually?

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Added on October 21, 2010, 12:29 amOn the MBB QCaptial paper, the forecast of FY11 for cmmt has a yield of 7.2%. But FY10 yield only 6.x%.



This post has been edited by yok70: Oct 21 2010, 12:29 AM

so you have high hope on hotel reit?

Axreit close 2.22! Yeah!

wow! RM4,700 for a day! congrats!!
mind to share what's your capital? but don't worry if don't wish to tell lah.

for small player like me, liquidity is never my concern. I never have the money to buy all that in the queues anyway.

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Added on October 22, 2010, 1:45 pmOne thing I don't like about mreit.reitdata.com is that they don't update the NAV much, most probably using the half year ago or even last year's NAV, which makes the yield figure inaccurate.


This post has been edited by yok70: Oct 22 2010, 01:45 PM

I shortcut too much, sorry for misleading.

What I mean was, when I decide on whether the reit's yield is good(cheap) or not(expensive), I normally look at both the yield and its NAV, in addition to its properties type (be it retails, factory, hospitality, hotel etc.)

ie.
I don't mind to pay a little premium for strategic location retail properties because of its defensive attribute. Meaning, even if the yield is 7.x, I'm fine with it as long as its price/NAV ratio is not more than 1.0.

As for hotel play, since its business highly depends on economic sentiment, I can only accept if its yield is above 7.0 with price/NAV ratio of 0.80 or below. So that at least I know I'm buying at a 20% discount price, that is at a safer zone for the price to drop further when economy goes wrong.

For office/industry/warehouse play, i prefer to get yield of 8.0 or above with price/NAV of 0.90-1.0. As it's a mix of defensive and risk. However, Axreit is a different case. It's too good in stable growth, I won't mind to pay some premium.

I understand most investors don't care about NAV for reits play, and I respect their thoughts. However, I still care. I think if the company got so much value of properties(higher properties price normally comes with higher rental fees), if the management is not too bad, any downside of rental received would be just temporarily.

Just my view lah.

Too many to read there. Can please point out where it is?

It usually more than that since if the reit your chose growth nicely, the share price will go up too.
However, Reit is for stable(not as low risk as FD lah) income. If u prefer explosive game, not Reit play loh.

Actually not that big a deal. You research, pick, buy, hold. Later, you regret, go sell. Without emergency economy situation, good reit counter's price pretty much stays stable. What are good reit counters? Read this entire thread, I bet you can get some ideas. Good luck.

me too! wait mid nov...

Its price can only move up that much if it's dividend yield also move up "around" that much. There's no free lunch....for Sunreit.