Frasers Commercial Trust Declares Stable DPU of 2.40 cents for 4QFY18

Frasers Commercial Trust has announced their 4QFY18 financial results on Friday, 19th October 2018. As mentioned in my previous post (My Personal Analysis of Frasers Commercial Trust), Frasers Commercial Trust has managed to pay out 2.40 cents for 1QFY18, 2QFY18 and 3QFY18 respectively. If they payout 2.40 cents for 4QFY18, this will amount to a total of 9.6 cents in FY18 versus 9.82 cents in FY17 which is a merely 2.24% drop in annual DPU. Yes, as per predicted, they have declared a distribution per unit of 2.40 cents for 4QFY18.

Debt

The proceeds from the divestment of 55 Market Street were utilised to repay S$197 million of borrowings in September 2018, which significantly reduced aggregate leverage to 28.3% as at 30 September 2018, from 35.4% as at 30 June 2018. Read More

My Sweet Retirement Applies T2023 Temasek Bond For Spouse

I am usually not interested in bonds except for Singapore Savings Bonds. However, a recent bond review by Adam Wong at the Fifth Person caught my attention. (Read more: Temasek retail bond: 5 things to know before you invest in the T2023-S$ bond)

Cutting the long story short, Temasek is offering a 5 year bond which matures in 2023 at a fixed interest rate of 2.7% per year. Interest is paid every 6 months and the principal amount is guaranteed by Temasek. The minimum investment amount is S$1,000 or more, in multiples of S$1,000. If you invest S$10,000, you will get S$270 per year or S$135 every 6 months.

The last date and time for applications under the Public Offer is 23rd October 2018 at 12 noon.

How To Apply

  1. You need a CDP account.
  2. There are three ways to apply for the T2023-S$ Temasek Bond.
    • Apply via ATM (DBS, POSB, OCBC and UOB)
    • Apply via Internet Banking
    • Apply via DBS/POSB mobile banking application.

Risk

The bond is not totally risk free. Risks associated with bonds include default, interest rate, liquidity, inflation risks and other risks.

Default Risk

Temasek can fail to repay the principal amount when its bonds are due. Of course, the probability of this is extremely low.

Interest Rate Risk

Interest rates may rise, causing bond prices to fall. If you need to sell your bonds in such situations, you may suffer a loss. We need to be careful of this risk as the US Fed may continue to hike interest rates.

Who Is The Investment Suitable For?

The bond is suitable for you if you:

  • want regular income at a fixed rate rather than capital growth;
  • want priority in payouts over share dividends in an insolvency situation;
  • are prepared to lose the principal investment if the Issuer and the Guarantor fail to repay the
    amount due under the Notes; and
  • are prepared to hold your investment until maturity or to exit the Notes only by sale in the secondary market which may be unprofitable or impossible.

October 2018 Financial Results Announcement Dates

It is almost coming to the end of the year and I am expecting to receive my last tranche of dividends payout from the REITs I am holding. With the recent announcement of Fed interest rate hike, it impacted the share price of REITs, causing them to decline slightly. For the past week, the stock market was in a sea of red. However, the stock market managed to recover slightly and re-bounced back on Friday, 12th October 2018.

The risk that I am expecting for Frasers Logistics and Industrial Trust has actualized as AUD weakened further against the Singapore dollar (1 AUD to 0.98 SGD). The market has reacted to this and the share price of Frasers Logistics and Industrial Trust fell lower to S$1.04.

Below are the date of results announcement for some of the REITs I am holding in my stock portfolio.

Stock Name Percentage of My Stock Portfolio Date Of Results Announcement
ST Engineering 16% Not applicable
Frasers Logistics and Industrial Trust 15% 5th November 2018
ParkwayLife REIT 11% 25th October 2018
CapitaMall Trust 11% 25th October 2018
Mapletree Commercial Trust 11% 24th October 2018
ComfortDelgro 8% Not applicable
OUE Hospitality Trust 4% Not applicable
The Hour Glass 3% Not applicable
Kingsmen Creative 3% Not applicable
Frasers Commercial Trust 2% 19th October 2018

Looking forward to collecting my dividends!