Below are some of the examples:
1) First REIT:
After a series of bad news on its sponsor Lippo Kawarichi's liquidity issues, bribery scandal in Indonesia & credit rating downgrading, the First REIT's share price tumbled by about 20% in just few days. I bought its units a few weeks before I witnessed such unfortunate outcome.
Although I choose to continue to hold on to it because of the underlying hospital assets, I do expect some kind of fund raising acquisition from existing unitholders soon as OUE might be trying to off-load some of its healthcare asset to First Reit. This means if I didn't take part in rights subscription, my existing unitholdings and DPU will be diluted. I will see how it goes.
2) Global Starhill REIT:
Its DPU declined for 2 straight consecutive financial years, causing its share price to continue to fall.
As per AR FY 2018, the management does have plans to acquire overseas assets. However, I do believe that asset acquisition will take years to complete, not withstanding the possibility of the company to raise funds from existing unitholders and the difficulty to acquire each new asset with property yield higher than its current dividend yield. This means that the chances of its DPU to continue dropping in FY 2019 is higher. As such, I decided to sold off all the units and deployed the retained capital somewhere else.
Bad news aside, 2018 is also a year where I learned deeper in stock investing along the way.
1) Portfolio construction/maintenance:
After I bought additional new Reits, I decided to focus on non-Reit income stocks with proven record in paying dividends over the past 5 to 10 years & growing DPS overall over these years with no unjustifiable & repeating share dilutive exercise.
I want my early retirement years to be blessed with reliable dividend income stream and not to be bothered about right issue subscriptions on REITs which could affect my monthly passive income's reliability.
2) Stock valuation:
a) Do not buy a stock simply because its share price reaches 52 weeks low.
I could get myself a falling knife and get my hands burn instead.
b) Do not buy a stock simply because it has attractive dividend yield.
The ultra high 7 - 10% yield is either due to a sharp declined in share price, or a huge special dividend payout which is one-time event.
c) Growth quality of the company matters in the long run.
If the company's earning and revenue are already consistently declining, its share price and ultimately its dividend per share will eventually decline.
c) Growth quality of the company matters in the long run.
If the company's earning and revenue are already consistently declining, its share price and ultimately its dividend per share will eventually decline.
3) Malaysian stock market investing opportunity.
Althought Malaysia stock market is not as developed as that in Singapore stock market in terms of corporate governance, I do see hidden gems in some Malaysian stocks. As a developing nation, Malaysian economy relies on exports (raw materials & manufactured goods). As more MNCs are setting up production plants/facilities in SEA region, there will be increasing demands on raw materials and that's where natural resources-rich nations such as Malaysia can be benefitted.
Also, as the economy is progressing, there is a trend to shift from manufacturing based economy to value-added service based economy. I do see growth potential on value-added service based sectors as well.
To avoid country bias in my investing, I will inject more capital on Malaysian stocks in 2019.
Also, as the economy is progressing, there is a trend to shift from manufacturing based economy to value-added service based economy. I do see growth potential on value-added service based sectors as well.
To avoid country bias in my investing, I will inject more capital on Malaysian stocks in 2019.
