The stock market has been in a nice run the last few months. I made use of the chance to take profit on some of my stocks. Notably, I have sold my Global Premium Hotel, as its last quarter results were not very good + no dividend + high gearing ratio (increased borrowing costs). Price movement was hovering about 0.255-0.26. Hence, instead of tying up my funds in the counter, I decided to take profit, and divest my $ into another counter - Croesus Retail Trust.
Croesus Retail Trust IPO is now open for subscription, and will be closed on 8 May 2013 at noon. Results of the balloting will be known on 9 May 2013, and the stock will be listed on 10 May 2013. Basically, I am attracted to this IPO because of its potentially high dividend yield (8% for 2014), and the 100% occupancy rates for the 4 shopping malls in its portfolio + long term leases of > 10 years. I also believe that the current PM and government are taking concrete steps to lift the Japanese economy i.e. the worst should be over, and things can only improve from now onwards. Even though there is risk that the yen will continue to depreciate (in order to boost JP economy by making it more competitive), thereby affecting DPU, on the flip side, an improving JP economy means that people have more money, and therefore increased spending power.
Even though it is a business trust i.e. not mandated by law to provide dividends, I think that in the first few quarters at least, there management will provide attractive dividends at least for maintaining or even boosting its share price. At this low bank interest rate and high inflation times, investment in business trusts with promise of dividends, a high one at that, does not sound bad at all.
Now, the problem is just, how many lots I can get.
Update 12 May 2013: Wow, I didn't expect demand for the IPO to be so hot. I bid for 12 lots, and got nil. SIGH!
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
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