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Saturday, August 11, 2012

AIMS AMP Capital Industrial REIT: Scrip dividend II.

I have been asked online and offline if I would be taking part in the Distribution Reinvestment Plan (DRP) offered by AIMS AMP Capital Industrial REIT.



The price is $1.2421 per unit. This is at a slight discount compared to the closing price of the REIT in the last session which was $1.27 per unit.

The last DRP offered unitholders a price of $1.1622. Shortly after, the unit price plunged to hit a low of $1.085. Could we see a repeat of history? Could unit price plunge lower this time as well?

I did not take part in the last DRP and was waiting to accumulate closer to S$1.00 a unit. Unfortunately, Mr. Market was hungry for AIMS AMP Capital Industrial REIT and buyers overwhelmed sellers after unit price touched a low of $1.085.

So, if we put these pictures together, we could see the REIT's unit price plunge below the DRP's offered price again. How low would the unit price go? This, no one can say for sure but if the opportunity should present itself, for anyone who would like to increase exposure to the REIT, buying then would make sense.

So, am I taking part in the DRP?

Related post:
AIMS AMP Capital Industrial REIT: Scrip Dividend.
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17 comments:

  1. Ah JohnAugust 11, 2012 at 4:22 PM

    So? Wish to know the answer too.

    ReplyDelete
  2. Ah JohnAugust 11, 2012 at 4:58 PM

    Nothing cheap to buy now.
    Hi AK, How do you think about HPH Trust?

    ReplyDelete
  3. WTKAugust 11, 2012 at 8:03 PM

    I think that it will be more appropriate to buy from the open market especially when the price is lower. If not, the DPU can be channelled to other counters if the opportunity arises.

    Ben

    ReplyDelete
  4. AK71August 12, 2012 at 11:14 PM

    Hi John,

    We will have to wait and see. ;)

    Is HPH Trust giving a 10% distribution yield now?

    HPH Trust: 2011

    ReplyDelete
    Replies
    1. Ah JohnAugust 13, 2012 at 2:31 PM

      Hi AK, normally you ask for 8%, but ask for 10% for HPH is because forex risk?

      Delete
  5. AK71August 12, 2012 at 11:14 PM

    Hi Ben,

    I share your sentiments. :)

    ReplyDelete
  6. JCKAugust 13, 2012 at 7:49 AM

    Cheap is relative and subjective.
    At 1.24 if AIMS can maintain their 2.6 cents payout, that will be
    8.38%..

    Thats pretty good as a yeild nowadays ....relatively speaking, no? :)

    ReplyDelete
  7. AK71August 13, 2012 at 11:02 AM

    Hi JCK,

    Most certainly, cheap or expensive is relative. Depends on the person who is doing the valuation.

    Technically, though, it looks like unit price could decline to test supports. So, it would be nice if we could buy at lower prices. Cheap or not, that is up to you to decide. ;)

    ReplyDelete
  8. SnOOpy168August 13, 2012 at 3:43 PM

    I prefer the dividends as cash in the pocket. Otherwise, not only do we have to deal with buy-in prices which is outside our decision matrix, the odd lots and rounding down of units can add up.

    ReplyDelete
  9. AK71August 13, 2012 at 8:17 PM

    Hi Ah John,

    Yes, HPH Trust needs to offer me a 10% distribution yield to compensate for the possibly continuing weakening of HK$ and US$ against the S$. This is the margin of safety I would demand. :)

    ReplyDelete
  10. AK71August 13, 2012 at 8:20 PM

    Hi SnOOpy168,

    Thanks for sharing. Money in the pocket it is. ;)

    ReplyDelete
  11. Sanye ◎ 三页August 15, 2012 at 10:03 AM

    Oops! looks like I am the odd one out again. I intend to subscribe...

    Good luck to all of us, cash or scripts...

    Sanye

    ReplyDelete
  12. AK71August 15, 2012 at 5:19 PM

    Hi Sanye,

    Your decision to subscribe to the last one has turned out nicely. Congratulations! :)

    ReplyDelete
  13. covenAugust 17, 2012 at 10:12 AM

    wouldn't subsribing to DRP result in odd lots ?

    ReplyDelete
  14. AK71August 17, 2012 at 10:29 AM

    Hi coven,

    Chances of ending up with odd lots are rather high but if subscribers are investing for income and have no intention of selling, this is not an issue. :)

    ReplyDelete
  15. genAugust 17, 2012 at 10:39 PM

    Hi Ak,

    Great site...

    Just wondering, isn't DRP = mini rights issue? As the script given will increase the overall trust's unit size. this would have an effect of dilution to the existing units like a rights issues but on a smaller scale.

    It is slightly different compared to a unit holder getting the dividend as cash and then buying it directly from Mr.Market(assuming it can be at the same price as the DRP offer) As this will not further dilute the existing unit holder or future DPU.

    Hope I am not confusing people.

    Thanks

    ReplyDelete
  16. AK71August 18, 2012 at 10:12 AM

    Hi gen,

    The DRP is just like any dividend reinvestment plan offered by companies. UOB is doing this too.

    Rights issues happen when there is a lack of funds while DRPs could be offered when conservation of funds is desired. While rights issues will have a definite and predictable impact on benefits per share, DRPs are less predictable as it would depend on the take up rate.

    Otherwise, both rights issues and DRPs would improve the amount of funds available to the REIT and, in this respect, they are the same. :)

    ReplyDelete