Saturday, 24 August 2013

Shares Investment Conference 2013

Date: 5 October 2013. 
Time: 9am to 6pm
Venue: Kallang Theatre
Speakers: Dr. Chan and Mr. Hu


I volunteered to do this blog post for free to thank shares inv for bringing me a lot of traffic to my blog and making my "face" more prominent on their website. Probably next time I can be the keynote speaker and you can support me just to see how i "look like".  :-P

Anyway, ShareInv asked if i am interested to write a short article for their event magazine for the conference and without me requesting, gave me 2 complimentary tickets to the event. To thank my active facebook fans, I am going to give my two tickets to 2 lucky "winners" who have previously participated in my online poll for Soilbuild REIT, Money Max and the battle of the 2 REITs

If you are one of those who have participated in one of the above 3 polls and can attend the event on Oct 5, please indicate your interest by posting a comment below this posting on facebook. I will let this "lucky draw" runs until Sunday 6pm and do a mini balloting if there are more than 2 fans who are interested to go. I think the ticket is worth $78 each (after discount).

The website for the conference is here or you can click on the banner above (click on the speaker you like).




Thursday, 15 August 2013

Soilbuild REIT - balloting results

Soilbuild REIT's IPO public offer of 62.5m was 5.4x subscribed and the over-allotment was exercised. The announcement is here.

The balloting table is as follows:

Investors who applied will have a more than 50% chance of being alloted and those who applied for 100 lots will have a 60% chance of getting 36 lots.

I didn't apply for the public tranche, as mentioned earlier but have about 12 lots from placement tranche. Think the debut will be muted with slight downside bias (gut feel).

Happy IPOing.


The first Million is the toughest?

I first set up the Facebook Page on 14 July 2012.

It took me more than 10 months to reach the first 1,000 fans on 27 May 2013

However, after i hit the first 1,000 mark, the next 1,000 fans took me less than 3 months and it reached that milestone today (14 Aug 2013)! :) 


There are probably a few reasons to explain the quick increase:
  • Share Investment invited me onto their "panel of authors" and that has brought quite a fair amount of traffic to my blog.
  • The listing of SPH REIT and OUE HT created a buzz on the IPO market here and that resulted in a renewed interest in IPOs.
  • The 1,000 fans continue to "like" my posts, post comments and participate the polls on Facebook page which, in turn, created a virtuous cycle of attracting more friends of fans to me. I take this opportunity to say "Thank You" and do continue to share my postings with your friends.
Below is the profile of my fans.

My fans continue to be predominantly male at 73% (versus 54% for all of Facebook) but this was an improvement when i just started where 80% are male.

Anyway, back to the topic today. The first million is probably the toughest and that is true. If you are just starting out or struggling to save up for retirement, you may want to start with a lower figure first, say $100,000 and then use the $100k as a base capital to work towards the $1m goal. Using the same analogy, once you get the first $100k, the next $100k will come at a faster pace and a virtuous cycle can then be built up. 

Stop dreaming about striking Toto for the first $1m and start saving and investing towards that goal instead!. :oP

Happy Investing and do me a favor, click "like" and helped me reach the next 1,000 fans faster ^_^

Saturday, 10 August 2013

How can you get Placement Shares - Part II

I received enough private emails and public comments on how i managed to get placement shares. Since it's National Day Celebration, i will do an update post to the earlier one I did on 6 Aug 2007 where i shared 5 tips to increase your probability. Wow, it has been more than 6 years but that post is still relevant! Anyway, the update post.

Tip 1: Stick to the core brokerage houses.

This is no rocket science. Open your brokerage accounts with the following brokerage firms:
  • DBS Securities
  • UOB Kay Hian
  • OCBC Securities
  • CIMB
DBS is almost always the first stop for underwriting for most IPOs. However, they are very selective and will only do the bigger IPOs. Hence, you will definitely see their names on the bigger cap IPOs such as REITs etc. If i want a brokerage account, i will go for DBS.

UOB will focus on the smaller cap IPOs and have started to be active in the Catalist space as well. PrimePartners like to work with UOBKH to place out their shares for Catalist listings. A recent example will be Moneymax. There used to be a few teams doing IPOs at UOBKH but D&H team has since left and there are 2 teams remaining.

Frankly, I am surprised to see OCBC back in the game this year. They co-underwrite and did the placement tranche of SPH REIT, OUE HT and the upcoming Soildbuild REIT. I recently called my OCBC broker to ask about Soilbuild REIT but in the end, didn't make any indication. I have not been trading through OCBC so i think the chances of getting will be low anyway (plus i am half-hearted about the industrial REIT).

I was pretty disappointed with CIMB. They did a small listing of Singapore Kitchen Equipment and has zero post-market support. Given that it was a small float, investors who were "bitten" will now be extra wary of their IPOs.

Tip 2: You don't have to stick to one dealer or remisier



If i show you my CDP statement, you can see a long list of brokerage accounts. Some are active but others became inactive over time. I tend to "reward" accounts that gave me IPO placement shares. 

In addition, you don't have to stick to one dealer or remisier. It is okay to have different accounts within the same brokerage firm. They understand. I have a few UOBKH accounts (no less helped by the consolidation back in the late 90s and early 2000s). However, not all dealers and remisiers will be able to get you placement shares. We will come to that in a short while.

Tip 3: Knowing the right people


This one i cannot help you. You have to know the right people i.e., the people who "control" the placement book. I happen to know a few of them but i am not "big enough" to underwrite the shares so they will give me some small allocation of placement shares out of goodwill. hahaha. You will need to build your own network and i do spend a lot of time networking on a personal basis.  

As such, if your broker controls the book or knows the people who controls the book, they will be in a better position to help you get some placement shares. 

Tip 4: Become a private banking client


If you have the means and source to become a private banking client, being the preferred client at DBS private bank or some of the foreign banks like Credit Suisse, Goldman, Deutsche or Standard Chartered might be able to help you lay your hands on placement shares. 

Contrary to what you may think :P, i do not have private bankers serving me. I am definitely too "small fry" for them plus I don't want to take away the thrill of managing my own money. ^_^ Private bankers will probably knock on your doors only if you have $1m investible cash.

Tip 5: Tell the broker you are keen to take placement shares and join the "IPO club" if there is one



The idea of an IPO club is you support the IPO regardless of whether you like the company or not. In other words, whenever there is an IPO, you have to "eat it". 

While theoretically, this may sound risky, in reality, it is actually not that bad. This is because the banks will only launch an IPO when sentiments are good and when the placement shares are fully placed out. The IPO club is usually to meet the 1,000 shareholders rule.However, having said that, it is true that they dump more shares on you when the demand is weak but give you "peanut number" of shares when the IPO is hot. As a result, you can actually receive more shares from the public tranche than via the IPO club when the IPO market is hot.

Hope this 5 tips are relevant and useful to you. 

Happy IPOing.

Thursday, 8 August 2013

Soilbuild Business Space REIT

Soildbuild Business Space REIT launched its IPO yesterday at a final price of $0.78. The prospectus is here.

The IPO time table as as follows:



My preview post was here and i have nothing to add except that it is good to see it being priced at 78c. It should have a few cents upside but don't expect more as this is after-all a yield play.


Valuation



At least at 78c, investors are buying the properties at slightly below the more conservative valuation from CBRE, which in my view, is good and leave some money on the table for investors.

Mr IPO's ratings

I will be vested with some shares and will probably apply for some at the ATM. No change to my fair value range and the Chilli ratings.

Happy IPOing.

Sunday, 4 August 2013

Soilbuild Business Space REIT Preview



Soilbuild Business Space REIT ("Soilbuild REIT") lodged its preliminary prospectus here. The founder is one smart guy. He privatized the company a few years back (I heard made hundreds of millions in the process) and then relaunched it with 2 IPOs! One for the construction business and now for the REIT business. 

I am considering whether i should put in a bid for the placement tranche, hence the preview. Do note that this is the first IPO to be launched this year without cornerstone investors. The news is here.

Soibuild REIT is offering 586.532m units at an offering range of $0.77 to $0.80 per Unit (subject to over-allotment of 56.307m units). The allocation between placement and public tranche is not finalized yet but the indicative number is 499.032m for placement and 87.5m for Public.

Principal Business

This is a Singapore REIT focused on investing in a portfolio of income-producing real estate in the industrial space.

Soilbuild's initial portfolio


The initial portfolio consists of seven properties with a purchase price of $921m. The location of the properties is in the picture above.

What I like about Soilbuild REIT
  • Longest weighted average leasehold term of around 50.5 years vis-a-vis its listed competitors
  • 42% of net income covered by Master Lease agreement to ensure yield stability
  • Rental escalation features in 4 of the properties ranging from 2% to 4.5% and a long term lease contract. (See below)
  • 343,240 square foot of GFA available through plot ratio maximization or popularly known as asset enhancement opportunities.
  • ROFR of 4 properties from Sponsor
  • The final purchase price of $921m is based on the average of Collier's valuation of $932m and CBRE valuation of $911m. This is, in my view, fair although i will definitely prefer to see the IPO priced at the lower end of the book-building range as the purchase price of $897.4m will then be at a slight discount to the more "conservative" CBRE's valuation of $911m.
My concerns 
  • Over-saturation of Industrial REITs in the market
  • New government regulations in this sector may dampen demand and yield
  • Interest not aligned as the public will hold between 73%~80% of the REIT with the founder, Mr. Lim Chap Huat holding the remaining (depending on whether the over-allotment is exercised in full). The Sponsor will no longer be vested.
  • Financial engineering? The implied yield is actually much lower if the manager has elected to be paid in cash for FY2013 and FY2014. If 100% of the management fees are paid in cash, the yield would have dropped to 6.7%-6.9% for 2013 and 6.8%-7.1% for FY2014. (I don't really like this!).
Forecasted Yields
The annualized yield will range between 7.3% to 7.6% for 2013 and 7.5% to 7.8% for FY 2014 (depending on the final offer price). The NAV of Soilbuild REIT is $0.80 per unit and the leverage at IPO is approximately 29.9%.

Peers'valuation

Let's see how the peers are trading as of 2 Aug. Source is here.


Looking at how the IPO is priced, it is probably 'fairly valued' based on the peers' valuation with slight upside potential if we treat Sabana REIT as a outlier. 

Mr IPO's views

While i like the "longest" leasehold life among its peers, I don't really like the "financial engineering" part by the fund manager to enhance yield for FY2013 and FY2014.  However, having said that, i think there is some slight upside potential given the positive market sentiments for IPOs recently. 

Assuming the fair trading range for Soilbuild REIT is a yield of between 7% to 7.5% , the fair value will be between 78c to 83c. If i use a price to book of between 1.0x to 1.1x, the value will range between 80c to 88c.

I will give it a 1 Chill rating for the IPO and subscribe only if you are interested in this sector and the projected yield. Don't expect to see much fireworks unless we can see some interesting names anchoring the IPO.  

Thursday, 1 August 2013

MoneyMax - Balloting Results


It is very difficult to get. The entire IPO was 24x subscribed and the small public float does not favor to retail investors. Once again, applying for many lots is no guarantee that they will give u sufficient shares. Perhaps it's time SGX expedite its plans to reform the IPO market for retail tranche.

Mr IPO's wifey account got nothing from the public tranche but managed to get 30 lots from placement for his personal account.

Let's see how the market will perform tomorrow. I hope to see some "fireworks".

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