|Japan Residential ORD 10P
||EPS - Basic
||Market Cap (m)
|Equity Investment Instruments
Real-Time news about Japan Resident. (London Stock Exchange): 0 recent articles
|martincc: Missed this when I first read through,
'The JRIC Board also announces that it has received a separate approach from a third party at a price of 72 pence per JRIC Share which may or may not lead to an offer. Discussions with this third party are at an early stage and it is carrying out due diligence.'
A chance we may get more than 72p once the revaluation is complete?|
|monty9: Up 6% on a £10K trade. JPY strengthening dramatically and signs of life in the Japanese economy. Company unlikely to go into liquidation due to lack of creditg (and a NAV of more than double the share price).
Starting to look like a good punt.|
|stuart14: Did nothing to the share price but:
Japan Residential Investment Company Limited ("the Company")
Refinancing of Loan
Japan Residential Investment Company Limited (AIM: JRIC), the closed-ended
Guernsey registered company established to make and hold investments in
residential property in Japan, announces the refinancing of JPY3.16 billion (GBP
22.0 million) of its existing debt with Mizuho Trust Bank ("MTB") scheduled to
mature in February 2010. The Company announced on 21 May 2009 that the
Investment Advisor was engaged in discussions with the lender regarding the
terms and conditions of this loan. The refinancing represents a repayment of
JPY1.31 billion (GBP 9.1 million) of the principal amount of the original loan
resulting in a reduction in the loan-to-value ratio of the related properties
from 75% to 44% based on property valuations as at 30 November 2009. The
refinanced loan with MTB is for an amount of JPY1.85 billion (GBP 12.9 million)
at a fixed interest rate of 2.20% maturing on 31 January 2014.|
|callumross: This comment on JRIC today is interesting - still toying with buying this one.
"Closed-end funds offer enormous value as a dearth of buyers is creating massive discounts on vehicles where the net asset value (NAV) continues to rise, argues Apollo Multi Asset Management's Tom McGrath even in unloved sectors such as property.
McGrath said the lack of buyers has helped create the massive discounts to NAV which hedge funds and arbitrageurs normally take advantage of, but due to lack of finance even these have been largely absent from the market. This is creating value across a number of sectors though property vehicles stand out in particular, as these have very wide discounts.
Examples include the Japan Residential Property Fund which is listed on AIM and whose share price has collapsed from 100p to 37.75p, at the same time as its NAV has risen from 100p to 180p. McGrath said it offers a seven per cent to eight per cent yield.
The vehicle is also helped by the strength of the Yen against Sterling something which has been helpful to Sterling investors for the past 12 months, according to Matthew Brett, Japanese specialist equities fund manager at Baillie Gifford"|
|monty9: Hello, anybody else out there?
JRIC just released a most encouraging trading announcement, pls see the link below. The two key points are:
1. NAV £1.21
Remember this is a closed end fund that, if the share price remains in the doldrums, will eventually be liquidated and the assets distributed to its investors.
2. Dividend of 1.5p
This makes a total of 2p for the year, a 5% yield on the current (silly) share price.
|monty9: The share price is now quoted at 59p. The GBP asset value may be in the region of £1.06. Heavy impairment losses were recognised at the last interims, which we might hope will not be repeated at the full year, or at least be at a much lower level. The company was profitable at the operating level, and this should have improved over the last 6 months.
Its anybody's guess, but I recon there will be some further impairment charges, but nowhere near the size of the last ones. Overall, profitability will perhaps be flat in the 6 months to 31 Dec 08.
In this case the recent strong appreciation of the Yen against Sterling might restore (in pound terms) the net asset price to just over £1 per share:
Last NAV per share at 1/8/08 - 92.2p
Assume no underlying gain or loss
in the value since 30/6/08, the
effect of the Yen's appreciation
will be roughly 92.2 x 214/186 - £1.06
The company should be moving toward cash generation, surely a 45% discount is too high. Perhaps a reasonable target price is in the region of 76p|
|monty9: The JRIC enterprise does seem to be more for the benefit of the advisors than shareholders. Ironic that the reason assets are still at the float level is the effect of substantial JPY appreciation against GBP. IMV that appreciation is likely to be over; surely the lunatic global 'carry trade' has unwound now and JPY repatriated.
Presumably that money now sits in the domestic economy looking for ways to earn a revenue without taking massive risk. At the risk of stating the obvious, real estate does seem to be a good example of this, particularly in the urban centres JRIC focusses on. I would expect this to increase the value of assets (despite the experts anticipating the opposite) at the expense of yield and hence investment opportunity. JRIC are reasonably invested already so while it might reduce the ultimate income it should not make the operational revenues negative. If I am right that might explain the activist interest - a break even, or slightly better, operation, with good potential break up value.
If the company does continue as planned, it should do well enough. The current dip in sentiment being offset by the windfall GBP gains. The one thing I still can't get my head around is why, given that the management and advisors must have known roughly what the costs of acquiring the properties were, the early operating losses came as such a shock to the market, and did so much damage to the share price. Was this a failure in the IPO doc?
Tony, I agree with your assessment there might be a buying opportunity in the Summer, but if the new investors really do shake things up you could also be looking at profits on what you have got already (at least from today's levels).|
|tonyd3: Well the results are out now so we have some information to go on
I think there are a few positive things to explain the stabilization of the share price recently
-A few activist investors have been tempted in so they must see value in breaking the company up and the assets maybe worth more than the whole and will buy more if it falls further
-It is good that they have slowed down investment speed as this will stem the advisor losses and allow them to be a bit more savvy about the market. Intiallly it looked as if they didn't know what they were doing. The activists have spotted this also
-I think delaying things gives them time to assess whether they should have lower leverage in they can get 5 year guaranteed deals.
-As Monty says the difference in 5% yield versus 2.28% interest means they will make money (Although this should not come as a surprise because this is what their original estimates and was what they were set up to do)
Some caution is still required though
-They promised 6% yield and they didn't deliver and it is not clear why ?????, given their original prospectus . They don't pay out any money till late June
-They are not very transparent as an organisation and they will not make any announcements about performance for a long time so investors could get twitchy again (particularly in the sell in May come back in October period nad if the credit crunch tightens
-They are saying the asset values will come under pressure in the medium term . The NAV will drop further
-The GBP versus yen is up 5% this week at 204
-The share price has increased recently so recent good news will be priced in
I don't think the share will now drop to 39p because they slowed down buying . However I do think this share will become cheaper again in the summer and that maybe a good time to buy|
|tonyd3: Prospect EP , the other japanese REIT that Money Week recommended with JRIC has fallen by well over 10% in the last 2 days based on its latest NAV update where the NAV has fallen by 6p in one month.
It worth noting Moneyweek recomended Prospect EP when its share price was £1.26 . It price is now 62p(50% loss). Looks like Money week have made a really bad call on its bullish view on the Japanese REIT market. Institutional shareholders sold another 250,000 JRIC shares today.
Please read my previous post where I predicted this share would fall to 68p. I was told I was being unrealistic
My sense now is this share will fall well below 68p, possibly as low as 39p in the next 12 months.|
|tonyd3: Prediction For this share in 2008
The Sterling -Yen exchange rate is about 10% below its high and at it october 2006 level when this fund Launch . If sterling falls another 10% against the yen then it will be at its longer term average level over the last 4 years.
This be good news for this stock . Should lift the NAV back up to 95p. Property prices don't decrease, as result of property bubble in Japan popping and the yield from existing properties is higher than expenses incurred from new properties so they don't make a loss over the next 6 months. The company pays a 3p dividend for the year. Confidence in the company is higher than other property stocks The company trades a 10% discount with share price of to 87p
The Sterling -Yen exchange rate is now in its long term trading range for 2008 meaning the funds NAV is 93p. The liquidity of property investment is such that the currency exchange does not move the share price as expected. Assessed Property values in Japan decrease by 3% in first half which has a 10% impact on NAV due to LTV and wiping out exchange rate gain. The company incurs another £7M of expenses and fees on buying the new properties in the pipeline to become 65% invested. The NAV is now 78p by mid 2008.The company invests its remaining 35% in 2nd half and incurs a further £7M in fees and expenses taking the nav to 71. Property values decrease by a further 2% in 2nd half taking Nav down by 8% to 65p by close of the year. The company still has not paid a dividend by COP 2008 due to fees and expenses in buying properties and setting up the fund. Confidence in the company drops and the resulting share price is trading at 40% discount and Share price drops to 39p.
My sense i the outlook for this share is probably in the middle of these two scenarios .|
Japan Residential ORD 10P share price data is direct from the London Stock Exchange