Oh oh.. no wonder the "free fall" in ARREIT earlier.

http://biz.thestar.com.my/news/story.asp?f...85&sec=business
PETALING JAYA: Standard & Poor's (S&P) has withdrawn all ratings for AmanahRaya Real Estate Investment Trust (AR-REIT) at the company's request after the rating agency gave it a “negative” outlook.

The Singapore-based S&P affirmed its BBB- long-term corporate credit rating and axBBB+ Asean scale rating on the company but said the “negative” outlook reflected its assessment that the extraordinary support from the Government could weaken if a proposed transaction between AR-REIT and Perbadanan Kemajuan Negeri Selangor proceeded as planned.

AR-REIT could not be reached for comment. A Singapore-based S&P analyst said he could not disclose the reasons for AR-REIT's request to withdraw all ratings.

The analyst said the BBB- rating comprised two components its stand-alone credit profile and the “moderate” likelihood of extraordinary Government support, based on S&P's criteria on government-related entities.

Although AR-REIT enjoys stable and resilient cashflows, high tenant security deposits and an improving market position in the Malaysian real estate investment sector, its credit profile shows a high exposure to the office property segment and increasing leverage.

AR-REIT is majority-owned by state pension fund Kumpulan Wang Bersama (KWB). The trust owns properties including Holiday Villa hotels in Langkawi and Alor Setar as well as Segi College branches in Kota Damansara and Subang Jaya.

The Selangor State Development Corp (PKNS) plans to inject three properties into AR-REIT in exchange for RM165mil cash and a 20% stake in the trust.

If this goes through, KWB's stake in AR-REIT will be diluted to 43% from 54%. One of S&P's rating criteria for government-related entities is the support of Government, measured by the latter's stake in a company.

“The proposed transaction with PKNS may result in the diminishing and perhaps eventual disappearance of Government support for AR-REIT,” the analyst said.

S&P also said in a statement that it could have revised the outlook to “stable” if the transaction with PKNS did not proceed, which would have resulted in KWB maintaining its majority shareholding in AR-REIT.

Bro Cherroy,

U mentioned earlier about better liquidity & sizing attracting fund managers and institutional investors to CMMT and SUNREIT even though their DY% is miserable compared to BSDREIT, TWRREIT, etc.

Wouldnt this "liquidity" be a two-edged thing?
I mean, the last i checked for the few days' tumble, heaviest casualty in terms of % of price falling were CMMT and SUNREIT.

Just thinking in terms of "reason of buying REITs" to a small fry like me lar - if i buy into CMMT or SUNREIT and it's nearly as volatile as things like PBank, Digi, LPI, why do it for the miserable DY%.

Thus, picking your brains / opinions:
Is there any major difference between such "sized & liquid" REITs like CMMT or SUNREIT (other than sector and tax % on dividends)
VS
"blue chips & dividend paying" like PBank, Nestle, Digi, etc
that small retail investors (not traders) to leverage on?

My apologies if it's an obvious Q, newbie alert here

This post has been edited by wongmunkeong: Aug 11 2011, 12:48 PM

Yeah, i understand that portion - "moving the market" being detrimental to the institutional investors when they accumulate or dispose a "small market cap" REIT vs a enormous monster-sized REIT.

Just thinking aloud and hopefully pick your experience in REITs - whether or not worthwhile these kinda monster-sized REITs with relatively low yields% at the market price
VS
common / normal stocks that's been shooting out dividends too


I'm just hoping to see / learn something i've not considered before , as i'm currently just going after the higher DY% and comparatively lower or ok D/E & higher ROE / ROTA REITs.

----------
Whoops - heheh, i replied too fast, just saw your updates/edit. Danke danke

This post has been edited by wongmunkeong: Aug 11 2011, 01:42 PM

Yeah - read / heard that there are things like Mortgage REITs overseas too, buying mortgages and loan. Heheh - oo.. reminds me of those nasty CDOs that got AAA ratings in 2008's kablooey.

I like LPI a lot too - unfortunately hit my trailing stop loss and took profits of about 40%+pa 2 days back. Held since 1st or 2nd quarter 2009.

Bro, play? Them REITs (bought at the right price) are like collectibles lar - buy and simpan only (while collecting dividends)

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Added on August 11, 2011, 6:55 pmer.. i'd take D - BSDREIT - 1.42 pls

This post has been edited by wongmunkeong: Aug 11 2011, 06:56 PM

It's a plantation REIT, getting $ from plantation management AND a % of the sales of oil palm. It's past 2 to 3 years' D/E is low enough + the ROTA/ROE looks good enough and at $1.42, a slight discount from its NAV/NAPS with expected gross DY% about 8%.

Anyways, i'm just aiming to get into plantation REIT & healthcare REIT. Healthcare - currently way too low DY%, thus plantation REIT first lor - I'm an opportunist . Heck even if office REITs like TWRREIT, UOAREIT or AXIS falls, thus DY% goes up, enough i'll take a nibble while keeping enough ammo to still get enough healthcare & plantation if opportunity arises.

Oh, 1 more thing - nothing scientific, just a gut feel though, with food prices climbing and stuff + population growth, food related & land related companies' returns will keep climbing.

This post has been edited by wongmunkeong: Aug 11 2011, 07:43 PM

Based on this: http://mreit.reitdata.com/ +HLeB's gross DY% , DY% looks ok-ish
It's current ration & acid test ratio is strong 4.61 (ie. can pay fast, $4.61 for every $1 owed), most probably due to its low D/E of 0.18 only.

However something weird here (see snapshot) - ROE & ROTA past 2 to 3 years, looks as though something was disposed and now oh oh.
ie huge spike in 2009 and crash in 2010.
Operating cash flow also looks to be hit in 2010 too.


Very very mixed signals - thus, i'm steering clear of it as i've got other REITs options
Anyways, not in my basic / simpleton approach of "filtered to watch" list of REITs, even for opportunities

This post has been edited by wongmunkeong: Aug 11 2011, 08:19 PM

Bro Cherroy - i just did a quick check (DynaQuest book).
"In FY2010, STAREIT announced a major re-shuffle of assets within the YTL Group of REITs. STAREIT will hold the hospitality assets, both local and foreign while the commercial REIT assets of STAREIT would be transferred to SG REIT. The latter par of the plan has been completed on 28/06/2010. It transfered its 2 non-tourism properties, Starhill & Lot 10, in exchange for RM625M in cash and RM405M in SG REIT's Convertaible Preference Units (CPU). STAREIT will hold on to the two properties and will aquire additional hospitality industry related assets in the future.
JW Marriot Hotel
The Residences."

Er.. in simple English, they did "dispose" to SG REITs in exchange for CPU + cash right? Maybe including the 3 years revaluation lar

This post has been edited by wongmunkeong: Aug 12 2011, 08:29 PM

BLR shouldnt increase unless Bank Negara Malaysia increases OPR + the last i heard, it's staying put for at least the next quarter heheh

G' morning (early morning ) bro Cherroy. Just to see if i understand properly, U mean that if STAREIT disposed its assets, it doesnt matter coz they already accounted it already in the 3 years revaluation?

I thought that if a biz that makes continuous / sustainable profits from Assets A, B, C, D, IF they sell / dispose of A & B for cash & CPU to SG REIT, then havent bought anything (well, may buy in future/planned), that affects the biz of the Co.
ie. investors may get lump sum payout dividends but in the long run...

I've seen it happening up front with EON (i was literally there) when they started "concentrating on their core biz" and sold off/spun off things like EON Bank (became EON Cap), some legal firms, etc., all of which contributed to EON's bottom line but was hocked off for mostly one-off gains. In the end, for EON lar, the cohesiveness / supply-chain control was broken + Proton's own dealership ProtonEdar (exUSPD) helped EON to where it is currently.

Er.. note that i'm not equating STAREIT to EON's hocking off its biz like EON Bank/Cap. I'm just trying to understand how it is good for a Co to sell off Assets which are making $ + how booking / accounting for them already makes it not matter. I need coffee....

This post has been edited by wongmunkeong: Aug 13 2011, 12:13 AM

Oh - STAREIT acquired the new assets for rental already? Hehhe - paiseh paiseh.. i gotta go check STAREIT's webpage

If U are on HLeB's stock's portal, see the attached image.

U one lucky dude as i responded to a private message (thus can copy & paste here). IMHO, most of us here will tell U to do some R&D first before asking such a general Q

REITs:
U can buy / sell REITs (Real Estate Investment Trusts) online just like stocks. In fact, they are stocks of REITs which U buy into, thus they pay U the stockholder, dividends.

How do I buy REITS? Do you need to go anywhere to buy it?
a. Go sign-up with a securities company like Hong Leong eBroking http://www.hlebroking.com or Maybank2U's online share trading.
b. Then go buy a REIT (eg. TWRREIT, BSDREIT, ARREIT, AXIS, etc.)

I have a Hong Leong account. So if I open the Hong Leong eBrokring, I can use my Hong Leong account to buy REITS right? Will they deliver a letter to my house or they will give me a passbook?
Then the interest, will they automatic credit it into my hong Leong account?
a. U'd have to transfer yr $ into Hong Leong eBroking after opening an account. Dont worry, all online.
b. No passbook or anything - it's statement based and online only. It's literally STOCKS of REIT companies
c. REITs dont give interest - they give dividends. Yes the dividends goes into your HLeB a/c (not HLB a/c). U can then ask them to transfer it out to your HLB a/c.
d. FYI - cash lying in your HLeB account attracts FD interest rate


Q1. The dividends are given annually or every half a year?
Q2. How is it calculated?
Q3. How do I select good REITS?
Q4. So if I open a HLeB account, and just deposit money inside, they will give me FD interest rates? (That is cool) Any terms and conditions?
Q5. I only have RM2500 with me. Is that enough to buy REITs? The rest are all lock up in FD. My uncle told me about REIT but he refuse to teach me.
Q6. Can I ask them to send me statement to my house?
Q7. How to withdraw from HLeB?
Q8. Any yearly or withdrawal fees to pay for HLeB?
Q9. Any charges for transferring from HLB a/c to HLeB a/c?

A1. Dividends are given out either 1/2 yearly or qtrly - dependant on the REIT itself
A2. When U log in and see the counters/stocks, look for DY.
That's the gross Dividend Yield indicator
Dividend Yield = dividend paid out for a year / last closing price of stock
A3. Er.. it's personal.
To me - D/E <0.6, ROE or ROTA >=8%pa for several years and buy at a good value price (ie. high DY%)
Google D/E, ROE and ROTA
All these data are available on KLSE Tracker, which can be accessed once U get into HLeB's website by r-clicking on the counter to check
A4. No terms and conditions.
Dont lar just sit on the cash - buy at least 1 REIT OR attempt to buy ;P
A5. er.. $2.5K is not an optimal transaction value.
Optimal as in it's too low, thus the cost of brokerage and stuff will be a high % of your transaction. Optimal is about $3K+, where the cost is about 0.55% of the transaction value
A6. Yup of course - U also get emailed for every transaction AND U can check your holdings/portfolio online
A7. Just email them or call them. They'll draw a cheque and bank-into your registered bank a/c. Simple
A8. No fees other than transaction charges when buying/selling stocks
A9. Nope - FOC

What is D/E, ROE and ROTA?
D/E: http://en.wikipedia.org/wiki/Debt-to-equity_ratio
ROE: http://www.investopedia.com/terms/r/return...p#axzz1WOpfdYCk
ROTA: http://www.investopedia.com/terms/r/return...p#axzz1WOpfdYCk

0.55% of transaction value means if say my transaction is RM1000, they will deduct RM5.50 right?
0.55% - more like if U buy say $1 share * 1000 units, U'll be paying $1,000 * (100% +0.55%) for the purchase.
Mind U - $1,000 will attract like 1%++ costs, not 0.55%

why 1%++ cost? I thought you said is only 0.55%?
brokerage commission is $12 or 0.42%, whichever higher (excluding stamp duties and what not costs).
Thus, remember i said there's an OPTIMAL transaction value?
ie. your buy/sell should be about $3K
That's when your TOTAL cost is about 0.55%
Imagine at $3K, your brokerage would be 0.42% or about $12
VS
$1K and your brokerage is $12
Which of the above is "higher cost" as a % of transaction value? Comprehende

phew...

This post has been edited by wongmunkeong: Aug 31 2011, 12:20 PM

You're welcome.
Hhehe - no taikor here, long time haven't "pehk yau" already

If U consider yourself lucky, please "pay it forward" when U can yar

Heheh - bro Xuzen, let's start the REITs collection together-gether
i'm waiting for my donkey "with held" bonus

My targets are more TWRREIT & BSDREIT,
with opportunities if presented, SUNREIT & ALAQAR REIT (ie ever EVUH lar the DY hits 8% OR Market Price / NAPS <=70% heheh).
Gambate!

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Added on September 12, 2011, 8:11 pmCoz U took pot shots at ARREIT lar (which just Ex today)

This post has been edited by wongmunkeong: Sep 12 2011, 08:11 PM

Er.. i'm not looking at "price" per se but more on gross DY% of >=9% and Price/NAPS <=70%
Based on current situation, about $1 would hit both criteria for TWRREIT & BSDREIT heheh. Yeah yeah - fat hopes for now BUT give it about 6 to 8 months like 2008's Mar start bearish trend till Dec 2008/Mar 2009

Please note that that's based on current few years of D/E + ROTA yar. If there's a huge fundamental difference in the near future, bye bye (not buy buy).
As bro Cheroy also chipped in earlier, U may also want to check out the properties held and the rental contracts, especially the anchor tenants of their properties.
Me - i'm kinda lazy but i do glance on their yearly properties held , thus your mileage and expectations may vary.

This post has been edited by wongmunkeong: Sep 13 2011, 08:49 AM

Better checkout their D/E (leverage), consistency in ROE thus ability to keep paying out dividends at that amount and even perhaps the actual physical properties held and their occupancy / vibrancy rate. Remember, risk before rewards (ie. look at the downside first before the upside), or that's just a worry-wart's thinking

U can get most of the details from hong leong ebroking's platform + it's partner KLSETracker. Just right-click on the REIT's stock and select KLSE Tracker. In there, select financial ratios or something to that effect. FYI - just go open an a/c, it's free (er.. the last time i helped a friend do it last 4 to 5 months ago)

Other than that, try this: http://mreit.reitdata.com/2011/09/16/september-2011-3/
For further details, search for one of my last posts here in this thread - http://forum.lowyat.net/topic/1993103/+102

Hope the above helps

This post has been edited by wongmunkeong: Sep 18 2011, 03:58 PM