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AS SURE AS DAYLIGHT, SREITS SHINE

By Gabriel Yap

AS SURE AS DAYLIGHT, SREITS SHINE

SREITs were hammered severely following the victory of Donald Trump in the US Presidential elections on 9 Nov 2016. Compared to recent highs reach in Aug/Sep 2016, SREITs were down an average of 4.1%, the 3rd sharpest correction in the last 4 years since the 23rd May 2013 Tapering Fears, triggered by then Federal Reserve Chairman, Ben Bernanke.

As in our last article, https://einvesthub/btonline/com.sg/sreits-get-pounded-by-trump for Dec 2016 issue and in our last REIT Investment class entitled “Tactical Profitable Positioning in REITS”, we have suggested that for the opportunity-seeking value investors, black swan events like this are probably the best time to top up on REITs when they are selling at maximum fear. This could turn out to be the classic “Buy when there is blood on the Streets”.

Henceforth, 4 months have passed and SREITS have started to shine again. Despite initial jitters, SREITS have gotten past the fears from the recent Mar 15 rate hike by the Federal Reserve.

Investors who have heeded our observations and learn in our REIT investment class the skills to pick the best performing REITS would have enjoyed returns of 9 - 14% from their recent lows, not including the dividends paid for 1Q2017. Mapletree Industrial Trust posted the sharpest recovery at 14% return while Ascendas Reit ascended 12.3% as the 2nd Best.

WORST 10 REITS
RECOVERED SHARPLY
Share Price
31/03/2017
Share Price
Low Nov/Dec
Price
Change
%
Change
Mapletree Commercial Trust $1.530 $1.380 $0.150 9.804%
Fortune Reit $9.400 $8.700 $0.700 7.447%
Mapletree Industrial Trust $1.780 $1.530 $0.250 14.045%
Frasers Logistics Trust $0.985 $0.895 $0.090 9.137%
Capital Mall Trust $1.970 $1.880 $0.090 4.569%
Mapletree Greater China $1.020 $0.950 $0.070 6.863%
Starhill Global $0.760 $0.735 $0.025 3.289%
Ascendas Reit $2.520 $2.210 $0.310 12.302%
AIMS AMP $1.390 $1.275 $0.115 8.273%
Capitacomm Trust $1.545 $1.470 $0.075 4.854%

It was pointed out that the retail sector suffered the most serious bout of sell-off in November 2016 - Major retail REITS like Mapletree Commercial Trust, Fortune Reit and Capital Mall Trust suffered losses of 9.43%, 9.04% and 6.68% respectively, one of the sharpest falls in their share prices in the past 4 years over a 2-week period.

WORST 10 REITS
POUNDED BY TRUMP
Share Price
9/11/2016
Share Price
Nov Low
Price
Change
%
Change
Mapletree Commercial Trust $1.545 $1.400 -$0.145 -9.385%
Fortune Reit $9.400 $8.550 -$0.850 -9.043%
Mapletree Industrial Trust $1.690 $1.550 -$0.140 -8.284%
Frasers Logistics Trust $0.965 $0.895 -$0.070 -7.254%
Capital Mall Trust $2.020 $1.885 -$0.135 -6.683%
Mapletree Greater China $1.015 $0.950 -$0.065 -6.404%
Starhill Global $0.780 $0.735 -$0.045 -5.769%
Ascendas Reit $2.340 $2.210 -$0.130 -5.556%
AIMS AMP $1.350 $1.275 -$0.075 -5.556%
Capitacomm Trust $1.555 $1.470 -$0.085 -5.466%

Again, participants in our investment class were shown that e-commerce fears and online shopping still pose minimal damages to retail REITS bottom-line when REITS reported that latest quarterly results. We show clearly that certain myths still continue to underpin the REIT market, but the smart investor can always capitalize on that.

Thus, if they had piled in, they would have pick some of the best performing REITS in the current rebound from the November –Trump effect lows.

SREITs continued to face an uncomfortable mix of low growth, heightened currency volatility, coupled with rising risk to distributions from an anticipated rise in interest rates in the next coming quarterly results from mid-April till end-May.

How does one navigate and gain first-hand analysis resulting in good gains in your REIT portfolio? Do sign up for our next REIT class, timely arranged for Saturday 6th May 10 am to 1 pm - https://www.eventbrite.com/e/which-are-the-good-valued-reits-to-have-in-your-portfolio-updateprospects-tickets-32678233476

Participants who attended our last REIT class had been invited to a personal Meet the CEO session of 1 of the best REITS on Fri 7th April. They will get to ask all their questions and uncertainties first-hand.

Participants who attend our 6th May class will be invited for an overseas trip to see a REIT assets first-hand during the June holidays and also get to ask all their questions and have all their uncertainties addressed. So do sign-up quick as places are limited at the Event Hall of Maybank Kim Eng Securities, the venue.

Gabriel Yap
Gabriel Yap

Mr Gabriel Yap was an eminent stockbroker and investment banker who retired in 2009 to devote himself to philanthrophy. He is well-known as the Investment Guru, having being regularly interviewed in the news media like Channel News Asia, Bloomberg TV, CNBC, Mediacorp Radio. Together with the famous Fortune Times, Mr Yap hosted the inaugural Asian REITS Awards 2016 in Singapore. Mr Yap was both Chairman of The Future of REITS Forum as well as Chairman of the Fortune Times Asian REITS Awards 2016 Judging Committee comprising of the leading CEOs, deal makers and who’s who in the Asian REIT sector.

Mr Gabriel Yap has lectured for almost 30 years – He has lectured at the famous Asian Development Bank, Monetary Authority of Singapore, Institute of Banking & Finance, SGX, ASME, SIAS and Share Investors. He has also trained the Top Producers at major insurance companies and banks. He has also trained students for the grueling CFA course and has lectured and delivered academic papers internationally.

Mr Gabriel Yap has also sat in the EXCO of the 13th Association of Small & Medium Enterprises, ASME. Mr Yap has also served in the EXCO of SIAS.