Today late rally over 30m sold at end after market closed at 4.00pm
AMP issues notice that no longer substantial holder sold between 13/02 to 26/02 approx 32M shares
No of shares on issue = 2.779Billion
362M shares traded in one week or 13% of issued units
NO major shareholder notice made? Who is the buyer?
Also as you guys know I am in the shit and own GMG, GPT & IIF. I am positive that if I can hold I can recover, here is why, please ffel free to comment on the logic or lack of it depending on your thoughts.
NTA post Dec 2008 reports and devaluations
GMG NTA = 1.05cpu (excluding intangibles) sp = 26.0c or 75% discount
GPT NTA = 1.43cpu sp = 47.0c or 65% discount
IIF NTA = 1.66cpu sp = 8.30c or 95% discount
GMG & GPT are well within lending covenants, IIF is close to the threshold.
With GMG the intangible assets when included in the NTA increase the NTA to $1.45. Even if ascribe a nil value, they have used discounted cash flow over 5 years which is the norm. However lets leave it at $1.05
My understanding of NTA is net assets after all liabilities, therfore in each case the current share price factors in armageddon.
Assume a further decline in values of the assets in Australia/Asia by say 10-15% and US & UK by a further 20-25%
The NTA of each (I have used 20% discount)
REvised NTA
GMG from $1.05 to 0.84cpu sp= 0.26c a discount of 70% GPT from $1.43 to $1.14cpu sp=0.47c a discount of 58% IIF from $1.66 to $1.33cpu sp=0.083c a discount of 93%
I understand that if the assets fall a further 20% then they will surely breach or come close to breaching lending covenants.
They go into administration and the assets are then sold at current NTA less say 20-30%
The revised NTA in whatever scenario you choose still exceeds the current share prices by a large factor.
I have also ignored the fact that GMG is still confirming guidance that a further distribution of 9.65 cents is on track for June 2009 half. Even if they reduce this by 50-75%
GPT is paying 2.1 cents per quarter. IIF has suspended the March 09 distribution and will review in June 2009 (subject to refinancing).
GMG in particular needs the following to pacify (or stick it to the market)
1. Confirm facility due in May 2009 $460M. Lets assume the worst. They still have according to S&Poors $167m in cash and $674m in undrawn facilities.
They could also not pay a distribution and save over $200m
2. Give guidance as to earnings for JUne 2009 half and looking frwad in terms of rental income and management fees.
3.Reaffirm their intention to pay a distribution in accoradnce with guidance provided wether or not it will be 9.65 cents , 5.0 cents or nothing.
In summary I was suicidal this week, I listened to the webcasts of all three, did further research, read analysts comments etc..
I actullay received $202K from GMG and used this to satisfy a margin loan call.
I have now sought from my family/friends $200K to further reduce the margin loan.
I will alos sell down my holdings to further reduce my margin loan and give me a buffer of over 40-45% based on todays closing prices.
I am now confident that the worst is over, all REITS have reported and they all told the same story.
Assuming wprld war 4 does not start and that the share markets only drop a further 20%. I can hold.
IN simple terms based on the above you can now buy a property (REIT) at 65-75% below reduced market value
In fact the price you are paing for some REITS is 10-25% of the NTA they hold.
Like the Fin Review said the current prices of the REITS are either the bargen of the century or they are ready to disolve.
That means that all valuers worldwide whom are now cautious are overstaiung the values by 70-90%.
What do you think, we own bargains or we are idiots.
For those that bought GMG at 19.0 to 30 cents I envy you.
GMG Price at posting:
23.6¢ Sentiment: Hold Disclosure: Held
(20min delay)