Harsh,Reasons are specific to me
- For my tax, surcharge bracket, the post tax yield of less than 7%, does not provide factor of safety. You can argue, where else I can get this…but I want the yield, without loss of capital as well and more on this, in the point below.
- I feel that the new range for price (between the DPU announcement period, to ex-record sell off lows has shifted from 325-305 in the past to 305-290 now and if there is any more bad news, like a tenant vacating somewhere, it may even reach 270s). I have seen that the price swings happen with very little volume and within the same day, the drop is as much as 6-10 Rs. By the same token, the price also increases with little volume of buys (example, a 10k purchase, can move this by 5 Rs in 5 mins) but it is unable to sustain this.
Take the behavior last few days. We have the DPU announcement done and there is still time to acquire before the record date (to get the DPU) but from the peaks of past 325, it is struggling to cross the peak of 310 and easily goes back to 302, in the same day…so, I am a big believer in yield, without even a hypothetical paper loss in capital and that assurance feel is not there in Embassy for me. (Mind you, invits like PG Invit have fallen into the same rut…even the indefatigable Indigrid, with all their acquisition plans and credible management, is in the same rut).
So, I plan to buy only at safe price, where the capital loss won’t be there, even in paper. Will this notional loss go away, when the interest rate regime goes away and the glory days be back? maybe yes but that is a quarter or 2 away and in the meanwhile, we may have a revisit of 270-290 range again !! and that is my fear that forced me to take, what I can.
If the market turns around, this is not going to on steroids…given attractive opportunities elsewhere, I made a choice.
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