What to do about a fully priced property trust sector

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Question: You recently answered a question regarding the NAB capital raising. Is there anything we specifically need to know if we are looking to offload our exposure? That is, excluding market fluctuations, is there any benefit to selling before the issuance of new shares and therefore avoid the dilution of new shares at the discounted price?

Answer (By Paul Rickard): No, in a pricing sense, the dilution occurs immediately – the market fully factors it in (this is why NAB shares today are trading at a discount to their pre rights price, approx. $33.34 versus $35.50).

Now that trading in the NAB rights has ceased (which provides some downward pressure), I think you might see NAB’s share price improve in a relative sense.

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