MIIF: Lower fair value with lower income distributions.

With MIIF divesting TBC, unit holders will no longer be getting income distributions twice a year from the Fund in future.

This is because MIIF receives income from TBC in March and September while it receives income from HNE and CXP in September only.

MIIF will have a DPU of about 0.7c in August 2013 which is from the final income received from TBC. A DPU of about 1.2c will be paid out in March 2014 which will be for income received from HNE and CXP.

In future, we should expect only once a year distribution from MIIF for income received from HNE and CXP. Also, do not expect 1.2c to be the norm either as it is expected that the tolling revisions for HNE will adversely affect DPU for the full year starting in 2014.

What would be a fair value per unit for MIIF when it resumes trading?

In recent past, MIIF was trading at about 63c a unit and with an annual DPU of 5.5c, unit holders were enjoying a distribution yield of some 8.73%. For ease of calculation, let us be generous and assume that an annual DPU of 1.2c will be the norm. This would give us a fair value of 14c per unit, thereabouts, in order to have a similar yield. This would mean a decline in price of some 49c per unit!

If this estimate should gel with Mr. Market, unit holders would have been better off selling at 63c a unit prior to the voluntary trading suspension since unit holders are only getting 44.329c per unit from the divestment of TBC either in cash or in APPT units (priced at 97c per unit).

It would also mean that anyone with a purchase price of 58c or lower per unit, prior to the trading suspension, is quite "safe" while anyone with a higher purchase price could lose money.

Of course, there is a chance that APPT could see higher unit price when trading starts and there is also a chance that MIIF might not see its own unit price plunging to 14c per unit. If this should be the case, then, this effort by the management to unlock value for unit holders could be declared a success.

Anyway, now that we have some ballpark figures, we will be able to make some snap decisions tomorrow, if required, keeping in mind that any investment at the right price is a good investment.

See: MIIF dividend guidance.
See: APPT offer price and MIIF APPT units.

Related post:
MIIF: Asian Pay Television Trust (APTT).

Am I trying to be the most popular blogger in Singapore?

Someone asked if I was trying to be the most popular blogger in Singapore. I don't know why she got that impression. Was it something I said or did? Hmmm...

Anyway, I really am too lazy to work much harder on my blog. Blogging is a hobby and I want to keep it that way. I mean I enjoy blogging enough to want to continue doing it but to work hard at it is really a different ball game, isn't it?

For anyone who has the ability and the will to become a popular blogger, there could be many financial advantages. No kidding? Yes, no kidding! There are enough examples out there.

Xiaxue

A blog I visit from time to time belongs to, arguably, the queen of bloggers in Singapore, Xiaxue.

She makes enough money from her blog to do it full time. I was told she makes $XX,XXX in certain months and has a manager to deal with advertisers!

When she got married, she didn't have to worry about most of her wedding expenses. She had so many sponsors!

See:
http://xiaxue.blogspot.sg/2010/03/my-wedding-solemnization.html
(Just scroll to the end of the blog post if you don't want to look at the photos.)

Then, recently, she got her matrimonial home renovated and, again, she had so many sponsors!

See:
http://xiaxue.blogspot.sg/2013/03/home-decor-part-1-living-room-and.html
(Again, scroll to the end of the blog post and you will see what I mean.)

Pretty amazing!

I think part of Xiaxue's success stems from not being a finance blogger in Singapore. Hahaha... I am only half kidding. Want to have more financial rewards as a blogger? Don't do what I do!

If you don't believe what I just said, you just have to search for blog awards in Singapore and there are quite a few annual events out there but you will never find a category at these awards that says "Best Investment/Personal Finance Blog".

Sobering for some.

Related posts:
1. A couple of thoughts.
2. Request for sponsorship.