Cromwell 1Q 2024; Buying CFA Reit ETF and AEM Holdings using CPF-OA

 Cromwell 1Q 2024 results

Cromwell's 1Q 2024 DPU dropped 10% to 3.5c euro. 

More interesting, one of its presentation slide noted that interest expense will increase by $6.9 mil, if its all-in interest rate increse from 3.28% to 4%

This suggest that if interest rate increses to 4%, the DPU may drop by ~10% and the dividend yield will be around 8.5% at current price of $1.47 euro. 

We can use this 8.5% dividend as lower bound (or worst-case DPU), as EU is likely to cut rate in June or 2H 2024. 

I have a small stake in Cromwell. Will continue to hold the position, unless I can find better opportunities.

Buying CFA Reit ETF using CPF-OA

Recently, I bought a small position in NikkoAM-STA ex Japan Reit ETF (CFA.SI) at $0.761 using CPF-OA funds. 

The buy reasons are
1) to higher yield offered by the Reit ETF compared to T-bill (3.7% - 3.8%). 
2) the current ETF price may have reflected the higher-for-longer interest rate environment. 

I kept the stake small, as S-Reits DPU may drop further due to higher interest expense.

Buying AEM holdings using CPF-OA

I also bought a small position in AEM at $2.35 using CPF-OA. 

The buy reasons are
1) AEM is in semi-conductor testing industry which is in downturn. In its 2023 AGM slides, AEM predicts recovery in test equipment utilization in 2H 2024 or 2025. Hence, its results in 2025 will be better.

2) Its 2023 AGM slides also noted that as chips get more complicated, more testing is required. This means more business for AEM in medium term. 

The stake is also kept small, as semi-con is cyclical and I cannot tell when AEM results will recover.