Previously, I had written an article on Business Trusts in Singapore : Business Trust – Boon or Bane.
The performance of most of the Business Trusts had certainly been laughable. The worst culprit has been Indiabulls Property Trust, which has lost more than 80% in around four years.
The Business Times recently published a couple of articles which called for regulatory changes on Business Trusts as well.
Time to Tighten Rules for Business Trusts? Teh Hooi Ling, 21 November 2012
Caveat Emptor Should Embody Moral Limits 23 November 2012
The second article is an interesting read on why the caveat emptor (buyer’s beware) principle that we adopt in Singapore is not sufficient.
Since my previous article, I have decided that Business Trusts is an instrument that I will try to avoid. This is especially so for those trusts that pay very high dividends despite a low operating income.