[Commentary] CapitaR China Trust

I'm vested in this counter. lately, received 2 letters for the following reason:

• Application for placements shares @$1.428
• Option to choose Scrip @$1.5232

Put it upfront, I've applied for the placement shares, but choose not to re-invest my dividends into the company.

Let's look at the assumptions

DPU for 2019 = 11.35c if no further declarations are made (a bit weird and high, maybe i included some capital reduction?)

The reit is acquiring more properties, lets take a middle ground and say the DPU remains the same  for 2019.

Yield for each situation

Placement (%) : 0.1135/1.428 = 7.94

SCRIP (%): 0.1135/1.5232 = 7.45

In both cases, the yield on cost will be higher than my enter price ( of $1.57), but 

Likely scenario

Currently, market sentiments are bearish, so i assess there is more possibility for downside than upside. 

The price support is likely lowest at $1.43. Counter likely to be sold down when placement shares allocated to traders/speculators wanting to get some Kopi money. At current price of $1.55, SCRIP price is merely a small discount. 

Personal conclusion

• there will be opportunity to scoop more CRCT at below $1.53 in a later date, so just wait.
• there are likely to be better businesses out there that is beaten down by bearish sentiments.