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AIMS AMP Capital Industrial REIT: Oversold.

Tuesday, February 15, 2011

Someone asked me why did I say that 21c is technically a strong support for the REIT. I didn't take the time to elaborate on this last night. It is where the rising 50wMA is approximating.


I put in an overnight buy queue at 21c which was filled when the session today started. In spite of massive selling pressure, price closed down one bid only at 21.5c. The selling pressure is well absorbed as the REIT's unit price demonstrated admirable resilience.

I, however, am not entertaining any grand delusions that price might not weaken further once the counter goes XD. Using Fibo lines gives us a clue as to where the supports would be next. 20.5c is where we find 123.6% and 20c is where we find 138.2% as well as 150% (which is at 19.8c). As both 38.2% and 50% are golden ratios, I expect 20c to be a very strong support level if ever tested.

When would I consider selling my investment in the REIT? Well, I still have a  fair value estimate of 25c per unit as the latest development has minimal impact on the numbers I came up with last year in December. So, I am not a seller at the current level but I am definitely a buyer.

As an assurance that the REIT's financial health is not taking a turn for the worse, Moody's Investors Service says Ba2 rating for the REIT, which incorporates some financial flexibility, is appropriate. Read report dated 15 Feb 2011 here.

Related post:
AIMS AMP Capital Industrial REIT: Acquisition of Northtech.


12 comments:

Anonymous said...

Hi AK,

I am putting a buy queue at 20.5c. This being my largest investment in Singaporean stocks already, I was very concerned about the recent acquisition. Thanks for your timely analysis.

Victor

AK71 said...

Hi Victor,

Miss the food in Singapore? ;)

Yes, many are still concerned. Judging by what people in LP's cbox are saying, opinions are still mixed but all have one idea in common: they are buying at 20c and 20.5c. Haha...

I am also in the buy queue at 20.5c. Good luck to both of us. :)

Anonymous said...

AK,

Off topic: just found out that 2 former chefs from Chatterbox are now working in restaurants in Causeway Bay, HK. Yeah!!

Victor

AK71 said...

Hi Victor,

Really? So, they have the signature dish, Singapore Chicken Rice, as well? You are so lucky! :)

Isaac said...

AK,

pls push prices down to .205 tomorrow so SB like me can jiak abit. :P

Anonymous said...

My main concern is if private placements become the recurring theme.

AK71 said...

Hi Isaac,

I am in the buy queue at 20.5c too. Judging by the number of people who are interested in getting in at 20.5c, we could see a long queue! ;)

AK71 said...

Hi Anonymous,

I believe in crossing a bridge when I come to it. Being concerned now doesn't achieve anything, does it? ;)

Make decisions based on the current realities and whether the REIT provides value for money. :)

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

Raelynn said...

my last 2k of cash for stocks investment is sitting in my bank account.. still a little hesitant and in a dilemma of whether to use it to buy AIMs. so many people putting buy queue at 20.5, lucky i havent placed my buy queue for 0.21 when i posted on your previous AIMs post =X

AK71 said...

Hi Raelynn,

It seems that 20.5c has found support amongst retail investors. ;)

Good luck! :)

K said...

Hi AK

Am actually deciding if I should put in a queue for this reit. My trader actually advised me not to considering the fact that I should be looking into other counters.

Am in a dilemma

k

AK71 said...

Hi K,

You would have to decide for yourself, I guess. I would always question the motivation for doing something. If the underlying reason is a sound one, I don't have an issue. :)

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