Saizen REIT: Hold or sell as insider buying continues?

On 15 March, Argyle Street Management Limited, a substantial shareholder of Saizen REIT, increased its holdings from 15.036 % to 15.201% or an increase of 1,942,000 units. Average price per unit: 13.06c. This is their second open market purchase two days in a row. Announcement here.

On 16 March, Starich Resources Limited, bought 1,000,000 Saizen REIT warrants. Read announcement here.

The continual purchases by insiders reinforce my own perception that at 13c/unit, we are pretty close to the floor, if not the bottom. In the worst case scenario, a total loss of the 28 buildings in the affected areas should limit losses to NAV and DPU to 15%. In fact, losses to the DPU could be lower as almost half of the 28 buildings in question belong to YK Shintoku which is not making any contribution to income distribution.

However, we have to bear in mind that the REIT would have to incur repair costs to the affected buildings even though the damages are seen to be minor so far. Given the healthy cash holdings the REIT has now, I do not foresee any problem with its ability to pay for the repair work unless it should run into tens of millions of dollars. So, there is no need for the REIT to seek extra cash from unitholders.

The one thing that could go wrong now is the situation at the Fukushima nuclear power plant. If the reactors or the spent fuel should suffer a complete meltdown, we could possibly see the current 30km evacuation zone widen.  I read somewhere that the USA suggested an 80km evacuation zone and this would mean the 3 buildings in Koriyama would have to be abandoned since those are within 60km of the nuclear power plant.

There is hope that things would improve: "Engineers were focusing their efforts on restoring the power supply to a quake-damaged nuclear plant in an attempt to reactivate its cooling system and avert a meltdown." Read article here.

I have many people asking me whether to sell or to hold. I cannot provide advisory but my own preference is to hold because I think we are pretty much near the bottom. I like to sell at resistance and not at supports, if I can help it. Of course, there is no guarantee that I am right. So, if you feel like selling and if that would give you a peace of mind, why not?

Please read this:
Help Japan and donate generously.

Help Japan and donate generously.

Eating emergency rations in shelter.

In life, sometimes bad things happen. I had a couple of things that went wrong at work today and was feeling somewhat grouchy but they are so insignificant compared to really bad things that could happen in life. How many truly holy and selfless people do we know?

In the aftermath of the earthquake and tsunami that rocked Japan, I watch scenes of destruction and misery on the TV and YouTube. My heart aches and I want to contribute to the aid efforts. I was advised to wait for an official donation line that would benefit the victims in Japan directly. One such line is now available at the Singapore Red Cross:

A child at an evacuation centre.

How we can help?

The Singapore Red Cross is accepting monetary donations towards this disaster. Donors may do so with the following:

Cash Donation :

For walk-in donations, the SRC is open during the hours:
Mondays to Fridays 9.30am-9pm,
Saturdays, Sundays and Public Holidays 9.30am – 6pm.

Address: 15 Penang Lane, Singapore 238486.

Cheque Donation:

Cheques to be made payable to the “Singapore Red Cross Society” At the back of the cheque, please indicate:

i) Name
ii) IC/Passport No.
iii) Address and Contact Number
iv) “Japan Disaster 2011”

SMS Donation

Donors may donate via their mobile phones to 75772. For every sms, S$50 will be donated to the “Japan Disaster” fund.

*Please take note that all donations to this disaster are non tax-deductable.

I think the most convenient way to make a donation is by SMS. Since the donations are non tax-deductable, there is no difference whether they have my name and IC number or not.

Please help the victims in Japan. Many have lost their homes and loved ones. Let us help them to overcome the current difficulties and aid their efforts in rebuilding their lives.


Watch this video:


This is a sincere appeal and please accept my heartfelt thanks for your compassion and generosity.

You may visit the website of Singapore Red Cross here to verify the information given above.

Japan disaster: dead, missing toll tops 15,000. Read article here.
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Another avenue to make a donation:

I was just doing some internet banking and found that DBS is facilitating donations to the Red Cross Japan Disaster fund and I have made my donation via internet banking. It is really easy for anyone who does ibanking with DBS. In the consumer reference space, fill in your telephone number.

16 Mar 2011 07:55 PM  Singapore

Your transaction is completed. You may wish to print out a copy of this confirmation for your reference. Payee Name RED CROSS JAPAN DISASTER  Pay From POSB Savings ***-*****-* Latest Available Balance ******** Amount S$**** Consumer Reference No. ******** Date of Payment Immediate  Transaction Reference ***********

Step 1: Log in to your DBS/POSB bank account

 

Enter your DBS/POSB internet banking User ID and PIN, and click Submit. Make sure you have your iBanking Secure Device with you. Enter the Secure PIN and click Submit.

Step 2: Go to Bill Payment

Once you're logged in, go to Payment Services and click Bill Payment Select Red Cross Japan Disaster from the droplist

Step 3: Add Red Cross Japan Disaster as a bill payee on your DBS/POSB iBanking account

 

To set up Red Cross Japan Disaster as a bill payee, here's what you'll need to: Enter your telephone number as your Consumer Reference Number Select the bank account you wish to debit your donation from Then, click Submit.

Step 4: Confirm Red Cross Japan Disaster as a bill payee