Wednesday, November 9, 2022

Added: Frasers Centrepoint Trust (Nov 2022)


Bought 7,000 shares of Frasers Centrepoint Trust (FCT) at $1.94 on 8 Nov.

This bring my total number of FCT shares to 36,800

Reason for buying:

1) PB 0.83

NAV as of 30 Sep is $2.33

2) 6.3% div

Given Singapore Saving Bond (SSB) risk free reaches 3.47% (Avg return over 10 years), I agreed that 6.3% div yield is not consider high. 

However, we need to take into consideration of the PB & Frasers branding too. 

If we are looking for 7% div, the price for FCT need to be at $1.74, which translate to PB0.75.

I wont say it is impossible to reach this price target, but it will be hard unless FED continue to hike at  0.75% or higher for next few months OR rights issues.

By then, 7% doesn't look attractive anymore too.

3) Retail Sales exceeded pre-Covid level

4) With higher Sales trend, higher rental will auto follow

5) 71% of borrowing hedged to fixed rate & debt avg interest rate at 2.5%

Risk 1) Rights issues if part of Mercatus assets goes into FCT 

As of 26 Oct, it seem only Frasers Property & Link REIT are battling for the Mercatus assets.

This will be a short term pain to FCT shares price but I will be happy if Frasers Property / FCT can won this Mercatus assets.

Risk 2) FED continue to hike interest rate


Related post:

1) Frasers Centrepoint Trust (FCT) AGM 2022

2) Added: Frasers Centrepoint Trust (Jan 2022)

3) Added: Frasers Centrepoint Trust (Sep 2021)