KINV

Buy @ $0.17. Decided to buy more to round up my holdings so that I won't end up with odd lots when they do the 5-for-1 consolidation. Results were out last evening and on first look, the DPU = 0.25ct for Q1 (Dec10) looks bad as it dragged down the annualised yield (compared to 2H – Sep10). But, if we look at the preceding quarters, the DPU for odd quarters are usually lower than those for even quarters. Comparing on a y-o-y basis, it actually went up from 0.24ct last year.

I was also previously planning to sell down my holdings but some recent events made me change my mind. One is the sale of a Japan asset (where Borrowings > Asset Value) for less than $1. This will result in a small gain and likely better earnings overall (this Japan asset was operating at a loss). This will also lower the Gearing to 38% (from 39.8%), but it's still dangerously high (chances of a need for Equity Fund Raising is high). The other was the announcement that the Trust manager will no longer be paid Acquisition and Disposal fees. This is positive as it aligns their interest closer to that of the shareholders.

So, although the yield is not fantastic, I'm hopeful that FCOT is slowly cleaning up their Balance Sheet (still have a few more assets in Japan and Australia to get rid) and becoming more pro-shareholder. 😀