Buy @ $0.71 and $0.705. Results were out on Sunday. Yield @ 11.574%, but will be adjusted to 6.614% due to dilution of current 3-for-4 rights issue @ $0.73. I plan to give up the rights unless mkt price goes above $0.73. Will also likely sell in short term. Seller code ’84’ – UBS 😀
Correction (24-Jul-08)
Yield due to dilution of 3-for-4 Rights Shares is recalculated using the info from the Rights Circular,
For Q308, assuming the new shares are issued in mid-Q308, we’ll only see half the dilution impact. My est. based on 73cts, yield will be worst case,
Q308 – 9.53% (DPU 1.74ct)
Q408 – 7.89% (DPU 1.44ct – as per circular)
But, I’m expecting better DPU than that, at least 5% more, based on MLT’s track record.
Based on the above estimates, the yield is still pretty good in spite of the dilution from the rights issue. I have therefore decided to hold on to my shares for longer term but will consider to sell if prices moves up a lot such that projected yield drops towards 7%.
Notes :
1) In the circular, DPU 1.44ct used Q1 DPU 1.9ct as reference. Q2 DPU 2.04ct is higher, so the projected DPU 1.44ct will likely be higher.
2) Q308 DPU may be lower than my estimate due to the underwriting expenses for the rights issues. If that’s the case, Q408 DPU may be correspondingly higher.
Current Shares vs New Shares
On 24-Jul-08, Mapletree did an SGX Annc that they’ll take up all rights that are not subscribed. My est. on the share price before it becomes feasible to exercise the rights @ $0.73,
Rights Price + Q208 Div + 0.5 * Q308 Div – Brokerage
= $0.73 + 2.04ct + 0.5 * 2.04ct – 0.3ct
= $0.755 (round down to nearest 0.5ct)
Here, I assume that,
– New shares issued in mid-Q3 ie mid-Aug ie. only qualifies for div from mid-Aug
– Q308 Div for old shares will match Q208 DPU up till time of new share issue
The above will also be useful to decide on the right price differential between MLT or MLT A (rights shares) should I decide to buy the shares.
The SGX Annc by Mapletree is positive as the risk of dumping by the underwriters who’d have been forced to take up all unsubscribed rights (share price was below $0.73 on last day of cri), is now eliminated. I’m now even considering to collect more shares if prices should fall (max price to buy would be $0.755 based on above calculations). I’ll unlikely subscribe for the rights.
Note that the risk is still high that the share price will still drop, esp. after xd, based on the recent record of new shares issues – KREIT, CRCT, AllCo,…..