AMFirst REIT

AMFirst REIT has given a really mild hint that they expect to outperform in the next financial year and beyond by saying that they expect that they will be able to cover any charges/losses caused by the preliminary discharge with additional revenues expected in the future. For those who have not had a slightest idea of who they are, look at what they have done in Hong Kong, in Singapore, in Malaysia and in Australia.

4. EFFECTS OF THE DISCHARGE

The Discharge does not have any material effects on the unitholders’ capital, substantial unitholders’ unitholding, gearing and net asset value of the REIT. 

The Discharge will have an impact on the earnings of the REIT. However, for financial year ending 31 March 2011 this will be mitigated by an amount of RM5.67 million received as compensation awarded by the authorities following the compulsory acquisition of the common area fronting The Summit Subang USJ. For financial year ending 31 March 2012 and subsequent years, we expect additional revenue arising from new tenancies as well as positive rental reversion due to the repositioning and rebranding strategies implemented, which will invariably cushion any financial impact arising from the Discharge.

 Comments: Lets just hope that there will not be a huge private placement in the near future.

City square seems ready for injection

City Square seems ready to be injected into Malaysia Commercial Development Fund or CapitaMalls Malaysia Trust. In a recently completed AEI, the management has added some beauty kiosks at the ground floor and managed to revamp a huge dead end corner lot retail unit at second floor. They shrunk the corner lot and created a few beauty kiosks out of it. Brilliant. They will divest it only at the peak of the market. When is the peak? It might be before the completion of the nearby Komtar building or it will never be divested.

Arbitrage activities by listed companies

 

Currency Arbitrage

1) Buying products made in neighbouring countries at subsidised cost and selling at premium/higher than average price in destination countries

What i have seen – ice cream cakes, pastries, cookies

 

Interest Rate Arbitrage

2) Borrowing funds at low interest rates from source countries and buying properties with yield equivalent to/higher than borrowing cost in destination countries with high borrowing cost

Destination countries – Australia, India