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SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

Most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue. SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan and has 17 followers.

SIA reassures cabin crew on medical leave system, Singapore News ...

SIA RIGHTS ISSUE: DEBUNKING THE COMPLICATION BEHIND THE MATHS

By now, most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue.

SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

S$15bn looks like a HUGE amount of equity to be raised, particularly when one compares with SIA’s key competitor Qantas which, a few days prior to SIA’s announcement, highlighted that it has managed to secure ONLY A$1.05bn in collateralized (against its fleet of 7 Boeing 787 aircraft) debt funding at an interest rate of 2.75%. Qantas share price appreciated by 26%.

Unlike SIA which has been levering up on its balance sheet to make new aircraft purchases, Qantas, on the other hand, has maintained a steady net debt balance of A$3bn over the past 3 years. Comparatively, SIA’s net debt balance has ballooned to S$8bn (including lease liabilities) as at end-2019 as a result of their aggressive fleet renewal plan.

So, Qantas (with a market cap of A$5bn) requires an additional A$1bn to tide over this major aviation crisis (for now perhaps) while SIA (now with a market cap of S$7bn) requires a potential total of S$15bn (plus S$4bn in bridging loan) and one can see the huge disparity in terms of capital management.

With that notion in place, let’s evaluate the two Rights issuance, first the SIA Rights Share followed by the SIA Rights Mandatory Convertible Bonds.

I will then follow up with 4 scenario analysis for a potential SIA shareholder and calculate what might the market value of the SIA Rights Shares and SIA Rights MCBs be worth when they start trading.

They are;

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Cromwell European REIT’s First Placement. Acquires Polish and French Offices (Guest Post)

Cromwell European REIT’s First Placement. Acquires Polish and French Offices (Guest Post)

There has been a few placements, non-renounceable rights issues and acquisitions by REITs that I cannot get through all (well by my own standards). But I thought I will just do the Cromwell European REIT one.

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This post was originally posted here. The writer, Kyith is a veteran community member and blogger on InvestingNote, with username known as Kyith and 700+ followers.

After the burnout work in the office in the past 2 weeks, I really do not feel like doing anything.

So this one will probably be a short one.

I have not do much homework on Cromwell, so decide to treat this as a relaxing homework of mine.

Cromwell European REIT will be purchasing:

  • 3 Freehold French Office Buildings in Greater Paris
  • 2 Freehold Office buildings in Krakow, Poland
  • 1 Freehold Office building in Poznan, Poland

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A Tale of Two REITS (Guest Post)

A Tale of Two REITS (Guest Post)

There are investors who like to base their Reit selection on two criterias: Price to Book Value and Dividend yield.
real-estate-singaporeThis post was originally posted here. The writer, D Wong is a community member on InvestingNote, with username known as Pizzaprata.

M Reit: $Mapletree Ind Tr(ME8U.SI)
S Reit: $Sabana Reit(M1GU.SI)

Based on the latest quarter’s results and closing prices:
M Reit’s P/B is 1.41 and yield is 5.7%
S Reit’s P/B is 0.76 and yield is 6.9%

From the above M Reit looks overpriced and S Reit looks attractive. Both Reits had their IPOs just one month apart in Oct/Nov 2010 with similar IPO prices of 0.93 and 0.917 respectively. That’s where the similarity ends, from the price performance chart below you can see that M Reit has doubled it’s share price since IPO while the other has dropped to less than half.

The reason is simple, M Reit has consistently improved it’s DPU every year whereas S Reit had to cut it’s DPU over the years. Therefore a good management track record is a more important criteria. So quality reits don’t come cheap and if you are hung up about P/B ratios you would never have bought M Reit as it has never dropped below its book value since IPO. Including dividends, M Reit’s total return is more than 200% so you would have missed a 3 bagger.

However past performance is no guarantee for future performance. You need to look at the Reits results in detail to see if the distributions are sustainable and what projects they are doing to increase DPU. Tomorrow I will reveal the Reits and why I accumulated M Reit last week although seasoned investors would have guessed which Reits I am talking about.

 

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TTI’s Portfolio Performance – May 2019 + Avenue Therapeutics Updates (Guest Post)

TTI’s Portfolio Performance – May 2019 + Avenue Therapeutics Updates (Guest Post)

May 2019’s a tough month, and no, there’s no new “Best. May. Ever” series… (Continuation of these:)

portfolio-750x440

This post was originally posted here. The writer, ThumbTackInvestor is a veteran community member and blogger on InvestingNote, with username known as ThumbTackInvestor and 2400+ followers.

Best. January. Ever.

Best. February. Ever.

Best. Mar……….. You Know The Drill!

TT Portfolio Performance & Review

Like most of everyone else, TTI’s portfolio ROI declined in May, alongside the volatility and market uncertainties from the trade wars.

SG Markets

Total portfolio value in SG markets is SGD 357,660.

Again, not much activity here, took profit on a tiny itsy bit of Geo Energy to redeploy into US markets, otherwise, holdings remain the same. I’m also not really spending much time looking in these waters.

Bonds

Again, nothing much to talk about here,the bond portfolio is approximately SGD 550,000.The intention is to leave all coupons to compound, with next to zero activity here.

US / Global Markets

ROI has declined from April 2019’s 40.61%, to the current 37.19% YTD.

Net Quantum investment gains YTD (excluding any capital injections/withdrawals) is thus USD 164,707.26

Current top/large winners include Wirecard, Avenue Therapeutics, Tesla shorts, JD.com shorts and a small position in the volatility derivative VXX.

The 2 biggest/most irritating losers are Centurylink (CTL) and Chesapeake Energy (CHK). I remain fairly optimistic about CTL, I just think the management needs to show a single quarter of revenue gain or even, just stabilization, and the share price would pop through the roof. In the meantime, I’m collecting like a 8% yield after the witholding taxes.

CHK on the other hand, is dead in the water. While Lawler has done a fantastic job deleveraging over the past couple of years, this may be too mammoth a task for him. Or he may need several years more. There’s hardly any difference in both scenarios.

Overall, I’m pretty pleased with how things are turning out for my US portfolio. Despite a drop of around 5% due to the trade wars in May, the gap between my ROI and the passive benchmarks is increasing, and the 3 indices I compare against are all at the 9-10% mark, and that puts my ROI this year at 3x that of mere mortals.

Alongside the huge volatility in May, the USD-SGD pairing also showed massive movements.

I’ve always said I’m no forex expert.

I don’t even think there’s such a thing.

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TIME WEIGHTED RETURNS VS MONEY WEIGHTED RETURNS (GUEST POST)

TIME WEIGHTED RETURNS VS MONEY WEIGHTED RETURNS (GUEST POST)

This article, Time Weighted Returns Vs Money Weighted Returns was originally posted here. He is a veteran community member on InvestingNote, with username known as ThumbTack Investor.

 

time_money

TIME WEIGHTED RETURNS VS MONEY WEIGHTED RETURNS

I think probably 70% of the people here don’t really calculate their returns.
Certainly not the traders with multiple transactions, cos it is a mammoth task doing so.
The vast majority of the remaining 30% are probably calculating it wrongly (Wrongly, that is, if you are using your ROI and comparing it to active managers)

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