First REIT fell %7 today, what was the reason?


#1

I couldn’t find any news to cause this sudden drop. Was it a computer glitch? Is it a buying opportunity for long term dividend seekers?


#2

I also watched in dismay as the price has collapsed over the last few days from around 1.30 to today’s 1.04.

There are several possibilities.

  1. A number of stop losses were fired causing a sell off.

  2. Lippo Karawaci has been downgraded and is raising cash by selling off assets including First Reit Manager. The problem remaining is that Lippo Karawaci is the tennant of the FIRST hospitals in Indonesia. If the company cannot pay the bills there is a small problem developing…

  3. The downgrading of Lippo Karawaci as the main tennant might cause institutional investors to divest.

  4. FIRST has a triple lease agreement with Lippo Karawaci. This year Indonesia has introduced a new tax and this has to be paid by Lippo Karawaci as an additional expense.

  5. The INR is not doing very well.

  6. Indonesia has just raised interest rates yet again in order to defend the INR.

  7. There is a general market down trend, so buyers are being much more selective and risk averse.

  8. AK sold off his holding a week ago.

Take your pick… And there may be other issues.

I am waiting until the dust has cleared, based on the current P/NAV and that people are always going to need hospitals unless they start exercising and stop eating huge amounts of carbohydrates.