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Be rewarded for opening an SRS account!

Saturday, November 9, 2013

I have blogged about the benefits of having an SRS account many times before and if you do not yet have an SRS account, you might want to think of starting one.


Click to enlarge.

If you are thinking of starting one before the end of the year to save on income tax payable next year, you might want to consider OCBC's offer.

First 2,000 customers to open a new OCBC SRS account with at least $8,000 will get a $30 Robinsons shopping voucher!

I love a good deal and I love sharing the news too.

Related posts:
1. SRS: A brief analysis.
2. Ways to reduce income tax.
3. Don't see money, won't spend money.

Not an advertorial.

Croesus Retail Trust: Initiated long position at 87c.

Friday, November 8, 2013

I love Japan and with the Japanese Yen so low now, I am planning a trip to the Land of the Rising Sun in December. 

This might have something to do with why I initiated a long position in Croesus Retail Trust. You think so? Nah.

Croesus Retail Trust is a business trust which owns 4 shopping malls in Japan. Its IPO in May priced its units at 93c a piece which meant a slight premium of 3.3% over its NAV of 90c a unit.


Luz Shinsaibashi is a new retail building in Osaka.

The Trust dangled a distribution yield of 8% and investors lapped it up, pushing the unit price to a high of $1.18 on the first day of trading. 

An auspicious number for the Cantonese people perhaps as it sounds like "prosper everyday" but not for those who bought some then. 

Unit price declined over the next 4 months to touch a low of 84.5c on 17 Sep for an almost 29% drop.

Buying at a discount to NAV and getting a relatively high yield is an attractive combination for me. The bug bear is the relatively high gearing level of about 44%. 

Any yield accretive acquisition will probably be funded through a blend of debt and equity. So, for someone who might not have the resources to participate in a rights issue, this is something to bear in mind.

Although trading at a discount to NAV and offering a relatively high distribution yield, there was nothing to prevent unit price from declining further after touching 84.5c on 17 Sep. The good news for unit holders is that it did not.



Indeed, unit price seems to have found a floor with many times tested support at 85.5c. The confluence of the 50d and 20d MAs form the immediate support at 87c. 

With the downtrend broken and unit price moving sideways now, I decided that downside risk has reduced from a technical perspective.

The 180 days lock-up for the sponsor and their strategic partners in the Trust will end sometime this month. Will they sell 50% of their stakes? 

With trading volume so low, it could drive unit price down by quite a few notches if they should do so. Well, I simply don't know.

What I do know is that at 87c per unit, I am buying at a 3.33% discount to NAV and I will receive an estimated 8.5% distribution yield. 

If price action should test the support at 85.5c, I might buy more because there would be a bigger margin of safety then.

Now, I look forward to the Trust's first income distribution which is expected to be paid in March 2014.

Related post:
Invest in Japanese real estate: Croesus Retail Trust.

Have a break!

Thursday, November 7, 2013

This is something I have pretty often for my afternoon tea breaks:




Wholemeal bread. So healthy!


So, what's inside? Er... ahem...




So yummy!

To let go or to hold on to a position?

We can either make statements of fact or opinions. They are quite different from one another although sometimes people mix them up. This is just something that happens naturally in daily life.

"Today's temperature is 30 degrees Celcius." This is a statement of fact. It could be either right or wrong.

"This is a nice day." This is an opinion. There is no right or wrong.

How could these be mixed up?

Well, to me, it might be a fact that the weather is nice but to someone else it might not be. We could have a debate until the cows come home on who is right but it would be an exercise in futility because there is simply no right or wrong to this.


Of course, we can make statements of fact or opinions about anything under the Sun, including people.

"This person is 1.7m in height." This is a statement of fact.

"This person is short." This is an opinion.

In the land of the Vikings, 1.7m might be short for a guy but in PNG, 1.7m might be considered tall.

Now, when we start saying things about people, we have to be a bit more careful because it could get sensitive. I know people who are vertically challenged who are very sensitive to being called "short".

So, I try to be careful about what I say about people. I don't want to be hurtful. The best is not to say anything at all. If I have to say something, I try to make sure it is positive. If it is not, I try to be diplomatic.

Sometimes, I might slip up. If the other party should be diplomatic enough to let it go, then, I should be grateful and let it slide. I might even think of how to make it up to the other party in future.

Why force anyone into a corner? When any regular guy with an iota of pride is forced into a corner, what is going to be his natural reaction? Should we be surprised by the answer?

We will very likely save ourselves and others a lot of angst if we are more careful with what we say in the first instance.

Perennial China Retail Trust: Progress in Q3.

Wednesday, November 6, 2013

In my blog post of 10 August, I mentioned that current DPU is being sustained by earned out deeds which will be exhausted by end 2014. So, we really need to see stronger occupancy and evidence of improved cash flow from operations in the coming quarters.

The latest report shows that the Trust's operations have improved with occupancy in Shengyang Longemont Shopping Mall increasing to 85% and with occupancy in Shenyang Red Star Macalline Furniture Mall at 93%. Shenyang Longemont offices saw occupancy improving from 33% to 41%, quarter on quarter.

Perennial Jihua Mall which opened in August has hit an occupancy of 95% while Perennial Qingyang Mall which is slated for opening in 1Q 2014 saw leasing commitment improving from 67% to 75%.


All in all, it seems that the management have been working hard to secure tenants. However, there is still much to be done. So, I believe that it is still relatively risky investing in PCRT compared to a plain vanilla retail or commercial S-REIT.

Therefore, I would ask to be adequately compensated for the risk that I would be taking on if I were to invest in the Trust.

For now and the next few quarters, the Trust would probably continue to draw on those earned out deeds in order to sustain the income distributions at current level to unit holders.

Will the Trust be able to maintain its current DPU without the earned out deeds from 1Q 2015? It would depend on the progress that they make in the next 15 months. If the Trust keeps up the momentum we see in Q3 and with the opening of a new mall with a relatively high level of leasing commitment in early 2014, it could happen.

Bearing in mind that another mall, Perennial Dongzhan Mall, could open its doors in 1Q 2015, things could further improve if there is, again, a relatively high level of leasing commitment. However, we do not want to count our chicks before they are hatched as the management have just started to market this new mall to prospective tenants.

Assuming that no further improvements are forthcoming which, I believe, is rather unlikely, then, I have estimated in an earlier blog post that DPU could reduce by at least 50% from 1Q 2015.

With an entry price that gives me approximately an 8% yield, a 50% reduction would bring the yield down to 4%. Although this is unlikely to be the case, if it should happen, it is still acceptable to me.

What about anyone who is thinking of buying in at 54c a unit today? Well, that would mean a yield of 7% and a worst case scenario yield, by my reckoning, of 3.5% in 2015.

If distribution yield should decline by 50%, however, it would be optimistic to think that the unit price of the Trust would not decline. This is especially true in an environment of rising risk free rate.

So, before we invest in the Trust, should we not ask ourselves if we are able to stomach what could be the worst case scenario?

Related post:
Perennial China Retail Trust: 1H 2013.

My iPad has died.

Tuesday, November 5, 2013

Last night, when I tried to switch on my iPad, all I got was a black screen with a faint light glowing from the sides. Reset it and it still didn't work. Charged it overnight and tried it again this morning and it is still dead.

The only thing I have yet to try is to slap it. Maybe, I should slap it (a few times) this evening when I get home. It might be in a deep slumber and hard slaps could be the remedy. You don't think so?


While driving to work, I was thinking of buying a replacement iPad. I am rather partial to the iPad Mini after seeing the one a friend has. The iPad Mini weighs a paltry 308gm. I find that attractive.

Since Apple dropped the price to $408.00 for the old iPad Mini with the new version launched, it is even more attractive to get the old version now. Of course, since I am not in a hurry, I could wait to get a refurbished iPad Mini for only $348.00 direct from Apple Store (and with warranty too)!

My iPad was pre-owned. A friend who was upgrading to the iPad 2 back then gave this to me more than 2 years ago. After using it for a bit, I was so wowed by it that I bought two iPad 2s, one for my mom and one for my niece. Now, we cannot imagine not having an iPad at home.

Rationally, however, I don't think I need an iPad. A friend told me I was under-utilising mine as I use it mostly for games and movies.

An iPad is definitely nice to have but, for me, it is probably not a necessity. Having said this, I suspect that it will still be hard not to have one around because I am so used to watching movies in bed (which is not a good habit, I know). The portability is very attractive.

I was doing quite well with just my PC and notebook before the iPad came into my life more than 2 years ago. Will I suffer withdrawal symptoms from being iPad-less? I guess there is only one way to find out. Wish me luck!

Related posts:
1. Have an iPad?
2. Protect your iPad.
3. I grew up without an iPad.

That's IT with AK71.

Monday, November 4, 2013

OK, amusing blog title? Go ahead, please laugh.


Muahahahaha!


LOL!


ROFL!


Fell off your chair? I hope you were not sitting on a high chair.


After all, AK71 and IT don't mix well. ;p

So, what is this blog post about? It is just to record some observations as to which OS and web browser are number 1 now amongst the readers of ASSI. Statistics are for the last one month:

Number 1 OS is still Windows although at 49%, it is probably not as dominant as before.


Android has a very small lead over iPhone. Actually, reading blogs on a phone must be quite demanding. I don't know why people do it. Of course, with bigger screens available from Samsung and HTC, for examples, perhaps, that is why Android has a slight lead.

Nonetheless, Apple is one against so many. If we add iPad and iPod, then, Android is beaten. Apple is just an amazing company.

What about browsers? It has always been Internet Explorer for me. Only when I started blogging a few years ago did I learn about other browsers. So, being the dinosaur that I am, I am a bit surprised to find that Internet Explorer is number 3 in my blog stats.


Number 1 browser is Safari with a 27% share and number 2 browser is Chrome with a 25% share. My good old trusty Internet Explorer has a 20% share.

Even though I am a "know almost nothing" guy when it comes to IT, these numbers are still interesting to me and tell me how things are changing rapidly (and that I am probably being left behind).

Related post:
ASSI: 10 quarterly reports in 1 blog post.


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