Stock Movement - Fortune Reit closes above the HK$2.90 level today

Fortune Reit closes above the HK$2.90 level today, at HK$2.940 with trading volume of 7,158,000 units, second top volume among the REITs today. Intraday high was HK$2.970.

Fortune Reit closed at a high of above HK$3.32 on Aug 21, one trading day before the announcement of rights issue and acquisitions of 3 new properties on Aug 24. Following the announcement, the price fell to the HK$2.9 level and hovered around that region for a few weeks. The price fell further when the rights were being traded, hitting an intraday low of HK$2.45 on Sep 24. Following the issue of new shares, the price was mostly around the HK$2.7 region.

Author's Note:
I have bought Fortune during the rights trading period at around HK$2.70++. Bought more when the price went lower to around HK$2.50++. Also successfully applied for some excess rights shares at HK$2.29. Average price is around HK$2.60. My rational for buying the stock then was because with the price around HK$2.5 to HK$2.7 region, and the promo forma semi annual DPU of HK$0.1203, the yield is estimated to be around 8-9% post rights issue, still one of the highest among the REITs, with the gearing still maintained at a relatively low level of around 25%. If the uptrend continues, there will finally be some pay off to my patience.

There will be a semi annual distribution at the end of this quarter, XD probably around January next year. Hopefully this will be a support and even boost to the share price. However, one thing to take note is that the REIT might not meet the promo forma DPU for this semi annual distribution as the 3 new properties were only officially acquired on Oct 15 2009. Their rental contribution to the coming semi-annual distribution will only be for one quarter.