||EPS - Basic
||Market Cap (m)
|Real Estate Investment Trusts
Real-Time news about Prospect EP. (London Stock Exchange): 0 recent articles
|wolstencroft: Likewise I have lost on property shares, having diversified into them partly to protect me against GBP weakness!! I think few of us realised how geared these are. PEJR was itself geared to approx 100% and many of the funds they invested in were probably 50% geared, that means a 100p investment exposues us to 200p of REITs and 300p of property. If property values are deemed to fall 30% then that means the REITS will halve (assets fall from 300p to 200p less 100p debt makes 100p share price), and our investment here from 200p of gross asset value to 100p (as the underlying investments have halved). take off 100p of debts in the company and the shares are worthless. The same has happened to the banks and any other company dependent on debt. Gearing so beloved of MBAs has killed many.
The shares will thus probably never recover to their highs as the debt will never be replaced, so even if property rises 50% (so REITs double, and PEJR NAV triples/quadruples) and they gear-up on the way the maximum share price will be about 30-40p IMHO. So 50p of that 100p is lost forever.
The other problem is fund charges now that NAV of the fund is so small, admin charges will eat up proportionately more. I hope the fund manager remains honorable and continues to manage the fund.|
|joan of arc: If this company is as stuffed as the share price says why don't they just wind it up and give us a few pennies back? Or do they just plan to spend the last £5m on themselves?|
|wolstencroft: sort of goes like this....
Assets 100p Gearing 50p NAV/Share price 50p
underlying asset holdings (=shares in portfolio) drop 25%
Assets 75p Gearing 50p NAV/SP 25p
margin call (margin allowed is 50%) to sell 25p worth of shares in the portfolio
Assets 50p gearing 25p NAV/SP 25p
but this causes shares in portfolio to drop a further 33% because they are illiquid
Assets 33p gearing 25p NAV/SP 8p
still on a margin call to sell assets,17p worth sold to bring gearing down to manageable levels
Assets 16p gearing 8p NAV/SP 8p
shares in portfolio drop a further 25%
assets 12p gearing 8p NAV/SP 4p
at this stage the manager ring-fences the 4p of NAV and sells 8p worth of shares because the margin call is to sell 6p worth of shares or otherwise fund the account, they can do some funding but this would come from the dividend reserve so they transfer some shares into their offshore account where the dividend reserve is, using that reserve to fund the purchase, and the bank manager offering them margin tells them they cant leverage anymore as it clear that they are considering not honoring the margin call if they end up with negative assets in the subsidiaries which hold the margined assets.
assets 4p gearing 0p NAV/SP 4p|
|jonwig: J o A.
From what I gathered, it's a money transfer problem, with management companies becoming insolvent and hence the REITs simply become creditors, so must themselves file for protection.
I'm actually quite annoyed that I must have taken my eye off the ball and missed this event (it was dated 29/09, and the share price chart shows the news filtering out gradually). Of course, the latest NAV will have included it.
The portfolio weightings will be in the latest H1 numbers, I think. Anyway, I didn't hang about but sold out yesterday. The gearing won't have gone completely, I imagine, and the Japanese REIT system just looks incredibly interconnected.
Perhaps I sold at the bottom, who can say?|
|jonwig: " ... undiluted net asset value per share on 11 September 08 was 29.78 pence"
A couple of bad days since then for the J-REIT index, but the NAV seems to be pretty resilient. Share price here doesn't seem to be following the trades, which are marked as buys today. (I know that can be misleading!)|
|pip_uk: Good looking buying today, and the share price has held up well.
The increase in the share numbers has gone down very well, and the perceived view of the fund managers is very positive.
Onward and upward I hope.
There`s the divi anyway.
|webby: Nice to see some action in the share price and people contributing to this thread. Kenmitch I think I may have read it in the initial offerring documents for this co.|
|kenmitch: No. Would be very interested to learn of any.
Just to add re. Prospect warrants - these should go up over twice as fast as the shares. Risk form needs to be signed to trade them - for those not familiar with them. Once done just trade them the same as shares. Risks are very overplayed.
You can't lose more than your stake and then not until 2009, and then only if Prospect shares are under £1.10. Otherwise share price £1.20 - warrant 10p, £1.30 - warrant 20p, £1.40 - warrant 30p etc. The extra we're being asked to pay now is the premium for time value. That gets lower as the share price rises and as warrant expiry date gets nearer.
Target £2 for the share, and the warrants are going to at least 90p, compared with 35p to buy now.
Shares to double to £2.40 before warrant expiry? Possible? If so the warrant price should be at least £1.30.
Invest half what you would in the shares for the same cash upside. That would leave some for another Japanese property share. Are there any others?|
|timanglin: thanks kenmitch, i also thought that the share price would settle into the nav. Could I please ask if you have any other japanese property plays on your radar?|
|kenmitch: latest nav is 116p - still a hefty premium.
Reasons for the shares trading at a premium?
Asset value rising fast.
Japan property prices have been depressed for many years, so the catch up if it comes could be quite spectacular and this fund is a good way of playing it.
This could prove an excellent investment over the next couple of years - and the warrants even more so - so investors seem happy to pay a premium now rather than risk having to pay more later, even if by then the premium has gone.
Agreed though. The shares are expensive on fundamentals.
Maybe the current share price pause will continue until nav rises further?
Assuming nav keeps up the present increase rate, or accelerates, then the shares are going to remain popular.
The warrant price will increase roughly twice as fast as the share price. The warrants are a bit overpriced too.
Also the spread is wide and they are not as easy to trade. Even so I prefer them because of the even better upside.
Exercise price 110p and expiry November 2009.
If not buying now then certainly one to watch. Both shares and warrants could go up a lot.
I hold the warrants. Bought them last month, and so far they have far outperformed the shares.|
Prospect EP. share price data is direct from the London Stock Exchange