Hyflux director divested all his shares!

Lee Joo Hai, a director of Hyflux, divested his shares completely at $2.18 per share in open market sale at own discretion on 15 April 2011. 

Total: 375,000 shares. 

As an insider, could he know something that we retail investors don't? Probably.





In my last blog post on the subject, I had mentioned that 

"the news that Hyflux is issuing preference shares with an annual dividend rate of 6% is somewhat surprising to me. In an environment of low interest rates, isn't paying a 6% interest a bit expensive? 

"It would only make sense to do this if borrowing from a financial institution would be costlier and it would only be costlier if the company and/or its business is perceived to be high risk."





Judging by how well the response is to the placement shares, which were 7x oversubscribed, I expect the ATMs to see long queues as people try to get their hands on some of these preference shares. 

Application closes on 20 April and the shares will start trading on 26 April. 

Good luck to those interested.

Related post:
Hyflux: 6% perpetual Class A preference shares.

Industrial rent forecasts strongest for Singapore.

This research paper on Asia Pacific real estate by DTZ Research was published on 23 February 2011. DTZ Research rates properties as HOT, WARM or COLD.  HOT refers to properties severely undervalued. WARM refers to properties somewhat undervalued to somewhat overvalued. COLD refers to properties which are very much overvalued.

It is very interesting to see that Singapore properties are rated as HOT for all three markets researched, namely, office market (-12%), industrial market (-14%) and retail market (-8%).  In more detail, HOT refers to an investment where investors can expect to make returns higher than the risk adjusted rate of return. Markets estimated to be more than 5% under-valued are classified as HOT. To put things in perspective, the office and industrial markets in Hong Kong are rated COLD. Taipei's industrial market is also rated COLD.

As I am heavily invested in industrial properties S-REITs, notably in AIMS AMP Capital Industrial REIT and more recently, in Cambridge Industrial Trust, Cache Logistics Trust and Sabana REIT, I am pleased to have affirmation from DTZ Research when I read this:  "Singapore, a traditional powerhouse in trade and logistics, is expected to be the best industrial performer over the forecast period in terms of rental growth, forecast at 3.6% pa." Refer to page 8 of the research paper. See it here.

Related post:
Higher rents to benefit industrial properties S-REITs.