CAPITALAND....... Land of Capital Growth

CAPITALAND
Investing in Capitaland was one of my most memorable journey in 2019. Capitaland is listed in SGX and is part of STI index component. It's main business units focusing on investment properties which generating recurring incomes from rental and trading properties as developer in major cities like Singapore, China and Vietnam. You can google it to learn more about Capitaland.

Headwinds....
The share price had been depressed for some time between late 2018 and early 2019. Singapore and China properties cooling measures had dented investor's confidents in the company's prospects. It is because the majority of its investments are concentrated in China and Singapore, more that >75%. It's gets worst with the on-going trade war between China and US.

Investment journey.....
I saw a window of opportunity here to make an investment. Looking outside the window, many see storms approaching and raging winds . What I saw outside was a rainbow beyond the horizon after the storms cleared. And that was how the journey started. Accumulating at low pricing between SGD3.00 to SGD3.30. Continued this journey until I had exhausted most of my SGD funds in my trading acc. It was partly because I also accumulating huge positions in REITs at the same time. You can read my previous posting on REITs investing if you interested to know more. Yes, there was a huge risk in the horizon, but I had never regret making this journey.

Tailwinds...... wind of change
In Jan 2019, the rainbow finally appeared. Temasek announced the merger of Capitaland and Ascendas-Singbridge. This deals will see Temasek injecting ASB asset into Capitaland and Capitaland to issue new share at $3.50 to Temasek. This announcement helps to boost the share price and confidents in the market.   

At the end of the journey.....
I finally decided to lock in profit at $3.50 per share, net profit of $18,655, 11% return in 5 months journey. As you can see in the chart above the share price continued to appreciate after I sold. I have no regrets because I can always embark a new journey in this investment world.

Personal notes:
I viewed investment as a journey, not just the end goal of generating income. You need to have the PASSION in what you do and I really enjoy the whole process of investing from early planning to execution. Regardless if I really make or loss money in the journey, I will make sure it's a memorable experience that keep you going. That is the part of my life's journey that I enjoyed the most. PASSION!

And that is my investment journey....

-William Cheng      

                                      Just completed watching this Drama recently. Enjoy!

Other Articles posting; Please click here:

Keppel Corp....... The Pheonix rising. Thank you, Temasek

Jardine Group ......... Dark force raising

GLP.... Make rumor your best friend

KEPPEL KBS US REIT...... Take the JUMP!

One of the popular investment class in SGX is REIT, Real Estate Investment Trust. It's typically provides stable and low beta stock price swing, sugar coated with consistent dividend payout. I probably should have invested more in SG REIT than speculating in stock market. However, those "Branded" REITs (Prada!!) which backed by heavyweight cornerstone sponsors are mostly trade at full book value >0.9 P/B and low dividend yield <6%.

This week, I would like to write about Keppel KBS REIT which recently changed name to Keppel Pacific Oak US REIT. This REIT was issued for USD0.88 at IPO. Traded around this price for sometimes until the share price start to tanked in late 2018.

2 key reasons for the fierce selling:

1. Fear of possible US tax withholding Law changed could impose 30% tax on its profits.
2. Greatly discounted Rights issue at USD0.50 to purchase new office building in US.

This REIT's price dropped from USD0.85 to USD0.54 lowest point in very short period of time. At this price, the dividend yield will exceed 12% return. Very attractive investments return especially the Right issue which allowed you to acquire more share at discounted price to book value. With Keppel as the cornerstone sponsor, I'm confidents that it's a very safe investment and the opportunity won't come twice in your lifetime.

What I like about Keppel KBS REIT:

1. High dividends yield >12%
2. Good sponsors > Keppel & KBS
3. Right market and strategic locations - US companies are growing a fastest pace support the demands for office space.
4. Super cheap rights issue - Like buying TESLA model X at Cherry QQ pricing.

I started buying between 58 cents and 64 cents. I had fully subscribed to the Right share and applied for Rights excess at USD 0.50. I got the full allocations plus excess share due to many not willing take the risk to invest. Including the Rights share and dividends received, my average price come down to USD0.53.

Fast forward to 2019, Keppel KBS US REIT issued a statement and clarify that they expected no tax impact as a result of the new US tax regulations. This immediately cleared up the risks hanging, the share price immediately recovered from 0.54 to 0.64. I sold it later in March 2019 at USD 0.68 with 23% gains in profit for 5 months holding period.

I admit that I make a big mistake as later it hit 80cents highest few months after I sold. Currently the stock trading at 74cents. But I'm glad I took the courage to "JUMP"  when others rush for the exit.

     "Taking a calculated investment risk is like taking a bungee jump with safety harness"-WC

I end this blog with my favorite song by G.E.M. "LIGHT YEARS AWAY". Enjoy.

- WILLIAM CHENG

Stock name: KEPPEL KBS US REIT
Country listing: Singapore
Research periods: 2 weeks
Stock accumulation/holding periods : 5 months
Return on investment (ROI) : 23% in 5 months 
2019 Stock ROI ranking: 5th (biggest gains)