some thoughts on ex-distribtion date

I am genuinely interested in how tomorrow will pan out regarding BJT's share price.

Other than what everyone obviously anticipates, I think the waters will be a bit murky.

It's reasonably easily understood what happens when a stock that is not a REIT goes ex-dividend....it will fall by the amount of the dividend (grossed up for franking?).

I haven't held REIT stock for longer than since December 2007. The REIT's I do/did hold are CNP, CER and BJT. SO needless to say this is the first time since that time I have been holding while a distribution was on the cards.

The point I am driving at here, is that there is a metric that is applied to the stock price as soon as it trades ex-dividend. This metric as referred to above is quite easy to understand.

In addition to this once the dividend is announced you immediately know how much it is and what the franking credit is also as it is not necessarily dependent on taxable income.

With REIT's however, a distribution announcement is only "estimated" and it goes to ex-distribution well and truly long before you have the "actual" distribution even if it hasn't changed from the estimate. Here also, the tax components of teh REIT distribution (as with BJT) are almost totally unknown in the definte sense. That is to say, some of it will be income and some will be taxable capital gains. You are very much left to your own devices to make this determination. So other than the volatility of teh market up or down on the day, is it necessarily the case with REIT's that they will drop by at least the distribution amount?

I think it's an interesting concept. Needless to say we will find out tomorrow. However I would welcome comments from those who have received a REIT distribution in past and who do remember what happened to the stock price on when it started trading ex-distribution.

Positive and Nagative comments welcome y'all!!

Cheers.