Amanah Raya to list 2nd REIT next year

December 16 2006

AMANAH Raya Bhd (ARB) plans to list its second real estate investment trust (REIT) in Malaysia as well as in Dubai by the second half of next year, said its managing director Datuk Ahmad Rodzi Pawanteh.

The value of the REIT is expected to be US$500 million (RM1.7 billion), a size deemed fit to attract foreign investors, especially those from the Middle East.

"The returns will definitely be higher than the first given that it is an Islamic REIT. With the recent dual listing regulations, we may list it here and in Dubai," he told reporters in Kuala Lumpur.

ARB has signed a memorandum of understanding with Macquarie Group and Faisal Private Bank yesterday to leverage on their corporate advisory and offshore Islamic banking services.

First logistic-focused industrial REIT

By Joyce Goh


Atrium Real Estate Investment Trust (Atrium REIT), the first logistic-focused industrial REIT, will have an initial portfolio of properties with about 809,668 square feet.
“The initial approved portfolio of investment properties comprises four freehold industrial properties with a combined net lettable area of approximately 809,668 sq feet leased to reputable and financially strong multi-national tenants,” said chairman of Atrium REIT Managers Sdn Bhd, Zakaria Meranun.

The four prime properties consists of three warehouses, namely the Exel and TNT logistics warehouses in Shah Alam, the DHL logistics warehouse in Puchong and a manufacturing plant leased to Unileaver in Rawang.

“The management has plan to double up the size within five years period. In the short term, we will try to exceed the one million sq feet target. Within five years, we will double up to 1.6 million sq feet,” said executive director of Atrium REIT, John Lim.

Future possibilities consist of warehouses in China, Vietnam as well as warehouses in Bukit Jelutong for a Swiss logistics company and a Japanese company.
“Atrium REIT’s principal objective is to invest, directly or indirectly, in a portfolio of income producing industrial and logistic real estate assets,” said Zakaria.
Chief executive officer of Atrium REIT, Wong Sui Ee said: “Trade is picking up in Southeast Asia because of China and India.
"Malaysia is a very strategic place for the goods to flow through China / India to the rest of the world,” she said.

“Logistics is definitely a growing industry. Malaysian total trade has exceeded RM1 trillion. More and more goods need to be distributed,” Lim added.
They were speaking to reporters after the signing of the underwriting agreement ceremony between Atrium REIT and Aseambankers Malaysia Bhd.

Atrium REIT will be making a public offering of 75.5 million units.
“The total issues is under RM150 million with offering around RM80 million,” said head of equity markets of Aseambankers, Francis Goh

The REIT has an approved initial fund size of 121.8 million units, whcih consist of 1,000 promoters' units, 46.3 million units for vendors Glory Blitz Industries Sdn Bhd and Sparkle Skyline Sdn Bhd and 75.5 million units for public.
Out of the 75.5 million units, 13.5 new units will be opened for public application, two million new units via pink form allocation and 60 million units will be for institutional investors via bookbuilding process.

Atrium REIT targets to be listed by the first quarter of 2007.

News Wednesday December 13, 2006

Starhill REIT to buy The Residences

KUALA LUMPUR: Starhill Real Estate Investment Trust's (Starhill REIT) proposed acquisition of property within The Residences at The Ritz-Carlton Kuala Lumpur will raise its total asset value by 10% to RM1.37bil.

The RM125mil purchase from YTL Corp Bhd unit YTL Land Sdn Bhd was for 60 serviced apartments, four levels of commercial podium block and two levels of basement car parks, Starhill REIT manager Pintar Projek Sdn Bhd said in a statement.

The transaction is expected to be completed by the first quarter 2007.

Pintar Project chief executive officer Tan Sri Francis Yeoh Sock Ping said the addition of The Residences property presented a timely growth opportunity to Starhill REIT to increase its exposure to key urban areas in Kuala Lumpur. “The acquisition is also expected to enable Starhill REIT to achieve an added level of cost aggregation and efficiency through the sharing of services with (nearby) Starhill Gallery and JW Marriott Hotel,” he added.

The purchase consideration will be satisfied via the issuance of 138.9 million new units in Starhill REIT to YTL Land, at an issue price of 90 sen per unit. The purchase price represents a 13.79% discount to the market value of the property.

YTL Land’s total cost of investment in The Residences Property was RM94.38mil.

After the transaction, YTL Land’s stake in Starhill REIT will rise from 54.85% (as of Nov 30) to 60.17%.

CapitaLand, Maybank set up M'sian real estate fund (Updated)

from biz time online

Singapore’s CapitaLand group has teamed up with Malayan Banking Bhd group to set up a closed-end private equity investment fund, Malaysia Commercial Development Fund (MCDF), with a target fund size of US$250 million (about RM887 million).

MCDF — CapitaLand’s first and one of the largest funds in Malaysia with an expected gross development value of US$1 billion — will allow investors to access a portfolio of prime real estate development projects in Malaysia.

The Singapore-based fund, which closes by the first quarter of next year, will acquire, develop, redevelop and realise profits in commercial and integrated projects in the Klang Valley.

The Maybank Group and CapitaLand Commercial and Integrated Development Ltd (CCID) will sponsor MCDF with MCDF Management Pte Ltd as the fund manager. Both CICD and MCDF Management are subsidiaries of CapitaLand.

Aseambankers Malaysia Bhd, the investment banking arm of Maybank, will act as the principal adviser to MCDF Management, providing advisory services on Malaysian capital market and funding issues.

In a statement on Dec 13, CapitaLand said MCDF’s seed investment is One Mont’Kiara, a mixed development comprising two office towers, a retail podium and car parks, on a 151,000 sq ft site at an estimated project cost of RM360 million.

CapitaLand said work on the project would start in the first quarter of next year for completion by the third quarter of 2010. It said One Mont’Kiara was an established upper middle-class residential area with a developed expatriate community.

It said separately, CCID woud also sign certain agreements to acquire two development projects, which may later be injected into MCDF.

In a separate statement, Aseambankers said MCDF provided an opportunity for international and regional investors to participate in the current growth phase of the Malaysian property sector.

Parties led by Aseambankers chief executive officer (CEO) Surachet Chaipatamamont and CCID chief executive officer Martin Tan are holding several roadshows in key Middle East cities, namely Bahrain and Dubai.

“With the setting up of MCDF, the first commercial development fund in Malaysia, the CapitaLand group will extend its international expertise in the real estate value chain and expand its integrated real estate and capital management business to Malaysia.

“It has successfully executed this strategy in other countries such as China. We will leverage on the skills and resources of several experienced real estate developers to tap into the tremendous growth potential in Malaysia’s real estate market,” said CapitaLand group president and CEO Liew Mun Leong.

CapitaLand said Malaysia was an attractive market opportunity as its real estate market was undergoing rapid growth, underpinned by healthy economic performance frequently boosted by the provisions in the five-year Malaysian Plans.

In Malaysia, CapitaLand has a 30% stake in the 50-storey Menara Citibank office tower, and a 40% stake in a joint venture with Quill Group to develop a premier office building in KL Sentral.

CapitaLand also has a 40% stake in Quill Capita Management Sdn Bhd, the manager of Quill Capita Trust, a real estate investment trust which recently launched its initial public offering.

Starhill REIT to buy The Residences

By Hamisah Hamid

STARHILL real estate investment trust (REIT) is buying service apartments known as The Residences at The Ritz-Carlton from YTL Land Sdn Bhd for RM125 million.

The deal, due for completion by the first quarter of 2007, is set to increase Starhill REIT's total asset value by 10 per cent to RM1.37 billion and reduce its gearing by 1.31 per cent to 13.09 per cent.

Tan Sri Francis Yeoh, the chief executive officer of Pintar Projek Sdn Bhd, the manager of Starhill REIT, described the acquisition as a yield-accretive acquisition that will further diversify and enhance Starhill REIT's asset base within the high-end luxury property segment.

The Residences - a 38-storey tower block adjacent to the Ritz-Carlton - comprises 60 serviced apartment units, four levels of commercial podium block and two levels of basement car parks. The value of the property as at September 25 was RM145 million.

Starhill REIT will issue 138.9 million new units of 90 sen per unit to YTL Land, a wholly-owned subsidiary of YTL Corp Bhd, to meet the RM125 million purchase price. Following the exercise, YTL Corp's stake in Starhill REIT will increase from 54.85 per cent to 60.17 per cent.

Quill Capita to raise RM140m via REIT listing

from biz times

QUILL Capita Trust, a property trust with an initial portfolio of four commercial assets in Cyberjaya, yesterday launched an initial public offering (IPO) that will raise about RM140.3 million.

The real estate investment trust (REIT), to be listed on January 8, is backed by Singapore's CapitaLand Group and Malaysia's Quill Group. Both groups will each hold 30 per cent of the trust upon listing.

Quill Capita Trust will distribute 100 per cent of its net earnings in the first three years to 2008, and at least 90 per cent in the subsequent years, Quill Capita Management Sdn Bhd chief executive officer Chan Say Yeong said. Quill Capita Management is the manager of the REIT.

The dividend yield is estimated at 7.14 per cent for the financial year ending December 2007 and 2008, and 7.32 per cent for 2009, based on the indicative retail price of 84 sen per unit.

Retail investors will pay the lower of 84 sen per unit, or 95 per cent of what institutional investors are paying under the IPO. The institutional price will be determined after a book- building exercise.

The four buildings in the portfolio - DHL 1, DHL 2, HSBC and BMW - are worth a combined RM280 million. The assets are all located in Cyberjaya and were designed, built and owned by the Quill Group.

"This REIT is small (by CapitaLand's standard). But it is a good vehicle which will help us to propel our growth in Malaysia," Chan told reporters after launching the listing prospectus in Kuala Lumpur yesterday.

The event was also attended by Tan Sri Dr Ahmad Tajuddin Ali, chairman of Quill Capita Trust, president of CapitaLand group Liew Mun Leong and Quill group's director Datuk Michael Ong.

Chan said both CapitaLand and Quill are committed in growing the trust with a long-term view in place. However, he did not give a clear expansion target, citing regulatory concerns.

Quill Capita Trust will grow by buying assets from the existing portfolio of Quill group and CapitaLand Financial Ltd, or from future vehicles or property funds created by the two groups to develop or incubate commercial properties, Chan said. The trust may also buy from third parties, he added.

Quill Capita Trust is focused on commercial properties here and ruled out stand-alone shopping mall and hotel for future buys.

The initial four buildings, complete with basement carparks, have a total lettable area of 493,113 sq ft and are 100 per cent occupied by multinational corporations on long-term tenancies with options to renew.

Difference between ICULS with warrants

Ms Connie Ong, CFA

ICULS is an abbreviation and stands for Irredeemable Convertible Unsecured Loan Stock. Because of it convertibility feature, many investors liken them to warrants when actually they are not.

All the warrants that are listed in the Bursa Malaysia today including the Khazanah covered call warrants confers the right to purchase the underlying mother share at a specific price sometime in the future within a specified maturity period. ICULS too confers similar rights but at a specified conversion ratio and this needs to be exercised within the specified maturity period.

Because they only confer rights to future ownership rather than the ownership of the mother share itself, both ICULS and warrants holders are not entitled to dividends that are paid out by the company. As such, ICULS and warrants may not appreciate in price when the company declares dividends as would normally be the case for the mother share.

ICULS are essentially unsecured loans stocks but with a feature that it can be converted into the mother share. In other words, it is a hybrid product somewhere between a bond and an equity. ICULS begins its life as a bond but ends its life as an equity once converted.

As long as it remains a bond, ICULS holders will enjoy payment of interest income at a predetermined specified coupon rate. This payment is normally dispensed twice a year rather than monthly as in the case of fixed deposits. When the bond is later converted into equity i.e. the mother share, the holder will thereafter participate in any dividend income declared and paid out to replace the loss of interest income resulting from the conversion.

How long the ICULS stays as a bond before conversion to equity is at the discretion and choice of timing of the ICULS holder. The conversion is mandatory as ICULS have a limited life span and will become valueless on expiry of its present life if it is not converted unlike in the case of straight bonds!

I believe the biggest difference between ICULS and warrants lies in the matter of `gearing'. Most investors are familiar with gearing and its effects when purchasing properties utilising mortgage loan. Property owners by merely placing a 10% deposit and borrowing the rest can expect to double their capital invested if the price of the property appreciates by just 10%. With merely 10% deposit, he has effectively leverage himself ten times on the capital invested. Therefore his returns will also be ten times the return of the investment. Likewise if he loses, his loss will also be ten times any losses incurred in the investment!

Warrant holders enjoy this gearing phenomena but ICULS holders do not. Warrant holders buy the right to purchase the mother share at a predetermined price. Therefore whenever the mother share moves up, the value of the value of the warrant should move up in tandem because the purchase price of the mother share is already fixed. This relationship is of course less obvious when the warrants are `out of the money' which happens when the predetermined purchase price of the mother share is much higher than the current traded share price. Such warrants are generally considered worthless unless they still enjoy a long expiry period or life span.

ICULS are however convertible at a certain ratio to the mother share. A conversion ratio of 1:1 means that one ICULS A can be converted into one mother share. A ratio of 5:1 means that you would require to own five ICULS B to convert to one mother share. In this case, there is no fixed purchase price. Therefore, the theoretical price of the ICULS should simply be just the mother share price in the first case and one-fifth in the second case.

If the mother share moves up by 10% ICULS A should do likewise but ICULS B can be expected to only gain 2%. Any gains greater than this ICULS B will result in arbitragers taking advantage of this discrepancy or price anomaly thereby causing the price of ICULS B to adjust back. This will result in the returns for mother shareholders and ICULS holders returning to equilibrium and as such there is no gearing effect to benefit from owning these ICULS.

In selected cases where ICULS can be converted into a mix of shares and cash, the ICULS holders will enjoy some gearing advantage albeit still not to the extent of straight warrant holders.

The greatest advantage of owning ICULS vis-à-vis the mother share is not it's gearing but its hybrid qualities. ICULS are preferred investment during periods of stock market uncertainty. During such times, despite the prospects of the longer-term fundamentals of the company being attractive, you may be concerned that the mother share price may not appreciate immediately resulting in opportunity loss of interest income.

In this instance, ICULS would be an ideal investment medium as it provides investors with a fixed interest income stream whilst awaiting stock market conditions to improve. Its convertibility is a hedge for investors in case of a stock market up tick as the ICULS price will move up in accordance to the conversion ratio even as the mother share price moves up.

The bond market being at its cyclical peak is also starting to catch onto this trend with the recent first issue of a convertible and redeemable bond by SCB Development, developer of the popular Mutiara Damansara Township in Selangor. This unlisted OTC bond is even more attractive to investors as it is not only convertible but also redeemable at the end of its 5-year life. This provides investors the added protection that ICULS holders do not normally have. Should the stock market not move up sufficiently during the life of bond, such bondholders could choose to remain invested in it as a bond without being unnecessarily forced to convert to equity.

As both the stock and bond market continues to experience substantial volatility and uncertainty, such hybrids like the Bursa Malaysia listed ICULS and the non-listed redeemable convertible bonds can be expected to become more widely sought after investment options. Investors will find that they can enjoy the best of both worlds here with the ability to move from one to the other at their discretion. Hopefully in future, we will not only be dictated by one way conversion from bond to equity but also in the reverse direction and not just once but as often as desired by the investor!

Boustead to add more value to Islamic plantation REIT

By pooikoon@nstp.com.my

November 24 2006

THE Boustead Group, which will float a RM472 million Islamic plantation real estate investment trust (REIT) in January 2007, is expected to sell more plantation assets into the fund from time to time.

Group managing director of Boustead Holdings Bhd Tan Sri Lodin Wok Kamaruddin said the group boasts over 100,000ha of land, of which about 80 per cent is planted.

As only 12,641ha will be sold to the REIT at the start, the group will still be left with sufficient assets that could be injected into the trust in the future, he said.

"We believe we have the size to grow," he told reporters in Kuala Lumpur yesterday. The property trust will have the first right of refusal in buying plantation assets owned by the group and it may also purchase from other parties when opportunities arise.

"If crude palm oil prices (CPO) continue to improve, unitholders will also benefit," he added.

The REIT has an annual profit-sharing of net incremental income based on a formula pegged to CPO and fresh fruit bunch prices. This may translate into higher dividend yield for investors.

"I cannot say about the expansion target, but we will do our best to continue adding value to the REIT and make it interesting for unitholders," Lodin said.

The Al-Hadharah Boustead REIT will be managed by Boustead REIT Managers Sdn Bhd, a subsidiary of Lembaga Tabung Angkatan Tentera. Boustead Group will hold 53.4 per cent of the property trust post-listing.

The trust will own eight oil palm estates and two mills in Peninsular Malaysia upon listing. It is buying these assets for RM472 million at a 3.42 per cent discount from the market value.

The REIT will pay at least 98 per cent of its distributable earnings to unitholders for the first three years, with a dividend distribution of at least 7.38 sen per year.

Lodin said Boustead plans to use the proceeds from selling assets to the trust to repay borrowings and for working capital.

He said additional capital is needed to expand the petrol stations under BHPetrol, to grow its plantation business, as well as for a biodiesel plan.

He gave no details of the biodiesel project but said the number of BHPetrol stations will grow by 8 to 10 per cent next year.

Shareholders of both Boustead Holdings Bhd and Boustead Properties Bhd approved the setting up of the REIT at a meeting yesterday, while the Securities Commission gave its nod a day earlier.

Hektar REIT to offer highest yield so far

November 16 2006 - Biz Times

THE Hektar real estate investment trust (REIT), which is heading for a main board listing on December 4, will offer investors a yield of 8.47 per cent in 2007, the highest offered in Malaysia so far.

"We are offering a best-in-class yield of 8.47 per cent to retail investors at an indicative price of RM1.05," said Zalila Mohd Toon, chief financial officer and director of the REIT's manager, Hektar Asset Management Sdn Bhd (HAM).

For 2008 and 2009, the company expects to offer a yield of 8.58 per cent and 8.84 per cent respectively.

"In absolute terms, it's considered very good," analyst Chan Ken Yew of OSK Research said of the 2007 yield.

Investors can expect to get sustainable cash dividends because of the way the REIT is structured, Zalila told reporters at the prospectus launch yesterday.

The REIT is expected to make RM74.6 million revenue for the 13 months ending December 31 2007, with a net income after tax of RM30.8 million.

Net income in 2008 and 2009 have been projected at RM28.8 million and RM29.7 million respectively.

The REIT, which currently comprises only two shopping malls - the 19-year-old Subang Parade in Selangor and Mahkota Parade in Malacca, is also looking to acquire a third property to be injected into it.

"We'd like to do it as soon as possible but it's got to be a yield-accretive acquisition," said Datuk Jaafar Abdul Hamid, chairman and chief executive officer of HAM.

To date, the company has received six offers to buy properties located mostly outside the Klang Valley, he added.

"It's a mixed bag of retail and office buildings, but we are (only) interested in pure retail. We think we can churn out better numbers with retail," said Jaafar.

Subang Parade and Mahkota Parade's value rose to RM523 million this year compared with RM370 million less than three years ago when the properties were first acquired by the Hektar group.

Jaafar said more retail space as well as some apartments will be built on a 0.8ha plot of land next to Subang Parade. The retail area will be injected back to the REIT, possibly next year, he added.

The Hektar group also plans to develop a lifestyle retail centre in Nusajaya, which is part of the Iskandar Development Region.

The Hektar REIT's initial public offering involves 159.5 million units, of which 16 million will be offered to retail investors and the remaining RM143.5 million to local and foreign institutions.

The offer closes on November 22.

EPF to buy more commercial properties

By sharen@nstp.com.my

MALAYSIA’S biggest pension fund, the Employees Provident Fund (EPF), wants to buy more commercial properties to help improve returns and boost its property portfolio.

Its property investment ballooned to RM1.65 billion at the end of June 2006 but represents only 0.6 per cent of the fund’s total size of RM272.24 billion in the period.

The fund can spend up to RM14 billion, or some 5 per cent, of its assets to invest in properties. However, it may also raise funds by listing a property trust to help part-fund more property acquisitions.

“EPF is also looking at buying more commercial buildings in the country to ride on the tenant rental.

This is the direction that it wants to move into, and it therefore requires additional funds for this purpose.

“It has not evaluated its potential fund size but the initial round will be in excess of RM2 billion to last between two to three years. It may double from there,” said the source.

Another source said EPF plans to launch a RM2 billion real estate investment trust (REIT) within two to three years.

It is believed that the plan will include a mixed REIT, and EPF would most likely include a string of properties like The Mall shopping complex and the adjoining office towers known as Putra Place at Jalan Putra in Kuala Lumpur, which it had acquired for over RM400 million.

It could also include the Giant supermarket and hypermarket chain and Wisma KFC at Jalan Sultan Ismail.

The REIT could post distribution yields that range between 7.15 per cent and 7.35 per cent.

“When such a REIT is formed, it could attract a lot of foreign interest due to the type of properties owned by EPF, and because of its prudent management,” said a source.

As of 2004, the EPF owned 45 properties nationwide.

Apart from its own office buildings in various states, EPF also owns the Sogo shopping centre at Jalan Tuanku Abdul Rahman, Bangunan Kassim & Chan in Kuala Lumpur, as well as shophouses, apartments, bungalows and land nationwide.

Support and REsistance by ChartNexus

Atrium REIT expects listing by Jan 2007

from Biz Time

ATRIUM Real Estate Investment Trust (Atrium REIT), which is the country's first industrial asset REIT, is targeting a listing on the main board of Bursa Malaysia by January 2007.

Atrium REIT Managers Sdn Bhd director John K. H. Lim said it will issue 121.801 million units. It obtained approval from the Security Commission recently.

Lim said four properties valued at RM158.3 million will be injected into the Atrium REIT, with the potential gross revenue to be RM14 million per year.

"The net distributable yield of the properties - Exel Logistics and TNT Logistics in Shah Alam, DHL Logistics in Puchong and Unilever in Rawang - are projected to be above 7 per cent per year," he told Business Times.

Atrium REIT Managers is 60 per cent owned by property developer Glory Blitz Industries Sdn Bhd, with the rest held by Atrium REIT Managers chairman Zakaria Meranun via Orion Asia Sdn Bhd (30 per cent) and Lim, via Jelatik Tegas Sdn Bhd (10 per cent).

On the issuance of the units, Lim said 60 million units will be issued to institution investors, 13.5 million units to the public, two million units for eligible directors, employees and business associates, while the remaining 46.3 million units will be retained by vendors Glory Blitz Industries and Sparkle Skyline Sdn Bhd.

Glory Blitz Industries, which is the flagship company, spearheads the group's construction and real estate activities - having evolved from general contracting to residential property developments and provider of high quality warehousing and industrial space solutions.

Its spectrum of civil engineering and general contracting services covers warehouses and distribution facilities, commercial and shopping complexes, government buildings, sport complexes, universities, factories, hotels and motorways.

It is currently bidding for five new properties worth a total of RM250 million in the Klang Valley, said Lim.

The leases for these properties are between five years and 10 years, with an extended option of another five years.

More REITs in the pipeline

Stories by ANGIE NG - STAR Online

MALAYSIA is on its way to host more real estate investment trusts (REITs) within a short span of just over a year since Axis-REIT became the first REIT to be listed on Bursa Malaysia in August last year.

The number of local REITs (M-REITs) is expected to double to 10 with another four to five lined up for listing on the local bourse by the end of this year.

With the growing number of REITs, investors now have the opportunity to participate in a broader asset class as these REITs represent the various sectors of the property market from office buildings to retail, hotels, plantations and industrial/logistics.

The five listed M-REITs so far - Axis-REIT, Starhill REIT, UOA-REIT, Tower REIT and Al-'Aqar KPJ REIT, are a commendable mix of office and industrial property (Axis-REIT) to retail and hotel (Starhill REIT), office buildings (UOA and Tower REITs) and healthcare (Al-'Aqar KPJ REIT).

Besides the array of commercial buildings, other potential REITs assets are infrastructures, resorts, serviced apartments, theme parks, ports, airports, warehouses and utility assets.

An analyst at Hwang-DBS Vickers Research said the country’s REIT industry was still relatively new with plenty of opportunities to be tapped.

“Considering that at least half the number of real estate assets in Australia belong to REITs, our market can still accommodate more REITs going forward.

This will improve the market depth and provide more trading avenues for investors,” he told StarBiz.

The Securities Commission has recently granted approval for Glory Blitz Industries Sdn Bhd to set up Atrium REIT, an industrial asset-focused REIT.

Targeting a listing by December, the company has proposed to inject three warehouses and a specially built office and factory complex worth a total of RM160mil into Atrium REIT.

The properties with net lettable area of some 75,220 sq m are located in Shah Alam, Puchong and Rawang.

In the plantation sector, the Boustead group has proposed to set up an Islamic plantation REIT to be known as Al-Hadharah Boustead REIT.

The plan involves the disposal of nine oil palm estates and two palm oil mills for RM500mil, which will be satisfied by the issuance of 270 million new units by Al-Hadharah and RM230mil in cash.

In the retail front, Hektar-REIT will showcase two retail malls - Subang Parade and Mahkota Parade.

Hektar-REIT, which will be managed by Hektar Asset Management Sdn Bhd, expects to raise RM176mil from the listing exercise.

Meanwhile, the Government has made two REITs proposals - a bumiputra property trust foundation, Yayasan Amanah Hartanah Bumiputera, with an initial capital of RM2bil to purchase commercial properties in major towns and AmanahRaya REIT.

AmanahRaya REIT is expected to kick off with eight properties worth RM337mil.

The asset portfolio includes two office towers at South City Plaza, Wisma UEP, SEGi College, Permanis factory and Wisma Amanah Raya (CIMB Building).

The REIT is expected to issue 184 million units at 94 sen each at an expected annual gross dividend yield of 6.9%.

Standard and Poor’s said the Malaysian REIT market (including AmanahRaya) has a small but growing portfolio, relative to global and Asian peers, such as those in Singapore and Hong Kong.

“However, there is income and cash flow stability from AmanahRaya's long leases and its support from the Malaysian government provide a high degree of certainty on quality growth,” an analyst at S&P said.

Although industry observers and investors would like to see more assertive and proactive actions been undertaken to expand the REITs industry, caution has cropped up as to the need to distinguish the real REITs players from sponsor companies who want to cash out.

“Some of the new and proposed REITs appear to be value-unlocking exercises for their parents.

“We are also uncomfortable with the potential constraints from exposure to a single tenant,” a CIMB analyst said.

There is also a difference between asset acquisition from third parties and from sponsor companies - the former being better regarded as it shows impartiality and better prospects for yield accretion.

“Overall, Malaysia needs to have larger and more aggressively managed REITs to attract investment in the sector.

“While tax breaks are positive for the fledgling industry, the REITs need to undertake more aggressive value enhancing measures to sustain long-term appreciation in value,” the analyst added.

Sunway expected to launch RM2b REIT
---Biz Time 26 Oct

MALAYSIAN conglomerate Sunway Group is expected to launch potentially one of the biggest real estate investment trusts (REITs) in Malaysia in the third quarter of next year, say sources.
Business Times understands that the size of the REIT will be in excess of RM2.2 billion and be built up in two or three stages.

"There will be pipeline projects and the total size of the fund will include more than 12 assets within Sunway City Bhd (SunCity)," said a source familiar with the plan.
REITs are trust funds which hold and invest in rental properties. Their main income is from rentals and they are required to distribute most of the profits as dividends to its stakeholders.
The REIT will give the main board-listed SunCity the opportunity to expand its market capitalisation.

SunCity is well stocked with commercial, retail, residential, hotel, college, hypermarket and shopping centre properties, which are revenue-earning and ready for a REIT.

They include Menara Sunway, Sunway College (comprising land and buildings occupied by Sunway College and Monash University), Sunway Pyramid Shopping Mall 1 and Carnival Mall, Sunway Resort Hotel (Main Tower), Pyramid Tower Hotel, Sunway Villa, Sunway Medical Centre and a shopping centre in Ipoh as well as in Penang, which are still under construction.

The pride of SunCity is the multi-billion-ringgit township of Bandar Sunway, comprising over 7,000 residential, commercial and light industrial units, and the RM880 million Kiara Hills residential project in Mont Kiara.

The source said SunCity is currently evaluating all the properties to determine which asset will be included in the first REIT.

The source added that the company is also talking with merchant bankers for advice on the REIT.

According to the latest Securities Commission guidelines on REITs, the initial minimum size of a REIT is RM100 million and the minimum size of subsequent launches is RM25 million.

Permitted investment for REITs include real estate, single companies whose sole principal asset comprises real estate, real estate- related assets, liquid assets and asset-backed securities.

"SunCity is a perfect candidate for a REIT. As long as the rental properties are well managed and consistent and the rental market is stable, the company's shareholders can expect a consistent dividend income," said the source.

something from ChartNexus

John Murphy's Ten Laws of Technical Trading

1. Map the Trends

Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale map of the market provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.

2. Spot the Trend and Go With It

Determine the trend and follow it. Market trends come in many sizes -- long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.

3. Find the Low and High of It

Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old "high" becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies -- the old "low" can become the new "high."

4. Know How Far to Backtrack

Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pullback in an uptrend, therefore, initial buy points are in the 33-38% retracement area.

5. Draw the Line

Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.

6. Follow that Average

Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4- and 9-day moving averages, 9- and 18-day, 5- and 20-day. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.

7. Learn the Turns

Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Most traders use 14-days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. These tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.

8. Know the Warning Signs

Trade MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a "histogram" because vertical bars are used to show the difference between the two lines on the chart.

9. Trend or Not a Trend

Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.

10. Know the Confirming Signs

Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It's important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirmsa that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.

"11."

Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.-John Murphy

SCOMI Group - Research by HLeBroking

A Warning That The Stock May Have Topped Out-How To Recognise It?

A Warning That The Stock May Have Topped Out-How To Recognise It?

article from http://www.investmentlink.blogspot.com/
At the end of a market move heavy volume is usually pure distribution, as stocks go from strong hands into weak hands, from the professionals to the public. It is deceptive to the public who view this heavy volume as the mark of a vibrant, healthy market going through a normal correction, not a top or a bottom.

One Day Reversal: This is a stock movement that often happens at the end of a long-term move. It definite as a one day reversal occurs where the high of the day is higher than the high of the previous day, but the close of the day is below the close of the previous day, and the volume of the current day is higher than the volume of the previous day. This secnario was a screaming "danger signal". This is a danger signal and must be heeded!

How to look at Dividen Entitlements
article from :http://www.investopedia.com/articles/02/110802.asp

Ann /Declar.Date 7/27/2004
Ex-Div Date 8/6/2004
Lodgement / Record Date 8/10/2004
Payable Date 9/10/2004

On July 27, 2004, Company XYZ declares a dividend payable on September 10, 2004 to its shareholders. XYZ also announces that shareholders of record on the company's books on or before August 10, 2004 are entitled to the dividend. The stock would then go ex-dividend two business days before the record date.

In this example, the record date falls on a Tuesday. Excluding weekends and holidays, the ex-dividend is set two business days before the record date or the opening of the market - in this case on the preceding Friday. This means anyone who bought the stock on Friday or after would not get the dividend. At the same time, those who purchase before the ex-dividend date receive the dividend.

With a significant dividend, the price of a stock may move up by the dollar amount of the dividend as the ex-dividend date approaches and then fall by that amount after the ex-dividend date. A stock that has gone ex-dividend is marked with an "x" in newspapers on that day.

Sometimes a company pays a dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company or in a subsidiary being spun off. The procedures for stock dividends may be different from cash dividends. The ex-dividend date is set the first business day after the stock dividend is paid (and is also after the record date).

If you sell your stock before the ex-dividend date, you also are selling away your right to the stock dividend. Your sale includes an obligation to deliver any shares acquired as a result of the dividend to the buyer of your shares, since the seller will receive an I.O.U. or "due bill" from his or her broker for the additional shares. Thus, it is important to remember that the day you can sell your shares without being obligated to deliver the additional shares is not the first business day after the record date, but usually is the first business day after the stock dividend is paid.

More Example:
Why All These Dates?
Ex-dividend dates are used to make sure dividend checks go to the right people. In today's market, settlement of stocks is a T+3 process, which means that when you buy a stock, it takes three days from the transaction date (T) for the change to be entered into the company's record books.

As mentioned, if you are not in the company's record books on the date of record, you won't receive the dividend payment. To ensure that you are in the record books, you need to buy the stock at least three days before the date of record, which also happens to be the day before the ex-dividend date.



As you can see by the diagram above, if you buy on the ex-dividend date (Tuesday), which is only two days before the date of record, you will not receive the dividend because your name will not appear in the company's record books until Friday. If you want to buy the stock and receive the dividend, you need to buy it on Monday. (When the stock is trading with the dividend the term cum dividend is used). But, if you want to sell the stock and still receive the dividend, you need to sell on or after Tuesday the 6th.

Hektar REIT
to raise RM176m
from REIT listing

By Adeline Paul Raj

bt@nstp.com.my

THE Hektar Group expects to raise about RM176 million from the listing of its real estate investment trust on the main board of Bursa Malaysia before the end of the year.

Known as the Hektar REIT, it comprises Subang Parade and Mahkota Parade shopping malls in Selangor and Malacca respectively and is the country's first focused retail specialist.

The REIT will be managed by Hektar Asset Management Sdn Bhd (HAM), which is part of Hektar Group.

Chairman Datuk Jaafar Abdul Hamid said the group's long-term plan is to buy more properties that can potentially be injected into the REIT. Hektar, he said, intends to unlock hidden value in mature malls.

But for now, Hektar will focus on developing more retail space on the land adjacent to its two existing shopping malls.

The group has 1.2ha of land next to Subang Parade, which is currently a nursery, and 0.8ha next to Mahkota Parade, which is now a carpark.

The group also owns 34ha of land in Nusajaya, Johor. About 20.2ha is being set aside for a lifestyle centre, known as Hilltop, for which the group is currently trying to sort out financing.

"We see Hektar REIT as a foundation for creating a retail management franchise in Malaysia," Jaafar said yesterday at theunderwriting ceremony for the retail portion of the REIT, with Aseambankers Malaysia Bhd and AmMerchant Bank Bhd.

Proceeds from the listing will go towards working capital, paying off borrowings and funding new properties, Jaafar said.

He said the REIT's yield will be competitive. "Ours is pure retail play. Retail REITs always command a premium," he said on the REIT's prospects.

Hektar REIT's prospectus will be launched on November 15.

The listing exercise involves an offering of 159.5 million new units, of which 10 million will be for the public and six million for eligible directors and employees at an indicative price of RM1.05 each.

Another 143.5 million units will be offered to institutional investors via a book building exercise.

The eventual size of Hektar REIT upon listing will be 320 million units. The Hektar Group will own a 50.16 per cent stake in the REIT, post-listing.

The REIT has a combined property value of RM523 million with a net lettable area of about one million sq ft.

Amanah Raya Bhd (REIT)
from BizTime 16 OCT

GOVERNMENT-owned Amanah Raya Bhd (ARB) plans to invest up to RM1.06 billion to buy properties that can generate more income for the firm.

The firm is on the lookout for office buildings in the Klang Valley, Penang and Johor. It is also eyeing offices and hotels in the UK, said the managing director of Amanah Raya subsidiary Amanahraya-JMF Asset Management Sdn Bhd (AR-JMF) Datuk Mohamed Azahari Kamil.

Henderson Global Investors Ltd, which invests in properties worldwide and has US$116 billion (RM427 billion) funds under management, is positive on the UK market.

Office rental values are rising in that country, said head of property equities Patrick Sumner.

"As at September, we had RM5.3 billion funds under management. We can invest up to 20 per cent of that in properties.

"The quality of the properties we want to acquire is very crucial. We want to ensure that the yields are maintainable and the buildings are leased out to respectable counter parties," Mohamed Azahari told Business Times in Kuala Lumpur.

ARB will launch a RM340 million real estate investment trust (REIT) - the first by a government-owned firm - comprising eight properties such as offices, hotels, factories and educational institutions.

The diversified asset classes will help spread out risks, Mohamed Azahari said.

The occupancy rates for the assets are between 80 per cent and 90 per cent, and most of the tenants are listed firms. They are currently generating an average yield of about 7.5-8 per cent.

ARB still has 14 properties in its portfolio, and it plans to inject two to three more into the REIT within a year.

Institutional investors can expect returns of at least 6.9 per cent, while retail holders may get 7.3 per cent.

Under Budget 2007, a REIT will be exempted from taxes given that it distributes more than 90 per cent of net income to investors.

In addition, tax on dividends received by local and foreign individual investors will be reduced to 15 per cent from 28 per cent, while tax on foreign institutional investors will be reduced to 20 per cent from 28 per cent.

"We hope that with the tax reduction, more foreigners will look at our REIT market. Although we are still not as competitive as Singapore and Thailand, we believe we have quality assets that can cushion the taxes," Mohamed Azahari said.

Foreign fund Morgan Stanley has already indicated interest in taking up some units in ARB's REIT, he added.

Standard & Poor's (S&P) has given it a "BBB-" rating with stable outlook.

The property trust will raise some RM120 million to RM150 million.

ARB is looking into subscribing to 30 per cent of the property trust.

The listing, initially planned for December, has been postponed to February next year for "strategic reasons". It wants to wait for S&P's rating as well, Mohamed Azahari said. The prospectus is slated to be out in January.

ARB also has plans to launch an Islamic REIT by the second half of next year.

The properties that it purchases will require the tenants, preferably listed companies, to stay at least five years in the buildings. ARB requires a substantial amount of security deposits from its tenants with payment of rental yields to standard banking arrangements.

Its current assets include Wisma Amanah Raya in Jalan Ampang, which it acquired last year for some RM60 million; Selayang Mall acquired from Seal Bhd for RM120 million; and the hotels it bought from Advance Synergy Bhd for RM105 million, namely Holiday Villa Cherating, Holiday Villa Alor Star and Holiday Villa Langkawi. It also owns the Prime College building in Subang Jaya.

HLe post on Utama BG.

Why are P/E ratios generally higher during times of low inflation?--source "investopedia.com"

Inflation affects equity prices in several ways. Most importantly, investors are willing to pay less for a certain level of earnings when inflation is high, and more for a certain level of earnings when inflation is low (and expected to remain so).

Let's review the two concepts involved: the price-to-earnings ratio and inflation. The P/E ratio is a valuation measure showing how much investors are willing to pay for a company's earnings. For example, if the price of a stock is $50 and earnings per share is $2, then the P/E ratio is $25 ($50/$2) and this shows that investors are willing to pay 25 times the earnings of the company. Inflation is a measure of the rate of price increases in the economy.

P/E is affected by inflation in the following ways:

1. Stable and moderate inflation means a higher probability of continued economic expansion. Modest inflation usually means the central bank won't be raising interest rates to slow economic growth. When inflation and interest rates are low, the greater the opportunity for higher real earnings growth, increasing the amount people will pay for a company's earnings. The more people are willing to pay, the higher the P/E.

2. When inflation levels are stable and moderate, investors have lower expectations of high market returns. Conversely, expectations rise when inflation is high. When inflation rises so do prices in the economy, leading investors to require a higher rate of return to maintain their purchasing power.

If investors demand a higher rate of return, the P/E ratio has to fall. Historically, the lower the P/E, the higher the return. When you pay a lower P/E, you're paying less for more earnings and as earnings grow the return you achieve is higher. In periods of low inflation, the return demanded by investors is lower and the P/E higher. The higher the P/E, the higher the price for earnings, which lowers your expectations of healthy returns.

3. During times of low inflation, the quality of earnings is considered to be high. This refers to the amount of earnings that can be attributed to actual growth in the company and not by outside factors like inflation. For example, say inflation is 10% a year (which is high), and a company purchases a widget for $100. In one year, the company will be able to sell that same widget for at least $110 because of inflation. Since its cost for the widget remains at $100, it appears to have increased profit margins, when really the growth is all inflation's doing. In general, investors are more willing to pay a premium, or a higher multiple, for actual growth compared to artificial growth increased by inflation.

History has shown that investors realize this phenomenon and take inflation into account when valuing stocks. When inflation is high, P/E ratios are low; when inflation is low, P/E ratios are high.

UEM VS TEBRAU

-article from STAR NEWSPAPER

The SJER has been earmarked as the focus area for development in the southern region under the Ninth Malaysia Plan.

While companies such as UEM World, MMC, Gamuda and Tebrau Teguh have hogged the limelight on the sheer potential of the development of South Johor

THE thrill over the South Johor Economic Region (SJER) appears to be almost palpable. The notion that there’s potential bursting within that massive development plans for construction and property companies is hard to miss. Harder to ignore is the fact that construction company UEM World Bhd’s share price has fared spectacularly on the back of such potential.

A major spot in southern Johor earmarked for development is Nusajaya. This 9,729ha land has turned into a major focus following the unveiling of the Ninth Malaysian Plan (9MP).

Essentially, some RM12.2bil has been allocated to develop the SJER(with Khazanah Nasional Bhd given a mandate to act as a planner and co-ordinator.) , and this will go towards building up Nusajaya, the Danga Bay waterfront, a transport hub and a high-speed rail link connecting Johor Baru to Kuala Lumpur.

UEM World owns 6,480ha, known as Bandar Nusajaya, which will house Johor's new administrative centre as well as several universities, a theme park, industrial estates and residential developments.

Most companies with either undeveloped land or ports in this sweet spot of Johor, such as Tebrau Teguh Bhd, MMC Corp Bhd and Gamuda Bhd have also experienced renewed activity in their shares.

Khazanah has got many companies under its umbrella. Some of these companies will be involved in the development of the projects in Johor Bahru and South Johor. Certainly, one of the resources that Khazanah has is through Prolink or UEM, the ownership of Nusajaya, the new growth center within South Johor. They will have to think of and be creative on other things as well. But they are taking the lead as the corporate vehicle that provides the private sector participation in this development. While the planning and authority are still vested with the government, but with the joint chairmanship of the commission by the Federal and the Prime Minister, Menteri Besar (the Chief Minister), Khazanah will become the private sector partner to coordinate this investment.

Upon completion of the development in the next five to seven years, the SJER would expand the services sector beyond its current concentration in the Klang Valley.

~about Tebrau~

According to an report by UOB-Kay Hian titled "Emergence of a Super-Cycle Performer" which highlights Johor Corridor stocks, Tebrau is worth RM1.67 (based on a revised net asset value of RM28 psf) per share over a 12-month period.
The report notes that a recent transaction of commercial land in Johor Bahru was done at RM110 psf, without specifying any particular sale. It also points out that the state government is asking for RM380 million or RM221 psf from the Federal government for 16ha of land in Bukit Chagar, Johor Baru.
According to UOB, these put current market values significantly above Tebrau Teguh's book value of RM13.40 psf. Fronting the sea allows Tebrau to price whatever development it has on the land at a premium. UOB says Tebrau is reviewing its master plan and will shift its focus from medium-cost residential development to high-end products.
Of course, these remain largely possibilities for now. Tebrau is not a company with an illustrious resumé of development projects.
"By themselves they have a limited track record. They've only developed one parcel on their own with low to low-end housing," says the valuer, who expects a fair amount of reclamation works to be done on the land, being located by the river banks.
Still, there's no stopping Tebrau from going into joint ventures with experienced partners. It could certainly use a partner with deeper pockets to fund projects.

------------ Just a reminder of things to come------