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
PRICE STILL BELOW IMPORTANT 20 50 200 EMA RSI <50 STILL TOO EARLY TO BOTTOM FISH
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