Top Reads this Week (23 Sep)

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1. Is buying experiences better than buying things? Not for everyone (Big Think)

This is a great rebuke to the idea that its more worthwhile to spend money on experiences rather than objects. As it turns out, the original study was flawed because it was performed on affluent college students. Brilliant.

“When money is tight, buying material things makes us happier than buying experiences. When we’re rolling in cash, it’s the other way around.”

2. Personal Lessons Learned Since the 2008 Financial Crisis (Financial Samurai)

Another great take on lessons learnt from Lehman, from the perspective of an invesment banker. It’s the last one I’m sharing on the GFC, I promise 😉

3. One Decade Later (Of Dollars and Data)

It’s been a decade since Lehman, so I’m going to jump on the bandwagon. Here’s one from the perspective of a student studying in Stanford back in 2008. What were you doing 10 years ago? Were you buying stocks in the GFC?

4. Revisiting the Fall of 2008 (A Wealth of Common Sense)

We all think we’re prepared for the next market crash, until it actually comes around. The next crash will look very different from 2008, but it’s still instructive to take a look at the panic and uncertainty that gripped markets back then.

5. How OUE C-REIT Is Destroying Shareholder Value (ProButterfly)

I’m not a unitholder of OUE Commercial REIT, but Tam Ging Wien does make some interesting arguments on the latest acquisition and rights issue and why he is not a fan. Worth a read if you’re a unitholder:

“OUE Comm. Reit (TS0U), this is one of the most serious shareholder value destruction move I have seen in a while in the REIT market. The last time I remember there was such a huge value dilution was Sabana Reit (M1GU)’s acquisition.”

6. Indonesia Billionaire Family reshuffles empire on currency rout (The Edge)

Shared by a reader:

“OUE Lippo Healthcare Ltd., agreed to buy 10.6% of Singapore-listed First REIT and plan to raise about $150 million in a rights issue to fund the purchase,

Within matter of weeks. We see the Lippo group of companies ( comprising the players- OUE Ltd, OUELH, OUE C-Reit, PT Lippo Karawaci, First Reit) in the mkt twice to raise almost $740m from rights issues as they shuffles assets between the different entities. raise funds but still maintain control of the assets.

Earlier we saw on 11 Sept- OUE Commercial REIT (OUE C-REIT) proposed acquisition of the office components of OUE Downtown for S$908 million via a rights Issue rights of 83-for-every-100 existing units for S$587.5mil and debt of S$361.6 million.

The 2 events have the nett effect of raising $740m from rights issues which are to be executed at steep discounts to prevailing mkt prices. Some will wonder why they are not going through the private placement route ( usually the preferred route and lesser discount and hassel?). Could they have raised the same fund at much lesser discount, hence issue less shares and hence less dilution? Are the institutions not keen? Is there sign of desperation? Anyone got any thoughts?”

OUE Ltd owns 56% of OUE C-Reit and 64% of OUELH. PT Lippo Karawaci owns 33% of First Reit.( OUE ltd is run by Stephen Riady, substantial shareholder and son of the founder of the Lippo group.


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