CapitaCom Trust   

CapitComm RIGHT Discussion Corner

Yes..that is why i say now it is trading Cum RIghts, and it is better to consider buy now, rather than wait till nil paid rights is traded

lionsword87      ( Date: 28-May-2009 00:27) Posted: ic .. so asssume the nil-paid is trading @ $0.305, the toal cost of purchase would add up to $0.305 + 0.59 + commission(+) = $0.895 ++ ?

 

Pretty well reasoned I think. In the short to mid term there may be other property stocks that have more potential than this one due to it's focus on Office space... hint: (those that deal with residential, Suburban malls). Still if you'r willing to hold for the long run, this one shld rise lah.

SupremeA      ( Date: 27-May-2009 12:01) Posted: ok, I'm a fresh grad, so take my ideas with a pinch of salt.   In the short run, there seems to be an oversupply of office space. Given the current downturn, this would mean that they may be pressured to lower rents and therefore yields. Therefore in the short run, it does not seem good. The key question to ask is whether you feel Singapore will continue to be a hub where businesses set up offices. This demand must grow to levels before the recession to fill up office spaces that have been created/will be created in the next few years. A factor to consider would also be the fact that they are renting premium office space. Rents per square foot is more than $10. 2 ways to look at this. Since most of their tenants seem to be doing pretty well so far (e.g. JPM) or will not fail (GIC i think), they can continue charging such rents. The other view is that they will not be able to sustain the rents as cheaper alternatives come in.  What is actually happening is that they have managed to renew contracts so revenue side seems safe. Costs side will be financing, but that could be resolved with the current rights issue. These are the key issues to think about from my POV. Whether it has a future depends on your view towards these issues

 

Of course, this way is uncertain since excess rights units are only assigned if there are excess rights units at the end of the whole rights exercise. But to BBs, they have the money to apply for large bulk of excess rights units and subscribe for it. If they get it, then they stand to profit a lot from this transaction.

 

Another way to go about getting more rights entitlement and rights units eventually which is more "uncertain" and "pushing one's luck" is to buy only 1000 shares of mother CCT shares getting 1000 rights units when subscribed eventually. Then, since one has 1000 shares of mother units, one may still apply for many more excess right units. I think some BBs do it this way and apply for many more excess rights units by just getting little amount of mother CCT units. So, in the end, they may have many more of CCT units at low price below the theorectical ex-rights price after exercising all their rights units. Then they can sell out their units for a quick profit from this transaction. They have the money to apply for a lot of excess rights units this way unlike average retail investors, so they are on the winning side of this whole affair. This is quite underhand, but it is how BBs can work things out to their advantage.

 

ic .. so asssume the nil-paid is trading @ $0.305, the toal cost of purchase would add up to $0.305 + 0.59 + commission(+) = $0.895 ++ ?

 

Hi I am new here. If I hold/buy the mother shares on 02 June 2009, will I still be entitled to the rights if I sell the mother shares on 03 June 2009 ? if not how long do I have to hold on the mothershares ? Is CapitaComm a good investment for mid term hold ? Many thanks.


 

 

If your plan is to buy nil-paid rights from market and convert to mother shares, you need to be aware that your total cost of purchase is equal to sum of three below:

1. market price of nil-paid rights

2. trade commission ++ of item 1

3. convert nil paid rights to mother shares, $0.59 per share. This must be done before the Closing date 24 June.

While the CCT is now trading Cum-Rights, it is better to consider buy from market mother share come with Rights, that decision is yours.

No one can predict with 100% accuracy what will happen on June 2, and June 3. The market will decide prices when it is traded.

 

lionsword87      ( Date: 27-May-2009 23:44) Posted: Hi Alligator, I have some enquires on the trading of “nil-paid” rights that I hope you can answer me … Assuming CapitaCom last traded price at 2 june is $1.20. On 3 june the price will be adjusted to reflect the inclusion of your rights shares, which works out to be $0.895. If I intend to buy the nil-paid rights starting from 10 june to 18 june, the nil-paid rights will work out to be (mother share price - rights issue price). For example, if the mother share now trades at $0.895, the nil-paid rights should be trading at $0.895 - $0.59 = $0.305. My question is, how much will I be paying for the rights? Will I be paying $0.305 or more?

 

Hi Alligator, I have some enquires on the trading of “nil-paid” rights that I hope you can answer me …

Assuming CapitaCom last traded price at 2 june is $1.20. On 3 june the price will be adjusted to reflect the inclusion of your rights shares, which works out to be $0.895.

If I intend to buy the nil-paid rights starting from 10 june to 18 june, the nil-paid rights will work out to be (mother share price - rights issue price). For example, if the mother share now trades at $0.895, the nil-paid rights should be trading at $0.895 - $0.59 = $0.305.

My question is, how much will I be paying for the rights? Will I be paying $0.305 or more?

 

Shareholder of Capitaland WILL NOT BE entitled to Capital Commercial Trust Rights issue.

If you want to have CCT Rights, then you must buy the CCT shares in the market before Ex-Rights date.

snooty      ( Date: 27-May-2009 23:10) Posted: hi guys, very much a newbie here. correct me if im wrong which i think surely is.. haha.. understand that Capitaland has also bought some of these CCT rights. Will shareholders of capitaland be able to subscribe to these rights? if so, whats the process like? will they send a letter to say that capitaland holders are eligible to subscribe that kind? Thks a lot!

 

i don't think so ...

In order to be eligible for the rights, i believe you must own Capitacom Share.

snooty      ( Date: 27-May-2009 23:10) Posted: hi guys, very much a newbie here. correct me if im wrong which i think surely is.. haha.. understand that Capitaland has also bought some of these CCT rights. Will shareholders of capitaland be able to subscribe to these rights? if so, whats the process like? will they send a letter to say that capitaland holders are eligible to subscribe that kind? Thks a lot!

 

hi guys, very much a newbie here. correct me if im wrong which i think surely is.. haha.. understand that Capitaland has also bought some of these CCT rights. Will shareholders of capitaland be able to subscribe to these rights? if so, whats the process like? will they send a letter to say that capitaland holders are eligible to subscribe that kind? Thks a lot!

 

If not wrong, CCT divi is coming this July09 (based on previous divi pay out).

Get the share n the rights, keep it. N if divi pay out comes on Jul09, cheers....... Another payment to our pocket.

Emm this one is a LONG for me. Cheers.

 

From Capitaland website ...

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjYyNnxDaGlsZElEPS0xfFR5cGU9Mw==&t=1

stockseeker      ( Date: 27-May-2009 18:30) Posted: But doesn't seem like it, b'cos there's no indication that the Cum-Rights is going on at the stock counters. There should be a "CR" on the counter. Neither is there any indicated on the SGX web site. Anyone can advise?   Alligator      ( Date: 27-May-2009 16:40) Posted: cum rights started since they announced.  Yes, Last day CR is 2 June. One June 3 it will be Ex-Rights.

 

But doesn't seem like it, b'cos there's no indication that the Cum-Rights is going on at the stock counters. There should be a "CR" on the counter.

Neither is there any indicated on the SGX web site.

Anyone can advise?

 

Alligator      ( Date: 27-May-2009 16:40) Posted: cum rights started since they announced.  Yes, Last day CR is 2 June. One June 3 it will be Ex-Rights. stockseeker      ( Date: 27-May-2009 16:31) Posted: When does the Cum-Rights for CapitaComm start??? Last day of “cum-rights” trading is 2nd June?? Meaning only very few days for the cum-rights to take place, right?

 

cum rights started since they announced. 

Yes, Last day CR is 2 June.

One June 3 it will be Ex-Rights.

stockseeker      ( Date: 27-May-2009 16:31) Posted: When does the Cum-Rights for CapitaComm start??? Last day of “cum-rights” trading is 2nd June?? Meaning only very few days for the cum-rights to take place, right?

 

When does the Cum-Rights for CapitaComm start???

Last day of “cum-rights” trading is 2nd June?? Meaning only very few days for the cum-rights to take place, right?

 

According to recent news, CCT pass on the Govt grant to the tenants to help them out. And this is a good attraction pt to make the tenant stick by with them in bad times.

For this news, if i am wrong abt it.....feel free to correct me.

To be frank my guts tell me its a good time to collect this baby share .....

When times good, it should rally back. Cheers.

 

 

Some date to take note of :

Event Date and Time

Last day of “cum-rights” trading for the Rights Issue
: Tuesday, 2 June 2009

First day of “ex-rights” trading for the Rights Issue
: Wednesday, 3 June 2009

Rights Issue Books Closure Date :
Friday, 5 June 2009 at 5.00 p.m.

Despatch of the Offer Information Statement to Eligible Unitholders :
Wednesday, 10 June 2009

Commencement of “nil-paid” rights trading :
Wednesday, 10 June 2009 from 9.00 a.m.

Last date and time for “nil-paid” rights Trading :
Thursday, 18 June 2009 at 5.00 p.m.

Last date and time for splitting “nil-paid” rights:
Thursday, 18 June 2009 at 5.00 p.m.

Closing Date:

Last date and time for acceptance of and payment for Rights Units
: Wednesday, 24 June 2009 at 5.00 p.m.(1)
(9.30 p.m. for electronic applications)

Last date and time for application of and payment for Excess Rights Units
: Wednesday, 24 June 2009 at 5.00 p.m. (1)
(9.30 p.m. for electronic applications)

Last date and time for acceptance of and payment by the renouncee
: Wednesday, 24 June 2009 at 5.00 p.m.

Expected date for issue of Rights Units :
Thursday, 2 July 2009

Expected date for commencement of trading of Rights Units
: Friday, 3 July 2009

 

Thanks SupremeA for sharing your views on CapitaComm. I share similar views as you. There may be a surplus of office spaces in future in Singapore (even premium grade A office spaces which CapitaComm is deriving rents from). Then again, it also depends on future demand for office spaces which is an uncertainity still. If future demand is higher, the increase in office spaces will not be too negative on office rents in future. If future demand is not going higher, then having more office spaces in Singapore will definitely create pressure for rents to decrease further since tenants will have more options to switch to cheaper rents.

Their major tenants are well-known companies or MNCs. They are tenants with stable large businesses which are less likely to pull out from their rent contracts with CCT. These tenants should be able to continue paying their rents to CCT. However, nothing is absolute, just that it is quite unlikely for these tenants to pull out because of debts problems. If most of these tenants have been renewing rent leases with CCT for a good number of years, it shows their trust and commitment to CCT as their office landlord providing and maintaining premium quality office spaces for these tenants. CCT's grade A premium office rent prices have been below the market average, so I see no reason for these tenants to seek for other cheaper alternatives. So, they are most likely to be happy with CCT's maintenance of office quality as well as reasonable rent prices per square foot.        

CCT has been proactive in renewing rent leases and a good part of the near future expiring leases have been renewed ahead of time, so there is significant certainity of a stable rental income in the next few years.

The rights issue will help to reduce their gearing. This is definitely a boost to their cashflow. The serious timebomb to any company is having too little cash at hand and current assets but having a high gearing  and current liabilities. Many so called excellent companies fall not because their earnings are not profitable but they cannot pay their short term borrowings or even fund their operations when they take on a significant high gearing. This is also true on a personal basis. A person can be high income earner. But if he overspends and takes on too many loans (high liabilities) and does not have much liquidity in cash, this is going to be a timebomb that may explode anytime when his income stream is disrupted. He will not be able to pay his loans as a result.

So, at least CCT has some cash at hand through the rights issue. Let's hope the management of CCT deploys this cash prudently to the benefits of their unitholders and tenants. This will then determine whether CCT has made the right call for a rights issue. If they don't use the cash prudently, then investors will be wrong about CCT as they will be making the wrong call for a "wrong" issue.  

 

ok, I'm a fresh grad, so take my ideas with a pinch of salt.

 

In the short run, there seems to be an oversupply of office space. Given the current downturn, this would mean that they may be pressured to lower rents and therefore yields. Therefore in the short run, it does not seem good.

The key question to ask is whether you feel Singapore will continue to be a hub where businesses set up offices. This demand must grow to levels before the recession to fill up office spaces that have been created/will be created in the next few years.

A factor to consider would also be the fact that they are renting premium office space. Rents per square foot is more than $10. 2 ways to look at this. Since most of their tenants seem to be doing pretty well so far (e.g. JPM) or will not fail (GIC i think), they can continue charging such rents. The other view is that they will not be able to sustain the rents as cheaper alternatives come in. 

What is actually happening is that they have managed to renew contracts so revenue side seems safe. Costs side will be financing, but that could be resolved with the current rights issue.

These are the key issues to think about from my POV. Whether it has a future depends on your view towards these issues