Atrium REIT (Real Estate Investment Trust) is issuing 2 units of shares for every 5 units of shares held by shareholders at a price of RM 1.02. This is normally done to raise cash for paying debts or doing more investment. The downside is it will dilute existing shareholding, kind of like printing money but if done right (eg investing properly and good debts), in the long run it can be beneficial to shareholders.
The rights issue can be subscribe via online as the share registrar company is Tricor which has in recent years allows all such activities to be done via their online portal TIIH Online.
Payment can be done using FPX payment from any local bank in Malaysia.
The effects of the rights issue has clearly some impact towards the share price of Atrium REIT as rights issues will dilute the existing shareholding unit holders. The share price of Atrium REIT has dropped from RM1.20 - RM1.05.
My 2cent opinion is to subscribe to it as interest rates expected to be lowered by Bank Negara before year end to stimulate economy. Lower interest rates will typically profit REIT companies. The other argument is to buy at open market since the price difference only 0.01 - 0.02 cents, but I feel that rarely people have the discipline to top up so this rights issues is kind of like a forced savings system.
