Mapletree Industrial Trust Non renounceable rights for new units: What is it and is it worth it.

The Singapore stock market has been pretty busy in recent months with many companies trying to raise funds thru various means. From bonds to stock options, there are no lack of options to invest your money.

Mapletree Industrial fund is offering new units in the Ratio of 100:5 for all current stock holders. This means that if you have 1 lot (1000 units), you are eligible to apply for 50 new units at a price of $2.64. This is a pretty decent price and represents a 3-4% discount from the current stock price of $2.70+.

Non renouncebale rights merely means that the rights to purchase these shares cannot be transferred to someone else or traded. This is unlike the rights that SIA has recently been giving which is tradable (albeit training at $0.00-$0.01).

Another thing of note is that this rights to new shares is only for Singaporeans and international investors are not eligible for these rights.

The money from this exercise will be used to acquire new data center in the US.

So my take is, subscribe all that your are eligible for. Like most stocks new unit offer, the stocks are going to be diluted, so if you choose not to purchase these new units at a discount, it just means that the stocks you are holding now will be diluted. Even if you don’t want more shares in the long term, it makes sense to purchase and sell it soon after purchasing.

My take on the trust? The business model is sound. Data center is an area of growth for many more years to come. Think about all the data we are using right now, without data centers, what is going to happen.

That’s my 2 cents worth. Hope this helps.

Kilt Lee
The opinion are personal thoughts and should not replace official financial advice.

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