AIMS AMP Capital Industrial REIT, First REIT, Golden Agriculture, CapitaMalls Asia and Sabana REIT.

AIMS AMP Capital Industrial REIT: For some time now, I keep saying that this REIT is undervalued. A reader sent me a little snippet from Kim Eng and I would like to share it here with everyone:

One of few undervalued players around. AA-REIT is still trading at a 20% discount to book even after a steep $41m write‐down in the value of its investment properties in FY Mar10. The capital values of industrial properties in Singapore have since recovered from the global financial crisis. AA-REIT’s gearing ratio is comfortable at 35%, with no near‐term refinancing need. Any further write‐down is unlikely. That AA-REIT is still trading at a discount to its peers is likely due to its relatively small market capitalisation and turbulent history in 2009 which saw AMP Capital Investors and AIMS Financial Group emerging as Manager after a major equity cash call and asset injection.

Near‐term catalyst. Asset enhancement opportunities abound for AA-REIT as at least half of its 26 properties have plot ratios that are under-utilised. Capital recycling exercise is ongoing and the potential sale of its single asset in Japan could be a near‐term catalyst.

Technically, we could see the unit price of this REIT trading sideways for a few more weeks with support at 21.5c and resistance at 22.5c. It seems that a symmetrical triangle is forming and it would not surprise me if its unit price trades higher in 1Q2011. I bought more recently at 21.5c and I am in the queue to buy more.

First REIT: I bought some First REIT units at 69c today. This gives me a yield of 9.28% based on the annualised DPU of 6.4c for 2011.  The next support level is at 67c which is where we find the rising 200dMA. Going by the trading volume in the last two sessions as long black candles were formed, we could see 67c tested in the next session. I have entered my buy queue. Why am I so bold? Fundamentally, this is a REIT with a strong track record. Technically, buying at supports in an uptrend is the way to go.

Many could be holding off their purchases in spite of the attractive yield at current price levels. If my guess is correct, they are probably conserving their resources to apply for as many excess rights as possible. Why buy at 68.5c if we could get excess rights at 50c? They should remember, however, that how many excess rights we are likely to get depends probably on how many mother shares we hold in the first instance. Those who fail to get the excess rights they want could cause a strong bounce upwards for First REIT's unit price once the rights exercise is completed.

Golden Agriculture: Its price continues to defy gravity as it rose on low volume to break the previous high of 78.5c to close at 79c. Volume is the fuel which drives a rally. I question the sustainability of the recent levitation act. Of course, Mr. Market is always right and I could be proven wrong this time round and if it does happen, it won't be the first time.

Immediate support in case of a pull back is at 74c and I see strong support at 70c. The MACD has formed a lower low and it remains to be seen if it would form a lower high. The negative divergence between rising price and falling volume is still valid. However, the rising MFI and RSI show that momentum is positive and support is strong. Any pull back is probably a good opportunity to accumulate.

CapitaMalls Asia: Price closed lower at $1.92 on higher volume. All technicals point to a high probability of price moving even lower in the near future. Any rebound, however unlikely, would be a chance to reduce exposure. For shortists, rebounds could be salivating opportunities for them to make some money here.

Closing at $1.92 is at support provided by the 138.2% Fibo.  38.2%, being one of the 3 golden ratios, is quite strong and if it breaks, the other 2 golden ratios are 50% and 61.8%.  The 150% Fibo and 161.8% Fibo lines are at $1.88 and $1.85 respectively. If the selling pressure keeps up, we could see prices go to those levels. Then, I would be sorely tempted.

Sabana REIT: Closing at 93.5c is exactly where I mentioned that 138.2% Fibo line would be providing support. Selling pressure is not letting up although volume has reduced on this down day. It recorded the second lowest daily volume since the REIT started trading.  This should be a relief for unit holders.

Could it really test the 150% Fibo line at 92.5c? Your guess is as good as mine but that is where I have entered my BUY queue. Wish me luck.

Related posts:
AIMS AMP Capital Industrial REIT, Golden Agriculture, Sabana REIT.
First REIT
CapitaMalls Asia