OUE H-Trust

[KopiKat]

The first time I came across Stapled Securities must have been SPAusNet. If I remember correctly, it must have been an Australian creation.. mainly for tax reasons.

Just went to chk and found an Australian article,

https://www.google.com.sg/url?sa=t&sourc...LFn_4kvYYA

[specuvestor]

Thanks KopiKat for the interesting link and pointing us to SPAusnet for further "investigations"... Ironically that also invalidates your point that stapled security is only for hospitality assets

Interestingly the article talked about tax arbitrage from franked dividends, yet IIRC REITS started in Singapore after we abolished the S44 So that is probably why taxation arbitrage is not a consideration here.

I concur with DP28 that overcoming the gearing restriction could be one incentive.

[KopiKat]

Thanks KopiKat for the interesting link and pointing us to SPAusnet for further "investigations"... Ironically that also invalidates your point that stapled security is only for hospitality assets

My observation was that amongst the REITs, it'd appear that there must be some benefit (could also be future benefits when they have to take over the running of the hotels and activate the Biz Trust from it's dormancy) for the Hotel-heavy ones to practise this stapling as all the SGX listed ones (CDL H-Trust, FE-HTrust, A-HTrust, OUE HTrust) are using it....

A-HTrust do have the majority of their hotel assets in Australia. CDL HTrust have some hotel assets in Australia. As for other 2, I'm sure their sponsors must have some Australian assets that can be offered as ROFR in future.

So, perhaps the hoteliers (sponsors) do know of some benefits (future or current) for this stapling, but as mentioned in the article, it may not necessarily be for the benefits of the unit-holders...

As for SPAusNet, it's listed in ASX and all their assets are in Australia. The benefit of stapling is likely for tax purposes (esp. for non-Australian shareholders), as mentioned in that article.

[specuvestor]

Thanks Kopikat you have great memory to dig up SPAusNet Interesting observation that it could also be because they have or want to have Australian assets.

These are the "stated" reasons for the BT in OUE H-T:

On the same page it talks about the purpose of the BT which is 1) a last resort master lessee (which sounds like a scheme to bypass some kind of REIT restriction of not renting out to itself), or 2) project development and asset acquisition which I assume are other non REIT businesses

Have to study what the other stapled trusts state as their reasons. The key to me is to observe how the cashflow is allocated in the case of a capital call.

[lonewolf]

Stabilisating Action Day 12 (14 Aug)

5,000,000 units purchased at $0.88

Total units purchased to date: 18,882,000
Total stabilising units left: 49,238,000

[KopiKat]

Just like what I had done for APPT, I will be keeping track of the stabilising action for OUE H-Trust.

Stabilisating Action Day 1 (Jun 25)

8,888,200 units purchased at $0.88

Day 1 figures should be 8,882,000 units. As such, it's affecting your cumulative total figures for all subsequent posts.
The giveaway on something seems not right is the odd lot of 200...

[cfa]

Now still has the buying support, just wonder what would be the share price after all bullets are used ?

[KopiKat]

Now still has the buying support, just wonder what would be the share price after all bullets are used ?

The logical conclusion is that share price will drop further... no bottom... But, from my previous observations, that may not happen and for some, the prices may even go up...

Why? IMO, there're many different players in the market and the mix of players are different at different stages. For eg. during the 1st few days of listing, there're likely to be many motivated sellers who'd gotten their allotment and just want to make a quick buck. There could also be Funds who wants to buy. If prices drops below IPO prices, there's also the Stabilising Mgr in action. If the price look weak, short sellers also appear...

During the stabilisation period, the short sellers are likely playing a major role as I suppose they can even make some $$ with just 1 bid step and a big enough volume transaction. I think a possible routine is to short it well below IPO price, then cover back when it's low enough. Next, wait for stabilising mgr to come into action, to bring it up to IPO price... Cycle repeats, short again...

But, when stabilising action stops, the risk become higher for the shortists. If they don't smell blood, they'd likely move on to the next target. With the sell supply not there, prices usually won't drop a lot more. Around this time, the Fund usually steps in (if it's their target stock) to pick up "bargains" and prices start to rise. Some of these Funds may even mop up the liquidity till they hold >10%... Prices naturally rises and other investors aka suckers get suckered in.. till the Fund one day decide to move on. In the meantime, these Fund may also be trading... buy-sell-buy-sell....

Don't believe me, go check some of the SGX Annc for other High Yield recent listings...

[lonewolf]

Day 1 figures should be 8,882,000 units. As such, it's affecting your cumulative total figures for all subsequent posts.
The giveaway on something seems not right is the odd lot of 200...

Thanks! I've corrected the previous figures.

[lonewolf]

Stabilizing Action Day 16 (20 Aug)

2,000,000 units purchased at $0.875

Total units purchased to date: 20,882,000
Total stabilising units left: 47,238,000

[Comment] First time the SM need to purchase below IPO price but still plenty of bullets left with more than half the 30-days Stabilizing Period gone.