Mapletree Industrial Trust has been a promising counter since the start. With its strong sponsor, Mapletree Investments, and the excellent performance its sister share Mapletree Logistic Trust has shown all these while when I was holding on to it, I believe that this will also be an outstanding counter to have.
I was lucky to be one out of the many who managed to get 1 lot of Mapletree Industrial Trust during IPO at the price of $0.93. During that period, there were many IPO listings in SGX, however, most seemed to underperform because soon after the hype, many of such new IPOs have their share price sinking to levels below their initial pricing.
Mapletree Industrial Trust on the contrary, stood out from the rest. Although after the initial hype in the first couple of days to hit a high of $1.19, the counter retreated to levels between $1.02 and $1.10 for a few months, it still remained above the IPO levels. This shows the confidence and the support investors have for Mapletree Industrial Trust.
Throughout the period that I was holding on to it, Mapletree Industrial Trust has been generating great returns for its investors. The dividends paid quarterly to investors rose from $0.0152 per share in 4th quarter 2010 to $0.0193 per share in 1st quarter 2011. This huge increase in payout further substantiates the capability of its management to generate great returns for its investors.
In July 2011, the share price of Mapletree Industrial Trust rose to $1.225, a new high since IPO. However, I was rather hesitant to sell at that point of time due to the news that there was a preferential offering of 2 shares for every existing 25 shares for all its current shareholders at a price of $1.06. In addition, the management has announced an estimated cumulative dividend payout of between $0.0309 to $0.0312 for 2nd quarter of 2011. As this has been a great counter, I was tempted to increase my holding and wait for the dividend payout. Therefore I decided to set a sell price target, if the target was hit before the XA period, I will sell it, if not I will just keep it and apply for the preferential offering as I believe after XA the share price will drop to below $1.20 due to dilutive effects.
However, patience paid off. After the XA period, the share price of Mapletree Industrial Trust dropped for a couple of days, and rose back to levels above $1.20 shortly. This gave me the opportunity to get the cumulative dividend payout, as well as profit from the capital appreciation. Thus, I made the decision to sell my single lot at $1.215.
My thoughts at that time: I was rather hesitant in selling this counter, due to its profitability all these while. However, I also have to factor in the risk-reward ratio. The counter has hit its recent high, and the possibility of a downtrend seems higher than a continual uptrend. Therefore I decided to act on it and sold it with a total gain of 34% from both capital appreciation and dividend payout.
Lessons learnt: Many times, the share price of a counter is not reflective of its fundamentals, especially in times of global economic uncertainty. I am glad I sold it and realized my gains, as the global market went into a selling frenzy almost immediately after. Do not let greed blind you. Once the target is reached, sell it, because if the global economic conditions turn, no matter how strong the fundamentals of the counter is, it will not be spared.
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