Happy New Year Paul,
APA Group (APA): The share price fell when bond yields moved back up. That would be the prime cause of the weakness. We remain keen on APA for defensive income even though we are down 11% on our position in the Income Portfolio.
Lynas (LYC): Rare Earth prices have been hit, much like Lithium. LYC temporarily stopped production at their Malaysian facility and China remains weak, which is important for rare-earths. We took a loss on LYC in November in our Emerging Companies Portfolio.
Stockland (SGP): They agreed to buy a portfolio of assets from Lendlease (LLC) worth around $1bn in partnership with Supalei, the transaction is set to close in stages through FY24/25 with the full economic benefit expected in FY25, and they say it will be earnings accretive. As you say though, the 1H dividend (8c) was underwhelming and looking forward, we think the yield here will be lower, something sub 5% given their gearing is approaching 30% by FY25 based on this acquisition. One thing that could change that would be asset sales which would take some of the pressure off. Ultimately, we like SGP’s strategy, buying straw hats in winter, leveraging up for a population driven rebound in property prices.
