What an absolute nightmare it is for investors. The disastrous collapse of Asian Pay TV Trust unit price is something that I have never seen for a business trust. Since its IPO in 2013, the performance of APTT unit price is nothing short of shambolic. From IPO price of $0.97, APTT unit price suffered an incredible meltdown within six years as the unit price slumped to the current abysmal level of $0.13. In fact, investors never had a good sleep with this counter as APTT unit price never exceed the IPO price level after its much-hyped listing.
Of course, die-hard fans of Asian Pay TV Trust would argue that this trust is one of the best yield counters in Singapore Exchange. In fact, over 43 cents per unit in distributions had been declared since IPO (including Q3 2018 distribution). But given the explosive free-fall of APTT unit price, long-term investors would still lose their pants even if all the distributions have been factored in.
Obviously, there are plenty of hard lessons to be learned for long-term investors and it is important that this group of people wise-up or else it would be like throwing good money after bad. How well does investors know about the Taiwanese Pay TV market? What are the competitive advantages of APTT? Has the management mitigated the significant downside risks? In this article, I will share my insights on what went so terribly wrong for APTT.
Asian Pay TV Trust and Temasek Holdings
For sure, the train-wreck of Asian Pay TV Trust unit price have caused much misery for long-term investors. But in life, there is no such thing as good or bad stocks. I have mentioned many times in this blog that whether you can make money from stock market depends a lot on your strategies. Don’t invest in stocks because of their promised yields or worse still, follow the big boys blindly without understanding the underlying business fundamentals.
Many Singaporean investors may have bought into Asian Pay TV Trust because Temasek Holdings is an early investor. The current shareholding of Temasek Holdings in APTT is 7.93%. Then again, as an institutional investor, it is unlikely that Temasek Holdings entered at the IPO price because they would expect some safety margin for their investments. So if you bought into this counter because of the backing from Temasek Holdings, then you might be in for a wild ride as the big boys make money at the point of buying, not at the point of selling. On the flip side, retail investors often try to make money at the point of selling, and not at the point of buying. Between the two, who do you think will be the ultimate winner?
Interestingly, it appears to me that Temasek Holdings had [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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