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A friend told me he is waiting for Saizen REIT's unit price to weaken before he buys some. I informed him that Saizen REIT has been buying back units from Mr. Market. So, there could be some support for its unit price in such a situation.
Daily share buy backs:
14 Dec 12 - 330,000 units @ 17.2 c
13 Dec 12 - 310,000 units @ 17.332 c
12 Dec 12 - 310,000 units @ 17.36 c
16 Nov 12 - 360,000 units @ 16.78 c
12 Nov 12 - 400,000 units @ 17.2 c
9 Nov 12 - 400,000 units @ 17.3 c
16 Oct 12 - 350,000 units @ 16.73 c
15 Oct 12 - 900,000 units @ 16.6 c
12 Oct 12 - 350,000 units @ 16.6 c
8 Oct 12 - 900,000 units @ 16.6 c
3 Oct 12 - 330,000 units @ 16.48 c
25 Sep 12 - 680,000 units @ 16.4 c
Although Saizen REIT's unit price has advanced since hitting a low in the middle of this year, I feel that it is still rather undervalued.
Fundamentally, the only negative I see for unit holders now is the weakening JPY which is probably going to decline further in value against the S$.
In a recent blog post, I made some assumptions which could be useful for anyone thinking of parking some funds in this REIT. See: REITs: When to buy?
It is, perhaps, also worth taking note that the units bought back from the open market were cancelled instead of being held as treasury stock (for possible re-issue in future). With less units in issue, the expected lower DPU in S$ terms due to a weakening JPY, everything else remaining constant, could be less of a concern.Technically, the rising 100d MA should provide some support at 16.7c. Failing to hold could see price testing the 200d MA for support which is rising and approximates 15.5c now. If unit price should go that low, I could possibly add to my long position.
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