3.89% T-bill. DBS and OCBC fined. IREIT Global.

I have been busy gaming in the last few days as Neverwinter celebrates its 10th birthday.

Time really flies and I have been adventuring in virtual worlds for 8 years.

Of course, I have been retired from gainful employment for just as long.

I remember saying that CPF is a pie we would all get to eat one day if we did the right things.

Well, in another 3 years, I would get to eat the pie.

It is both a happy and depressing thought.

Anyway, like I shared in my last blog, I ignored AA REIT's rights issue.

It meant accepting an 11% reduction in income from the REIT in future.

I am staying invested in AA REIT but as a retiree without plenty of excess funds, I am less willing to deploy money into any venture that does not add to my income in the very near future.

Even if I were to take up my rights entitlement, unless I am willing to apply for a lot more in excess rights, I would still suffer some income reduction from the REIT.

Much better to put the money in T-bills in my case.

This provides a nice segue into the next topic.

My non-competitive bid for the recent 6 months T-bill was 100% filled.

3.89% p.a. huat ah!

Could have been higher but it is obvious that many kiasu people were placing very low bids of possibly under 2% p.a. in order to secure their T-bills.

Proof is in the pudding with average yield at a paltry 3.07% p.a.

I saw that and it was a face palm "Alamak AK!" moment.

I have no words.

Speechless.

OK, I stop.

Another "Alamak AK!" moment was DBS and OCBC being fined $2.6 million and $600,000 respectively by the Monetary Authority of Singapore.

It is a ton of money to AK but it is probably like being stung by a mosquito for the banks.

I am staying invested in DBS and OCBC, of course.

Still looking to add to my investment in OCBC and UOB at supports.

Hint: OCBC tested immediate support which has risen to $12.30 a share just now.

Longer term support for OCBC is still around $12 a share.

I would add to my investment in DBS too but its stock price would have to decline much more for it to be attractive to me.

Nothing to see here, move on.

I am gathering my funds to take part in IREIT Global's rights issue now.

Must pay by 11 July.

If I am successful in getting all the excess rights I aim to get as well, IREIT Global could become an investment as big as my investment in OCBC.

Yes, I am emptying my war chest for this.

This is an exciting thought but also a scary one.

I might have to do some rebalancing of my portfolio later on.

For now, I just like the idea of increasing my income from IREIT Global by at least 16%.

That's all for now.

If AK can talk to himself, so can you!

Related posts:

1. Ignore one and buy the other.

2. Rights issues and my parents.

Ignoring one rights issue and buying more of another.

Recently, I talked to myself about helping my parents to pay for their rights entitlement for both AIMS APAC REIT and IREIT Global.

This will take a chunk of money.

As these two REITs are also two of my largest investments, I have to set aside a relatively large amount of money to pay for my own rights entitlement too.

After much thought, I made the decision to forgo my own rights entitlement for AIMS APAC REIT for the following reasons.

1. The money raised is not for any activity that would immediately generate more income.

Of course, I might see DPU increasing again in future if they use the money prudently for AEIs and redevelopment.

However, I won't see any return on the proposed additional investment right away.

2. My investment in the REIT is already free of cost.

All income generated by the REIT is really free money for me.

I don't have to add to my investment to have a good outcome even if I should take an 11% reduction in income from the REIT in the meantime.

Readers who have been following my recent blogs and the comments sections might remember that I talked to myself  about these.

Now, hot from the press, we have firm details on IREIT Global's rights issue.

161 for 1000 units at 40.8c a unit.

IREIT Global initially used an illustrative rights unit price of 45c when they announced the proposed acquisition of retail parks in France.

That sent their unit price tumbling down to 44.5c at one point.

When readers asked if that was a good price to buy, I said that it appeared attractive to me with a potential 8% distribution yield.

However, I was waiting to buy at 42c because that was where the chart showed stronger support.

I also said in another reply that we must remember that 45c was only an illustrative price.

With IREIT Global already trading at 45c a unit, the rights issue would have to be at a lower price to be attractive.

So, I would wait.

Now, priced at 40.8c a unit, it is very attractive to me.

I wish I had more money in the war chest to apply for more excess rights.

At a unit price of 40.8c, I am looking at a potential 8.8% distribution yield from mostly freehold assets.

This is also on the back of a relatively strong balance sheet with gearing ratio at 33%, post rights issue.

With interest rates likely to stay higher for longer, I keep saying it would be business entities with stronger balance sheets that would see the light at the end of the tunnel.

The Fed chair has already hinted that a lowering of interest rates would not happen until 2 years later which means sometime in 2025.

Fortunately, IREIT Global has almost 100% of its debt on low interest rates fixed till late in 2026.

It is always darkest before the dawn.

I am quite happy to be paid while I wait.

If AK can talk to himself, so can you!

Related posts:
1. Rigths issues and parents.
2. T-bills and REITs: My plan.