First Reit (AW9U.SI) share price has dropped 17% (1.15 to 0.955) over the last 3 days. Even Sabana cannot match the speed of this spectacular drop.
First Reit’s bond prices hardly moved in the last 3 days, trading at about 90.
Many have asked me if I know why the price is falling. Here are my guesses:
- The trigger – Lippo Karawachi downgrade
The news that triggered this drop seems to be the downgrading of Lippo Karawachi from B to CCC+ by Fitch. About 80% of First Reit’s rental income is contributed by Lippo Karawachi and its subsidiaries. They are First Reit’s sponsor, key tenant, and main revenue contributor.
2. Rumour – Lippo Karawachi may sell remaining 20% stake in First Reit
According to https://www.theedgesingapore.com/lippo-karawaci-says-fitch-credit-downgrade-regretted-fund-raising-progressing-smoothly, Lippo Karawachi may sell their remaining stake in First Reit.
3. Rumour – First Reit may issue rights
Only 1 month ago, OUE Com Reit (TS0U.SI) issued a deeply discounted rights. Is First Reit going the same direction?
4. Rumour – Selling by institutions
I read this from https://www.facebook.com/gabrielyap17/, which I will paste here:
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