Wednesday, December 19, 2018

Added: FIRST REIT (Dec 2018)

Bought 4,000 shares of FIRST REIT on 19 Dec at $1.
Total numbers of FIRST REIT shares owned increased to 15,000 shares.

Reasons for buying:

1) FIRST REIT had released an "Analyst Briefing Slides" dated 12 Dec to manage "expectation" instead of based on "rumour" (Link). Key slides to focus: Slide 22 - 29
2) 8.6% dividend yields
3) First REIT is oversold

4) P/B at 0.91
5) I actually quite like the idea of OUE becoming one of the Sponsors. 
This will allow First Reit to have the Right of First Refusal (ROFR) in buying asset outside of Lippo Karawaci radar (Putting aside the buying price if it is beneficial to shareholders). Thus, the very first purchase will be in the spotlight. 
6) As per the report in Business Times dated 21 Nov, "She noted in a previous report that Lippo Karawaci has been paying up more slowly than usual but has so far not defaulted on its rental payments." (Link) Shareholders should be able to rely on OUE to ensure this is minimize as it will have bigger impact for OUE given they have 10.63% stake, as compared to us.
7) Quarterly dividend payment

As FIRST REIT shareholders, we must expect Rights issue given the purchase of asset from OUE Sponsor (As stated in the Analyst Briefing Slide 28, "Plans to rebalance portfolio where up to 50% of assets will be located outside Indonesia"). For those who had high % of FIRST REIT in your portfolio, please ensure your warchest is sufficient. Else, please perform some portfolio rebalancing.

As mentioned in point 5 above, the first purchase of asset will be the key focus for the share price direction.
If the buying price is beneficial to shareholders, the shares price should goes up.

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