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AIMS AMP Capital Industrial REIT: Buying up.

Tuesday, September 7, 2010

There has been quite a bit of buying up activities in this REIT in recent sessions.  Today, of the 2,595 lots transacted, 1,763 lots were bought up and, of these, 843 lots were bought up at 23c.  From the transaction sizes, it would seem that there is some amount of interest returning to this REIT from retail investors.  Why buy some units of this REIT now?  The attraction, I suppose, is the entitlement to rights at a price of only 15.5c.  Of course, unit holders will also be able to apply for excess rights and in the process, possibly, improve the overall yield of their investment.

A while back, some readers asked me if they should buy in at 22c and my advice was that it was a fair price.  Buying 20 lots at 22c would give us 7 rights at 15.5c.  That would give us an average price of 20.31c.  With an estimated DPU of 2.08c per annum, XR, that gives us a yield of 10.24%.

Technically, the MACD has completed a bullish crossover in negative territory. If the MACD crosses into positive territory, that signals a return of positive momentum. The MFI has just emerged from oversold territory and has formed a higher low which suggests a return of demand. A recovering OBV suggests some accumulation is underway.

For a second session running, this REIT is trading above all the daily MAs.  22.5c could possibly be resistance turned support.  This needs confirmation.  The long term resistance remains at 23c but remember that this was compromised in early August.  So, it is not as strong a resistance as it once was.

Related post:
AIMS AMP Capital Industrial REIT: Sell the rights.


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