ADIA reducing stake in MIIF

Announcement made today that Abu Dhabi Investment Authorithy have sold 4 million shares (hence, its stock holding reduced to 5.9509% from 6.2890%) in MIIF.   Time frame of sales period was not made known; probably after it went ex-dividend?

But how to explain on below on ADIA previous / recent announcements on sales of MIIF as follows :-

a. 22 Feb :- from 7.6597% to 6.9990%

b. 7 Feb :- from 9.99% to 7.6607%

Right Reit l Like - 2 Mar

This is the final week to get into to both MIIF and CapitaRChina.  Stock that goes ex-dividend not necessarily will shed its share price.  It is really not so easy to forecast how a share price would react when it goes ex-dividend.  I reckon, stock that goes ex-dividend in a positive stock market would see its share price either unchanged or going up further; and its share price would go south in a negative market.  So, is it still worth going into both MIIF and CapitaRChina?

Looking at ROC itself is not that practical though.  As shown in the table below :- CDL Trust - ROC 3.09%, dividend amount $267;  LippoMalls - ROC 2.93%, dividend amount $293.  Though CDL (3.09%) has a higher dividend yield rate versus LippoMalls (2.93%) but when it comes to absolute dividend amount, LippoMalls ($293) is much better than CDL ($267).  As below is based on last year's declared interim dividend rate, circumstances this year would be different.  For example, Pluit Village and Plaza Medan Fair will add more rent collections for LippoMalls and revenue from Studio M Hotel will go into full swing for CDL.


The table below is assuming that all other matters remaining constant as each Reit stock has varied and many types of planned changes to its portfolios; so, the table below is just a quick guidance of the possible returns which can be so much different for an investment amount of $10k.   

Just to remind myself on my journal of 18 Feb :-
Money is always not enough so it must be used to work hardest so as to generate highest returns.  Assuming that l have $10k of funds and my focus is Reit and business trust; and also investment horizon timeline is important - one to two months or less than 6 months. Because of short investment timeline preference, l will not be looking at annual dividend payout rate. So, this table goes to show that with a available funds of $10k, l can get say, Cambridge 19 lots and its dividend amount of $190 versus say, Sabana Reit 10 lots which generates dividend amount of $304. Both stocks are having ex-dividend dates in May month.  A loyal investor on Cambridge would loose out to a cyclical investor who would have selected Sabana instead.  If stock prices are lowered (or gone up) then l can buy more (or less)  and this will directly affecting the dividend amount and its yield.  If the overall stock market is in a bull run but not supported by a bullish economy then there is no reason to drool over the high dividend amount and buying into the high dividend yield stock immediately.  Just Do It is not suppose to work this way.

previous journal :- Right Reit l Like - 24 Feb

Right Reit l Like - 24 Feb

Under March and April months category, MIIF now is a chart topper in both ROC and absolute dividend amount.  MIIF gives a wonderful surprise by declaring higher dividend rate versus same period in 2011.  The top five preference ranking in terms of both ROC and absolute dividend amount have the same stocks components.  My personal preference is on the absolute dividend amount.  Though CapitaRChina has a higher ROC comparing with Frasers Comm but the latter has a $34 more on dividend amount.

Back to MIIF again, l reckon almost all investors are caught off guard by the higher dividend rate.  Its last done price in both this week and previous week stays at $0.585 and hence with $10k, an investor can get the same 17 lots shares.  But if the investor have decided to park his $10k funds with other Reit stock and not with MIIF then it's really a harsh punishment as the latter's higher dividend rate means an additional $213 forgone.

  

previous journal :-  Right Reit l Like - 17 Feb

Right Reit l Like - 17 Feb

Money is always not enough so it must be used to work hardest so as to generate highest returns.  Assuming that l have $10k of funds and my focus is Reit and business trust; and also investment horizon timeline is important - one to two months or less than 6 months. Because of short investment timeline prference, l will not be looking at annual dividend payout rate.

From the table and for Reit with ex-dividend date in the next one to two months, the top five value for money Reits are Frasers Comm, CapitaRetail China, MIIF, First Reit and Suntec Reit.

For longer ex-dividend dates, l would go for Ascendas India, Ascott Reit, K-Reit, Saizen Reit and Sabana Reit as these are expected to generate much higher returns versus popular Reit stocks, as an example on LippoMalls, Cache Logistics, Cambridge Industrial, K-Green, CitySpring and others.

So, this table goes to show that with a available funds of $10k, l can get say, Cambridge 19 lots and its dividend amount of $190 versus say, Sabana Reit 10 lots which generates dividend amount of $304. Both stocks are having ex-dividend dates in May month.  A loyal investor on Cambridge would loose out to a cyclical investor who would have selected Sabana instead.

The ranking will not be static as older ex-dividend dates will become obsolete as newer dates will then be assumed and their re-ranking is required.  As all stocks prices have gone up by a lot in recent weeks then its probably unwise to rush in to buy my favorite counters.  There is "plenty" of time till ex-dividend dates in March and if this is missed, ex-dividend dates in April and future months can be targeted.

If stock prices are lowered (or gone up) then l can buy more (or less)  and this will directly affecting the dividend amount and its yield.  If the overall stock market is in a bull run but not supported by a bullish economy then there is no reason to drool over the high dividend amount and buying into the high dividend yield stock immediately.  Just Do It is not suppose to work this way.

Reit stocks are popular as passive income source but they can be leveraged for an even bigger and better returns.  It is better not be overly sentimental  on certain Reit stocks but be always ready to consider other Reit stocks.  Thinking of only the same and certain Reit stocks are god-send is not a wise decision.  Even research houses do not always have the same stock pick within the same industry (hospitality, industrial, office, retail, etc.).

Exit strategy - the dividend approach

l am using a new approach this year 2012 on getting paid in advance on the dividend amount.  Which is actually all about selling a stock at no loss before or after its ex-dividend date.  What is the time frame of being paid in advance?  IMO, this can be in the range of a few days to one year, to its anticipated ex-dividend date.   Below is the example.

Selling with gain on a stock in advance of its ex-dividend date is not really trading or investing on the basis of speculation.  This is because there is already a target selling price to exit to begin with.

The dividend rate is not always the same quarter-to-quarter or year-on-year unless it is the-like of SingPost.  But it is really a good gauge to form the target selling price to exit.

If the stock price goes south after ex-dividend then l can have the choice of offsetting the dividend amount received and selling the stock at gross loss but still profitable with nett gain - dividend amount received less away realised gross loss.  Each investor has his own preference.  l do not wish to subscribe to this offsetting strategy though; probably not yet - which means not for now.  Except for Reits, there are many companies paying dividend but l am eyeing those that are not fundamentally rotten to the core.  This way, if the stock price goes deeply south upon ex-dividend l can still hold at next exit opportunity, probably at breakeven; as there is no danger that the company is getting into a going concern issue over the next few months.

In the illustration, if l limit my investment amount in the range of $2k then l can buy 5 lots of LippoMalls at price of 0.395.  Hence l can actually anticipate dividend amount of $53 or $55.50 using past dividend payout as basis and assuming that its ex-dividend date is same as last year, on 22 Feb.  So, here l have set my exit selling price to be at $0.415 and it is only $0.02 away from original purchase price.

Setting the exit selling price and the eventual actual selling price can different as the former is not really cast in stone yet.  If a stock happen to be wrong purchase then l will target to sell it at breakeven.  And also, if the exit selling price later prove to be a tough hurdle to overcome then it is not an unforgivable thing to do by selling it at a slightly lower selling price.

After exiting the stock way before it goes ex-dividend, the price can still run up.  But l can tell myself that l have already pocketed the dividend, in advance of its ex-dividend date.  And l have no wish of speculative trading.  So, no worries really.

Going long into a stock for value investment (say, on Keppel Corpn, Kingsmen, MIIF-MacqIntInfra, SingTel, Starhub, SIA Engineering, SMRT, etc.) is good but one needs to be mindful of getting overly emotional attached over it (be it one or two stocks).  This is because it shuts off one's mind of other even better or good opportunities around and blinded of the danger in putting all funds in a basket.  In value investment, there is no exit strategy.  Perhaps l can jot down some notes of this matter in future blog.

Cash - Closing Status 09 Dec (unrealised stocks status)

Added HwaHong 5 lots, LippoMalls 9 lots, FSL 15 lots.

Sold Noble 2 lots, MacqIntInfra 3 lots, CDL HTrust 2 lots, CapitaComm 2 lots, MappletreeLog 5 lots.

Tested  my cash portfolio as of Dec 02 on dividend returns in absolute dividend amount on the assumption of what-if available funds of $10k and also the full 100% allocation of the funds against each stock.

If $10k is in POSB bank savings account, l will get $5 annual interest.

If $10k is spent on goods and services in a year which comes with 7% GST, l will suffer $700 on GST paid.

With 100% of $10k allocation against each stock, the counters which l have sold this week (Noble, MacqIntInfra, CDL HTrust, CapitaComm, MappletreeLog) failed to give me an annual dividend above $800.  This $800 is enough to cover the GST amount paid but remaining $100 (in a year) is really too little. 

Of these three counters added this week, HwaHong is riskiest (per its 3rd quarter financial statement), what got into me investing in this counter ... OMG.  l will continue to monitor it.

previous posting :-
Cash - Closing Status 02 Dec

Cash - Closing Status 25 Nov (unrealised stocks status)

STXPO of only 100 shares is the single largest contributor (at 47%) of paper losses in the cash portfolio.  Not really sure how many share market bull runs for it to achieve a much smaller negative returns so that l am okay to let it go. If only l have more of MacqIntInfra; it is the smallest member of the cash portfolio but shines the brightest amongst all in terms of paper gain.