S-REIT Investment Blog: Purchase and Rights Subscription of Rickmer Maritime

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 $3,800/month.

Wednesday, June 19, 2013

Purchase and Rights Subscription of Rickmer Maritime

Current Price on 18th Jun 2013 = $0.275

Current Yield = 10.73%
Price-to-book Ratio = 0.376
Assets per unit = $1.595
Debt per unit = $0.865 (including current liabilities)
Gearing = 54.1%

Rickmer Maritime has made a successful rights issue last month and also successfully extended their waiver of their LTV ratio. The high excess application rate shows that there is still demand for such products despite its woes. With an extremely high yield of 10.73% and low price-to-book ratio at 0.376, I believe that its low price is a strong reflection of its high risk.

I took a small portfolio of 10,000 shares at $0.34 (total $3,400) of Rickmer Maritime even though it is an extremely high risk investment trust to me. With that, I have also subscribed an additional 11,000 shares exercising my rights and excess rights at $0.24 (total $2,640).

Current price is at $0.275 which is lower than my average purchase price of $0.288. With the high subscription rate of its rights issue earlier last month, things should stabilize and I will be enjoying my 10.73% dividend yield with an expectation of zero capital appreciation.