ARA Asset Management: Updates from the AGM April 2016

If you have not read my last Investment Idea post, follow the link.

Updates from the latest AGM

Stable business

1. The board of directors are rather confident in the company, some have bought shares recently using their own money.
2. CEO assured that core business is REIT management, which generates recurrent income unless ARA loses position as manager.
3. Has been overperforming in terms of Assets under management (AUM) growth, vision to hit 40 billion AUM in near future, which CEO deem is world-class.

Drivers for growth

1. Trend that money from within South Korea, China and Hong Kong are moving out of  their country for investments. ARA is benefiting from this trend with their private funds set up in these countries.
2. Currently also making progress in Australia using the same strategy.

CEO's reply to query on last rights issue

Image source: forbes.com

1. The funds raise are not to clear debts but expansion.
2. Used as seed capital in REITs and private funds.
3. Seed capital is relatively low at <2% compared to competitors' 4%.
4. If never raise capital, would be to cut dividends.
5. ARA is asset-light company, so does not enjoy easy loans from banks.

Guidance on dividends

Image source: nasdaq.com

1. CEO admits that payout ratio is high but is committed to maintain 5cents per year for dividends.
2. The Board will consider shareholder's suggestion of scrip dividend option, where dividends are paid in terms of shares.

Investment Ideas (March 2016) - Cache Logistic

Since there isn't that many module reviews to write about, I would post writings on things that I am interested in from time to time. In this post,  I will present a share counter which potentially hold the key to unlocking better rewards than SGD time deposits.

Cache Logistic Trust (K2LU:SGX)

K2LU Google finance Summary

Current price: 0.840

Expected Dividend Yield: >8%

Trading plan: Buy & hold at least 1 year

Why I buy?

I would love to accumulate Cache at below 0.850, especially below 0.830. The dividends for FY16 (this year) is not expected to decline much, meaning the high div yield will provide a strong support for the price in 2016. The REIT acquired new properties in Australia last year which will strengthen the distribution per unit (DPU). In Singapore, it also has a newly developed DHL Supply Chain Centre will increase its revenue. If one is optimistic on global economic performance in 2016, the current price has got to be a bottom. So are you optimistic? Personally, I thought this would be an investment which I will not regret regardless of market upturn or downturn. Meanwhile, I am still in the process of nibbling (did not lump-sum buy) Cache... All in all - fat dividend yield with limited risk.

Any questions?

Leave a comment below. I am not well-equipped to answer "expert questions" but layman discussions would be no problem. Look out for more of my stock picks from this blog in the future!

Caution: Stock market is risky and I am not to be held responsible for any losses incurred as a result of following my trading plan. I am only responsible for my own money, so are you.