In my previous post, I wrote an article about how the market has been surging since the Brexit event takes place. It is indeed very surprising to me as with anybody why this is happening. This could very well be the start of a secular bull run continuing their rally since 2013.
During this period, I’ve divested a few rounds of FCT since I’m uncomfortable with the run-up. First, I divested my earlier stake of 7,000 shares at $1.985, and then today I divested another 8,000 shares at $2.11 and another 10,000 shares at $2.12. As of writing, I have NIL shares in FCT at the moment.
By divesting these shares, this is a part of my strategy to protect both my capital and profits and the proceeds would go to my savings which would be deployed upon available opportunity. Since Mr. Market is irrational in nature, the best way to take advantage of it is to exploit their weaknesses and be greedy when fearful, be fearful when greedy.
FCT management is aiming for a 9% increase in the rental reversion IRR for Northpoint once they completed their AEI. It’s a positive shot for the long term though we are likely to see NPI compression for the next 3 quarters ahead.
The occupancy for Q2 would look to be at the lowest during the whole AEI, so we are likely to see a poorer earnings and a lower DPU in the short term. NPI is expected to reduce by about $1m in Q2 year on year so the impact should be minimal but given how they’ve been increasing every year, this should have a knee jerk reaction to investors who are short term minded. If that happens, that’s probably a good entry time to load onto it more.
The NAV is currently at $1.91 which makes current share price valuation at a P/NAV of 1.12x which I think is slightly overvalued given the short to mid term headwinds. On the longer term, this should benefit from the integration of Woodland and Yishun integrated hub and I should be looking to re-enter closer to the NAV.