Friday, April 11, 2014

MRCB-Quill REIT

"Quill Capita Trust Bhd (QCT) will become one of the biggest real estate investment trusts (Reits) in Malaysia in three years with an asset base of some RM5bil from RM1.6bil presently, said Malaysia Resources Corp Bhd (MRCB) group managing director Datuk Mohamad Salim Fateh Din.

We intend to inject assets worth at least RM1bil (into QCT) every year. We will inject these assets either from MRCB’s side or from Quill Group. On MRCB’s side we have a pipeline of some RM20bil worth of properties to be injected in over the next few years,” Salim told StarBiz.

MRCB is now the single largest shareholder in QCT with a 31% stake, after its wholly-owned subsidiary MRCB Sentral Properties Sdn Bhd signed a sale and purchase agreement for the disposal of Platinum Sentral to QCT for RM750mil to be paid for in cash and shares.

“This joint venture with MRCB allows us to scale up faster and deliver better yields for our investors. We too have a pipeline of assets that we plan to inject into QCT over the short and medium term,” said Quill group executive director Datuk Michael Ong.

The Quill group owns a host of properties which are not housed under QCT, such as the RM250mil Quill Building 6, the RM450mil Quill Building 7 and the RM300mil Quill Building 9.

QCT is also applying for a name change to MRCB-Quill REIT."...Read more

MRCB sells Platinum Sentral to Quill Capita Trust

"Malaysian Resources Corp Bhd (MRCB) is selling its Platinum Sentral to Quill Capita Trust (QCT) for a total purchase consideration of RM750mil.

MRCB said on Thursday it had signed a sale and purchase agreement with Quill Capita Trust (QCT) --  a real estate investment trust (REIT) - to dispose of the office-campus style Green building in the KL Sentral CBD.

The purchase consideration will be partly satisfied via cash of RM486mil. The balance will be satisfied via the issuance of 206.25 million new QCT units at an issue price of RM1.28 per unit.

"This will result in a divestment gain of approximately RM240mil," said MRCB.

The disposal of the building would also result in MRCB owning 31% of the enlarged QCT upon completion of the exercise."...read more
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I reckon Qcapita will soon become the most interesting counter to watch in the M-Reits arena. Will MRCB stop at injecting just one property into Qcapita???

Saturday, April 5, 2014

4 things to look for in annual reports

Do you read those Annual Reports you receive?

"...Studies on how many investors read paperwork show varied results, but most suggest that no more than 20% of the people getting the reports spend any time perusing them...here’s the quick-and-dirty version on what to take from annual reports with just a few minutes’ reading:

1. The executive summary

Read the top dog’s take on what’s going on with the company. If the CEO is making excuses or talking in jargon and it makes your nerves jangle, take the hint. “You’d be surprised what you can come away with just by reading and feeling the tone of the letter,” said Chuck Carlson, editor of The DRIP Investor newsletter and chief executive at Horizon Investment Services.

2. Debt levels, cash on hand, sales, operating profits

You don’t have to be a sophisticated investor to know that a significant year-to-year increase in debt levels, or a big decline in sales and/or operating profits, is a bad sign (as is reduced cash on hand if there hasn’t been an acquisition or special dividend). There can be sound explanations for any of these red-flag issues, but you’ll only search for those justifications if you find those flags flying in the documents. It’s entirely possible for a company to see its stock price rising as sales, profits and cash-flow are declining, but if those conditions make you nervous – and they should – you don’t want to be thinking everything is fine when Wall Street figures out that it’s not.

3. A brief auditor’s report filled with boilerplate

Look for a short note, with your only concern being that auditors say the statements “accurately represent the company’s financial position.” If management is changing auditors or disagreeing with its accountants, you should wonder if the numbers are trustworthy.

4. Proxy statements

They’re included with most annual reports and if you’re going to be a shareholder, voting is the right thing to do, even if you simply reaffirm that you trust management. That said, completing proxies maintains a relationship with the firm, reducing the chance that any “inactive account” someday gets sent over to state authorities. (If your brokerage firm or adviser votes proxies on your behalf, learn their policies; typically, with a few policy exceptions, they vote in line with management.)

In the end, you’re doing enough analysis to have some control, and to maintain the courage of your convictions, rather than just riding along and hoping things turn out."...read more
[By Chuck Jaffe, MarketWatch]