9M 2015 passive income from non-REITs.

Some wonder if Mr. Market could go into a depression? I don't know but I do know that many stocks became much more attractively priced in the last three months.

Consistent with my strategy to diversify my portfolio to reduce reliance on S-REITs for income, I added to my long positions in the following as their stock prices declined more significantly recently:

1. Accordia Golf Trust

2. Ascendas Hospitality Trust

3. ST Engineering

4. Starhub

5. SembCorp Industries

In the last three months, I also initiated long positions in the following as investments for income:

5. VICOM
"A 15x PE ratio would give us a fair value of $5.36 or so per share."

6. Religare Health Trust
"Trust has demonstrated its ability to improve its revenue organically quite strongly which makes up for the expiration of the sponsor's waiver to their share of the distributable income."

7. King Wan
"King Wan is in a net cash position and it also has an order book that would provide earnings visibility until 2018."

Finally, I accumulated the following stocks which have a bit of an income investing angle but the main reason is because I think they are worth much more and at lower prices, they became even more attractive:

8. Wilmar

9. OUE Limited

If you should be interested, you could search ASSI for more of my blog posts on these stocks and why I decided to add them to my portfolio when I did.

Of course, stocks could stay undervalued for a long time but regularly receiving some dividend in the meantime makes the waiting more palatable. I like to be paid while I wait.

If you suspect that I have dipped into my war chest in the last three months, you are right. 

Could we see another big decline in the stock market? We could and we should be ready. So, being cautious, I have not exhausted my war chest.

I have a couple of fixed deposits maturing next month in October and I will probably be keeping the money close at hand instead of putting it in another fixed deposit or two.

In Q3 2015, the following non-REITs paid dividends:

1. SATS

2. Old Chang Kee

3. APTT

4. SingTel

5. SCI

6. SMM

7. Wilmar

8. NeraTel

9. ST Engineering

10. QAF Ltd.

11. Starhub

12. HongLeong Finance

13. Croesus Retail Trust

For the first 9 months of 2015, total passive income received from non-REITs: S$ 57,747.59. 

This works out to be S$ 6,416.40 per month.

Have a shopping list and be ready to pounce if Mr. Market becomes depressed.

Related post:

6M 2015 passive income from non-REITs.

Croesus Retail Trust: 22 for 100 rights issue.

Some time ago, I mentioned that due to the relatively high gearing level, I expected further acquisitions made by Croesus Retail Trust to be funded through new equity or a blend of new equity and debt.

In their acquisition of another mall in Japan, Torius in Fukuoka, funds will be raised partially through a rights issue. 

Some details:

1. 114,222,677 Rights Units. 

2. Issue price of S$0.610 per Rights Unit.

3. 22 Rights Units for every 100 existing Units held.

I very much prefer a Rights issue to a share placement because the former allows all unit holders to participate. I also like Rights issues if the money is used to purchase good quality income producing assets which would lead to DPU accretion.

Based on the purchase price, the NPI yield of Torius is 7.8% while Croesus Retail Trust's portfolio's NPI yield is 5.3%. So, the purchase is NPI yield accretive. However, due to the enlarged float, post Rights issue, we would see only a slight increase in DPU.

By subscribing to the Rights, I am putting my trust in the management to extract more value from the property as they have hinted at AEIs and future positive rental reversions.

I will fully subscribe to my Rights entitlement at 61c per Rights Unit and I will also apply for excess Rights, as usual. If I am successful in getting some excess Rights, it would improve the distribution yield of my investment in the Trust.

During the one week or so when nil-paid Rights are being traded (9 Oct to 19 Oct), we could see some weakness in the Trust's unit price. That could be an opportunity to accumulate.

Also, if the nil-paid Rights are priced attractively, I could buy more. For example, if we think that, post acquisition and Rights issue, a fairly good unit price to pay for Croesus Retail Trust is 80c a unit, then, if the nil-paid Rights should trade at anything lower than 19c a piece, it could be a good deal (80c - 61c).

I certainly hope that this rights issue would present opportunities for me to add to my investment in Croesus Retail Trust at more attractive prices.

Read announcement: here.
See Press Release: here.
"Nil-paid" Rights trading period from 9 October 2015 to 19 October 2015. The closing date and time for subscription for Rights Units by Unitholders is 23 October 2015 at 5:00 p.m. (9.30 p.m. for Electronic Applications through ATMs of Participating Banks).

Related post:
Croesus Retail Trust: ONE'S MALL.