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Saizen REIT: Sold down.

Monday, August 16, 2010

A few big transactions today, selling down Saizen REIT units.  One single transaction sold down 2m units at 15.5c.  This caused the OBV to plunge today and the MFI to sink deeper into negative territory. Distribution coupled by a reduced demand.  Not a pretty picture.

However, checking for announcements by Saizen REIT did not show any sale by insiders or substantial shareholders.  I suspect some retail investors are losing patience again.  Momentum is clearly negative as the MACD continues to decline beneath the signal line in negative territory.

At this rate, we could possibly see 15c tested as the next support. If that happens, I would buy more.

Mapletree Investments, a real-estate firm wholly owned by Singapore state investor Temasek Holdings, plans to launch a Japan property fund of around 80 billion yen (1.3 billion) this year in a bid to expand in the country’s property sector ahead of its rivals....

....Japan’s property market, the world’s second-largest and heavily leveraged, was hit hard by the onset of the global financial crisis and has yet to see a major investment since then.

But some Asian investors including wealthy Chinese individuals have begun showing an appetite for assets in Japan, whose property market is considered relatively transparent and yields stable returns.


Anonymous said...

Dear AK

must catch it before div and quarter report :)


AK71 said...

Hi Chan,

I have a large investment in Saizen REIT already. If price does not hit 15c, it is unlikely I would accumulate.

I am looking forward to the report on the 26th. :)

Anonymous said...

Hi AK,
as far as i know, saizen has outstanding warrants of more than 400mil. its current outstanding shares is more than 800mil shares.
i will like to understand this. should the co. declare a for eg: 0.3cts per share on the 26th. and the warrant holders, wanting to take part in the dividend issue, decided to fully exercise the warrants. note that the total shares in the mkt will become 1.2bil shares. given a cash strapped co. like saizen, will they be able to fully pay out all shareholders? will they alter the dividend payout? pls advise.

AK71 said...

Hi CC,

Saizen has almost 1 billion units in issue. Warrants number more than 400 million. You are right.

When the REIT goes CD, I would think that only the units existing at that point in time would be entitled to the cash distribution. Seems logical but what if I were wrong?

If warrant holders decide to exercise their warrants, they would have to pay 9c per warrant to do so. Per your assumption of 0.3c per unit in cash distribution, these investors would be getting back some of their own money. If it is a problem for Saizen REIT, it's a happy problem. :)

Anonymous said...

from what i understand, after exercising the warrants, the shares will rank pari pasu with the outstanding shares whether it is CD or not. Anyone paying attention to this blog can verify that? But you are right, the 9cts will more than enough to cover what is required for the co. to payout. thanks for replying.


AK71 said...

Hi CC,

Most welcomed. :)

I will be away for a few days from tomorrow and can only hope that I would be able to find time to update my blog. If a reader posts a comment, it might take some time for you to see it published because of this.

Anonymous said...

I don't think the seller recently is any retail investors. How many retails has so many shares to sell? Recently in Mar, Cube capital sold down their holdings to 4.9%( apx 47mil shares)and they will not have to declare further transaction since they holding below 5% now. My guess is they are selling.

left_ray said...

Here is an article you may find interesting. I don't know how they derive their numbers but its from the economist. Singapore property is 20% overvalued and Japan is 34.6% undervalue.

AK71 said...

Hi Anonymous,

So des ne. Thanks for reminding me. I almost forgot about Cube Capital. It could well be them selling away their stake. :)

AK71 said...

Hi left_ray,

Sell our real estate in Singapore and run to Japan to buy theirs!!! ;-p

Thanks for sharing. :)

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