Welcome

Welcome to my investment blog where I share with you my analysis of REITs in Singapore.

I hope that my investment philosophy will bring me a steady stream of income apart from my job. I am aiming for at least $3,000 per month which can sustain the current expenses of myself and my family.

Do enjoy reading my blog and post any comments that you have. I welcome them because it is a time to learn from each other.

When I am looking at investing in REIT, here are some of the guidelines that I am looking at. Feel free to comment on it. I am willing to listen to ideas.

-> at least 8% yield.
-> Price that is lower than its NAV.
-> Low gearing (if possible)
-> High secured NAV.

Current Dividend income is $3,300/month.

Thursday, February 7, 2013

Executing FCOT CPPU Strategy

I have decided and executed my FCOT CPPU strategy which I have discussed earlier. Thus, it means that I have sold 20,000 shares of FCOT at a price of $1.33. At the same time, I have bought 28,500 shares of FCOT CPPU at a price of $1.085. With that, here is the statistics.

No. of shares of FCOT CPPU = 28,500
Conversion price = $1.1845
No .of shares of FCOT once converted = 24,060

Total amount invested = $31,027
Average price of FCOT shares once converted = $1.29
Current Price on 6th Feb 2013 = $1.33

It is great to me because I have just sold my shares at $1.33 and rebought it at a price of $1.29 which is a 4 cents difference. Thus, I am looking at a paper profit of $973 at current price which is higher than the dividends that they are distributing every quarter. Moreover, I am still entitled to 5.5% p.a. coupon which they are paying to CPPU holders every quarter. (compared to 4.75% yield currently) Here is the calculations.

Coupons received = $392
Paper Profit = $973
Losses due to odd lots = ($80) => I am assuming that the value of 60 odd shares which I will receive is zero.
Total Profit = $1,285.
Percentage to investment = 4.14%
Annualized Yield = 16.56%

The drawback is that I am stuck with FCOT CPPU till April 2013 thus I can't really sell it. To me it is ok because I am always investing for long term. If the price difference stays the same, I will be executing this strategy every quarter.



3 comments:

  1. hello how did the execution go?

    ReplyDelete
  2. hi, the manager redeemed the shares. what would this mean for us who executed this strategy?

    ReplyDelete
  3. Hi Josh and Joseph,

    I will be updating everyone soon about the status of my strategy. Thanks for asking. :-)

    ReplyDelete