It was reported recently that Lippo Malls Tr (D5IU.SI) sold 2 shopping malls (https://www.businesstimes.com.sg/companies-markets/lippo-malls-indonesia-retail-trust-to-divest-pejaten-village-and-binjai-supermall).
I always compare my leveraged returns against the best practices in the market, such as professional REIT managers borrow banks to make money for their Real Estate Investment Trusts (REIT). This allows me to evaluate the risks that I am taking vs the potential returns.
Since Feb 2018, bonds and reits have fallen and have not recovered to Feb highs. With interest rates rising, they have fallen out of investor’s favour. Yet recently, many SREITS are now making 20 day highs, outperforming most SGX stocks. Like wise bonds have recovered slightly after long tenor bonds were beaten down.
I sold ASTREA IV S$242M4.35%B280614 (RMRB.SI) retail bond at 1.05 last friday. Nothing wrong with this bond, in fact, I like this bond (see http://wealthlions.com/2018/06/astrea-iv-4-35-retail-bonds/). 5% is more than one year’s coupon. The money can be channeled elsewhere.
Why I like Astrea IV Class A-1 Retail 4.35% retail bond:
- Indirectly wholly-owned by Temasek Holdings. Bondholders are ranked higher than equity holders.
- Secured bond. Most secured bonds have typically much lower coupons.
- Risks are diversified across 596 companies.
- Beneficial structured safeguards for bondholders
School holidays are over, my kids are in school, and my blogging will resumes! I will now answer some questions posed to me recently.
I am sharing the various scenarios of Hyflux perps that is playing out in my mind. Please note that the following are my speculation as no one can predict the future.
Mr Goh Eng Yeow wrote an article in the Straits Times “Perpetual market – too much risk, and too little reward”. http://www.straitstimes.com/business/companies-markets/perpetual-market-too-much-risk-too-little-reward?