Author: Risk N Returns

Follow up on Eagle Hospitality Trust

Overall, after engaging with management, I feel the Queen Mary issue is not that big an issue given the safeguards in place. Salvatore, to me, comes across as earnest, cares for investors and someone with the right answers. What holds me back is that it’s too early to tell. He needs to execute and prove to investors that management is true to their word, which is in itself the toughest part of the job. I thank Amanda and Salvatore for taking the time to speak to me. Do you agree with my assessment of the pertinent issues with EHT?...

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Capitaland Retail China Trust (CRCT) to buy 3 malls from Capitaland- Is it a Good Deal?

Using the expected equity fund raise of $275m and taking into account acquisition fee of $5.9m that will be paid in units, I plotted a graph of Pro-forma NAV vs Equity Issue Price from $1.20 to $1.60. At issue price of $1.51, yesterday’s closing price, pro-forma NAV is expected to be about $1.58. This represents a slight dilution in NAV from $1.59. Of course, rights / private placements will be issued at a discount to current share price to attract interest. Pro-forma NAVs range from $1.52 – $1.58 depending on the issue price from $1.20 to $1.50.  On this...

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My Guide to the CPF Investment Scheme (CPFIS)

There is a real opportunity cost to using OA and SA funds. Just by not doing anything and leaving your funds in the CPF account, you are guaranteed a 2.5% or 4% return on those funds annually. As such, when selecting an investment to park your CPF funds in, you have to make sure that the expected rate of return, after taking into account cost considerations, is greater than 2.5% or 4%. If not, it would not make sense to invest in the first place.  The thought process is similar to deciding whether an investment is worth investing using...

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Singapore Savings Bonds (SSBs) – July 2019 Issue

At Risk N Returns, I’m passionate about promoting sensible DIY investing through sharing my thoughts or documenting my investing journey. While I love to take calculated risks, I recognise that most Singaporeans don’t. So here’s a relatively risk free way to invest your warchest or emergency funds with almost no lock-up period and generally higher yields than fixed deposits – the Singapore Savings Bond. Here’s the latest issue details: 1. Latest SSB issue details Issue Code: GX19070WAmount Available: $350 millionIssue Date: 1 Jul 2019Coupon Date: 1 Jan & 1 JulMaturity Date: 1 Jul 2029Application: 3 Jun 6 pm to...

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REIT Spotlight: Ascendas REIT (2019)

In the early years, A-REIT pioneered the sale and leaseback, and build-to-suit programmes to aggressively grow the REIT. The sale and leaseback programme’s strategy was to purchase HQs and properties from companies and lease them back to the companies. Companies benefit from freeing up large sums of capital stuck in their properties, while A-REIT benefits from yield accretive acquisitions and DPU increases. Early examples of these sale and leaseback acquisitions include OSIM’s HQ and SingTel’s portfolio of buildings. The build-to-suit programme’s strategy was similar, just that it was focused on greenfield developments specifically tailored to the needs of the...

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Portfolio @ May 2019

Performance Indicators / Dividends YTD Time weighted return: 12.66% Dividends collected: SGD 3,131.11 Cum-Dividend: SingTel: SGD 770.40 Sell in May and go away The great start to the year finally came to a screeching halt with my portfolio declining about $1k to $162k . Performance May was a great month for dividends as quite a few counters in my portfolio went Ex-Dividend. This led to my best single month of dividends in my almost 6 year investment journey, clocking in at $1,870.55. Stock performance however was not that fun to look at. Between US-China trade war escalations and price...

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Why Singapore REIT ETFs have low yield

While at the REIT Symposium last weekend, I noticed that Nikko Asset Management and Philip Capital had booths set-up in the exhibition hall. Their presence reminded me of the existence of REIT ETFs in Singapore. I’ve always wondered why their yields are typically lower (4-5%) than the REIT sector generally (4-7%). Curious to find out more, I took some time to examine the 3 REIT ETFs listed on the SGX. Here are some thoughts. What is a REIT ETF? A REIT ETF is a combination of 2 investment instruments into 1 – the REIT and the ETF. A Real...

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Eagle Hospitality Trust IPO Review

Ging Wien from ProButterfly alerted me to the presence of a curious asset in the IPO Portfolio. The only independent hotel is the Queen Mary Long Beach, a ship that is moored permanently in Long Beach Harbour (pictured in my cover photo). The ship was converted into a hotel and has been a feature of Long Beach Harbour since 1967. Interested to know more, I went down the Google rabbit hole and I came across a concerning article from local press Long Beach Post regarding the history and cost of the renovations at the property. One article led to another which...

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SingTel FY2019 Results Highlights

SingTel reported their FY2019 full year results yesterday. With it being my largest holding in my portfolio, I obviously have a vested interest in SingTel’s performance. Here are some highlights. A Mixed Bag Year on year Source: SingTel FY2019 Results announcement Operating Revenue is flat-ish year on year. Unfortunately, EBITDA margins have been falling and associates pre-tax earnings continue to be under pressure. Underlying net profit drops 21%. Nothing too unexpected, very much in line with guidance and past few quarter’s expectations. Quarterly trends As investors in SingTel, we have to be on the constant lookout for signs of...

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REIT Spotlight: AIMS APAC REIT (2019)

Amidst all the drama discussed earlier, Nicholas McGrath was appointed CEO of MI-REIT in November 2008, replacing MacarthurCook founder Craig Dunstan. His resume carried a significant blemish, with his immediate prior position being CEO of Allco Commercial REIT (Now known as Frasers Commercial Trust), a REIT that needed help from Frasers Centrepoint Ltd due to debt troubles.  In spite of this, the new owners AIMS and AMP kept him on as CEO of the manager until he moved on to AMP Capital in 2014. Under his reign, acquisitions came thick and fast following the takeover, with 4 industrial properties...

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Investment Quadrant 3.0 by The Fifth Person – Course Review

The Business Quadrant talks about how to evaluate the company’s following characteristics: Business model – How to see if the business model is sustainable and scalable Growth Drivers – Factors that will drive future growth in the company Economic Moats – Factors that make the company’s business more resilient Business Risk – Factors that may go wrong and affect the company’s business The ideal outcome of this review is that the company has a good scalable and sustainable business model, with strong economic moats and growth drivers to push for future growth, while also being aware of the risks...

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Singapore Savings Bonds (SSBs) – June 2019 Issue

At Risk N Returns, I’m passionate about promoting sensible DIY investing through sharing my thoughts or documenting my investing journey. While I love to take calculated risks, I recognise that most Singaporeans don’t. So here’s a relatively risk free way to invest your warchest or emergency funds with almost no lock-up period and generally higher yields than fixed deposits – the Singapore Savings Bond. Here’s the latest issue details: 1. Latest SSB issue details Issue Code: GX19060SAmount Available: $350 millionIssue Date: 3 Jun 2019Coupon Date: 1 June & 1 DecemberMaturity Date: 1 June 2029Application: 2 May 6 pm to...

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ARA US Hospitality Trust IPO Review

The IPO portfolio consists of 38 hotels, all within the Hyatt brand portfolio. 27 of them are Hyatt Place hotels, a upscale select-service hotel brand, and 11 of them are Hyatt House hotels, a upscale extended stay hotel brand. Select service hotels defer from full service hotels in that they are focused mainly on lodging with limited banqueting and F&B outlets. Extended stay hotels are similar to serviced apartments in that they cater to guests who stay for 1 week or more. Upscale means the offering is more luxurious than normal, which I assume to be at least some...

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Portfolio @ April 2019

Performance Indicators / Dividends YTD Time weighted return: 14.15% Dividends collected: SGD 929.91 Cum-Dividend: Keppel Corp: SGD 195 DBS: SGD 60 Capitaland Mall Trust: SGD 109.44 AIMS APAC REIT: SGD 170.50 Frasers Logistics and Industrial Trust: SGD 495.60 Hang Lung Properties: HKD 1,160 Yuexiu Transport Infrastructure: HKD 1,440 Grinding Higher The positive start to the year continued with my portfolio setting another record high of $163k . Performance The first month of every quarter is always the most exciting as its earnings season and when my REITs declare distributions. This quarter’s results has been largely in line with my...

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Follow-up on Keppel-KBS US REIT AGM homework

Last week I attended the Keppel-KBS US REIT (KORE) AGM and left feeling a bit uneasy about some of the responses given during the AGM. As such, I gave myself a little homework to verify / cross check some of these responses. Here are my findings. On Rights Issue Circumstances It was represented during the AGM that the reason they had to issue rights at a huge discount to NAV was due to a “perfect storm of bad news”. This comprised of the trifecta of a US-China trade war, Aggressive Fed Rate Hikes and Potential tax regulation issues. So...

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