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Some Info I Looked into on Elite Commercial REIT (Guest Post)

Some Info I Looked into on Elite Commercial REIT (Guest Post)

Elite Commercial REIT has all the right metrics you would look for in a worthy Reit to invest in. Great looking yield, long wale, low debt to asset, freehold property and a tenant that looks like someone who you expect to be the last to default on their rent.

This post was originally posted here. The writer, Kyith is a veteran community member and blogger on InvestingNote, with username known as Kyith and 800+ followers.

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Sometimes it is either I overthink things or that I am absolutely right to be a little more skeptical.

Private equity firm Elite Partners is looking to IPO Elite Commercial Reit. A lot of the context for how to look at this REIT is shaped by the people associated with supporting this REIT.

My mode is wary for two reasons:

  1. The guys working on these deals try to sense the market and priced it accordingly. At this point (23 Jan), we don’t even have a sensing what is the range of yield we will get. It feels to me they are trying to gauge interest from the larger investors to see how to price this. If this REIT has high-quality assets yet the IPO prices the REIT at a high yield, either the banks advising and the people themselves have a lack of confidence or that there is something we don’t know about this portfolio
  2. The people behind it

That said, it doesn’t mean I am always right in the short term.

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Why Reits Are Likely To Stay At The Top For Longer Than Most People Would Expect (Guest Post)

Why Reits Are Likely To Stay At The Top For Longer Than Most People Would Expect (Guest Post)

The real estate industry cycle has been around for many years.

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Traditionally, it has several built-in advantages that make it natural for property owners to receive rental income while awaiting for their property to appreciate in value over time. This is due to the higher affluent population group and the higher GDP for the nation as well as decent inflation rise that will all but contribute to an eventual higher property price.

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and 1800+ followers.

While traditional real estate usually requires high amount of funds to start with and is out of reach by many retail investors, Reits on the other hand are not. They are investment vehicles that is structured to exhibit the same attributes as traditional real estate but more importantly it allows retail investors like you and me with minimal funds to invest in them.

When investors like us buy Reits, the properties owned are generally incorporating a steady income and cashflow predictability into our income-oriented portfolio. Because of this, most of the returns we are getting should be in the form of the dividends that are being paid out. Capital appreciation is a secondary bonus factor, if any due to the nature that they have to pay out more than 90% of their cashflow income as dividends, leaving only a small amount of retained cashflow for any growth opportunities.

How Managers Are Optimizing Their Cost of Capital

Since a REIT is always raising money to grow, its cost of that capital is one of the most important things to help determine a REIT’s long-term investment potential.

There are three sources of capital: undistributed cash flow, equity, and debt.

The cost of capital is the weighted average of all three sources of capital. Undistributed or retained cash flow is by design (and tax law) the smallest but cheapest (free) source of capital.

The next cheapest is debt,measured by the total interest expense it pays out of the total debt, especially in today’s low interest rate environment.

The most expensive source of capital is equity. This makes sense intuitively because each additional share sold is a future claim on a REIT’s cash flow and increases the dividend cost.

Reits Are No Longer Just An Income Play

Gone are the days that Reits are just an income play.

Kep DC Reit – Effective Debt Structure & Accretive Acquisitions


MLT – Exponential Rise To The Top

Thanks to the sluggish global economy that encourages lower funds rate and cheap borrowings, managers are looking to tap into the credit liquidity to leverage their portfolio in this era of lower borrowings.

They would tap for as much leverage the company could take before considering for more access to funds via the equity route.

That is because the cost of equity is usually more expensive than the cost of debt and it would make more sense for them to consider debt first then equity as their main cost of capital to structure the most effective leverage for growth opportunities.

To the managers, they would look for pipeline opportunities and maintain a cost of capital that is lower than the cash yield on new acquisitions in order for AFFO and dividend to grow sustainably over time.

REIT’s leverage ratio, measured by key metrics Debt/Asset or Debt/EBITDA, is important because this is one of the major factor that credit rating agencies use to determine how risky a REIT’s profile is. A lower credit rating increases a Reit’s cost of debt capital, which could spiral into lower return on investment for any growth opportunities.

So REITS can grow over time and quickly for as long as they find good opportunities aided by cheap cost of borrowings and a rising share price, which compresses the cost of equity lower when they are issuing shares for funding.

Conclusion

Investors are generally afraid that they will be diluted when REITS increase their share counts over time so this leads to active participation from investors who will but contribute to this gracious cycle that will allow more funds for management to grow and seek accretive acquisition that will allow the cash yield from acquisition to be higher than the cost of capital on the equity.

Growing cash flow and a well diversified portfolio would then lead to a rising share price and capital appreciation for the investors.

In fact, the likely they remain at the top, the easier it is for management to look for external opportunities because the growth play is likely to remain a big part for a rising capital opportunities.

The only likely swan that could break this cycle is a liquidity crunch as well as a black swan event which eventually leads to a credit crunch which typically leads to increase in the cost of capital. But by then, REITS are not alone. All of the companies in all sectors around the world are likely to be impacted as well.

Thanks for reading.

Once again, this article is a guest post and was originally posted on Brians profile on InvestingNote. 

Also, we recently did an interview with Brian, to understand how he invested and traded during the SG Active Trading Tournament here.

Become a part of our community and also see what other investors are saying about the current market right now: (click on the view now button)

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InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

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Come for the 1st Market Outlook For 2020!

Come for the 1st Market Outlook For 2020!

We run the largest community of investors in Singapore and every new year, this is THE #1 question every investor will ask:

Which part of the stock market will help me to profit better in 2020?

Fact is, our local market has been stuck in a trading range for a large part of 2019.

After making a low last October, local banks, big developers and particularly electronics manufacturers have a good run, partly fuelled by US markets hitting an all-time and progress made in US-China trade talk.

Investors heaved a sign of relief but is this run likely to be short-lived, especially with more geopolitical tensions like the US-Iran situation surfacing?

So this time, the question is not just which part of the stock market will help me to profit better in 2020, but also what to avoid in 2020.

Experienced investors and traders will sense a storm is brewing – it’s been more than 13 years since the previous one. Doomsayers have been warning about an impending crash since years ago and it’s not hard to understand why.

At some point, the consequences of the loose monetary policies, geopolitical conflicts, and rising debt levels will break out into a global financial “storm”.

To help you get a better understanding of the market this year, we’re inviting you to an exclusive Market Outlook For 2020, which also happens to be the first of the year.

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To give you a headstart this year, veteran speaker CK Ee will be sharing on the following:

✔ Hidden forces (apart from global economic/political events) that drive the market and why most investors and traders lose money
✔ How to recognize signs of a bear market in the making and take advantage of it
✔ What are some of the variables to keep tab on during market slowdown?
✔ Which market will reap the most benefits and which will be most affected
✔ Gain insight into the various asset classes and more!

Due to popular demand, this seminar will have strictly limited seats (more than half of the seats taken during 1st day of registration).

Register for yours now before it runs out! 

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This event is exclusively hosted and sponsored by City Index Singapore.

Global Indexes In 2019: How did global indexes really perform?

Global Indexes In 2019: How did global indexes really perform?

The Straits Times Index (STI) performance (with dividends) is around 8%.

Now take a look at the comparison tables for major global indexes. Source: https://tradingeconomics.com/

Did You manage to beat any indexes?

Take the poll here: https://www.investingnote.com/posts/1771829

Want to beat the STI index? We’ve just launched a club that might help you achieve that!


InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

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Traders Dashboard: How Traders Think & Trade Daily

Traders Dashboard: How Traders Think & Trade Daily

Ever wondered how traders think and trade on a daily basis?

Behind the numbers, charts and complexities?

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For the first time ever, a group of traders have come forth with demystifying complex stock market happenings through in-depth analysis and breakdowns, so that you don’t have to.

Join this exclusive club where a group of traders including veteran expert @Li_Guang_Sheng, share regular updates on happenings in the global market and how these influence their daily trading and investment decisions.

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As a member of this Club, here’s what you will get daily from the group of traders, called the Traders Guild:

✔ Market direction – They look at economic data, monetary policy, interest rates and sentiment so that we know what’s happening around the world. They monitor news flow to keep surprises at a minimum. They assess what it all means for our trading & investment portfolios.

✔ Trading – Discuss their trading ideas, how they discover them, how they approach potential entry, stop-loss & exit points & the corresponding price action signals they look for.

✔ Investing – They look at beaten down assets, stocks at highs, IPOs, rights issues and decide whether we would take any action.

Club members will have the edge, from the Traders Guild’s observations of daily price action!

Get a 7 Day FREE-Trial and 20% OFF every month afterwards by using this promo code: DASH

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Activate your Free-trial and come see the Club for yourself now!

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InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

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Prize Presentation Ceremony and 2020 Market Outlook Recap

Prize Presentation Ceremony and 2020 Market Outlook Recap

Yesterday night was the Prize Presentation Ceremony of the SG Active Trading Tournament and our two esteemed speakers, Geoff Howie (SGX Market Strategist) and Desmond Leung (Everest Fortune Group) gave a 2019 wrap-up and 2020 market outlook.

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img_20191204_192759Geoff gave a very comprehensive and succinct presentation on how different sectors performed, not just in Singapore, but the world as well. REITs in particular, have given very good returns for 2019.

You can find the full presentation here.

Next, we had Desmond from Everest Fortune Group, also known as EFG on InvestingNote where he does daily technical ideas and calls. Follow him here.

img_20191204_194505Desmond gave the technical outlook for both the Hang Seng Index and Straits Times Index. Based on technical analysis aspect, it does not particularly bode well for both the indexes for 2020. Investors might have to be more cautious when trying to trade or invest in the market, especially during this prolonged volatile period.

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All Winners of the SG Active Trading Tournament!

All Winners of the SG Active Trading Tournament!

ULTIMATE WINNERS OF THE SG ACTIVE TRADING TOURNAMENT

The Final Round just ended last Friday, and we’re excited to announce the Top 3 ULTIMATE WINNERS of this Trading Tournament:

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1st Position: @luxcan
2nd Position: @shirleyfam
3rd Position: @wancheehoong

Congratulations to these 3 winners! They battled hard and now they get the glory!

People’s Choice Award Winner: @Stockcham

Based on votes, he has garnered 173 votes in total during the Final Round of the SG Active Trading Tournament.

For winning this award, he will be winning $1,000!

LUCKY WINNERS OF THE SG ACTIVE TRADING TOURNAMENT

We’ve also just done the Lucky Draw for the following: 1x iPhone 11 Pro (for all participants), 2x Apple Watch Series 5 (for participants who’ve traded once during Elimination Round) and 1x Apple Watch Series 5 (for voting) and here are your lucky winners!

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1x iPhone 11 Pro: @michaelalexand
1x Apple Watch Series 5: @noblelady
1x Apple Watch Series 5: @Financialmtc
1x Apple Watch Series 5(voter): @yuhaoloy

Congratulations to all the winners!

They will be presented with the prizes during the prize presentation ceremony and market outlook 2020 event happening on 4th December, 7pm at the SGX Auditorium.

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Come join us!

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InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

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New Oriental Education – This Company Grows at 138% In The Past 12 Months (Guest Post)

New Oriental Education – This Company Grows at 138% In The Past 12 Months (Guest Post)

This is a company that has returned 138% in the last 12 months for investors as the company is looking to grow even more in the next few years which spells opportunities if you are looking into a growth play.

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with username known as 3Fs and 1800+ followers.

The company last closed at it’s historical high at $122.72 and it is continuing to grow at a very fast double digit topline growth in the next few years.

Company Overview

Founded in 1993, New Oriental Education & Tech Group (NYSE: EDU) is the largest provider of private educational services in China. The company has an extensive network of over 1,261 learning centres that span across 56 different cities. New Oriental was the first successful Chinese educational institution to be listed in the New York Stock Exchange through their public offering back in 2016 and it has a market capitalization of over USD14 billion today.

The company has a substantial presence in Beijing, Shanghai and Wuhan, where combined they have a total presence of 245 learning centres, or close to 20% of their entire portfolio.

Beijing: Beijing has one of the fastest growing population in China, as the number of people living in the city grew from 13.5m in 2000 to 20.1m in 2019 (source: worldpopulationreview). In terms of GDP per capita, Beijing has also outperformed the rest of the cities by growing at more than 8% per annum, despite the ongoing Trade Wars threatening the slowdown of their growing nation.

Shanghai: Shanghai currently ranks first in terms of population density as the modern revolutionized city appeals to International expats and locals to come to Shanghai for both work and live. It currently houses a population of about 26m but has the infrastructure capacity to double its living population in the city to 50m by 2050 (source: shine.cn) through their urbanization transformation in the region and strong economic growth.

Wuhan: Wuhan is a surprise inclusion because of its strong economic growth and infrastructure transformation over the years, the city has recorded one of the highest rate of historic population growth over the years (source: wiki-wuhan). To date, their population stands at about 10.6m, which is about half the population size of Beijing.

Financial Performance

Revenue has increased by 26.5% year on year from $2.4m in FY2018 to $3.1m in FY2019 and has grown at a CAGR of 19.8% over 5 years.

This is mainly due to both the organic aspect of growth (152 new facilities and learning centres added in FY2019) as well as inorganic growth through the successful implementation of the optimization strategy coming in from the K-12 After-School Tutoring division and U-Can Middle School, which grow by 28.5% and 27.2% respectively.

Gross Profit margins continued to remain resilient at 55.5% in FY2019, despite coming in slightly lower than the 5-year average of 57.3%.

As the company seek to embark on its expansion plan, the company has correspondingly incurred higher costs for marketing and other SG&A related costs such as salary and rent as there are higher headcounts to account for.

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2020 Market Outlook & Prize Presentation Ceremony for the SG Active Trading Tournament Event

2020 Market Outlook & Prize Presentation Ceremony for the SG Active Trading Tournament Event

Join us for the 2020 Market Outlook & Prize Presentation Ceremony for the SG Active Trading Tournament!

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As 2019 is coming to a close, what will the 2020 entail?

Will it continue to be a low-interest rate environment? If yes, how should we be investing? If no, how can we capitalise and trade or invest better?

Which stocks and sectors should we be looking at?

What if The Trade War continues to intensify?

Join us for this exclusive event to hear what Active Traders have to say about the upcoming year 2020 in an exclusive panel discussion and attend the Winners’ Ceremony to meet all the winners of the Trading Tournament in-person!

Date: December 4th, 7-9pm
Venue: SGX Auditorium

Register here right now for the last big event of the year:

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InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

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Interviews with A Finalist of SG Active Trading Tournament: Justin Tay

Interviews with A Finalist of SG Active Trading Tournament: Justin Tay

This mini-interview series is to showcase finalists of the tournament and what propels them to be able to trade well.

This post was originally posted here. 

Today we have Justin, who is a Top 10 Finalist in the ongoing Final Round of the SG Active Trading Tournament, trading under his moniker @gangel. He has risen to the Top 10 by beating 2,000 other participants of the tournament.

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We asked the following questions and this is what he had to say:

How many years have you been trading and which markets do you usually trade?

Justin: I have been trading for 6 years, mainly focused on SGX. Just started US market and HK market recently due to the higher liquidity.

What’s your profession?

Justin: I am currently in my final year of my PhD studies. I am also a licensed pharmacist and work part time in one of the retail pharmacy chains.

Wow, that’s impressive! How did you start trading and what got you started? 

Justin: I started trading under the influence of my dad, who gave me a small start up capital to trade. He taught me some basic trading tips like price action and volume. From there I went on to learning how to do some basic chart and learn about some indicators. Some of which I have adopted ever since.

So what’s your usual trading plan like?

Justin: Usually I will decide on how big I want to trade, whether I have the capital to pick up or just playing contra before entering a trade. I like to make use of the GTM/GTD function so that my lots will be in the front of the queue. I also tend to queue slightly below the resistance zone so it has a higher chance of getting filled.

Then how do you usually determine an entry for a particular trade?

Justin: I do so by identifying support zones either through trendline support, moving average support so forth or wait 1 day bounce off from support zone for confirmation. On top of that, I will also try to look for signs of reversal with some of the indicators to convince myself to go in for the trade.

How do you usually determine an exit for a particular trade?

Justin: I do so usually by identifying resistance zones, either by historical high or trendline resistance. or when the tides change very suddenly.

As this tournament focuses on trading Daily Leverage Certificates (DLC), what is your experience trading DLC? 

Justin: It’s like a double-edged sword: it can magnify your profits or losses very quickly.

Finally, what would you say to new traders who want to trade well?

Justin: It’s really important to start from the basics of support and resistance, learn how to read the graphs and prepare to stop loss if the trade do not go in your favour. Once the price has moved up from your entry price, can consider doing a trailing stop loss strategy to reduce your losses.

If you like this interview, cast your vote for Justin for the Most Popular Trader Award and stand a chance to win an Apple Watch Series 5 worth $600!

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Also, if you haven’t taken our simple 5 question quiz where you’d get a chance to win an Apple Airpods PRO, do it now!

Good things really must share!


InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.

Download our free app here:

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