General S-REITs Discussion Thread

[Dividends Warrior]

hi DW thanks. Have a plan in place for 3 years, just want to see what you think about it. As I have a plan to create a portfolio similar to yours generating cash flow, 1st year i will buy those battered down reits like FCT yielding 6% or more and have increasing DPU history for the past 5 years . Once i hit a dividends yield of around $200-300. I will then buy in more stable companies like Singtel, Singpost, M1, SH, etc with yield of less than 6% to maintain a stability in my portfolio. This should average out to me around 5% yield for my whole portfolio. What do you think of this plan ?

Ur plan deserves a pm from me.

I shall reply u tonight thru pm.

Having lunch now, a little difficult to type a lot.

 

[Lasogette]

Ur plan deserves a pm from me.

I shall reply u tonight thru pm.

Having lunch now, a little difficult to type a lot.

thanks DW. btw just found out u have a high jump of yield from 2010 to 2011. Just wondering what happened which made this big difference.

 

[mc98888]

Hi,

Thanks for the support.

- gearing is more than 40%
- Japanese yen weakening against sing$
- earthquake prone

Good points
- freehold assets
- more than 8% yield

Dw sifu ,alway hear about this gearing issue , can kindly explain more in details.
Thanks

 

[norman123]

Dw sifu ,alway hear about this gearing issue , can kindly explain more in details.
Thanks

Hmm let me try to help.

High gearing means there is

1. More exposure to interest rates fluctuations. In a rising interest environment, these companies are at risk as they have to make higher interest payments.

2. Less capacity to take on more debt for acquisitions (May turn to rights issues since no more capacity for debt)

On the flip side, you can view it as the company already trying to maximize their growth since they taken on the debts for acquisitions or have already acquired.

 

[mc98888]

thank bro,
I come across gearing apporx. 30-40%, and some said the lower the better.

 

[bhalimking]

Note down impact of high gearing on the company. It will have to raise equity sooner or later through placement or rights issue.

 

[mjboon]

Hmm let me try to help.

High gearing means there is

1. More exposure to interest rates fluctuations. In a rising interest environment, these companies are at risk as they have to make higher interest payments.

2. Less capacity to take on more debt for acquisitions (May turn to rights issues since no more capacity for debt)

On the flip side, you can view it as the company already trying to maximize their growth since they taken on the debts for acquisitions or have already acquired.

Also, some REITs have high % of Fixed Debt which I believe will face slightly lower rates fluctuations risk. Example, FCT has 94% fixed debt.

 

[Lasogette]

Also, some REITs have high % of Fixed Debt which I believe will face slightly lower rates fluctuations risk. Example, FCT has 94% fixed debt.

is that a good sign? sorry not too well versed in the fundamental analysis of reits. but i do come across FCT have increasing DPU for the past few years which is one of the criteria warren buffet always look out for.

 

[Dividends Warrior]

is that a good sign? sorry not too well versed in the fundamental analysis of reits. but i do come across FCT have increasing DPU for the past few years which is one of the criteria warren buffet always look out for.

Yes. It is a good factor.

 

[Dividends Warrior]

Also, some REITs have high % of Fixed Debt which I believe will face slightly lower rates fluctuations risk. Example, FCT has 94% fixed debt.

U got do homework.

 

[norman123]

Also, some REITs have high % of Fixed Debt which I believe will face slightly lower rates fluctuations risk. Example, FCT has 94% fixed debt.

Haha I am just interested to know why investors still sell off counters with high fixed rate debts when they hear that QE tapering is coming...

technically they should still be relatively sheltered from the interest rate fluctuations unless the FR debts are maturing soon. Unless everyone bundles reits together and believe ALL reits will feel the impact the same.

 

[Dyhalt]

Haha I am just interested to know why investors still sell off counters with high fixed rate debts when they hear that QE tapering is coming...

Human are emotional beings

Technicals means little when people are all fearful, and that same reason caused REITS to trade at average yield of 17% back in OCT 2008. (2/3 of the networth wiped out prior to that)

Sudden QE tapering has just as great an impact as lehman collapse

 

[mjboon]

U got do homework.

Learned my lesson past 2 years entrusted my hard earned $$$ with those "professional" unit trust fund manager

Is better to do own homework and learn from DW on the power of Dividend
Started to invest into stock market this June (bought FCT and AIMSAMP). Still got much to learn, hope DW can provide more guidance

 

[Lasogette]

Human are emotional beings

Technicals means little when people are all fearful, and that same reason caused REITS to trade at average yield of 17% back in OCT 2008. (2/3 of the networth wiped out prior to that)

Sudden QE tapering has just as great an impact as lehman collapse

wow 17%. I was not there in the market at that point in time. anyone caught some high yield stocks then care to share the experience?

 

[Lasogette]

Learned my lesson past 2 years entrusted my hard earned $$$ with those "professional" unit trust fund manager

Is better to do own homework and learn from DW on the power of Dividend
Started to invest into stock market this June (bought FCT and AIMSAMP). Still got much to learn, hope DW can provide more guidance

recently one of my frens plonked her savings onto a emerging market bond fund only to realised the -11% drop of the EM bonds. So much for professional fund managers.

 

[Darkzi0n]

Haha I am just interested to know why investors still sell off counters with high fixed rate debts when they hear that QE tapering is coming...

technically they should still be relatively sheltered from the interest rate fluctuations unless the FR debts are maturing soon. Unless everyone bundles reits together and believe ALL reits will feel the impact the same.

Bcos stock price is forward looking. Now not affected dosnt mean 3 years or 5 years later still not affected. When interest rate rise, it loses the opportunity to refinance with cheaper loan. new debt needed to finance future expansion plan might also be affected, slowing growth of the REIT.

Yield spread could also force the price of dividend paying stock down

 

[Dividends Warrior]

thanks DW. btw just found out u have a high jump of yield from 2010 to 2011. Just wondering what happened which made this big difference.

In 2010, I was just "testing waters" with my dividend investing strategy since I was still a newbie.

In 2011, there were so many events that gave me excellent opportunities to buy telcos and REITs.
-Japanese earthquake/tsunami/nuclear contamination,
-Euro Debt Crisis in PIGS,
-Arab Spring,
-US debt ceiling fight and subsequent rating downgrade.

All these events allow me to deploy most of my salary and bonuses to build up my dividend portfolio. 2011 was a super volatile year.

That's why u see such a big jump in my passive income.

 

[mjboon]

In 2010, I was just "testing waters" with my dividend investing strategy since I was still a newbie.

In 2011, there were so many events that gave me excellent opportunities to buy telcos and REITs.
-Japanese earthquake/tsunami/nuclear contamination,
-Euro Debt Crisis in PIGS,
-Arab Spring,
-US debt ceiling fight and subsequent rating downgrade.

All these events allow me to deploy most of my salary and bonuses to build up my dividend portfolio. 2011 was a super volatile year.

That's why u see such a big jump in my passive income.

And I'm waiting for such opportunity ... Perhaps a more aggresive QE tampering?

 

[Dividends Warrior]

And I'm waiting for such opportunity ... Perhaps a more aggresive QE tampering?

Yup.

And another US debt ceiling fight coming again.

 

[simon_84]

from ocbc dated 17 sep.

Bullish breaks suggest more upside ahead

Key obstacles conquered. CapitaMall Trust could see further recovery after initiating strong bullish breaks above both its 5-month down trend resistance and $1.90 key resistance on significant trading volume yesterday.

Indicator turning bullish. The MACD has just initiated a sharp bullish crossover, suggesting that the upside momentum is improving greatly.

Next resistance at $2.09. The counter is likely to head towards the $2.09 next key obstacle (key support-turnedresistance) in the weeks ahead.

Immediate support at $1.90. Meanwhile, we advocate a stop-loss exit around $1.87, which is slightly below the newly established resistance-turned-support at $1.90.