When Will You Sell A Stock

I Bought MPACT

MPACT Festival Walk

This week, I bought MPACT (Mapletree Pan Asia Commercial Trust) when share prices of stocks and REITs plunged due to geopolitical worries and Fed rate cut uncertainties. In my previous post, I shared that the Fed delayed rate cuts to September 2024 because there are no signs of inflation going under control.

In the early hours of Friday, US officials said that Israel had hit Iran with a missile. This could further escalate tensions between the two countries. As a result of consecutive negative news, it is no wonder this sparked panic among investors.

While other investors may view this as a stock market crisis, I view this as an opportunity to accumulate dividend yielding stocks to increase my passive income. As a dividend investor, I focus on buying stocks or other assets that pay regular dividends. Thus, I am less concern on the share prices.

In fact, when share prices goes down, the current dividend yield of dividend paying companies goes up. Let us take a look below at how much the share price of MPACT (Mapletree Pan Asia Commercial Trust) has fallen and what is MPACT’s current dividend yield.

Mapletree Pan Asia Commercial Trust Share Price

Mapletree Pan Asia Commercial Trust Share Price 19-Apr-24

In a week, the share price of MPACT (Mapletree Pan Asia Commercial Trust) has fallen as much as 7.63% to end the week at S$1.21. Based on MPACT’s current closing share price of S$1.21 and FY22/23 full year distribution of 9.61 cents, this translates to a current dividend yield of 7.94%.

Let me recap the pros and cons based on MPACT’s 3Q FY23/24 Financial Results.

The pros are:

  • Gross Revenue and Net Property Income (NPI) rose 0.8% and 1.7% year-on-year respectively.
  • To mitigate forex volatilities, approximately 94% of MPACT’s expected distributable income.
    (based on rolling four quarters) was derived from or hedged into SGD.
  • 85.0% of MPACT’s borrowings are hedged at fixed interest rates.
  • Overall portfolio occupancy improved from 96.3% to 96.7%.
  • MPACT achieved a positive rental reversion of 4.1%.
  • Current high dividend yield of 6.91%. Factoring the lower future DPU, the estimated yield is 6.35%.

The cons are:

  • A stronger Singapore dollar (“SGD”) dampened the overseas contributions.
  • Distribution Per Unit (DPU) declined 9.1% to 2.20 cents in 3Q FY23/24.
  • Aggregate leverage ratio stood high at 40.8%.

Give the above considerations, the share price of MPACT may not recover immediately over the next few months. However, the improvement in MPACT’s portfolio occupancy and positive rental reversion could see the REIT turn around in the longer term.

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