AIMS AMP Capital Industrial REIT: Bought more at 19.5c.

There was a single transaction today where 14,600 lots were sold down at 19.5c. This was at 4.01pm. That wiped out the buy queue at 19.5c. I went in and bought more units at 19.5c shortly after. It was a bargain and I could not resist it.

Substantial shareholder, Dragon Pacific Assets Limited, on 16 Mar increased its stake from 11.41% to 11.65%. This is an increase of 5,274 lots. Today, it increased its stake to 11.98%. This is an increase of more than 7,300 lots. Insider buying is taking place as price declines, it would seem.

Could we not see 19c or 18.5c per unit? In this current market, we could. Sentiments are still very negative and people do become irrational in times like this. I already have a buy queue at 19c.

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AIMS AMP Capital Industrial REIT: Bought more at 20c.

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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?

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