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AIMS AMP Capital Industrial REIT: Target price?

Friday, September 17, 2010

Closing at 23.5c on higher volume shows a continuing and heightened interest in this REIT.  This is especially true when we remember that this is after the counter has gone XR!  Buying at 23.5c and with an expected DPU of 2.08c, the yield works out to be 8.85% per annum.  Apparently, many feel that this yield is still attractive for them.  If we think of it objectively, it is still rather high, relative to some "blue chip" REITs, for example.


MFI continues to climb higher but is not yet overbought.  OBV too continues its climb upwards.  Demand remains strong and accumulation is relentless.  RSI rose higher into overbought territory suggesting that the buying momentum is somewhat overdone but the MACD continues pulling away upwards from the signal line in positive territory.  Momentum is currently positive and in very bullish situations, the RSI could stay overbought for a while longer.

This is a long shot but if 23.5c should be taken out convincingly, we could even see 25c tested.  At 25c, a DPU of 2.08c would translate into a yield of 8.32% per annum.  Still attractive for some? Perhaps.

Related post:
AIMS AMP Capital Industrial REIT: XR.

8 comments:

Anonymous said...

It's the low interest rates .... yield will continue to get worst if the low rates persist

DC

AK71 said...

Hi DC,

Yes, the low interest rates make investing in Treasuries or even JGBs a formula for almost certain wealth destruction or so Dr Marc Faber and Mr Jim Rogers say.

Money will go where it is treated best and AA REIT is definitely one of those places, in my opinion. Its yield would fall as its unit price appreciates. That's for sure. This is good news for all who got in earlier at lower prices, I guess. :)

Anonymous said...

Waiting for 20/9 to excerise my rights allotment & excess rights. Huat ah.

Jimmy

AK71 said...

Hi Jimmy,

I am also waiting to see if there would be some kancheong investors who would sell their rights cheaply to me when trading of nil-paid rights commences on 23 Sep. Hehehe... Huat ah! :)

Anonymous said...

Hey AK,
Thx for replying to the last question. Am waiting quite enthusiastically for the package with the instructions. But since the nil-rights purchase is in 2 days, I've another question. How do you buy the nil-paid rights?

Thx a bunch. Blur...

~K

Anonymous said...

I think the price may correct to 0.21 if everyone decides to cash out on their rights after receiving them. Seems like a lot of people have such intention, especially if they do not want to have more REITs in their portfolio. Maybe you can buy more then even if you can't get the rights. :)

DC

AK71 said...

Hi K,

If you are referring to the nil-paid rights which you have been alloted. You could accept and pay for them from 20 Sep at an ATM. The last day you could do this is 7 Oct. So, wait for the package. You don't want to botch things up like a reader did with Healthway Medical's rights issue months ago. ;)

If you are referring to buying (more) nil-paid rights in the open market, you could do so from 23 Sep and this would be paid for like any shares purchased through your broker. :)

AK71 said...

Hi DC,

This is a bit of a chicken and egg question. Does the price of the mother share determine the price of the rights or does the price of the rights determine the price of the mother share? Doesn't matter to me really.

If a fresh purchase could secure a yield of >10% for me, I might just bite. This would mean buying the nil-paid rights at 5c or less OR buying the mother share at 20.5c or less. Do you think it likely? ;)

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