FMETF [FMETF 105.20, up 0.9%; 5% avgVol] [link], the PSE’s only exchange-traded fund, was halted by the PSE at 1 p.m. yesterday after it was discovered that its iNav had failed to update since 11:30 a.m. FMETF said that it would “coordinate” with its “service provider” to im plement a fix, but as of this writing, FMETF has not advised that a fix has been implemented nor has the PSE lifted the halt.
MB bottom-line: This problem happened six times last year, and while it’s great that we made it into May before we had our first FMETF outage of this year, it’s still discouraging to see “iNav not calculating” as a problem that we need to contend with in 2024. For those who are unfamiliar, FMETF is an exchange-traded fund, so FMEFT’s per-share price is derivative of the per-share prices of all the shares that FMETF owns/represents. The “iNav” that keeps breaking is the number t hat represents the current value of FMETF’s holdings, expressed as a “NAV per unit” or “NAV per share”. So, if the iNav isn’t updating, then traders are not getting the kind of information they need to place FMETF stock trades. “We need more ETFs” is something that I’ve heard traders say for years now, and while I still count myself as part of that group, I wish we could see some forward progress in the maintenance of FMETF before we introduce anything more exotic to the market.
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Citicore Energy REIT [CREIT 2.83, up 0.3%; 345% avgVol] [link] and MREIT [MREIT 12.96, up 0.1%; 96% avgVol] [link] declared their Q1 dividends on Monday, while Filinvest REIT [FILRT 2.93, down 2.0%; 47% avgVol] [link] declared its Q1 dividend on Friday. For CREIT, the dividend will be P0.049/share (stable), payable on July 9, representing 101% of CREIT’s Q1 distributable income (DI). For MREIT, the dividend will be P0.246 (stable), payable on June 14, representing 93% of MREIT’s DI. For FILRT, the dividend will be P0.062/share (falling), payable on June 7, representing 99.9% of FILRT’s DI for the quarter.
MB bottom-line: The name of the REIT game is stability. While REITs cannot help what happens in the macroeconomic world with interest rates (all REITs got smacked when rates rose to fight inflation ), what separates a good REIT from a bad one (in my opinion) is the management team’s ability to effectively worry about everything else to protect the income stream from loss. Bonus points should be awarded to teams who grow their dividend over time. Between these three companies, both CREIT and MREIT have shown the ability to deliver a stable dividend. CREIT has even managed to grow its dividend by 11%. That leaves FILRT, which has continued to deliver giant turd after giant turd to its bagholders in the form of smaller and smaller dividends. FIRLT’s first three quarterly divs were at the P0.112/share level, and their most recent div was just P0.062. That’s a 44.6% drop. I don’t have a thesaurus within reach capable of accurately describing to you just how bad that is for a REIT. It’s not like the company suffered some major trauma that nearly halved the dividend; the div level has fallen four times over the past twelve quarters and in each of the last three.
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Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.