Thursday, April 16, 2015

Stock Watch - AMFIRST

"AmFIRST Real Estate Investment Trust Bhd expects its asset under management to increase 18.9% to RM1.57 billion, from RM1.32 billion as at Dec 31, 2014 after its acquisition of the Penang Mydin hypermall building for RM250 million.

Am ARA REIT Managers Sdn Bhd CEO, Wong Khim Chon said the proposed acquisition will help provide stable income that will increase its asset portfolio from the retail sector from 21.5% in FY14 to 34.2%...

This transaction will be accretive at both net property income and distribution per unit levels. On an annual basis, the proposed acquisition is expected to contribute DPU of 0.34 sen per unit," said Wong.

The property is located along Jalan Baru which is the main service road connecting Bukit Mertajam and Butterworth, Penang.

The acquisition is expected to be completed by end of July and fully leased to Mydin Mohamed Holdings Bhd for 30 years with 10% increament every five years.

The acquisition which will be financed by bank borrowings which will increase its gearing to 42.8% from 32.6% in FY14." more

...I have added some AMFIRST units to my stock portfolio due to its improving property portfolio profile with the latest retail property purchase. Furthermore, AMFIRST will be announcing its next half-yearly income distribution sometime next month.

Saturday, March 28, 2015

TWRREIT - How long can it stay undervalued?

Tower Reit (TWRREIT) recently announced that it was disposing off 19 office parcels and 190 car park bays within Menara ING in Jalan Raja Chulan for RM132.34 million cash, which will result in a gain of RM40.4 million for the trust. Well, the proposed disposal has been completed as announced on 26 March 2015.

With net asset value backing of about RM1.91 per share, I wonder how long the share price can remain undervalued at the current price of RM1.29. The discount of 62 sen or 32% to its net asset value is just too large for a dividend-paying REIT, in my opinion.

What options or developments can arise from the deployment of the sale proceeds of around RM132 million? Whether the funds are used to repay bank borrowings in full or be used to purchase new yield-accretive properties, the dividend payout should increase accordingly. 

I continue to think that holding Tower REIT shares in my portfolio is a good idea. The waiting will be worth it, I reckon.

Wednesday, March 25, 2015

How robo-advisers will change investing

"They won’t take you golfing, but they won’t trade away all your profits either"
"They won’t ever tell you any funny anecdotes, won’t take you out for a round of golf, and will probably won’t even get you a drink. But robo-advisers — automated machines that give you financial advice and manage your portfolios — are about to go mainstream.
Charles Schwab, one of the largest brokers in the U.S., has just introduced them for its vast number of clients. In the U.S., the U.K., and in most of the main developed markets, dozens of fast-growing startups are jumping on the bandwagon of replacing old-fashioned flesh-and-blood advisers with the silicon and plastic kind.
There will be a long debate about whether automated advisers can be better at running portfolios than people are. But the fact is they are likely to grow in significance, and have more and more funds under management. In time, that is going to have a big impact on the market.
A robo-adviser programmed to build wealth over a decade or two is just going to buy a set amount of equities every year, and ignore short-term fluctuations. Humans find that very hard to do, because they are emotional. Robots will find it far easier.

Why? Because the robots will make subtly different investment decisions.
There are four likely changes. The markets will become less volatile, because robots will be less emotional. They will become more rigorously analytical. There will be less trading. And they will become more globalized as well" more