The leveraged loans market is on a meltdown, together with junk bonds eventhough the investment grade and government bonds are rallying.. on a more relevant and a related note, the same thing has been going on with the SREIT space. High quality REITs have generally rallied while those with weaker fundamentals have been sold down sharply. This points to large institution investors positioning for a much weaker economic situation in 2019, hence why they are dumping the more vulnerable REITs/assets for the stronger/defensive ones. This is commonly known as "flight to quality/safety".

This post has been edited by Havoc Knightmare: Dec 22 2018, 08:19 PM

https://www.businesstimes.com.sg/companies-...pel-kbs-us-reit

Woohoo!

Manulife seems to have been brand recognition.. and it has a large weight in some REIT ETFs in Singapore to my surprise. It has a 5.9% weight in the Lion-Phillip S-REIT ETF, larger than some of the established names like Parkway and Mapletree REITs. In terms of management, only time will tell.. but both have undertaken non-accretive deals which is a strong negative to me. But for me, the main reason why I've been staying away from Manulife is because it has alot more exposure in California as compared to Keppel-KBS, and apparently California is overdue for a major earthquake. I might be acting paranoid over this, but I sleep better without bearing such a risk that I am unable to gauge.

It's snapped back quite a bit.. heading back up again. Probably not enough institutional investors who are around during the last week of December to push it up in a big way

Anyway, Happy New Year guys! I've decided to start a blog sharing some of my research that I do prior to buying a stock, which I spend days or sometimes even weeks. Since SREITs feature heavily in my portfolio, there will be a focus on this segment, although it will cover REITs and stocks across Malaysia, Singapore and Hong Kong. Since 2019 looks volatile, SREITs should still be a safe haven for us. Would appreciate any feedback guys.

https://reality-inversion.blogspot.com/

This post has been edited by Havoc Knightmare: Jan 1 2019, 08:25 AM

Falling bond yields, slowing economic growth but not an outright recession is a perfect recipe for a REIT rally.. 2019 might be the year for REITs. I will continue to stay fully invested in SREITs!

This is just my opinion, but I haven't seen any non-real estate trust that has done well in the long term. All those listed in Singapore seem to be on a long term downward trend. My guess is because the assets are depreciating assets and some are also vulnerable to obsolescence over time. APTT is a good example. I sure would like to be proven wrong with Netlink though.

Yes, the fact that Singtel is backing it makes me believe that this has potential. I understand that Singtel was forced to divest of this profitable asset due to government regulations trying to reduce monopolistic influence in utilities. I think it will do well for a few years but obsolescence due to 5G might be a threat as bro Hansel has pointed out.

Yes KIT seems to be doing relatively better than most other trusts out there. But I still believe that an investment in a good quality would have posted some capital gains. After all, it is a bit tough for those assets such as pipes and cables to appreciate in value the same way real estate does right? To me, I would require to be fairly compensated for bearing this risk, in the form of higher dividend yield.

I'm not sure if KIT's assets can be depreciated to $0 anytime soon, because it depends on the accounting method utilized. These assets are generally depreciated to reflect the tenure of the leases, which is the case for highway operators who depreciate their highways to reflect the remaining tenure of the concession agreement, rather than the condition of the highway. So the value might approach $0 just as the lease of the asset is about to expire, which is realistically correct

I just did a write up on Parkway Life REIT on my blog, just to share with you guys

Thanks for the support.

I have avoided industrial S-REITs for years already due to the issue of negative rental reversion and oversupply in the space. If you have been following my posts here, you will see that recently I bought Keppel KBS and Cromwell when their price plunged following their respective rights issue. I also hold Sasseur and EC World as well. But S-REITs are only half my portfolio. The other half is in HK dividend stocks with similar yield 7-8%. The trade war actually turned the HKSE into a playground full of high yielding stocks.. some good names are trading at PE ratios of 5-6X only.

This post has been edited by Havoc Knightmare: Jan 10 2019, 08:57 AM

I'm holding the big banks. ABC and ICBC but no real preference between the big 4 to me. They are trading at 5-6x PE and paying out 6% dividend yield. Profits and dividends are still growing at 5%. Not exciting, but if you compare it with Maybank trading at 13x PE and growing at a slower of similar rate, the Chinese banks look very cheap. The big banks have provisioned massively for a spike in bad loans, some have argued too conservatively, so I'm not too worried about the big banks if the economy slows further. Smaller banks I wouldn't touch.

I'm currently working on a blog post on China Aircraft Leasing Company (1848), it's quite a decent growth story and dividend yield is expected to reach 9% in 2019 based on current price. I'll share it with you guys once it's ready

The big banks are relatively conservative. The explosion in lending over the years has been due to shadow banking, which is the insurance firms, asset management and other non banking companies that came into the banking sector and start acting as banks. If you Google up on the shadow banking sector, you can see that the government has been clamping down on that which will benefit the big banks, which is why I invested into them. In the banking sector, bigger is better, so the big boys will tend to win out in the long run. They will fare better in a crisis and have the means to swallow weaker rivals.

The major downside to these big banks is that the government uses them as part of policy making, meaning that they have to engage in 'national service' such as support the currency and etc that may hurt profitability. But their profits have been growing decently over the years.

They are known as H shares, not red chips.

Thanks.. I buy both markets using StanChart Singapore. For certain shares that they don't permit like Keppel KBS I use FSMOne.

This post has been edited by Havoc Knightmare: Jan 10 2019, 12:33 PM

Yes I'm happy with SCB except for their restriction on the USD SREIT counters..

Since I don't expect much, if any capital gains for netlink, I expect to be paid a higher dividend yield compared to a normal REIT where some property price appreciation can be expected (very subjective but property prices generally appreciate with rental rates, I think everyone can agree on that at least). But I think as long as the revenue and profits are growing for the next few years, the share price should do OK. Beyond that it really depends if the technology becomes obsolete. I keep thinking of APTT and how they are becoming obsolete with internet TV streaming.

You're welcome.

My simple framework for screening dividend stocks.

This post has been edited by Havoc Knightmare: Jan 13 2019, 11:55 AM

I don't expect much, if any changes for capitaland or ascendas REITs. It will make a difference for the parent company capitaland since they are enlarging their operations.

Don't really expect so since they will be getting 3 REITs along with the acquisition already. They might have more assets from Ascendas to inject into their own REITs though, which could be a good or bad thing. Since some of the rights issues carried out over the past years haven't really benefited existing unitholders.

Just posted up my analysis of CALC (1848)

https://reality-inversion.blogspot.com/2019...ng-Company.html

One of the larger shareholders, Cerberus sold it's entire stake in Cromwell at 0.455 cents overnight. The company is a private equity of sorts, so its exit may not really mean much in terms of the fundamentals of the REITs.

They are the same, but the SGD one has next to no liquidity.

SGD. The REIT hedges the currency 12 months forward.

Coincidentally I just did a piece on IREIT. Very good long term outlook.

http://reality-inversion.blogspot.com/2019...EIT-Global.html

No problem.