Actually, unless the company has borrowings OUTSIDE of Malaysia, there wouldn't be too much of DIRECT effects against the borrowings of local REITs, right ? ... since BNM does not intend to increase interest rates,...

Tq,...

Just two things/points :-

1) smart investors will be able to distinguish this.
2) But,.. I think if all central banks increase rates, I don't think BNM can hold out too long,... for obvious reasons,...

Generally, Yes,... but it also depends on when the time comes for the REIT to renew its loan facility,... by that time, if it has not yet 'adjusted itself' to the new higher loan interest environment, THEN,.. basically,.. its dpu will be affected.

Yes,... increasing interest rate will compress the yield gap, making REIT yield needing to go HIGHER to attract investors. The enable a REIT yield to go higher, its unit price must drop,... OR,... its dpu must INCREASE.

Either one of the above will 'enlarge' the yield gap again,....

Back to my point earlier,.. if BNM does not increase interest rates in Msia,... then, theoretically, the yield gap remains steady,...

Emm, bro TSOM... it's harder to increase dpu, because in order to raise dpu, the rental collected must be higher. I don't know much abt the T's and C's of the leases in Msian REITs, but I would think given the current economic situation in Msia,... no tenant would easily allow the REIT manager to raise the rental easily ! They can just move to another premise IF there is no legal binding,...

So,.. I think,... to maintain the yield-gap, the easiest way would be to drop the REIT's unit price,.... I invite opinions to my above opinion.... I'm afraid I'm more familiar with the SG mkt,....

Bro Foo,... if you look back at history, there were periods when the USD would WEAKEN even when the FOMC raise interest rates. I was surprised too when I saw this,... hence, it's not a 100% surety that the USD would strengthen with rising Feds rates,....

Yes, bro Smurfs,... if MGS yield = 4.30%, what would be the recommended REIT yield please ?

So,... if MGS yields 4.30%, then a prime REIT like IGBREIT should yield 4.30% + 0.15% = 4.45%.... hmm,.. not too wide a spread... I think should be wider,.. otherwise,... hoho,... earning 0.15% more in a risky REIT,... everybody would not be willing to do so.

Or quantum,... eg instead of hiking 0.25%, perhaps hike by 0.50%,.....tonight ????

Apologies,.. you are right,... then 4.30% would need to 'rise to' 5.80% yield of a REIT for the REIT to remain attractive to investors,.... a difference of 1.50% is,.. okay,...

..what if the REIT is so-so only ??

Rental income collected is also unstable... What sort of yield-gap would investors demand then ?

Sure bro Cherroy,...

Just sent to me by an investor pal in SG : https://sbr.com.sg/financial-services/news/...means-singapore

There is expectation fro a rapid rise in the US interest rates,...

This post has been edited by Hansel: Jun 13 2018, 06:11 PM

Bro Cherroy,... I declined to comment yesterday when you mentioned this statement : Current Fed is not hawkish bias one, in fact, pretty dovish, and slow in raising rate.

At this morning's press conf at The Feds, the tone was exactly opposite, which I expected to be so. Three statements I made this morning,...
1) As expected and ' priced-in' , the Feds announced a hike of 0.25% at 2.30 am this morning.
2) The more impt observation is that the tone of the Feds is now more hawkish, and there will be another two hikes this year.
3) Then the mention of the neutral rate... possibly at... 3% at the current pace of economic trajectory before they pause.

Said to be two times this year. And as you said three times next year,... then will be touching 3.25%,... above the suspected neutral rate already,... hmm,...

After yesterday's rate hike, it's now at 2.00%,... or 1.75% ???

I used to think like you, bro,... but as I grew older, I realized I needed more than what I planned earlier,....

Bros,... wait for the prospectus to come out, the benefits, risks, offers and taxes will be inside.

If you are keen to invest, just start saving your money now, and do not renew your FDs for long periods anymore,...

It's not a very good idea to set up a REIT with assets for which the rental is difficult to collect ! - purely common sense here,... odd venture this is !

Yes,... an exit plan for them,...

Not to mention when you hold SREITs, you are earning income based on a strong and resilient currency !

Did you sell it accidently ?

Then this was a good conscious decision made by you as an investor. Nothing stupid abt that.

Time will one day prove you are right !

Like to make one comment here : one thing abt focussing on dividend-investing is, one should not solely look at the dividend collected, one should also be defensive in the dividend stocks that one chooses to invest in. I noticed some dividend-investing bloggers would mention they are collecting so much and so much of dividend for a particular period, monthly or quarterly, but they would never mention if the dividend stocks they are holding are at losing positions or not.

I do understand the fact that one has NOT lost yet until one has sold, but wouldn't it be better if the dividend stocks are at winning positions, and the higher the current price the stock is at compared to the investor's holding price, the larger the margin-of-safety the investor is enjoying ?

Isn't this 'safety' critical for a dividend-investor ? What's the point of earing ots of dividend over a period, but ultimately losing it all in a 'nett sense' if the counter gets wiped out ?

Another comment I'd like to make is : using gearing to buy dividend stocks in order to to earn the 'differential dividend', ie dividend earned minussing interest and other expenses paid out to the loan-provider. In today's volatile environment, is this safe anymore ?

Is there safety here to justify this type of risk-taking, especially by a risk-averse dividend investor ? Or a retiree ?

Shouldn't we be using our own funds to invest as a risk-averse dividend-investor ? Using borrowed funds to invest for dividend equivalent to a capital-gain investor who has a higher risk-appetite ?