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Golden Agriculture: An inverted cross.

Friday, May 14, 2010

A doji that looks like an inverted cross. Not good.  Well, it's not because it invites the devil in but it suggests that price tried to push higher but ended up in failure at the end of the day.



Fundamentally, CPO price declined again today and, thus, continues the downtrend. This is probably one reason why Golden Agriculture's share price is lacklustre.

MFI has formed a slightly higher high. It remains to be seen if it would form a higher low. MACD and OBV are both flat. Volume is much lower.  All these suggest a lack of interest from market participants.  If this continues, chances are greater that the price would drift slowly lower.

55.5c remains the resistance level to watch for now. This was the price at which I divested some of my remaining investment in the company recently on 10 May, observing that the uptrend has been compromised.

SPH: Another black candle day.

After doing a partial divestment of my investment in this company at $3.95 on 10 May, the price has been closing lower. This is the 4th black candle day in a row. I was hoping that price would move higher to test the next higher resistance so that I could divest more of my investment. No such luck.



MACD is moving deeper into negative territory. MFI formed a lower high on 10 May and has continued declining since, suggesting declining positive buying momentum. OBV is more or less flat.

On a positive note, the volume has been rather low in the last four sessions which means an absence of heavy selling.  If price does move higher towards the declining 20dMA at $4.00, I would very likely sell more.  If it moves to retest the recent low, I would wait to see if a higher or lower low is formed before deciding on a course of action.

CapitaMalls Asia: Another up day.

CapitaMalls Asia staged another up day on similar volume as the prior session.  I queued overnight to reduce exposure further at $2.12, not confident that this level would be taken out.  I also queued to sell at $2.17, two bids below the next resistance which was identified at $2.19, if $2.12 should be taken out.  Of course, both sell orders were done. I have a small position left. 



What will I do next? If the price moves higher to test the higher resistance level at $2.23, I would exit totally. If it does not and shows signs of a slide back downwards, I would also exit totally as it might go on to retest the recent low. The recent increase in price on rather low volumes lacks conviction and does not bode well for long only investors. I would watch out for the counter to form a base, lacking which, it should form a higher low, before I consider going long again.

This is the second counter I have cut loss on this year after China Hongxing.  In a way, it is good to lose some money after a long winning streak as it reminds me that I am human and that I make mistakes too.  Must not become overly confident which might really sink me one day.

I read somewhere that it is normal to give back some of our gains to the market when the trend turns.  The person being interviewed said to give back 25% of our gains is acceptable. Personally, I think that is too much. ;-p

Courage Marine: 1Q 2010 results.

Thursday, May 13, 2010

Courage Marine presented its 1Q 2010 results today with the BDI at an auspicious number, 3,888! A happy coincidence! 

Quarter on quarter, operationally, its revenue improved 12.9% and gross profit margin improved from 19.1% to 27.8%.  Its balance sheet remains very strong as it retains a nett cash position.  Cash flow from operations in 1Q 2010 was US$5.3m.

Technically, Courage Marine's chart looks weak.  However, there is no obvious selling down of the stock.  This is confirmed by the OBV which is flat. MFI is in the oversold region and price is currently below all the daily MAs.  If the price action does not recapture supports, the malaise could continue and price could drift lower.




I have a list of companies and REITs which I would like to buy on any near term weakness in the next few months. Courage Marine is one of them.

Read press release here.

Related post:
Courage Marine: Riding the waves of recovery.

Charts in brief: 13 May 10.

CapitaMalls Asia:  MFI continues to rise from the oversold region.  MACD turned up towards the signal line. OBV has turned up. Things are looking up, it seems.  Then, we see the white candle with a long wick on top.  This is a weak white candle. Volume has expanded but not significantly so on an up day.


$2.12 remains a strong resistance as market participants remember this as the support that failed not so long ago on 4 May.  The descending 20dMA is, coincidentally, at $2.12 as well which adds to the downward pressure. 

I queued overnight to reduce exposure at 2 bids below resistance at $2.10, cutting losses in the process.  I am not confident that $2.12 could be taken out but if it does get taken out, the next resistance is at $2.19, the bottom of the base formation earlier in February.

Golden Agriculture: CPO's price declined again today, continuing its downtrend. For Golden Agriculture, it is quite obvious that 55.5c continues to be a formidable resistance. That the decline has halted is evident as the MACD has flattened. The OBV has flattened too.  Price seems to be moving sideways within a range for now. 53c to 55.5c is my observation.  The near term downtrend is still intact.







Related post:
Charts in brief: 12 May 10.

LMIR: 1Q 2010 results.

Wednesday, May 12, 2010


For me, the important numbers are the following:

1. LMIR is trading at a huge 43% discount to NAV 84c.
2. Gearing is very low at 10%.
3. Annualised yield is 10% at the unit price of 48c.

Despite the very strong fundamentals, LMIR's unit price has been languishing.

Technically weak, it has closed below the 200dMA support today after forming lower highs since the start of the year. The next support is at 47c. If this breaks, price could fall to as low as 44c, I reckon.



MFI has been forming lower highs, suggesting a lack of positive buying momentum, making a further weakening in price for this REIT probable. So? I would definitely accumulate on weakness if it does come to that. 44c would be a bargain!

See presentation slides here.

Related post:
LMIR: More units at 10% yield.

AIMS AMP Capital Industrial REIT: Results.

A nice set of numbers and within expectations.  A dpu of 0.5376c will be paid out on 28 June. Annualised dpu of 2.1504c or an annualised yield of 10% based on a unit price of 21.5c.  Low gearing of 28.9% and a NAV of 31c make this REIT a very attractive proposition for anyone seeking reliable high yields as a source of passive income.



Technically, there seems to be some underlying support for this REIT.  MFI and OBV are both uptrending, although choppy. The MAs are uptrending too. 23c remains the resistance to watch and support has been established at 20.5c.  I would very much like to accumulate more units of this REIT.

See presentation slides here.

Related post:
High Yield Portfolio.

Charts in brief: 12 May 10.

Courage Marine: BDI is up 3.1% at 3,822 today. Looking good for dry bulk shipping. Very low volume today with price at 19.5c. MFI remains in the oversold region. OBV is flat. Investors are not taking up big positions either way. Waiting for the quarterly results? Maybe.



CapitaMalls Asia: Price is detaching from the lower limits of the Bollinger bands. Although momentum has turned up, the volume is low. Let us see if immediate resistance could be taken out and if $2.12 would be tested. I would definitely reduce exposure then.



SPH: The technical weakness is obvious. Volume has been declining as price rebounded from a low of $3.76 four sessions ago. MFI has been forming lower highs. I would wait to accumulate on further weakness.  If price falls closer to $3.70, I would be tempted.



Related post:
Charts in brief: 11 May 10.

Golden Agriculture: Net profit rose 932%.

Chu Yeow commented during lunchtime that Golden Agriculture "turned in quite a good quarter". It was an understatement, I found out. The impressive set of numbers resulted in a white candle day for the counter. What we have looks like a bullish harami and, if valid, will see 55.5c resistance taken out.  The technicals do suggest that the rate of descent has slowed. If 55.5c is taken out, the next resistance level would be 58c.




"Golden Agri-Resources says net profit attributable to shareholders rose 932% to US$89 million ($122.9 million) in the first quarter 2010 (1Q 2010) from US$9 million in (1Q 2009) despite low seasonal production....

".........The planter’s financial position as at end of March 2010 remained at a healthy level with conservative gearing and sufficient cash balance. Total assets maintained at US$7.83 billion while total liabilities were recorded at US$2.21 billion."


Read full article:

 
Related post:
Three portfolios and three counters: Future gains and passive income.

Gold is higher once more.

Gold hits record high in Asian trade
Posted: 12 May 2010 1113 hrs

HONG KONG : Gold opened at a record high of 1,228.00-1,229.00 US dollars an ounce in Hong Kong on Wednesday, as investors sought a safe-haven over deepening concerns about the eurozone debt crisis.

The precious metal closed in Asia on Tuesday at 1,208.00-1,209.00 dollars but later climbed as high as 1,224.82 dollars an ounce in European trade.

Analysts said the commodity was likely to maintain its safe haven role while other markets remained vulnerable.

The previous record for the metal was set on December 3 last year when it reached 1,226.56 dollars.

"The response of the central banks and the IMF to the southern European mess is almost guaranteed to ensure continued volatility in world markets," said Capital Spreads analyst Simon Denham.

Investors had on Monday welcomed the European Union and International Monetary Fund aid package worth 750 billion euros (one trillion dollars) to resolve the debt and budget deficit crisis in Europe.

However, the euphoria faded on Tuesday amid resurgent doubts over countries' ability to reduce their deficits.

Read complete article here.

Gold Surges: Time to Climb on Board or Is the Party Just About Over?
Posted May 12, 2010 03:06pm EDT by Heesun Wee



Related post:
Gold at US$1,210 an ounce.

Saizen REIT: 3Q FY2010 Results.

A good set of numbers overall for Saizen REIT.  The only thorn in its side remains the CMBS for YK Shintoku which it defaulted on late last year.

Key points for me:

1. Saizen REIT's properties are all Freehold and not Leasehold.  So, there is no "depreciation" which some investors might be concerned about.

2. Occupancy rates have been consistently above 90% even through the financial crisis which reinforces the idea that demand is relatively inelastic for Saizen REIT's properties.

3. Average rental rates have stayed consistently above JPY1,500 psm.

4. If YK Shintoku were to suffer foreclosure, the nett effects would be a 22% decrease in nett property income, a 10% reduction in NAV and its gearing level would decline from the current 36.9% to 27.4%. 

A 22% decrease in nett property income would probably mean a similar reduction in dpu from my projection here. Based on the current number of units in issue, the dpu would reduce from 2c to 1.56c giving us a yield of 9.45%.  The NAV would reduce from 39c to 35c approximately.  With the proforma foreclosure gearing at 27.4%, Saizen REIT would emerge unscathed and, in my opinion, stronger in its balance sheets. So, if YK Shintoku goes through a foreclosure, Saizen REIT remains a great investment as it has high yield, a big discount to NAV and low gearing.

The CMBS lenders for YK Shintoku, as expected, are dragging their feet and still "formulating course of action".  Why would they want to go ahead with foreclosure when they are receiving 7.07% interest payment now? They are lenders, not property managers or investors, after all.

YK Shintoku's property income is more than sufficient to cover the punitive interest payment due to the default.  So, it is still more positive than negative to keep the status quo.

Presentation slides here.



SAIZEN REIT:
Out of woods and resuming cash distribution
Written by Sim Kih, Thursday, 13 May 2010.
Read the article in NEXT INSIGHT here.

Related post:
Saizen REIT: March 2010 presentation.

Charts in brief: 11 May 10.

Tuesday, May 11, 2010

STI opened higher but declined to close lower at the end of the day. The huge rallies in Europe and the US did not manage to lift Asian markets today, painting a picture of uncertainty with a bearish bias.




Courage Marine: BDI higher at 3,707 today. MFI has just dipped into oversold region. OBV is flat.  Immediate resistance remains at 20c. Picture of low volume pullback continues. As the fundamentals are good, I would accumulate when the technicals give me the signal.



Golden Agriculture: CPO declined to close at RM2,505. This continues the downtrend. Things look pretty weak, technically. We have an engulfing black candle today which negated the morning star setup. Buy signal on the MACD has been negated as well. The rising 200dMA might be tested as a support soon if the weakness continues.


SPH: Opening at $3.95 only to move and close lower at $3.88 is bearish. What has been formed is a bearish piercing line pattern as the black candle declined to cover more than half of the previous day white candle. $3.95 is now burnt into the psyche of traders as an important resistance level due to the failure to move higher today.


In summary, for most counters, prices did not move higher and, so, I did not get to sell more at higher resistance levels with the exception of Healthway Medical which I managed to sell off most of my remaining shares at resistance.

I will continue to use any rebound to sell into strength, for stocks with weakening technicals.  I will accumulate when the technicals show signs of bottoming, especially for stocks of companies with sound fundamentals. The market is now a riskier place for long only investors like myself.

Dow 8500 Before 11,500:
Sell the Surge, Suttmeier Says
Posted May 10, 2010 09:47am EDT by Aaron Task
 


Related post:
Charts in brief: 10 May 10.

Charts in brief: 10 May 10.

Monday, May 10, 2010

The STI rebounded nicely today. Personally, I am making use of the rebound to reduce exposure. If the rebound continues tomorrow, I would lighten my portfolio further.




Courage Marine: The BDI is in excess of 3,600 today! Good news for Courage Marine as it closed 1c higher at 20c but on very low volume. If Courage Marine is able to close at 21c or higher in the coming sessions, it would negate the bearishness seen in the last couple of weeks. We have a buy signal on the MACD but its reliability is suspect due to the very low trading volume. Wait and see.




Golden Agriculture: CPO at RM2,538 today means it is still in a downtrend which started in early March. Golden Agriculture staged a nice rebound with price piercing resistance provided by the 100dMA at 55.5c to touch a high of 56c before closing at 55c. Volume is also respectable.  We have a morning star set up, a 3 stick reversal pattern. The buy signal on the MACD is more credible in this instance. My overnight sell queue at 55.5c was done.  Let's see if 55.5c could be overcome and the resistance at 58c tested next.  58c, that's where I would queue to sell again.



SPH: MFI bounced off 50% support, forming a higher low. $3.90 resistance successfully taken out as price closed at $3.95. Volume is respectable and the price might go higher tomorrow to test the next resistance level at $4.03 gap resistance which coincides with the 20dMA. SPH remains the largest investment in a blue chip for me and I made use of the rebound today to offload some, locking in some gains. I might offload more tomorrow if its price goes higher.



CapitaMalls Asia: 4r1g buy signal on the MACD. MFI is turning up from the oversold region and the OBV is turning up too. We also have a valid morning star pattern although a weak one with volume very low on this up day.  There are various resistance levels next if the price continues to move up.  I would reduce exposure at these levels: $2.09 gap resistance, $2.12 support turned resistance and $2.15 declining 20dMA resistance.



Healthway Medical: MFI emerged from the oversold region. OBV continues to decline, suggesting that distribution is underway even though the counter has gone CD. I continue to queue at 15.5c to sell at resistance.



Saizen REIT: Quarterly results on 12 May 10, two days from now. Price closed at 16.5c today with technicals turning very positive. First off and a major development: the negative divergence between price and volume has been negated!  MACD is turning up towards the signal line as we see a buy signal. MFI's higher high is a given while the OBV suggests aggressive accumulation. The only negative is the descending 20dMA which seems poised to form a dead cross with the 50dMA.



Before the price could go higher, the descending 100wMA which is at 17c has to be overcome. This is a very long term MA and is likely to be a strong resistance. Let's see.



Good luck to all fellow Saizen REIT unitholders!

US Futures are looking very green now.  Looks good. :)

Related post:
Charts in brief: 7 May 10.

Tea with AK71: A good cat.

I spent an hour or so visiting local blogs on investment and trading just now. I read the latest post in Musicwhiz's blog.  It is titled: "Why traders are important for value investing." It had 22 comments by the time I read it.  I added a diplomatic 23rd comment.

Then, I came back to my blog and found a comment (from an anonymous reader) which likened buying stocks to betting on horses, saying that we want to bet on the fastest horse. This is found in my post: "Replies from AK71: More on REITs".

People will always have opinions about anything and everything under the sun. This is one reason why interaction between people is interesting. It would be terribly boring if everyone were to have the same opinions about everything. However, there will be times when strong feelings are attached to these opinions. To verify this, we just have to see how Musicwhiz's post invited some rather strongly worded comments.

What do I think? Well, I took a leaf from the late Deng Xiaoping's book. He said that it does not matter if the cat is black or white. If it catches the rat, it is a good cat. Deng Xiaoping was a truly visionary leader. China would not be where it is today if not for him.

Chamomile tea, anybody? It's calming, I was told. Have a great week ahead!

Gold at US$1,210 an ounce.

Sunday, May 9, 2010

I started buying gold bullion coins in March/April 2009, believing that it is a hard currency that has intrinsic value unlike fiat currencies which are flawed.  Jim Rogers and Marc Faber have greatly influenced the way I look at current day world economics and I take their views to heart.

When I started this blog last Christmas Eve, one of my first posts was on the subject of gold. The last time I bought some gold bullion coins was in March this year and I gave one to my dad for his birthday and I just gave one to my mom for Mothers' Day. Last year, I gave each member of my family a gold coin as well and the value of those coins have gone up quite a bit by now.

I strongly believe that we need some hard currencies as a hedge against fiat currencies and inflationary pressures. Physical gold is the most accessible precious metal in Singapore at a "fair" price. There are issues but it's a lot better than the situation with physical silver, for example.

I continue to believe that every person should have some physical gold as a long term hedge against all other forms of investments and cash. This could be gold jewelry as well for people who do not like the idea of buying gold coins just for keeps, but, of course, we would be paying for workmanship and wastage in such instances. Some would buy gold coins with commemorative messages and we would be paying a higher price for numismatic value in such instances.  For me, I still prefer the boring 1oz Canadian Maple Leaf as I buy gold for its intrinsic value.

Gold closed at US$1,210 an ounce on Friday. Translated, to buy a 1oz gold bullion coin at UOB now, we would have to pay about S$1,880.  This compared to when I first started buying last year at about S$1,400 an ounce, the numbers speak for themselves. Check gold and silver prices at UOB.

Of course, gold price will not move up in a straight line.  Prices almost never do.  I would look out for dips and corrections to buy more gold.


I will also be looking out for opportunities to increase my exposure to silver as I believe that it is undervalued when compared to gold.

Related posts:
Gold: to buy or not to buy?
Gold or silver?


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