SKY,

Without using DDM, assuming the expected DY of 9%, a fair price of 2.41 would translate to DPU of 0.21 (estimated DPU for FY2009 of 0.16 and FY2010 of 0.15~0.17). What I am saying is, the assumptions used to derive the fair price of 2.41 is impractical. When would this fair price be met? Rental reversions will not be significant for at least a few years, so when would the DPU of 0.21 be met?

Based on my DPU estimations with Kenanga's estimated growth rate of 2.8%, it would take a good 9 years to see a DPU of 0.21.

SKY,

I wouldn't consider this as an argument, but a healthy discussion. Please do not take it seriously

I am sure many would agree that we invest into REITs for their dividends, and not capital appreciation. Therefore the most effective measure for REIT prices is DPU. There is no use for assets to appreciate to super-high prices but DPU stays low as asset appreciation is non-distributive (meaning we get nothing even if assets appreciate by 100%). I am using DPU because we know that is what we'll be getting.

SKY,

I don't know why you're touching on gearing and loans when I was just commenting on Kenanga's report

Of course DPU can be increased by increasing the gearing, but what good would that make? We want sustainable high DPU, not a high DPU which is shaky (as you have stated). So the only reasonable way is to go for private funding, but with a price.

As REITs issue more shares, the DPU will continue to dilute. Therefore, to ensure the DPU is maintained, the cash obtained from the issuance must yield equal or higher returns than the current DPU (which is happening in this case). Having said that, I am not against the placement proposed by AXREIT.

The discussion here is based on Kenanga's report, and not how AXREIT is getting the funding. The fair price must correspond with the expected DY, which based on Kenanga's report, is too high (fair price) and too low (DY).

I do hope that my comments do not confuse you

Well then, it is up to me to trust the report or not as you said way back. Since the purpose of discussion has been defeated, I don't think it is wise to not discuss any further. You do have your own perception, and I have mine. So I think the best thing to do is to respect each others differences nonetheless

By the way, good discussion here.

Oh, AXREIT is paying us half of Q3 in advance, and another half would be deferred to be paid together with Q4. Expecting the placement to be placed out in Q4

---

Added on August 25, 2009, 12:44 amAXREIT's placement will be priced at RM1.66 (surprisingly just a discount of 5.7% of NAV). Seems like a good price.

This placement will raise RM85 mil (previously estimated RM75 mil), of which RM65 mil will be used for ASC's acquisition, and expecting them to pare down their debt using the additional RM20 mil. Things are looking rosy for AXREIT at this point

---

Added on August 25, 2009, 12:51 amWould like to add a sidenote here. As of today, AXREIT was trading at a high of 1.85, and closed at 1.80, as I have expected

Now to see if my prediction of AXREIT's price holding above 1.80 until the placement materialises.

This post has been edited by Jordy: Aug 25 2009, 12:51 AM

If you believe in it, you didn't have to worry at all.

I wouldn't buy at 1.66. It'll increase my ABP by a lot. Give them to EPF

I would like to keep it above 11%. If my yield drops below 11%, not worth to keep anymore as I can get more elsewhere.
Still, different people will have different perspectives. Some are more conservative, some are more aggressive
Bullets also running low now, so better save it for better opportunities coming soon.

Those who bought earlier can gain 14%, so my 11% is nothing.

Huh? Business?

asambuffett,

I would say that is very well priced as usually private placements are priced 10% below average weighted price for a particular stock. In this case, it is just a little over 5%. Also, the money raised will be used to fund its acquisition of ASC, which would in turn increase the fund's NAV.

SKY,

Agree with your statement. In a company, it's always the top guys benefiting first, then only the small guys.
So same goes here. We're only small-time shareholders with no say, but as long as we still getting better than average returns, we're satisfied.
Unless the management is really digging gold without consideration of us minority shareholders, then only we dump.

So back to your quote. Do your own judgment. If you think it's worth keeping/buying the shares, then go ahead. If you think it's not, better sell it.

AMFIRST still having low yield. I'm waiting for it to drop below 0.90 still

ATRIUM lagging behind could be a good thing. Means more time to accumulate

AXREIT also going back to 1.80, I'm also happy.

SKY,

Would you mind to share the link? I'm interested to know more

SKY,

It's alright. Not that it affects my investment perspective anyway. I saw that coming though

This post has been edited by Jordy: Aug 28 2009, 03:49 PM

simplesmile,

It depends on each individual's preferences and very subjective. So I don't think it's good to compare your numbers with others.

Get one distribution % you're comfortable with and stick with it. Some may be satisfied with 40%, some 50%, others may want 90%. In the end, you should be the one to make the final call.

Of course in this case, the higher % the better, but there are pros and cons which I think cherroy would continue with later.

You've done your analysis on S-REITs? I'm planning to go Singapore for a visit end of this year just to have a feel of the property industry there

lclee,

Some of our local brokers provide offshore trading services (i.e. OSK188 or HDBS). You could try visiting their websites for more details. I know OSK188 trades in Hong Kong, and HDBS trades in Singapore. Once you get an account with them, the rest of the process is the same as local trading.

Pana,

You'll have to allow 2 weeks for the cheque to arrive ma. This is not your first time right?

AXREIT surged pass 1.80 to close at 1.85 (+0.07) today. Don't know what fueled today's fierce rise in its price, but it is expected to keep trading between 1.75 - 1.85. Enjoying a very nice margin there

Oh, AXREIT goes ex-date today, and still going strong. Up by another 2 cents as of now, giving me a nice total return of 50% in 6 months