pending breakout, page-31

You are ignoring many macroeconomic minefields lying ahead for LPTs.

- MOF's customers are going to be stretched to meet their rents because they are all suffering the worst business conditions in 70 years. This will eventually come out as lower leasing rates, which equates to
-- increasing vacancy rates
-- lower customer retention rates
-- lower profits
-- lower margins
-- lowering rents

This is all EPS destructive.

Secondly, do you really believe that MOF will 101% keep to its 3.5c dividend if things are heading south and, for instance, FOREX fluctuations impact its look-through gearing negatively? Hells no they wont. 3.5c in June is, firstly, in June, and secondly, a politician's promise.

There's also the fact that MOF has a huge swag of properties in the USA, where 500K jobs are being shed each month. Care to guess at the state of their client's balance sheets? MOF is in a similar position to a bank; it needs its portfolio to remain compliant and the price of its rents to remain buoyant, to meet its debts. If this deteriorates, things can still get ugly.

Sure, Mitsui Asset Management might buy it up, but it isn't going to do this at 35c if it can pull back from the market tomorrow and see the price fall to 20c and soak people up cheaper. Remember, you are talking about MOF doubling its share register. Did Mitsui top up its shares to support the price above 20c to lure out others to buy up their entitlements so that MOF could raise the cash it needed to raise? Is it happy to keep par with its original stake in MOF? Maybe once the entitlement is bedded down Mitsui sells the extra shares it bought.

If you are right this will be the first and only equity raising I've seen in any market which goes up after the fact. Every other time, a share price touches the equity price. maybe this is the fabled unicorn of stocks. But I doubt it.