Wednesday, May 8, 2013

Update to Croesus Retail Trust IPO

Previous post: [Wrong Gears for the Wrong Crowd? - Croesus Retail Trust]

Applications for Croesus Retail Trust IPO will close by Noon 8 May. If you have yet to apply, do so ASAP.

For the undecided, you may wish to check out my review of the IPO here - Wrong Gears for the Wrong Crowd? - Croesus Retail Trust

For the decided who has yet to execute, SG IPO Statistics page will help you make the decision to how many lots to apply for to maximise your cash and not over extend yourself during this application-before-funds-return phase. Of course, it is heartening to know that by 10 May results will be out and excess money will be returned.

My view is that applying units worth ~$10,000 is typically the most cash-effective for a small retail investor with other cash commitments to handle. In other words, I am advocating applying for 11 lots as an optimised decision for this IPO (please still base your decision to apply on your investment/trading strategy and not on my advice).

Statistically, for REITs/Trusts priced at 80-90c, one can apply 10-15 lots with $10,000. And in that range, you usually get 3-4 lots if successful. Examples are Mapletree Greater China Commercial Trust (3 lots with 11 lots applied), Religare (4 with 11), Far East Hospitality Trust (3 with 11) and Ascendas Hospitality Trust (3 with 11), all calculated with $10,000 cash for application. This uses about 25% of the $10,000. The number hardly changes with $15,000 used, and only varies after $20,000 cash and more. Of course, if you are cash-rich and these 2 days of not seeing your cash is of no sweat, then it does not matter that you are using say $100,000 to stag on obtaining like 10 lots (10% of cash utilised).

For the decided who does not know how to apply, do check out Guide to IPO Investing. The deadline is Noon 8 May! Hurry.

Lastly, do follow HealthyTrading on Twitter! We are live on Twitter! Follow to get updated financial news with a Singapore perspective for your investment and trading ideas.


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