18 August 2013

SGX IPOs Mania - July & Aug 2013

We have seen some successful listing of REITs in SGX recently such as SOILBUILD BUSINESS SPACE REIT, OUE HOSPITALITY TRUST, and SPH REIT. It reminds me of one thing - the company will go for IPO during bull market, as they can raise higher fund during this period. Second thing is that, the investors may turn their interests in REITs market, as this is a higher yield sector compared to other industry. Nonetheless, with SOYBUILD REIT dropped about 8% from IPO price on the first day (unfortunately met the US Market Sell Down), I believe we have to be more cautious on REIT investment, to pick up some assets that bring stable gross income as well as having stronger bargaining power against its tenants on rental increment. 

As for other IPOs such as Money Max and Rex, I believe more speculators are involved as we cannot find any exciting story near term. Let's look for new investment theme for following months. I still think that STI should stand at at least 3,400 point. Being one of the relative cheap market, we should be able to find more under valued counters before the real bull market comes. 

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