I was actually a fan of the old Boustead REIT. It's sad that they made the stock private to facilitate the new Boustead Plantation IPO. Although I wouldn't necessarily recommend the IPO as I have yet to do solid research, Plantation REITs sound like solid investments.
Palm oil plantations' stock prices dependent on the price of palm oil, a commodity notorious for price volatility depending on agricultural prices caused by external factors.
Palm oil companies have been through the hard and good times. They know how important it is to keep capital on the balance sheet and thus out of investor's pockets. But sometimes, capital on the balance sheet leads to pressure to be fool hardy and double down on their investment, such as buy more land for palm oil plantations, than to concentrate on shareholder returns and efficiency.
The structure of REITs for plantations actually makes a Plantation CEO's task much easier, to return as much money to the shareholder as possible. And if the price is good, to sell the REIT to a high bidder.
Palm oil plantations' stock prices dependent on the price of palm oil, a commodity notorious for price volatility depending on agricultural prices caused by external factors.
Palm oil companies have been through the hard and good times. They know how important it is to keep capital on the balance sheet and thus out of investor's pockets. But sometimes, capital on the balance sheet leads to pressure to be fool hardy and double down on their investment, such as buy more land for palm oil plantations, than to concentrate on shareholder returns and efficiency.
The structure of REITs for plantations actually makes a Plantation CEO's task much easier, to return as much money to the shareholder as possible. And if the price is good, to sell the REIT to a high bidder.
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