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K-Green Trust: Weak technicals.

Tuesday, October 26, 2010

In my first blog post on K-Green Trust on 3 July, I mentioned that "I would be quite happy to collect some units at $1.00 which would give a yield of 7.82% to begin with." With its price in decline lately, could I get my wish?

On 22 August, I said that "a near term support seems to have formed at $1.10" and "I would buy some at the current price of $1.11 instead of waiting as per my original plan". I also said "With an estimated yearly DPU of 7.82c, buying at $1.11 would give a yield of 7.05%."


Well, as things turned out, K-Green Trust's support was at $1.09 and this broke on 21 Oct. Today, price closed at $1.06, a natural candlestick support level. This could break and a stronger support would be at $1.04. Could we see $1.00 eventually, the buy price I thought of in my maiden post on the trust?

With the lower highs on the MFI and RSI plus the MACD plunging in negative territory, we could see price going lower in the near future. Look at the OBV and we see ongoing distribution. All technicals point to a higher probability of price going lower.

Related posts:
K-Green Trust: A stable source of passive income.
K-Green Trust: Possibly stabilised.

16 comments:

Drizzt said...

oh this is sad. sitting on a loss here. now thinking whether to accumulate at 1 buck.

AK71 said...

Hi Drizzt,

If it were to test $1.00, I would buy. My wish might come true. ;)

Drizzt said...

its not that far off really. but wonder if its worth it.

AK71 said...

Hi Drizzt,

Well, for me, it is actually quite easy because that was the price I thought of as a nice entry. So, I would buy some regardless. :)

limbeh said...

Hi AK71,

I have been reading your blog for a while and this is the first time I am posting. I am also monitoring this counter and I am targeting to buy some at $1.02. Apart from this, I am also looking at CapitaMall. Will like to hear your review on this counter if you have the time.

Thanks! :)

AK71 said...

Hi limbeh,

K-Green Trust at $1.02 would be quite attractive. :)

CapitaMall Trust? As I am investing for income, at almost $2 per unit, I am not excited by its DPU of 2.36c for 3Q2010. That's an annualised DPU of slightly more than 10c or a yield of only 5%. I need my money to work harder than that. ;)

JW said...

I entered my 3rd batch of KGT at 1.06, bringing my average down to 1.11

4th batch ready, not loaded.

AK71 said...

Hi JW,

Your average price is now the same as my price. Congrats. :)

I am still waiting to see if Mr. Market would humour me and let me buy some at $1.00. ;p

Drizzt said...

JW and AK71, check the comments on my blog. fruit for thoughts.

http://www.investmentmoats.com/money-management/reit/k-green-trust-weak-technicals-to-accumulate/

Drizzt
Investment Moats.com

AK71 said...

Hi Drizzt,

Food for thought indeed.
Thanks for sharing the link. :)

K-Green Trust has 3 assets:

1. Senoko Waste-to-Energy Plant
(Concession period: 15 years from 1 Sep 09)

2. Keppel Seghers Tuas Waste-to-Energy Plant
(Concession period: 25 years from 30 Oct 09)

3. Keppel Seghers Ulu Pandan NEWater Plant
(Concession period: 20 years from 28 March 07)

Not all of the concessions are 15 years in tenure. Furthermore, with zero gearing, chances of the Trust making DPU accretive acquisitions are good. Still early days. ;)

Drizzt said...

essentially currently its like them giving back our money.

Anonymous said...

Hi AK,

When you say "I also do not have to worry about rights issue from KGT. So, it is perfect for SRS money." do you mean they won't be offering any rights? I am thinking of using my CPFIS to invest in KGT.

AK71 said...

Hi Drizzt,

Yup, we are taking back some of our own money (i.e. a return of capital). So, the true yield is not 7%.

However, if we work it out, I dare say the effective yield is still higher than what I would get from leaving my money in the SRS account. Perhaps, I should spend some time to crunch the numbers. ;)

AK71 said...

Hi Anonymous,

With gearing at zero, it does not seem likely that KGT would have to issue rights unless it is going after a very large acquisition. One never knows for sure. ;)

Could you leave your name or initials in future comments? Thanks.

eemin.the.ifa said...

Hi AK71, thanks for your note at my blog on CitySpring. Kind of overlook K-Green. Nice w/o debt.

Did my own TA and attach link for ref. https://docs.google.com/leaf?id=0Bw2JSx88xnkiOTA3YzA0NjktYzIyNy00NTU4LWI0MzUtYjU1MmYxMjg4MWI3&hl=en&authkey=CLTllOMP
If familiar w Dow theory, the 2nd divergence should mark end of current down channel. Looks primed for nice gains in 2011, esp since price action gaining past fibo fan :)

AK71 said...

Hi Ee Min,

K-Green Trust does seem to have found a floor. Using the Fibo fan seems to verify this.

Thanks for sharing the chart. :)

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