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Saizen REIT, First REIT, Golden Agriculture and Genting SP.

Friday, November 12, 2010

Markets in Asia seemed to have taken the lead from the dismal performance of Wall Street and the STI was no exception as it retreated 1.3%.


STI drops 1.3% to 3,252 at closing
Friday, 12 November 2010

So, is this the beginning of the end? I actually find it re-assuring that such a question was making its rounds amongst local investors. It shows that the memory of the last crash is still fresh in the minds of many. Many are actually holding cash and waiting for the next big crash before moving in to cherry pick beaten down stocks.

The market could be perverse and the more we expect something to happen, the more unlikely it becomes. So, people waiting by the sides with chestfuls of cash could be disappointed.

Indeed, there is massive amount of liquidity in the market if the amazing over-subscriptions of GLP and MIT were anything to go by. Money is going where it is treated best. It is not going to be treated best in US Treasuries, for sure. The investments to be in are Asian assets. Asian countries with strong economies and currencies are the ideal investment destinations.

So, unless we have evidence to the contrary, I would say: Do not fear the selldown!  What are we to do then?  Invest in Asian equities (and inflation is here to stay)!

Personally, my portfolio which is primarily investing for income hardly budged in today's selldown. No roller coaster ride for my weak heart. Just dividend collection on a regular basis for me.

With regards to Saizen REIT, a reader sent me an email asking: "Was it your article in your blog that attracts sudden interest in this stock?  The volume is more than ordinary. I wonder." I doubt that my blog has such influence.  Anyway, there were some sessions in the past in which volume was much higher but the interesting thing about today was the number of trades with large buy ups at 16c. There was a total of 14 transactions with a total of 5,419 lots changing hands, of which 12 transactions were at 16c and 5,204 lots were bought up at 16c. 2 transactions were for 1,000 lots each and 1 transaction was for 2,000 lots. Has Saizen REIT caught the attention of some heavy weight investors? Your guess is as good as mine.
See my last blog post on Saizen REIT here.

I have been waiting the whole day for someone to sell me some First REIT units at 95c but to no avail. Some people are puzzled why am I so interested in getting some at 95c when I am already vested at 40+c and 70+c. Well, with the proposed acquisitions and rights issue, buying more even at 96c could be quite rewarding. With an average price of 70c, post rights, if we were able to buy at 95c now, a yield of 9.1% is not impossible with an estimated full year DPU of 6.4c in 2011. As the XR date is 1 Dec which is almost 3 weeks away, I will continue to wait patiently at 95c. Wish me luck.
Read announcement from First REIT here.
Read my last blog post on First REIT here.

Golden Agriculture suffered a downgrade by OCBC and broke its immediate support at 75c, closing at 73c. Just yesterday, I mentioned that "Although Golden Agriculture reported commendable results today with a 41% year on year increase in net profit to US$99 million (S$127 million) for the third quarter ending 30 Sep (3Q2010), the attempt by price to go higher was half hearted as it touched a high of 78.5c before closing at 76c. The very long upper wick on this short bodied white candle hints of strong selling pressure. Volume is relatively low and the negative divergence between price and volume is still all too visible." We could see 70c support tested sooner than later.
Read my last blog post on Golden Agriculture here.



The counter on my watchlist that suffered the greatest decline in percentage terms is Genting SP, declining 15c or 6.6% to close at $2.13 after touching a low of $2.07. The question on the minds of anxious investors is whether it would go lower?


The price gapped down to start the day at $2.10 but formed a white spinning top after testing the 50dMA at $2.07 which was the low of the day. A spinning top suggests indecision which is a good thing for bulls on a day with massive selling pressure. If the price starts at $2.18 or higher in the next session and manages to break resistance at $2.21 which is the 50% Fibo line as well as the 20dMA, we could have a recovery. Having said this, the MACD has been moving lower as price moved higher, presenting an obvious picture of negative divergence. I would treat any rebound as a chance to reduce exposure.

8 comments:

Junjie1983 said...

Hi AK,
something i like to ask u...how do we acutally use fibo line?what is the intention of using 1?i am not very good with it...can give mi some guidance? :)
thanks ;)

AK71 said...

Hi Junjie1983,

Fibo lines are used to help identify supports and resistance. Connecting 2 extremes in price, we could see the different supports and resistance.

The choice of the 2 extremes would give us different results. The longer term choices would show us stronger supports and resistance.

So, for example the choice of a High in month 1 and a Low in month 12 would show theoretically stronger supports and resistance than the choice of a High in month 1 and a Low in month 3.

Sometimes, I would use 2 or even 3 sets of Fibo lines to identify really strong supports and resistance.

In my next post, you will see me using 2 sets of Fibo lines. ;)

Junjie1983 said...

that it is...so those 50...61.8%...etc...they are showing various support/resistance right?
let's say i use a 1 mth fibo compared to 3 mths..i got a rather close support..say 40cents,that will be a very strong one...say for over quite a extended period of trading?

Thanks a lot for the info.and the guidance...anyway i had always been your loyal blog reader....haha!

nice investment portfolio u have...more stable income type...i shall put a portion of my investment in these type too ;)
haha!anyway i am still very "green" =(

AK71 said...

Hi Junjie1983,

You got it. Those percentages show the supports and resistance and if you use more than one set of Fibo lines, you could identify which are the stronger supports and resistance by looking for overlaps. However, you have to remember that they are only stronger and not unbreakable. TA is always about probabilities. ;)

I am glad you like my blog. Help spread the word and tell your friends about my blog. The more participation we have, the more vibrant the community.

We learn together. :)

Junjie1983 said...

yeah,seems like u placed a lot of effort in writing the blog well..haha..cheers for u! =)

Currently i am looking at GMG global..seems good with its financial result and the 30 years high rubber price(although a slight pullback due to recent china's tightening concerns ;( )!haha...hope it rebounces ;) waiting for a good price to in.... mayb 315 or 320....hmmmzzz...any suggestions/comments on that?

AK71 said...

Hi Junjie1983,

I have not looked at GMG Global before although I have heard it discussed a few times. It seems that people are generally positive about it.

I am not going to comment on it because commenting on specific counters demand that I have done some analysis on them.

Having said this, waiting for a pull back before loading up in this environment does seem like the prudent thing to do. :)

Junjie1983 said...

yeah.totally agree...shall b waiting for a good pullback...hopefully around 295...haha!anyway nice conversing with u! ;)

AK71 said...

Hi Junjie1983,

I enjoyed the exchange too. Good luck and I hope to hear from you again soon. :)

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