Mr. Lee Kuan Yew on the eurozone crisis.

I just received the latest copy of Alumnus in the mail and on page 4 is a one page write up on what Mr. Lee Kuan Yew said during LKY School of Public Policy's 7th Anniversary. He said something about the eurozone which got me interested enough to search for more details online.

The one liner that got me interested was: "Mr. Lee thinks European leaders will try very hard to prevent the collapse of their currency union but he does not believe they will be able to keep it going." So, does he think that the eurozone will ultimately dissolve?

Searching the internet, I found a website with the details:

... European leaders will try to save the euro zone from collapse, because a collapse of the currency union would be “an admission that their aspiration for one Europe is not achievable”.

.......

“A fundamental problem of the euro is that everybody, every European country, march to the same drummer whereas each country has its own tempo and you cannot expect the Greeks to march like the Germans, so the problem will not go away”.

Therefore, he added, “a two-tier Europe or even a three-tier Europe is possible but a one-tier Europe with different spending habits, thrift habits and discipline is too difficult to achieve”.

The euro came into existence in 1999 with the aim of increasing economic cooperation and growth in Europe, and upping Europe’s presence on the world stage.

With the recent debt crises, the currency union forces other European countries to bail out troubled  members and policymakers are denied the flexibility of monetary policy as a tool to fight recession.


Read articles: here and here.

So, will the eurozone go the way of the Dodo? If it will, when will it happen? 

Your guess is as good as mine. 

One thing is for sure, Mr. Lee Kuan Yew has spoken and I will take note.

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Seven eurozone countries had their ratings confirmed while nine were downgraded by S&P on 13 Jan (Friday). It downgraded France's top AAA rating by one notch to AA+, with a negative outlook while  Italy went down by two notches to BBB+, negative outlook, and Spain was also down two notches to A, negative outlook.

Read article: here.


BREXIT!

Updated on 25 June 2016: Prime Minister David Cameron is to step down by October after the UK voted to leave the European Union. Speaking outside 10 Downing Street, he said "fresh leadership" was needed. The PM had urged the country to vote Remain but was defeated by 52% to 48% despite London, Scotland and Northern Ireland backing staying in. (Source: BBC)

The UK is likely to lose its AAA credit rating after it voted to Leave the EU. Moritz Kramer, chief ratings officer for S&P, said on Friday morning that the UK's AAA rating was “untenable under the circumstances”. German daily newspaper Bild quoted Kramer as saying: “If Great Britain decides for a Brexit in the EU referendum on Thursday, then the AAA credit rating would come due and would be downgraded within a short period of time.” (Source: Independent)

Related post:
Stakeholders should worry as credit is tightening.

Sabana REIT and AIMS AMP Capital Industrial REIT: Releasing quarterly results on 20 January 2012.

Both Sabana REIT and AIMS AMP Capital Industrial REIT will be releasing quarterly financial results on 20 January 2012.

Sabana REIT: see announcement here.

AIMS AMP Capital Industrial REIT: see announcement here.

Sabana REIT has completed a few acquisitions in the last quarter. However, I think their contributions to distributable income will be more substantial in the current quarter. This is because the acquisitions where completed in November and December and not at the beginning of the last quarter.

On 22 November, acquisitions of the following were completed:

1. 3A Joo Koon Circle
2. 2 Toh Tuck Link
3. 21 Joo Koon Crescent

See announcement here.

On 7 December, the acquisition of 39 Ubi Road 1 was completed. Read announcement here.

On 15 December, the acquisition of 6 Woodlands Loop was completed. Read announcement here.

All acquisitions were funded by debt and would contribute to a higher DPU. Conservatively, I am expecting a DPU of 2.2c or a bit more to be announced on 20 Jan.

We could see a higher DPU in the next quarter when full quarter contributions from the aforesaid completed acquisitions weigh in.

As for AIMS AMP Capital Industrial REIT, redevelopment of 20 Gul Way is ongoing and seems to be progressing nicely. Higher income due to this redevelopment will materialise only in 1Q 2013. I blogged about it before. See it here and how I bought more units at 93.5c.

It would be nice to have a repeat of 2.5c DPU when results are released on 20 Jan although I would not be surprised if DPU dips a bit due to possible loss of rental income from the redevelopment of 20 Gul Way. I mentioned it last year in a blog post as well: here.

Unit prices of both Sabana REIT and AIMS AMP Capital Industrial REIT have been creeping up. Their unit prices closed at 90c and 97.5c respectively in the last session. With the estimates I have made, this would mean annualised distribution yields of roughly 9.78% and 10.26% respectively.

Good luck to all unit holders.