Fundies were reducing their holding last couple weeks....that why sp was pressed down. Sp will slowly going up now.
Great update n retailers are performing well.
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Fundies were reducing their holding last couple weeks....that why sp was pressed down. Sp will slowly going up now.
Great update n retailers are performing well.
I don't have evidence of funds selling, volumes are not extraordinary, except maybe being above the post covid falling average. Can you show us what the funds have been doing?
KPG Chart looks good, pretty undemanding indicators currently easing, steady medium term up trends, nicely above usual MA's, currently taking a breather from double test of the .61% Fib retrace from the pre-Covid high-close $1.69. I expect with the favourable economic tailwinds, the SP will progress up into the historical SP trading band between $1.30-$1.45 (ish) where it could fluctuate for some time. A rapid push through that seems unlikely at this stage though it would be nice to see pre-Covid highs in due course, with dividends along the way.
Disc: have a few, 6% of portfolio.
Yesterday disclosure yeah au...
Vgl....once the fundies reduced...the sp bounced back....
Sale time! Limited time offer! grab them (cheap shares) while they last!
Steady on Cowboy... or you might be right ...:eek2:
Flash Sale finished.
Congrats to anyone who picked up some good deals on the silly CV temporary selloff.
4 week range has a low of only 1.22
range today was nothing much....
the sale is still on... if you have a 12 month view although the 10 year is pushing up.
This stock should rally a lot more from here if dividends return even if the 10 year continues to go up.
Unless rents are down there should be a pick up slowly over the next 24 months to 36 months.
not traders stock for sure. Seems to be a bit under valued still surely.
Can't seem to get out of the $1.20-$1.30 trading range.
Won't be long until its in a $1.30-$1.40 range with the current interest rate environment. This will be a solid dividend payer over the next decade.
Back in November the company was forecasting full year ending March 31st dividend would be based on AFFO of 4.95-5.15 cps (which they will pay out ~95% as dividend, or around ~2.7cps on top of the 2.2cps already paid out at half year result). That includes Covid impact on result.
I would expect the dividend for 2021, and especially 2022, will likely be higher as forthcoming vaccinations make lockdowns much less likely. Will also be interesting to see what they do with the proceeds if/when they sell the Palmy shopping centre.
Should pay down a bit debt if they sell it.
now its not that good a performer.
slow growth here plenty of time please dont rush in ......:p
DISC: (down ramp post, slow down please...buy in 3 months time).
well 1.23 again today... what is it with this stock... could HLG on line sales be dumping on the retail malls?
the longer people are stuck inside the longer they want to go out even to malls as winter approaches those south south aucklanders have only one place to go...they will be sick of on line only shopping soon surely..2023 cruises already starting to book out... cabin fever world wide will be setting in....
did MR B not buy any more?
Hi mate, we're seeing the 10 year Govt stocks moving a fair bit north in the US here and in some other countries. I think that's undermining a bit of confidence in REIT's and utilities.
I haven't bought any more at this stage but its on my radar. To be honest concerns expressed at posts #116 and #120 still linger in my mind. Not a big position for me and unlikely to be anything more than a fairly modest one going forward for the reasons expressed in those earlier posts.
"10 year Govt stocks " still only 1.29. If the US unloaded 1.9 T then perhaps rate could move again.
yes we saw talk of that yesterday and its faster than expected.
surely with it DIV down and yet to recover its still well undervalued and a short term movement down.
A buying opportunity surely.
"absolute bargain"
yes one would have though so!...
In fact we are thinking its a big buying OP... BIG BUYING OP!
We are thinking of doing what we did for ARG and roll some other investments that are still a bit under water into KPG rather than moving it back off shore.
I can only think that the HLG on line buying is effecting it as see commercial property as real value.
Govt bonds of indebted country's are not on our radar and these government are no longer stable.
But in the end there is nothing like going into a real shop. Body shop and clothes shops have people in them with personality.
These amazing sales people are the best adds for these companies and some of these young sales people are a real assets to those companies.
with demand increasing for housing land; established commercial property in the heart of crowed cities is only going to get more expensive not cheaper, 10 year or no 10 year.
About 12-13 weeks until Full year results are released, so might bounce around a bit until then. I actually think that will be a good time for a results announcement, as New Zealand's vaccination effort will be ramped up by then and management will have a clearer view that lockdowns will be increasingly unlikely and so can provide a clearer forward guidance picture and dividend program.
I dont see HLG online sales hurting KPG malls. Yes, retail is transitioning more to online but they will still need to have 'flagship' stores in key retail sites. And KPG have the key retail sites. They have the best malls with international tenants. Just the place HLG want to be.
"KPG have the key retail sites. They have the best malls with international tenants."
exactly and therefore the price is just silly and cheap? 10 year or no 10 year..
back to 1.20's ... got to be the biggest property stock bargin on the market... almost worth backing up a truck and betting the farm...surely..10 year even at 2% the value of these sites is just not reflected in this price..
10 year is at 1.3%
"Probably right, but my trailer load is in the bottom drawer "
already! some will have loaded up last april and have gone from these sites laughing all the way to the bank..
still a very very good buy at 1.18 and if it goes lower on silly days because the T10 goes higher.
If that 1,9T is passed wonder what that will do to the bond market...
" I will bet the farm on that"
well was going to comment same but thought it was going a bit far..
Betting the whole farm? diary prices are forecast to be up and that farm complete with debt has just brought some relief to the reserve bank.
Repost of Sep 2020 posts. I am not going to bet the farm or anything like it and the above is why. I'm still a bit grumpy about the above so I will stick with just a very modest allocation to this one.
Pretty sure I read the 10 year Govt stock yield hit 1.5% today.
Much discussion on inflation returning but Yellen seems to think major damage without the 1.9T.
we sold KIP some time ago but we think with all the new developments they will be forced to pay something soon if profits return.
july 2019 10 year was over 3 and stock price was 40 cents above.
If they continue down the no payment path we think they will come under pressure.
but certainly someone needs to ask some questions at the next AGM.
NTA alone values this stock well above current price surely even if dividend was suspended.
When no inflation or little comes in 6 to 12 months and the FED does nothing to rates as they want to train to run hot for longer they wont be lifting rates..
Those other commercial property stock they may well get a second wind later in the year.
Definitely some good 1 year options here and time for them to make good on the dividend. It could be a hated share price rally at some point. There may also be an element of arrogance has crept into the management team knowing they have the golden site in south auckland.
Land in south auckland will be a premium going forward and hard to find for either housing or commercial property.
:t_up:
I think we will have a dividend coming soon, but I'd like KPG to limit dividends to the size that can be fully imputed. Beyond this level you are starting to destroy shareholder value as 28% of the dividend paid goes to the taxman. Rather than do this money could be returned to shareholders by spend the same amount buying back some existing shares so EPS goes up (particularly when trading below NTA) and shareholders wishing to sell have a buyer.
If shareholders want more cash back, just open a sharesies account, transfer in some KPG shares and do regular little sells to get the cash they want. Now they are only losing at most 0.5% in brokerage, not the 28% of the value lost through non imputed dividends.
An exception being when your sector is exposed to beneficial tax rules meaning you as a company pay basically no company tax. Paying an unimputed dividend in this instance may be sensible because it helps decrease the risk of unfavourable tax changes being made. I'm thinking here of the property companies looking after elderly citizens.
...Duplicate
"even if dividend was suspended....time for them to make good on the dividend"
Did they re-start dividends after the sept HY with promise of higher after FY. Would like to see a catchup special div too
As KPG is a listed PIE, any part of a dividend paid that can’t be imputed is exempt income in shareholders hands, so absolutely no downside in paying dividends that can’t be fully imputed. With the reintroduction of tax depreciation on buildings, the level of imputation credits available should fall, but the benefit can be directly passed onto shareholders where you have a listed PIE.
The other advantage with a listed PIE is that shareholders can choose whether they include fully imputed dividends in their tax returns - where their total taxable income is below $48,000 there is a benefit in doing so because the 28% imputation credits exceeds the final tax rate on the income and they can benefit from the excess credit.
Double up - deleted
PIE investments are the way to go as entities can be pass through and be distributed into beneficiaries.
we could see a down side to 1.10 or lower for a while if markets panic on the 10 year but they will recover once the adjustment passes as it always does.
Dividend across the economy im sure we all know will slowly return over the next 5 years and share prices should continue to rise in a bull market.
"bull market"
NZ experience out of lockdown of rising property values is now being felt in Australia and elsewhere. I've been surprised by 6 month lag of aust resi property to low interest rates but fast happening now. Wealth effect spreading.
I bought during the Covid dip so I haven't had any non-full imputed dividend from them yet (Dec was fully imputed). My understanding of PIE's was that the correct tax is deducted so that you don't need to pay any further tax. That's what's happened on PIE interest income I've received so I'm assuming its the same for dividend income. What is received is free of any further tax. If you are a 28% PIE and there is full 28% imputation credits, no further tax would need to be paid. The full value would be received (10,000 shares and a 3.5c dividend would be a $350 payment).
If a 3.5c dividend was paid with no imputation credits, a shareholder with a 28% PIE would only receive $252, it would be excluded income so the shareholder can exclude the income from their tax return and avoid a further 5% (or soon 11%) tax on the income as its moved to 33% or 39%. It is not however untaxed, the taxation just happens before being received. The lack of imputation credits in this example has caused $98 to go to the taxman. The $252 received as a PIE is however better than a normal company dividend with no imputation credits which would be $234.5 (or $213.50 if hit by the new 39% tax rate).
The Nov 2019 dividend of 3.5c had 2.03c with full imputation credits and 1.47c was "excluded income". My guess is therefore that 0.41c of tax (28% if 1.47c) was deducted from the excluded income before being received. The cash received was 3.09c/share and it was tax paid income ($309 for the shareholder with 10,000 shares). If it was actually 3.5c - bonus!!
I think the stated reason for the dividend pause after the large negative asset revaluation was to reduce the chances of breaching their stated gearing ratio for debt to assets. A higher ratio may have impacted negatively on credit rating and associated future interest rates on debt.
At the time I suppose it was a reasonable risk of further large lockdowns and the threat of significantly less profits of retailers going under and vacating shops etc so it was a very cautious move on their part.
Once/if they sell the Palmerston North mall (which is currently on the market) they will be a bit more flush with cash, but who knows whether this means higher dividend or quicker development of the Drury project and/or the build-to-rent apartment complexes (which will be a nice area of diversification.)
You do not need to include PIE income, no matter where it comes from, on your tax return. You can however declare any part that is imputed and and/or had RWT deducted if your marginal rate is below 28c so you can get a refund on the extra tax paid. This is written on the PIE payment statement.
As explained by Southern Lad in post 331.
KPG paid an interim dividend on Dec 18, 2020
Scrunch did you not receive the KPG div in early December?
You do need to include PIE income and PIE tax in your return if you have had too low a PIR applied (you need to check the income and PIE income levels for several years to find out the appropriate PIR rates.) If you have had PIE tax deducted at too high a rate you do not get a refund as far as I am aware. Definitely DYOR.
Bjauck, that’s the position for multi rate PIE’s such as KiwiSaver funds. The rules for listed PIE’s are different because shareholders don’t use a prescribed investor rate (PIR). With listed PIE’s it’s a case of distributions being imputed at 28% to extent the entity has imputation credits available. This is the same for all shareholders. Distributions that aren’t imputed aren’t taxable to shareholders.
a study of the ten year in relation to commercial property stock prices doesnt actually seem to be 1:1 at all over a 5 year period. And even over 12 months has no relationship we can find.
Im not the math guy on the team just the overview person. But our math tech guy in zoom on friday doesnt see it either.
I'd say at this moment, this is the best value on the nzx I can find.
Solid dividend play I think, not sure why the market hasn't picked up on the guidance on the dividend but I'm confident that they can pay that this year. I suspect a valuation back up in a massive way in March, the valuations happened in the past year in the peak of the covid angst as we went into Level 4 lockdown, and then again in August when the September valuation happened.
I think a fair value closer to $1.50 is more appropriate for this one. Perhaps they just need to show proof of it through a uplift in valuations and payment of the dividends they have guided for. I'd like to see a plan on the Drury site because this one could be a wildcard to unlock future growth.
Disc: Bought in again at $1.21 on Friday, adding to my position built last year.
certainly a lot of interesting and wide ranging views on this stock.
I just had note overnight from our maths man and he says he thinks the market has it wrong to related government US bond rates to AUS/NZ listed public commercial property stocks that arnt tourism and food related..
industrial commercial is his favourite european market portfolio and sees the same for NZ servicing it agri sector industrial hubs such as auckland supplying the upper north island.
"gone wonky lately eh"
classic quote by W(n)!
"Solid dividend play "
Mr B has outlined his views on that matter in his posted. I think one might says a nuanced view of the managements teams decisions.
Winner could well be right, I couldn’t find the NZ 10 year bond on my charts so used the Aus as a proxy and Lo and behold the SP of both KPG and ARG are quite closely correlated since 2013 … until covid, then it went wonky. But it does look like it’s trying to realign. Maybe
the ten year we whatch is the US ten year.
from our maths guy no alignment between down under commercial and US 10 year that he can find,
thinks is just the panic reaction of investors going to cash in these stocks.
i will bring the NZ 10 year up next zoom later in the week. Will try to find some good data on the NZ treasury. Perhaps commercial property stock are just hit as collateral damage. We first held KIP in private trusts before the GFC.
NZ performance looks like it can sustain a high debt to GDP which should give investors world wide more confidence in the country for private and public investment.
These stocks should be like the housing market boiling hot.
Americas cup photo op should have them lining up to invest and the government needs to get a move on bringing in the overseas money.
Labour has been slow to understand you cant close the country to progress.
Baabaa - I used that Smartshares thing NPF for commercial property stock performance
Strong correlation with 10 yr govt stock until covid hit -- then interest rates didn't matter as commercial property was going to collapse. As pointed out share prices getting back to levels in line where the correlation says it should be.
https://tradingeconomics.com/new-zea...ent-bond-yield
over a 10 year period i cant see the relationship being anything but im not our maths man...
Must mean something
Smart shares NPF (Comm Property ETF) v 10 Year Govt stock relationship
thats only back to 2016..
was looking at 10 years... over 4 stocks.
would have looked at 20 years but global shocks get in the way.
standard deviations looks good there but the wider picture showed me nothing...
the maths people might see something the opposite as in that jpg.
what software did you use to plot the data.
I used that NPF as it covers most listed property companies.
Thought you were looking at relationship between comm prop and 10 year bond rates..... that seemed to suggest interest rates had a large bearing on the sector share valuations
Interested what your maths guy comes up
Same analysis for KPG over 10 years paints same picture but correlation is a bit weaker
I recently upgraded by abacus to a Texas thingie - not too sure what software is built in ...cool eh
i would ignore my suggestions because the reason they give me the reins is because they never know where im taking the tardis next.... they like the random journey...
my take was a decreasing 10 year over 10 years.
2016-2018 US 10 year move up 137 - 304 approx roughly. No downside i can see in the NZ comm props.
your standard deviation probably flattened the data for the entire sector. Meaning higher paying stocks bucked the standard deviation and other factors came into play such as the sector they serviced.. Now they are all getting tared with the same brush.
your data flatten and takes the outliners out of the picture and they are the ones that may move again after the selling stops.
yes texas instruments are the best... very cool.
we wont be able to ask him at the moment as he is tied up deep in code. When that is finished ill probably have to ex fil and take the copter out of here if that goes out for consumption in eruope.
https://www.military.com/video/opera.../1873340343001
in the mean time you will have to rely on the texas superior blazing high speed computer.
.. i prefer a 80286 myself but each to there own..:scared:
just too many "threads" to be confused by ....
imagine when 32 cores is common... how many next..
i should probably bail end of summer... nice being here.. fab weather..
this stock first hit 160 back in 2007 with OCR rates heading north of 7 percent? Amazing to retrace the share price and OCR rates..and of course the 10 year at 6.7
DISC: on and off holders since 2004.
Attachment 12330
some revaluations on PCT today and income reporting... KPG going to make for some very interesting reading.. order building even with short term (next 12 -24 months) pressure from the bond markets.. these stocks usually break away from the 10 year as there yield increases... 10 year acts a bit like a big gravity pull until a stock breaks free
Hi waltzing as you know I was picking 118 low... were 118.5 overnight. They are right now trading at 121 up 2.5 so we might have seen the bottom for now. This time last year KPG was trading at 152.5 and it is a better, stronger company now. Also lower funding costs.
I think the stock price has been roughly tracking Community case developments over the last few days, but I could be wrong there and seeing patterns in the noise like a crazy person.
yields comm props are supposed to sell off on 10 year yields according to markets rules.
but we have always made money off them when their yields move higher and there market valuations seem to let them break free of the 10 year.
remember while the reserve banks set the OCR that only a short term money market mover not the longer term 10 to 30 year,
if enough of you believe that VALUE here is cheap then your picks for bottoms will be your bet that 10 year yields arnt strong enough to keep pulling down the price of yield versus value.
DISC: holding and looking to hold more.
Look like there is selling coming on in the afternoon across some prop stocks today driving down the price.
fed will want to see equity yields keep up with rising bond yields.
FED might need to buy the long end of the curve and sell the short to control spikes in yields. QE might need to be brought to bear on the US T market if the FED want to keep interest rates low for full employment.
Comp Props holding under a lot of pressure from the spiking 10 years today.
$1.155. unbelieve price.
NTA (based on last years reval) was $1.29.
11% gain on the table just to square up the ledger.
NTA soon to be in the low $1.30s on next valuation.
There was always going to be an adjustment until the market settles and that could take a year or 2.
When rates settle back to 1.9 and a bit above and dividends start to power away prices should move up for some comp props...
Some will slowly decline. This one should move up but its anyone guess when.
good demand today across the COM Props .. we were waiting for 213 on GMT and nothing..
good demand on this stock today shows that even with rate on the rise demand for good retail and commercial property stocks is still holding on the NZX.
GMT would have been a good trade today.
Retail & Office assets are currently changing value on much more immediate concerns such as Covid lockdown likelihood. We are in the homestretch of the ever shrinking possible lockdown window, with vaccinations rolling out the threat of lockdowns impacting retail and office operations will soon be a thing of the past - after which assets should return to their appropriate long term valuations.
Edit to add: Friday trade saw the late afternoon announcement of Auckland coming out of level 3, and rest of country coming out of level 2, and hence KPG bounced on that news.
Laser kiwi eye,
You owe the Tesla thread an explanation
...
Share price now well below NTA.
It will one day revert to the mean. And one day trade well above NTA, for a period.
I'm lucky I have new capital to invest each month so will continue to top up at these levels.
Some international and Insto's will be rebalancing at this time in the reflation causing a lot of dislocation in the next 12 months.
its dividend might not be seen as high enough for it to pull away from the black hole of the 10 year across most markets accelerating. Once that levels out and its dividend can get away over 4% that might be enough for it to move back to 130 and above.
GMT has so far been the worst hit but it seems to be holding in the 2.12 -2.25 range. ARG is also getting hit and even PCT hasnt been able to move back up.
From 2014 to 2019 the dividend increased each year like clockwork.
KPG paid a 7cent dividend in 2019.
Forget about the covid impacted year 2020.
The board should look to get back to a 7 cent dividend asap which is a 6.1% gross yield at todays prices.
You wont get anywhere near that in a term deposit anytime soon, no matter the talk of yields increasing. And KPG will come with NTA growth.
I was hoping MR B would comment on this company from his technical Financial point of view. We are looking at roll out of GMT which we trade and move into this stock as is the last to revalue in this sector.
I think the black hole 10 year is weighting on this sector and you may have noticed there is volume sales sometimes in the afternoon after 3am local time as asian markets come on line.
last 2 days a small rally in GMT after 4 am as late afternoon selling abated.
we actually have some stuff coming along that MR B may be interested in at some stage.
Experience so far says kiwis like good malls so any effects are a temporary small reduction in immediate earnings. That should be a few cents reduction in fair value not ten's of cents. If mass vac. Is mainly done in 2021 then 2022 impacts should also be limited. I'm struggling to see how there would be 2023 and onwad effects. Also when those exposed to the border and their immediate families have a vac. another layer of protection against lockdowns is added.
we think the 10 yr black hole has taken money out of the comp props... look at the 5 year chart. overseas investors are moving money at this time in the cycle.
traditionally property companies should trade at a discount to NTA , if they trade above they are expensive. in a reflation environment lease duration is important in valuation of these stocks. i dont hold any of these types of stocks at the moment due to the reflation trade
I agree. I went to Sylvia Park on sunday once Auckland went back into level 2 and guess what- it was pumping. People couldnt wait to get back to Auckland's best mall after the 6 day lockdown. 2022 we are likely to see little to no lockdowns.
And KPG has traded at one point each year above its NTA for the last 5 years.
KPG oversold.
Probably is oversold, (and people's comments about vaccine roll-out are fair enough), but the speed of the increase in the 10 year Govt stock rate has spooked investors, was under 1% just on a month ago and 1.9% yesterday...that rate of increase is "interesting" to say the least. Where will the 10 year rate be at year end, 3% ?, maybe even 4% :scared:
I think the era of lockdowns is quickly coming to an end Beagle, we are talking a few more months and then we will be well into vaccination of general population making lockdowns increasingly unnecessary. I think we all have been looking past CV anyway to see what good value KPG is under normal operating conditions, and paying out 90-100% for the divi.
I'm actually more curious about the office portfolio in the era of increased work-from-home environment persisting - but I don't see it as a major issue as the location of the office towers are all prime real estate which in a worst case scenario could be repurposed to residential (adding to KPGs nascent build-to-rent residential ambitions).
Also worth remembering the Palmerston North Mall is currently on the market.
Yeah I hear ya....I think you might be talking me around. I don't know how others feel but I'm finding it hard to work up much appetite for fresh share investment allocation at the moment after 6 straight weeks of losses on the NZX. To me I feel at this moment in time, I'd like to see some forward momentum in my portfolio to give me confidence to invest more. (Sitting on a fairly high cash allocation which ahs been a good thing in recent weeks).
I was going to throw a Warren Buffett quote at you regarding your trepidation for investing your cash, but im sure you have heard them all..
There are some deals in the market on some good performing companies. These deals wont be around for long. TRA is a prime example. Could have purchase $3.11-$3.12 last week. Then another profit upgrade and the buying opportunity is gone(ish).
KPG, OCA, MHJ, FPH good value imo.
EVO and TRA was good value last week.
KPG seems pretty good value at the moment. I’m in for a small parcel.
WHS look like they are about to post some startlingly good numbers. Bought a few more this morning. Agree this one is fair - good value at present but lets see where the 10 year Govt stock rate settles.