Investment Opportunity For MS B Samples †MyAssignmenthelp.com

Question: Discuss about the Investment Opportunity For MS B. Answer: Introduction: The study aims in identifying the relevant investment opportunity for MS B, which could help in improving relevant returns from investment. In addition, the recommendations are based on relevant returns, which could be provided from investment. Furthermore, different equity stock, REIT and property investment options are evaluated for MS B, as adequate portfolio could be designed for her investment purpose. The performance of property market has instigated the investment requirement, which holds investment instruments related to property sector. Identifying the investment opportunities presented to MS. B: Investment amount SGD 5,000,000 Particulars Per sqft Price per sqft Amount Expected rent Residential Condominium 1,200 SGD 2,800 SGD 3,360,000 SGD 7,000 SGD 9,500 Commercial Office 1,200 SGD 2,800 SGD 3,360,000 SGD 7,000 SGD 9,500 The above table mainly helps in identifying the investment option in property and real estate, which could improve return generation capacity of the portfolio. Both investment has the same kind of investment and returns. However, the investment type of both the property is relatively different (Baum Crosby, 2014). The demand for residential and Commercial property has exponentially grown in Singapore, due to which the return could be high. Hence, accommodation of the shares in portfolio could help in improving the return generating capacity of MS B. Particulars Current share price Net Book Value PB Dividend yield (%) Avg Traded Volume CWL 12.8 9.8 1.31 1.50% 20mn JIL 1.8 2.15 0.84 3.50% 1mn F-REIT 2.9 3.2 0.91 4.50% 2.2mn P-REIT 1.5 1.3 1.15 6.75% 22mn The above table mainly depicts the overall returns and current share price of proport stocks and REIT, which could be used in identifying the most viable investment option for formulating the portfolio. The entire enlisted shares have been taken into consideration, which could improve relevant return generating capacity of MS B. The evaluation of Price to book ratio is conducted to identify the most viable investment opportunity, which could be listed in the portfolio (Newell, Pham Ooi, 2015). Recommendation provided to MS. B: Investment Per sqft Price per sqft Amount Return Residential Condominium 1200 2800 SGD 3,360,000 SGD 99,000 Commercial Office 1200 2800 SGD 3,360,000 SGD 99,000 Mortgage payment SGD (84,000) Return 1.70% SGD 114,000 Investment Current share price Number of Shares Amount Return JIL 1.8 266,665 SGD 479,997 SGD 16,800 F-REIT 2.9 400,001 SGD 1,160,003 SGD 52,200 Total Investment SGD 5,000,000 SGD 183,000 Particular Value Amount Return from investment 3.66% SGD 183,000 (-) Inflation rate 3.00% Actual return from investment 0.03% SGD 33,000.03 The above calculated portfolio depicts the overall return that could be generated from investment, which might help in identifying investment viability. In addition, the overall return after adjusting the inflation rate is mainly at 0.03%, which indicates the profitability that is generated from investment of 5 million SGD. The portfolio mainly utilises mortgage system, which helps in accommodating the asset investment and utilises the full investment value. The investment capital is mainly used for investing in shares and REIT, which could help in generating higher returns from investment. Therefore, combining the shares of JIL, F-REIT of and property investment in the portfolio, which might allow MS B to tap into the returns provided by the rising property market. In this context, Deng Wu (2014) mentioned that creation of adequate portfolio could eventually allow investors in generating higher rate of return from investment, which could increase the level of profits from investmen t. The investments in Crystal World Ltd and P- REIT could be identified by MS B, as the price to book ratio of the investment was relatively higher than 1. This indicates that share price of the company is relatively overvalued and is expected to decline in near future. In addition, both price of the investment is near 52 weeks high, where it could be assumed that investment scope in the security has dried out. This could not allow the investors in improv their wealth, which in turn could hamper relevant profits from investment. Ho Rengarajan (2017) stated that investors mainly choose stock, which are undervalued by investors, as they increase investment capital and provide high returns from investment. The overall investment in JIT and F-REIT needs to be conducted by MS B, as it provides an investment opportunity, as the price to book ratio is relevantly undervalued. This indicates that share price of the company is undervalued and could increase in near future. In addition, the dividends provided by both the investment is relatively high, which could help in generating higher income from investment. The total dividend return that is provided from the investment is relatively at the levels of SGD 69,000. Moreover, JIT and F-REIT mainly has high level of inclination to provide relevant dividends, which could increase return from investment (Nanda Rhodes-Kropf, 2013). Lastly, the investment in Residential Condominium and Commercial Office can be conducted by MS B with the help of mortgage system. The use of mortgage could eventually help in utilising both the property investment, which might help in generating higher rate of return from investment (Reddy, Higgins Wakefield, 2014). The investment in real estate is mainly estimated to provide a return of 1.70% on yearly basis after paying all the mortgage payments. Therefore, Ms B with the help of above drafted portfolio could generate adequate return and tap into the trend of real estate, which is currently flourishing in Singapore. However, the return that is provided from the investment is relatively higher than the inflation rate, which could help in raising relevant value to of the portfolio. Conclusion: The overall portfolio depicted in the above assignment could mainly allow MS B to generate relevant returns from investment in Real-Estate of Singapore. The portfolio created for MS B could eventually help in identifying financial viability of the investment, which could in turn generate higher return from investment. The portfolio is mainly estimated to provide a return of 0.03%, which amount to SGD 33,000.03. The combination of REIT, shares and property could eventually help in generating the required level of return from investment. Ignoring stocks and REIT with higher Price to earnings ratio could eventually help in improving the sophistication level of the created portfolio in generating higher returns from investment. References Baum, A. E., Crosby, N. (2014).Property investment appraisal. John Wiley Sons. Deng, Y., Wu, J. (2014). Economic returns to residential green building investment: The developers' perspective.Regional Science and Urban Economics,47, 35-44. Downs, D. H., Ooi, J. T., Wong, W. C., Ong, S. E. (2016). Related party transactions and firm value: evidence from property markets in Hong Kong, Malaysia and Singapore.The Journal of Real Estate Finance and Economics,52(4), 408-427. Ho, K. H. D., Rengarajan, S. (2017). Industrial Real Estate Market Dynamics in Singapore: A VAR Approach.International Real Estate Review,20(4), 417-450. Kim, H. M., OConnor, K. B., Han, S. S. (2015). The spatial characteristics of Global Property Investment in Seoul: A case study of the office market.Progress in Planning,97, 1-42. Nanda, R., Rhodes-Kropf, M. (2013). Investment cycles and startup innovation.Journal of Financial Economics,110(2), 403-418. Newell, G., Pham, A. K., Ooi, J. (2015). The significance and performance of Singapore REITs in a mixed-asset portfolio.Journal of Property Investment Finance,33(1), 45-65. Reddy, W., Higgins, D., Wakefield, R. (2014). An investigation of property-related decision practice of Australian fund managers.Journal of Property Investment Finance,32(3), 282-305.