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First REIT: Bought more at 95c.

Monday, November 15, 2010

Last Friday, I mentioned that "I have been waiting the whole day for someone to sell me some First REIT units at 95c but to no avail. Some people are puzzled why am I so interested in getting some at 95c when I am already vested at 40+c and 70+c. Well, with the proposed acquisitions and rights issue, buying more even at 96c could be quite rewarding. With an average price of 70c, post rights, if we were able to buy at 95c now, a yield of 9.1% is not impossible with an estimated full year DPU of 6.4c in 2011. As the XR date is 1 Dec which is almost 3 weeks away, I will continue to wait patiently at 95c. Wish me luck."

To all my readers who wished me luck, thanks! My overnight buy queue at 95c was filled. Now, I will wait to buy at a lower price if there are people who are willing to sell cheaper to me. This is quite possible since the XD date is 1 Dec.  Many things can happen within these two weeks.  When I mentioned this, someone said that he does not think it is probable since the counter is offering deeply discounted rights. I replied that there might be people who cannot afford to pay for the rights and might choose to lock in their capital gains now by selling the units they have. Never say never.


Technically, the doji formed when First REIT's price touched a high of 99c on 9 Nov was a warning of a possible reversal. It also formed lower highs on the MACD, the MFI and the RSI on that day.  This has painted a picture of negative divergence between price and all the momentum oscillators. OBV confirmed the bearish picture as it plunged, suggesting massive distribution.

So, I have suggested that I would be buying more if people are willing to sell to me cheaper. At what price would I buy more of? Using Fibo lines, I see 138.2% at 93.5c and 161.8% at 92.5c.  Assuming that I buy more at 92.5c, I would have an average price of 92.5c x 4 + 50c x 5 /9 =68.9c and a yield of 9.29% with an estimated annualised DPU of 6.4c in 2011.

92.5c, I am waiting.  Once more, wish me luck. ;-)

Related post:
Saizen REIT, First REIT, Golden Agriculture and Genting SP.

10 comments:

Drizzt said...

if you subscirbe to the rights issue just proves that you have deeper pockets lol.

Drizzt
Investment Moats.com

AK71 said...

Hi Drizzt,

Perhaps. ;)

It would be a shame not to subscribe to the rights in this case though. :)

Anonymous said...

Er, just to clarify. "The Rights Issue books closure date will be at 5.00 p.m. on 3 December 2010."

Does it mean that I can go to the ATM and subscribe to my rights on the 4th Dec onwards ? Or was it that I have to subscribe by 3rd Dec 5pm ?

Thanks

SnOOpy168

AK71 said...

Hi SnOOpy168,

We can only pay for the rights once the nil-paid rights start trading on the 8th of Dec, if I am not mistaken.

dN said...

Hello AK71,

Just wondering about this First REIT's rights issue, have they sent anything yet? How do we apply to pay for the rights? I am a holder, but to date have not received anything yet. Please excuse if it's a silly question, as I am a newbie when it comes to rights issues (First REIT is my first holding to have one :)

Thanks!,
dN

AK71 said...

Hi dN,

Not to worry. You will receive a package from them detailing how many nil-paid rights you have been alloted plus instructions on how to pay for the rights. This will happen a few days after XR (1 Dec). So, wait for it. :)

Anonymous said...

hi all...

i have gotten a book on the proposal. they have a proxy form in it but this is for attending the AGM on the proposed aquisition. it doesnt matter if i dun fill it up right?

well, i have not receive any package detailing the nil paid rights alloted as yet.

AK71 said...

Hi Anonymous,

I believe what you have is the notice for the EGM regarding the rights issue.

Don't have to do anything if you are not voting for or against the rights issue. :)

dN said...

Dear AK71,

Thanks so much for your reply. Understand now... Have also received their EGM notice as well.

Have a good one,
dN

AK71 said...

Hi dN,

No problem. Glad to share. :)

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