As an illustrative example, since Jan 1, 2022, ESR-REIT has traded in the range of 24.5 cents to 48.5 cents. Using a rounded unit trading price of 26 cents within the range mentioned above, the mandated Singapore Exchange (SGX:S68
) (SGX) bid-ask spread of 0.5 cents for counters below $1/unit will result in a 1.9% change in unit trading price.
The manager of ESR-REIT has announced a proposed unit consolidation of 10 existing units to one unit, held by unitholders of ESR-REIT.
The rationale for the proposed unit consolidation is to reduce the magnitude of fluctuation in ESR-REIT’s unit trading price and reduce excessive volatility in its market capitalization, and allow for unit price movements that are more consistent with general market movements in terms of percentage changes.
