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AIMS AMP Capital Industrial REIT: Rising MACD.

Wednesday, December 29, 2010

The MACD on this chart has stopped declining.  In fact, it seems to be rising gently, forming higher lows. Higher lows were spotted earlier on in the MFI which suggests firm underlying demand.


The rising 200dMA is at 21c and this, in my opinion, would provide very strong support. Immediate support is at 21.5c while immediate resistance is at 22c.  The downtrend line connecting the highs of 17 Sep and 19 Nov suggests that strong resistance is to be found at 22.5c in the current timeframe.

A quick check on the weekly chart confirms strong support to be at 21c and that the longer term trend is up. I bought more today at 22c and would continue to accummulate on weakness.

Related post:
AIMS AMP Capital Industrial REIT: High yield with limited downside.

First REIT: Excess rights not enough.

First REIT's rights issue is a resounding success. Valid acceptances at 97.7% which means there are not many excess rights to go around. Of the 7,790,838 rights which were not validly accepted, rounding up of odd lots would have priority. Seeing how there are 88,002,026 excess rights applied for, chances are most of the funds would be refunded to those who applied for excess rights. This includes me.

Rights units would be issued on 30 Dec and will start trading on SGX Main Board on 31 Dec.

Read announcement here.

I believe that there is some fear that First REIT could see a fall in price when the rights units start trading as people cash in their excess rights for a 40% capital gain. Personally, I do not think that very probable. If priority is given to people who need to round up odd lots, how much excess rights would they be able to sell to realise this gain? With such an overwhelming number of excess rights applied for, each unit holder who did apply for excess rights could end up with one or just a few lots of excess rights.

Personally, if I were successful in getting any excess rights at all, I would hold on to them for an estimated yield of 12.8% (6.4c/50c). I would also hold on because I believe the fair value to be closer to 80c (for an 8% yield). I won't be in a hurry to sell.


Having said this, Mr. Market is unpredictable mostly. Price is currently at support provided by the 20d and 50d MAs at 70.5c. In case of a pull back, expect support at 69c, as provided by the rising 100dMA.

First REIT's management also announced that its existing portfolio has been revalued at $355.5 million, an increase of $14.6 million from the end of 2009. This means that NAV for the REIT is now higher by some 4.3% and this would also lower its gearing level a bit. Good news.

Related post:
First REIT: XR and fair value.

Golden Agriculture: Testing resistance at 80c.

Tuesday, December 28, 2010

The negative divergences on the charts have been there for some time now. However, price continues its levitation act as it retested resistance at 80c today.


In the shorter term, it would make sense to wait for price to pull back to the 20dMA at 77c before loading. Personally, I would wait for a retest of the 50dMA before loading up. Would there be a catalyst for a stronger pull back? If I miss out on this one, then, too bad for me.

Indonesia will raise a tax on crude palm oil exports to 20% for January from 15% this month, an official said late Monday (27 Dec). Trade Ministry Director General of International Trade Deddy Saleh told reporters that the reference price for CPO will be US$1,118.37 a metric ton. (CPO closed at US$1,221 on 28 Dec.)  -By Joko Hariyanto; contributing to Dow Jones Newswires

Related post:
Golden Agriculture: Pulling back.

CapitaMalls Asia: Rising on low volume.

CapitaMalls Asia closed closed at $1.91 today, up 2c. The MACD's bullish crossover is following through as it continues rising above the signal line. Being still in negative territory, this could just be a rebound. However, the higher lows on the MFI and RSI suggest firm underlying demand and buying momentum.


Immediate resistance is at $1.92 which is where the declining 20dMA is approximating.  If this is taken out convincingly, next resistance level is at $1.95 followed by the downtrend resistance at $1.97. Closing above $1.97 would break the current downtrend. Support at $1.83 has been established.

Related post:
CapitaMalls Asia: Reversal?

Market malaise and First REIT.

Monday, December 27, 2010

I guess it is safe to say we can take the whole week off and we would not be missing anything. The STI rose 15.56 points on thin volume (total value of S$559.8m) to close at 3,159.36. Thankfully, I was rather busy at work today. Otherwise, I might have been quite bored.

So, what am I looking at in the stock market now? Apart from thinking of what would I be doing in 2011, nothing much. Actually, I have started writing but I am still adding some finishing touches to the blog post. I would definitely put it up before the end of the week. Look out for it.

However, there is one counter that is on my mind: First REIT. It would complete issuance of the rights units (including excess rights) on 30 Dec (Thursday) and the rights units would start trading on 31 Dec (Friday). At an exercise price of only 50c, successful applicants of excess rights would make approximately 40% capital gain immediately!




Related post:
First REIT: Dragonfly doji at 71c.

MERRY CHRISTMAS!

Saturday, December 25, 2010

A photo of the Helix Bridge I took a few evenings ago as I took a walk from MBLM to Millenia Walk. Yes, it was a long walk but it was a cool evening. I rather enjoyed the walk. :-)

See the Singapore Flyer in the background on the right?  I am quite proud of this photo taken with my free Samsung mobile phone's built in 5 megapixel camera. ;-p


Merry Christmas to one and all!

Tea with AK71: ASSI turns 1.

Friday, December 24, 2010

My blog is one year old! Who would have thought that starting this blog out of curiosity exactly a year ago could have resulted in what we see today? I wouldn't dare say that I will blog for years to come but I will definitely continue as long as I still feel happy doing it. :-)

A birthday cake for ASSI:


Actually, it's my own birthday cake as I turned 39 earlier this month and, guess what, it was with compliments from GNC. Free and yummy birthday cake. I like. ;-)

To show support for my blog, remember to visit my sponsors, give my ZUJI banners a chance if you're travelling and, of course, all cash donations are welcomed. ;-p

Related posts:
Tea with AK71: Buy me a cuppa tea?
Planning to travel? Check out ZUJI.

Japanese properties attracting international buyers.

Thursday, December 23, 2010

International real estate portfolio investors from the United States to Singapore are increasingly looking to buy property in Japan with over $2 billion in deals already agreed this year, it is claimed....

............Franklin Templeton is understood to be looking to buy a portfolio of distressed loans at a discount, which would provide attractive returns and allow access to physical assets, while Blackstone plans to buy Morgan Stanley’s loans which are backed by commercial real estate such as office buildings.
 
Wealthy Chinese investors are also increasingly looking to Japan and a number of travel agencies have started offering Buy Japanese Property tours. Realtors say major foreign private equity groups, real estate trusts and realtors have earmarked an estimated $6.6 billion for investments in Asia, showing interest in Japan’s bricks and mortar assets and property debt.
 
‘While we are cautious around the country’s fundamentals, we do believe that the sheer size of the market allows for opportunities,’ said Peter Kim, managing director, ING Real Estate Investment Management, which has funds invested in Japan......

........Distressed or marked down properties in Japan, such as debt backed by commercial real estate, are also emerging on the radars of foreign buyers. ‘We are finding a degree of success in finding deals through trust banks or lenders who have taken control of over leveraged assets,’ said Jacques Gordon, global investment strategist at LaSalle Investment Management.
 
As foreign money pours in, the real surge in buying may just be starting, according to Mark Brown, a real estate analyst at researcher Japaninvest. The gap between what distressed property owners are asking and the amount buyers are willing to pay is closing fast, he said, adding that would lead to plenty of new deals. 


Source: PropertyWire

Related post:
Japanese real estate: Has it bottomed?

AIMS AMP Capital Industrial REIT: High yield with limited downside.

The very low trading volume these days probably affirms talk that most traders are taking the rest of the year off. There is also not much to say with regards to the counters on my watchlist. Most are behaving in ways which I think they would be behaving.


I decided to take a look at AIMS AMP Capital Industrial REIT which has been holding steady for some time now. I like this REIT for its relatively high yield. However, price has been trapped in a tight range between 21.5c and 22c for many sessions now. What direction would it take in future?

The OBV is generally flat while the MACD has declined into negative territory. Although momentum has turned negative, volume is drying up. It is very likely that this counter could be trading sideways for some time to come. With the rising 200dMA at 21c, downside could be pretty limited. If the 200dMA were ever tested as support, I would probably buy more.  With an expected DPU of 2c in 2011, buying at 21c would mean a yield of 9.52%. All in good time.

Related post:
AIMS AMP Capital Industrial REIT: Revised DPU and fair value.

CapitaMalls Asia: Reversal?

Wednesday, December 22, 2010

CapitaMalls Asia (CMA) is buying Queensbay Mall in Penang. I have been to this mall a few times on cruises to Penang and Phuket. I think it is the nicest mall in Penang: new, spacious, clean and cool. However, everytime I went there, I would wonder how the shops survived. It was also very quiet.

CMA's chart looks similar to that of Raffles Education: a prolonged downtrend with a white candlestick reversal signal as well as higher lows formed on the MFI as it rises from the oversold region.


The descending 20dMA is approximating $1.95 and should provide resistance. In case this were taken out, the descending 50dMA at $2.06 would be the next significant resistance level. In a downtrend, sell at resistance and that is what I would probably do.

Related post:
CapitaMalls Asia: Rebounding from $1.83


Raffles Education: White hammer.

Bullish reversal candlesticks in this counter's chart have a notorious reputation of lacking follow throughs. So, the reliability of the white hammer formed this session is suspect. Nonetheless, downtrends are rivers of hope and rebounds are not unusual.


The MFI, a measurement of demand, has risen from the oversold region. It has formed a higher low for the second time in the last fortnight. Volume has expanded as price stabilised or rose. This is a sign of underlying demand. Could we see demand improving to push the price higher?

Immediate resistance at 25.5c. Further upside could be limited as resistance is expected at 26.5c, a many times tested support turned resistance, and 27c, where we find the descending 50dMA and the downtrend resistance line.

First REIT: Dragonfly doji at 71c.

Tuesday, December 21, 2010

The bulllish harami identified on 14 Dec delivered most sportingly as I said then, "It is my personal belief that the 200dMA support at 67c has been recaptured.  Further upward movement in price would find immediate resistance at 68.5c.  This will be followed by 70c and 71c. In due course, if these resistance levels were cleared, the counter could cover the gap at 73.5c. There are some who are still waiting to see how low the price could fall before buying in. Their hands could be forced in the next two days if price continues to be resilient and this would contribute to a further strengthening in price."

First REIT's trading volume has reduced markedly as price rose higher in recent sessions. Today, price closed at 71c, forming a dragonfly doji, suggesting a lack of selling pressure as price rose on relatively low volume.


The OBV formed a sharp V since the formation of the bullish harami candlestick pattern. It has continued rising but more gently so. Accumulation continues. The MACD is poised to form a bullish crossover with the signal line, although in negative territory. Could this upmove in price be just a rebound?

I am of the opinion that it is more a recovery from a deeply oversold condition. Valuation is now moving towards fairer levels. In the days ahead, we could see a gradual rise in price and it could cover the gap at 73.5c. A retest of 75c, the adjusted historical high would be next in line.

Not so long ago, during the days of mad selling down which saw the rights touched a low of 16c and the mother shares touching a low of 66c, what was presented to us was a window period of a few days to load up on the cheap.

Only with strong confidence that comes from knowing the sound fundamentals of the REIT would we dare to buy more and I said as much when asked what would I do then. Friends sent SMS, readers left comments and sent emails. To all, I said we should recognise the window of opportunity, ignore the noise and buy more which I did.

"Am I not worried whether the price would decline further? No. Why should I worry? I cannot do anything to influence the price movement of the REIT. If the market is willing to sell a good thing to me at a lower price, I would buy. It's simple. So, would I buy again if the price declines further. Yes, I would." 13 Dec 10.

I could be sticking my neck out by saying this but congratulations to all who conquered their fears and held their positions. In my opinion, the fair value for First REIT remains at 80c /unit.

Related posts:
First REIT: Quiet confidence.
First REIT: XR and fair value.

FSL Trust: Closing the gap soon?

On 17 Dec, I mentioned that "The MACD is about to cross into positive territory. OBV suggests continuing accumulation. MFI and RSI are both rising, suggesting strengthening demand and buying momentum."


The resistance provided by the 50dMA at 45c was taken out today as price closed at 45.5c. With the MACD rising into positive territory, we could indeed see the gap closed at 46c next. Eventual target remains at 47c.

Related post:
FSL Trust: Testing 45c resistance.

Healthway Medical: Closed the gap at 15.5c.

Monday, December 20, 2010

On 13 Dec, I divested my trading position in Healthway Medical at 17c, saying that "I expected 17c to be a strong resistance as it is where we find the merged 100d and 200d MAs as well as the downtrend resistance line.  So, a trading position entered on 22 Nov last month at 15.5c was divested at 17c today." and on 14 Dec, I mentioned that "Price could first retreat to 16c, a many times tested resistance and now possible support, before closing the gap at 15.5c."


Healthway Medical closed the gap today at 15.5c. Am I expecting more downside? Share price is pulling back from almost overbought conditions and I do not expect any huge downward movement. Notice that the decline in share price has been on the back of reducing volume. This is good news for the bulls. Also notice that the uptrend in the MFI and RSI are still intact. However, the charts suggest the possibility of both indices to retest their supports. This could mean a reduction in price or volume or both in the near future. A successful retest of supports could lead to another upward movement in price.

Immediate support at 15.5c.  This is followed by 15c and 14.5c.

Related post:
Healthway Medical: Still at resistance.

SPH: Breaking the 100dMA.

A reader recently asked me at what price should he buy more shares of SPH? Well, I always like to buy on weakness. Today, SPH closed at $3.90.  This was after breaking the support provided by the 100dMA at $3.95 last Friday.


Although the MACD is in decline, the MFI suggests that there is some support as the counter gets sold down. Of course, this could change quickly.  In such an instance, using Fibo lines, we see the next support at $3.86. However, the 138.2% Fibo line at $3.83 should be a stronger support being one of the three golden ratios. This is followed by $3.81 and $3.79.  I could add to my position then.

CapitaMalls Asia: Rebounding from $1.83.

Last Friday, I mentioned that "A short term positive divergence is what I see with higher lows on the MFI and the RSI as price declined. As price has been pushing the borders of the lower Bollinger and is some distance from the 20dMA, we could expect a brief respite from further downward pressure."


Today, a white candlestick was formed with price rebounding to close at $1.87. The relatively low volume suggests that the mood is still cautious and the rebound could simply be a technical one as the counter was oversold.

There could, however, be more room for price to rise as the MFI and RSI both formed higher lows, enhancing the picture of a positive divergence with price movement. A buy signal has also appeared on the MACD histogram while OBV turned up signalling an end to distribution which has been taking place since 13 Dec.

This counter is still in a downtrend and selling at resistance is the prudent thing in a downtrend. I see immediate resistance at $1.92.  This is followed by $1.95 and $1.97.

Related post:
CapitaMalls Asia: Closed at $1.84.

Golden Agriculture: Pulling back.

In various recent blog posts, I mentioned that the negative divergence between indicators and the price movement of Golden Agriculture is too glaring to be ignored. The charts show clearly rising price against a backdrop of declining volume, MACD, MFI and RSI.


Of course, the MACD is declining in positive territory and the weakness in price could be a chance to accumulate at support. I see support provided by the rising 50dMA which approximates 72c. This is followed by 70c.

Related post:
Golden Agriculture: Waiting for a pullback.

Tea with AK71: Love the plants.

Sunday, December 19, 2010

This was taken at a Chinese dessert place at Vivo City. I guess the shop owner must be either a humorous guy or he got quite tired of having to replace the plants! Be kind to plants!

Saizen REIT: Steady.

Saturday, December 18, 2010

I have not been doing much TA on Saizen REIT and some readers are worried. OK, let me do an update.


Saizen REIT has settled into a tight trading range. All the daily MAs are within close proximity of each other. The technicals are benign. MFI is forming higher lows and higher highs. OBV shows some accumulation.


Look at the weekly chart and the picture is more exciting. 20wMA has flatlined. The 50wMA continues to rise which reduces the capping pressure on upward price movement. The 100wMA continues to rise strongly and this limits further downside and could also provide a push to the unit price.

The MACD is poised to cross over into positive territory. The higher lows on the MFI are equally obvious on the weekly chart. All technicals point to an improvement in longer term sentiments.

Things could only get better in time.

Here is a link contributed by a reader, DP:
Japanese property market on the rise.
Click on Listen:Windows Media for a radio broadcast which we could listen to as well.

Related post:
Saizen REIT: Insider buying continues.

FSL Trust: Testing 45c resistance.

Friday, December 17, 2010

FSL Trust is rising on pretty modest volume. It closed at 45c which is the resistance provided by the 50dMA today. Could it move higher?


I suggested that the counter could close the gap at 46c which could indeed happen. The Bollinger Bands are beginning to widen after squeezing tighter and tighter in the recent past. This usually hints of a break from a tight trading range and could have some momentum.

The MACD is about to cross into positive territory. OBV suggests continuing accumulation. MFI and RSI are both rising, suggesting strengthening demand and buying momentum. If this keeps up, we could see the declining 200dMA, currently at 47c, as the eventual target. Immediate support is at 44c.

Related post:
FSL Trust: Higher volume and testing resistance.

CapitaMalls Asia: Closed at $1.84.

The support identified at $1.85 was broken yesterday but recaptured. Today, price closed at $1.84. Do we hit the panic button, sell and run for the hills?


The black candlestick formed today was on the back of lower volume, less than half of yesterday's volume. Selling pressure is still around as suggested by the long upper wick of the candle. However, with price closing only 1c lower, it suggests that the bulls are putting up a fight here. The bears are not as strong as yesterday but still have the upper hand.

A short term positive divergence is what I see with higher lows on the MFI and the RSI as price declined. As price has been pushing the borders of the lower Bollinger and is some distance from the 20dMA, we could expect a brief respite from further downward pressure.

Connecting the highs of 10 Nov and 13 Dec gives us a steeper downtrend resistance line. This is where the declining 20dMA approximates. I expect some resistance at $1.95 in case of a rebound.

Related post:
CapitaMalls Asia: Bought some at $1.85.

Cache Logistics Trust: Still on my watchlist.

Thursday, December 16, 2010

I hardly talk about Cache Logistics Trust but regular readers would know that this is on my watchlist. With an annualised DPU of 7.76c, at today's closing price of 94c, the distribution yield would be 8.26%. Still not attractive enough for me but I recognise its strong numbers which would convince me to start a small long position if price would decline to test its historical low of 91.5c for a yield of 8.48%.

Here are the numbers as at 30 Sep 10:
Gearing: 23.4%.
NAV/unit: 88c.
Interest cover: 9.2x.
Portfolio 100% leased.
WALE: 5.8 years.

Substantial institutional shareholders:
JPMorgan Chase   9%
Morgan Stanley     7%
The Capital Group 6%
Amundi                 7%



How likely is it for the Trust to retest 91.5c? Since 22 Sep, the OBV has been in decline, though bumpy. This suggests that there is gradual distribution going on. The MACD has also been on a decline. Volume is, however, very thin. Price could be quite volatile.

Anyway, if I get some units here, it is a move to diversify my portfolio but it is not absolutely necessary. If the price does not decline to the level I feel comfortable with, I would give it a miss.

See 3Q 2010 slides here.

Related post:
Cache Logistics Trust: Low gearing.

First REIT: Quiet confidence.

First REIT experienced much lower trading volume today. The frantic selling of nil-paid rights was noticeably absent today.


Well, today is the last day of trading for the nil-paid rights. Without the option of an arbitrage, investors interested in First REIT would only have the option of buying the mother units from now on. I expect this to return greater stability to First REIT's unit price which could turn buoyant in the near future.

Immediate support at 68.5c, as provided by the 100dMA.  Immediate resistance at 70c, as provided by the 50dMA.

Related post:
First REIT: A bullish harami.

Golden Agriculture: Waiting for a pullback.

I have been saying to stay cautious on Golden Agriculture for quite some time now. Am I going to change my tune? Unfortunately, it is more of the same. Waiting for a pullback before loading up would be the prudent thing to do.


The negative divergences are too glaring for comfort. The MACD and MFI are both forming lower highs as the price formed higher highs. Trading volume has also been declining as price rose.

I will bide my time.

CapitaMalls Asia: Bought some at $1.85.

Just last night, I said "With all the momentum oscillators forming lower highs and the OBV showing obvious distribution, going long on this counter now would be most risky. Any upmove could simply be a rebound from oversold conditions and would find immediate resistance at $2, a recently many times tested resistance level and it is also where we find the declining 20dMA. I have my eyes on $1.88 and $1.85 as possible fair entry prices."


Well, my overnight BUY queue at $1.85 was filled. What is my plan now? Well, prices don't go down in a straight line. If there is a rebound, I expect resistance at $2.00 and that is where I would divest for a trade. The likelihood of this happening in the next few weeks is not at all remote.  Look at the MFI, it seems to be forming higher lows. There is still some underlying demand for this counter's stocks, it would seem.

However, looking at how the volume expanded dramatically today, almost tripling compared to yesterday, we cannot help but wonder if price could weaken further. Using two sets of Fibo lines, the first using $1.91 as the extreme low and the second using $1.84 as the extreme low, we see $1.65 showing up as 161.8% Fibo line in the former and 138.2% Fibo line in the latter.  That is the ultimate strong support in case of a continuing sell down with heavy volume. That's a fair bit to fall from $1.85 and I will have my warchest ready.

Related post:
CapitaMalls Asia: Testing historical low.

CapitaMalls Asia: Testing historical low.

On 9 Dec, I mentioned: "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."


Price formed a wickless black candle as it tested the counter's historical low at $1.91. The difference? On 7 May, when $1.91 was touched, a white candle was formed. It looked like a white spinning top with a long body which was a potential reversal signal and it delivered. This time round, a wickless black candle was formed as price closed at $1.91. The picture is more bearish now, for sure.

With all the momentum oscillators forming lower highs and the OBV showing obvious distribution, going long on this counter now would be most risky. Any upmove could simply be a rebound from oversold conditions and would find immediate resistance at $2, a recently many times tested resistance level and it is also where we find the declining 20dMA. I have my eyes on $1.88 and $1.85 as possible fair entry prices.

China Hongxing, Healthway Medical, Sabana REIT and First REIT.

Wednesday, December 15, 2010

I was wondering whether to take a break from blogging tonight but once I switched on my computer, I just had to check my blog. Before I knew it, I was blogging. This is a most serious addiction.


China Hongxing: Last night, "Closing at 17c is resistance provided by the falling 50dMA which just completed a dead cross with the rising 100dMA recently. Technically, China Hongxing has just broken out of its downtrend but it remains to be seen if 17c resistance could be turned into support. Falling back under 17c would mean that the downtrend is still intact.


So, 17c is still resistance and I see strong support at 15.5c. If volume does not expand on the next upmove to push past resistance, the declining 50dMA could well prescribe the next downtrend resistance. However, with the MACD rising towards zero, we could see momentum turning positive. This counter bears watching.

Healthway Medical: Last night, "Price could first retreat to 16c, a many times tested resistance and now possible support, before closing the gap at 15.5c. In case the bearish reversal signals are nullified in the next session, the upside target is still 18.5c."


Its share price closed at 16c today and I fully expect 15.5c to be a strong support, if tested. Both MFI and RSI are retreating from the borders of their overbought regions and we could see them retreating to retest their uptrend support lines. This would mean a further weakening in price and a thinning in volume. I would want to see support holding up nicely before venturing with another long position here. Overly cautious? Perhaps but that's what I would do.

Sabana REIT: Last night, "the white spinning top, a possible reversal signal, formed today on low volume is encouraging. Volume was the lowest since the REIT started trading in late November. OBV also seems to be rising since 7 Dec, suggesting continual if mild accumulation since. Selling pressure has weakened and if 92.5c was ever tested again, it would be a stronger support as market participants would remember it as the price they missed out on to go long. The worst could be over."


Volume expanded nicely as price rose to hit a high of 96.5c before closing at 95.5c. There is some selling pressure as suggested by the upper wick of the white candle. However, selling pressure is much weaker now and OBV suggests that accumulation is ongoing.  For anyone who is thinking of investing in Sabana REIT, it would seem as if things have stabilised. Technically, 94c (the 38.2% Fibo line) and 93.5c (the 23.6% Fibo line) are fairly safe entry prices now.

First REIT: Last night, "What we see today is a textbook example of a bullish harami, a bullish reversal candlestick setup."


We have confirmation of the bullish signals formed yesterday. Buy signal seen on the MACD histogram. Price gapped up, starting the day at 68c, touched a high of 69.5c and closed at 69c. Resistance provided by the 100dMA at 68.5c was taken out with ease. With volume much lower, it suggests that there is a lack of sellers which allowed little buying to push up the price. 68.5c could be resistance turned support. Next resistance level is at 70c.

The rights closed at 17.5c today and for anyone who is thinking of investing in First REIT, buying the rights at 17.5c would make more sense than buying units in First REIT at 69c. There is a 1.5c difference which is a 2.18% savings. If there should be further selling down tomorrow, I would buy more, tomorrow being the last day for the trading of nil-paid rights. 22 Dec is the last day for the acceptance and payment of the rights.

First REIT: A bullish harami.

Tuesday, December 14, 2010

Volume expanded again today with a total of 12.21m units changing hands. This time, a white candle was formed. With price opening at 67c and closing at 67.5c, this is a wickless white candle. Also, this formed right in the mid-section of the previous session's black candle.

Remember, I mentioned yesterday that "the black candlestick formed this session is not as bearish as the three black candlesticks before it. It actually started in the middle of the previous session's candlestick and it also formed a lower wick unlike the previous three candlesticks. Support is at hand." What we see today is a textbook example of a bullish harami, a bullish reversal candlestick setup. As with all technical analysis, this will need confirmation in the next session.


It is my personal belief that the 200dMA support at 67c has been recaptured.  Further upward movement in price would find immediate resistance at 68.5c.  This will be followed by 70c and 71c. In due course, if these resistance levels were cleared, the counter could cover the gap at 73.5c. There are some who are still waiting to see how low the price could fall before buying in. Their hands could be forced in the next two days if price continues to be resilient and this would contribute to a further strengthening in price.

I count it fortunate that I managed to collect some rights at 16c yesterday (effective cost = 66c). I queued for more mother shares at 64.5c last night in case price weakened further today. 64.5c now seems rather remote as a possibility. With the OBV turning up sharply, the suggestion is that accumulation is back in force. Let us see if the long term support at 67c holds up from now.

Related post:
First REIT: Good bad news.

Sabana REIT: Possibly bottomed.

92.5c touched on 10 Dec could possibly be the bottom which worried unitholders are looking for. As with all bottoms, it is only apparent after some time. In fact, calling it a bottom now could be a tad early.


However, the white spinning top, a possible reversal signal, formed today on low volume is encouraging. Volume was the lowest since the REIT started trading in late November. OBV also seems to be rising since 7 Dec, suggesting continual if mild accumulation since. Selling pressure has weakened and if 92.5c was ever tested again, it would be a stronger support as market participants would remember it as the price they missed out on to go long. The worst could be over.

Related post:
Sabana REIT: Touched 92.5c.

Healthway Medical: Still at resistance.

Closing at 17c today, forming a doji on reduced volume suggests that the upward movement in price is losing momentum. This is confirmed by the falling MFI and RSI.  The fall in OBV suggests too that distribution is underway. 17c resistance is, therefore, intact.


Price could first retreat to 16c, a many times tested resistance and now possible support, before closing the gap at 15.5c. In case the bearish reversal signals are nullified in the next session, the upside target is still 18.5c.

Related post:
Healthway Medical: Good news.

FSL Trust: Higher volume and testing resistance.

Volume expanded today as price action formed a dragonfly doji. This is promising. The MACD has been rising above the signal line, although it is doing so in negative territory. The MFI has formed higher lows which suggest positive demand momentum. The OBV has turned up, suggesting that we are seeing some accumulation activity.


The 100dMA seems to be providing immediate and strong support with the Bollinger bands narrowing. A precursor of a breakout? Perhaps. Immediate resistance is at 44c and, in the event of a breakout, the eventual target is where we find the declining 200dMA, which is currently at 47c. Before that, expect resistance at 45c, the flattening 50dMA, and 46c, gap resistance.

Related post:
FSL Trust: Approaching target.

China Hongxing: Breakout.

On 29 Nov, I mentioned that "It pays to remember that 15.5c was itself a strong support which broke and it is where we find the gently declining 200dMA. It could prove a challenge to overcome this resistance level unless volume expands meaningfully on buy ups."


China Hongxing rose to the challenge today as volume expanded, taking out resistance at 15.5c. Closing at 17c is resistance provided by the falling 50dMA which just completed a dead cross with the rising 100dMA recently. Technically, China Hongxing has just broken out of its downtrend but it remains to be seen if 17c resistance could be turned into support. Falling back under 17c would mean that the downtrend is still intact. The jury is still out on this one. However, resistance at 15.5c is now immediate support.

Related post:
China Hongxing: Rebounding.

Healthway Medical and First REIT: Good news and good bad news.

Monday, December 13, 2010


First, the good news. In my last blog post on Healthway Medical, I mentioned that "If the buying interest follows through, we could see its share price rising to test resistance provided by the merged 100d and 200d MAs and that is at 17c." The counter closed at 17.5c today on expanded volume. Momentum oscillators have all turned up. Beyond 17.5c, I expect resistance to be found at 18.5c, a many times tested support and should be a strong resistance.


I expected 17c to be a strong resistance as it is where we find the merged 100d and 200d MAs as well as the downtrend resistance line.  So, a trading position entered on 22 Nov last month at 15.5c was divested at 17c today. I made some pocket money and that is the good news. Do I have any interest left in the company? Yes, I still retain 5% of my original stake in the company and I will continue to monitor its progress or the lack of progress in time to come.


Now, what's a good bad news? Well, it is a piece of news which seems bad but which is actually good. I am referring to the declining unit price of First REIT.

I mentioned in an earlier blog post that I see long term support at 67c as this was underpinned by the rising 200dMA. We see that 67c is also where we find the 123.6% Fibo line. Price, today, touched 66c which is where we find the 138.2% Fibo line.  38.2% is one of the three golden ratios and provided a stronger support.

My original intention was to wait to buy at 67c but, last Friday, I changed my mind and queued for the rights at 16c instead at the influence of fellow finance bloggers who bought the rights at 16.5c. Guess what, my buy queue for the rights at 16c was filled today. So, my effective cost would be 16c + 50c = 66c which means a yield of 9.7% based on the 2011 DPU guidance of 6.4c by the REIT's management. I am a happy man.

Am I not worried whether the price would decline further? No. Why should I worry? I cannot do anything to influence the price movement of the REIT. If the market is willing to sell a good thing to me at a lower price, I would buy. It's simple. So, would I buy again if the price declines further. Yes, I would. When?


If we look at the chart, we find the 150% Fibo line at 65.5c and the 161.8% Fibo line at 64.5c. As 65.5c is only a half cent difference from 66c (my effective buy price today), I would not bother putting in a buy queue at that price. I have put in a buy queue at 64.5c and I would be very surprised and very pleased if it could be filled in the next few days. At 64.5c, the yield would be 9.92%!

Some may be puzzled by how someone who bought more of First REIT at 95c and 96.5c, CR, could feel pleased with the declining unit price in recent sessions. Well, it is true that the TERPs of my purchases at 95c and 96.5c are 70c and 70.7c which are now in the red. However, let's be rational.

The recent weakness in First REIT's price is due to the selling down by one of its cornerstone investors, Golden Rainbow International Limited, which owned more than 9% of the REIT. I won't be surprised if they continued to sell down today. What's the reason for their massive sell-down?  Well, only they know the reason, I don't. It is a waste of time for me to guess why they have decided to sell.

The REIT's CEO, Dr Ronnie Tan Keh Poo, who is also a director, however, has been buying up the REIT's nil-paid rights as they got sold down. I like it when a REIT's management's interests are aligned with unitholders'. Dr Tan is unlikely to throw his hard earned money down the drain.

Technically, today's volume at 8.04m units is the REIT's highest in its history. However, notice how the black candlestick formed this session is not as bearish as the three black candlesticks before it. It actually started in the middle of the previous session's candlestick and it also formed a lower wick unlike the previous three candlesticks. Support is at hand. This is another reason I said that if my buy queue at 64.5c could be filled, I would be very surprised and very pleased. Good luck to us all.

Related post:
Healthway Medical: Broke out of resistance.
First REIT: Waiting at 67c.

Saizen REIT: Insider buying continues.

Sunday, December 12, 2010

Saizen REIT remains my single largest investment in the stock market and I firmly believe that it offers value for money. I also believe that investing in a REIT where the management's interests are aligned with that of the unit holders is a big plus.

On 9 Dec, Mr Chang Sean Pey, bought 200 lots in the open market at 16c /unit.  Mr Chang now has 2,600 lots. Insider buying in Saizen REIT has become more the norm than exception.

Saizen REIT has 1,119,352,395 Units issued as at 12 November 2010. Apparently, more have exercised their warrants and the REIT has 1,122,909,819 Units issued as at 9 December 2010. It has 323,447,598 Warrants outstanding as at 9 December 2010.

Related post:
Saizen REIT: Insider buying and divestment.

AIMS AMP Capital Industrial REIT: Revised DPU and fair value.

Saturday, December 11, 2010

This perhaps comes a bit late, the result of my blog being a one man show. Reading the Market Update dated 23 November, "Sale of 23 Changi South Avenue 2 Singapore above book value" which is expected to be completed by January 2011, I went and found out how much this property contributed to the REIT's rental income for the year ended 31 March 2010.  It was S$1.4549 million.  This is 3.49% of total income for the year ended 31 March 2010.

Doing some back of the envelope calculation, prior to the rights issue for the purchase of 27 Penjuru Lane, the DPU was 2.15c.  Post rights and acquisition, the estimated DPU was given as 2.08c.  If we remove 3.49% from the DPU of 2.15c, that would give us 2.075c.  So, post rights and acquisition, we would get a DPU of approximately 2c.

As the sale of 23 Changi South Avenue 2 will be completed only in January 2011, its contribution to rental income for the quarter October to December 2010 is unaffected.  With the contribution from 27 Penjuru Lane coming in, I expect the income distribution that would take place in March 2011 to be 0.52c per unit as per guidance.  For subsequent quarters, it should be about 0.5c per unit, everything else remaining constant.

However, with a bigger cash balance on hand, I fully expect the REIT's management to do some asset enhancement to increase lettable space for properties which have not maximised their plot ratios or to make new acquisitions which are NPI yield accretive in nature.  The former would be easier than the latter, I suspect, given the strong recovery in real estate values in Singapore.

At the revised DPU of 2c, the REIT still provides an attractive distribution yield of 9.3% at a unit price of 21.5c which is where I hope to load up more. There are still more positives about this REIT and there is probably more upside than downside in the next 12 months. After revising the annualised DPU to 2c and expecting the REIT to trade at an 8% yield, the fair value I ascribe to the REIT is now 25c /unit.

Note that I did not take into consideration the other positive developments in the Market Update which is the 100% occupancy achieved for 15 Tai Seng Drive (85.7% as of 31 March 2010) and 23 Tai Seng Drive (84% as of 31 March 2010).  Conservatively, this should add about $400,000 to the REIT's annual rental income.

Read Market Update.



Related posts:
AIMS AMP Capital Industrial REIT: 2Q FY2011

 
 
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