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I don't think my application for excess rights would be fully filled.
So, I am waiting for some money to be refunded.
I have also received some money from a 6 months T-bill which has matured.
The next 6 months T-bill will see its auction happening on 20 July or next Thursday.
Instead of simply recycling money from the matured T-bill, I plan to increase the quantum by using some of the money I expect to be refunded from my application for excess rights.
Judging by the increased interest in non-competitive bidding in the last 6 months T-bill auction, it is possible that my non-competitive bids would only be partially filled in future auctions.
So, given this consideration, increasing the application quantum in future makes sense too.
With interest rates offered by the banks for 6 months fixed deposits having declined pretty significantly, it is only natural that interest in 6 months T-bills should pick up.
Adding exposure to 6 months T-bills while the front end of the yield curve remains elevated will generate relatively attractive passive income for me safely.
It would also help to strengthen the fixed income component of my portfolio which is something I have been doing for quite a while now.
The money in my T-bill ladder can also be deployed in the next significant stock market correction which might happen if the much talked about economic recession takes place.
Just talking to myself, as usual.
If AK can do it, so can you!
Recently published:
IREIT's rights issue oversubscribed.
(Read the comments section too.)
Bloggy Award
24 comments:
Considering the amount of excess rights applied by substantial shareholders (CDL), taking out those excess rights, i think the rights issue will be only ard 105% oversubscribed. So i think most will get their excess rights filled.
Hi LKH,
I was under the impression that CDL would only mop up the excess rights if no one else wants them.
I might be mistaken.
Will just have to wait and see if I get everything I applied for. :)
Hello AK
Any idea when will the results be out?
Hi Yv,
The rights units will be converted into regular units and start trading on 19 July.
So, we should know by then.
Money for unsuccessful application will be refunded within 3 days after that.
AK sifu, good morning. Could you please self talk and point us to your past blog post on how to apply 6-mth T-bills and how to determine roughly non-competitive interest rate to apply for ah... thank you!
Hi C,
I searched my past blogs and found that I shared a link in October last year in this blog:
4.19% p.a. T-bill. Stunned!
Since DBS has such a good write up on how to apply for T-bills, I didn't see the need to re-invent the wheel.
AK is lazy lah. ;p
I usually do non-competitive bids when using cash on hand to get T-bills.
Any cut-off yield is probably going to be higher than the interest rates from regular savings account.
For using CPF OA money, I would place competitive bids because there is a possibility that the cut-off yield could be lower than the CPF interest rate.
In the past, when OCBC offered to take CPF OA money for their 8 months fixed deposits, they offered 3.8% p.a. interest rate.
So, I think you would agree that placing a competitive bid for T-bills with a yield that was lower than that was silly.
Unfortunately, some blogs actually taught people to do that and in the process lowered the cut-off yield for everybody.
Now that OCBC no longer provides the option, than, we just have to make sure our competitive bids for T-bills are above the CPF OA interest rate, factoring the loss of 8 months interest income in the process.
I blogged about this earlier this year:
Using CPF-OA for T-bills.
I will stick to non-competitive bids when applying for T-bills using cash on hand. ;p
Hi Ak,
Had been reading your insightful. Thanks for sharing your investment journey with us. I toll subscribed to the Ireit rights but given the acceptance rate, likely i will be a lot of the excess returned to me. For that, i was thinking putting the money into SRS and invest in S&P500 to further diversify my portfolio. For that, would like to check if you invest in S&P 500 and if yes, how you go about doing it? Do talk to yourself on that! Thanks!! :P
Hi TS,
I don't have any exposure to S&P 500.
As for SRS, you might be interested in the following:
How AK uses his SRS money?
and
Win and win again with SRS.
They are from 2017.
SATS is no longer in the list but the ideas are still valid. :)
Thank you AK for such detailed sharing:)
Hi C,
I talk to myself in great detail from time to time.
Mental. ;p
At the Rights issue price of $0.408 vs current market price of $0.43, we are seeing an instant paper gain of 5% on the rights issue subscribed.
What’s there not to like?
Hope AK is feeling better after the recent family event
Hi NMHRGY,
Most people flock to what everyone else is buying.
The price goes up and that convinces more to buy up.
That was the case with AIMS APAC REIT in recent months until the rights issue happened, for example.
I much prefer to look at value.
IREIT Global is very undervalued. ;p
I am feeling better now but still worried about some things at home.
Will just have to roll with the punches.
Thanks for asking. :)
Hi AK,
How much excess rights have you applied for IREIT? Do you get all? :)
Hi AK,
Pleased to say that I received fully my excess rights, slightly more than double my allocation. Lucky me :)
Hi DL,
I just checked a few minutes ago.
My application including for excess rights was fully filled. :D
Hi keng,
Steady lah!
Huat ah! :D
Hi,
not sure is a good or bad thing, its the first time that I got my 2x excess rights fully filled. usually other excess rights application only a small fraction is filled.
Hi wt,
Going by the comments I have seen, some people didn't get any excess rights.
So, I don't know how the allocation was decided by the issuer.
Anyway, I am happy my application was fully filled.
It was a bargain. :)
Hi AK,
I applied with close to 2x excess rights and all fully filled too... Guess I think they go by first come first serve? As I applied it much earlier.
Hi jackson,
That could well be the case as I applied on the very first day it opened for application.
Didn't think of that possibility. ;p
Interested in your thoughts on how you value IREIT and what factors made you continue to invest in it, other than the fact that their dividend return is a whopping 8%. Care to share?
Hi Jojo,
Alamak, you have not been eavesdropping on AK for a long time, is it? ;p
I have been talking to myself about IREIT Global and its valuation pretty extensively.
The most recent self talk happened just last month:
Ignoring one rights and buying another.
If you go to the web version of my blog, you will find labels at the end of the article.
Click on "IREIT" and all the past blogs will pop up.
Sadly, their results seems to be on downward trend.
DPU down by 23%!
Hi JCK,
That is to be expected since the Darmstadt asset is mostly vacant.
The new tenant which took 25% of the space has yet to make full contribution.
Also, the out of town retail parks in France have not been purchased yet although new units have been issued through the recent rights issue.
Then, the Berlin property's higher rent won't kick in until middle of next year.
If IREIT Global's unit price should drop below it's rights issue price, I hope I would have the resources to buy more. ;)
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