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Baby in pram by the beach.

Saturday, March 12, 2011

On my recent vacation, while spending time by the beach in Phuket, I witnessed a somewhat interesting event.

A mother pushed her baby in a pram to the beach and stood there for quite a while before deciding to take a swim, leaving the pram on the beach as the tide was coming in.





If you take a close look at the three photos in sequence, you would notice that the pram's wheels were deeper in the sand in the second and third photos. An eye opener for me. 

Would you leave your baby all alone in a pram by the beach and go swimming in the sea for even a few minutes?

Actually, I was not sure that there was a baby in the pram until the lady came back from her swim and squatted next to it. 

A baby's arm came out to touch her and confirmed my suspicion!

CapitaMalls Asia: Closing at $1.70 support.

In the massive selling down, CapitaMalls Asia touched a new low of $1.68 before closing at $1.70, which remains an important support. Would the price continue to decline next week? Your guess is as good as mine.

However, what is clear is that the downtrend is still intact. If we draw a trendline resistance connecting the highs of 9 Feb and 17 Feb, we would see that it approximates the position of the 20dMA. This means that the 20dMA is providing immediate resistance. A retest of the high of 3 March at $1.78 could happen and it should be a strong resistance. Wait a minute? Did I just say could happen? Yes, I did.


If we look at the MFI, which takes into consideration volume and price, it has formed a higher low. There is some positive momentum in demand as price weakened. Now, if we look at the volume, on 28 Feb when a black hammer was formed, volume was very high. Look at the last session which also saw the formation of a black hammer and we would see that the volume is much lower. Sellers are less enthusiastic now.

The 20dMA would provide immediate resistance on the upside while immediate support is at $1.70 with a possibility of a retest of $1.68.

Related post:
CapitaMalls Asia: A basket case?

Earth shattering news: Yoga, CIT's rights issue, Japan's earthquake and Saizen REIT.

Friday, March 11, 2011

This is a momentous day. I went for my first Hot Yoga class! Yes, were you expecting me to talk about the correction in the USA or the earthquake in Japan? Well, jokes aside, I have not stretched myself in so many different directions and curled myself up in so many positions in ages, if at all! It was all done in a room set at a temperature of 38 degrees centigrade. I lost almost a kilo after the session. Had a dinner of salad, fish and rice after the session just to continue feeling good about myself doing something healthy for a change!

Anyway, when I came home, I saw 15 comments in my blog awaiting moderation and, of course, response. Wow! That's a record but one that is not taken note of by any analytical tools. I guess people must really be spooked today by all the happenings in the market, including Cambridge Industrial Trust's (CIT) rights issue.

OK, if you can't tell by now, this is going to be a mish mash of a blog post. I am going to talk about all the stuff that's on my mind and maybe more. I am still feeling very warm from yoga, despite having showered twice, once at the yoga studio and once at home (after replying to all the comments in my blog). Full from a very healthy dinner, I am feeling very drowsy at this moment.

Now, first off, CIT. I got in at 51c this morning and I blogged about it here. The sell down after lunch was rather unexpected. Well, so was the earthquake in Japan. These things happen. As long as we got in at a fair price, there should be no regrets.


What are my plans now? Buy more if its price weakens further? Looking at the daily chart, CIT is trading below the 200dMA. So, I look at the weekly chart for hints of the next support. The rising 100wMA is at 46.5c now and should provide relatively strong support. 46.5c? That is some way to fall from here! Yes, it is but remember that TA shows us where the supports are and not necessarily that they would be tested. If it should be tested while the counter is still CR, I would buy more.

Buying 16 lots more at 46.5c would mean an average price of 46.11c. With a DPU of 5.07c, post rights, it would be a distribution yield of almost 11%! Of course, owning more units could possibly entitle me to more excess rights as well.

Next, the biggie: earthquake in Japan. This has been described as the worst earthquake in Japan in many years. In my memory, the last big quake was the Kobe earthquake in 1995 and that measured 7.2 on the Richter scale. The earthquake in question now measured 8.9 on the Richter scale. It is a catastrophe that has triggered tsunami warnings "for countries to the west and across the Pacific as far away as Colombia and Peru". Read report here.

For investors of Saizen REIT, we are concerned as to how much of the REIT's portfolio is affected. Saizen REIT currently owns 146 buildings of which 28 are in the affected areas. These buildings jointly account for about 15% of the REIT's income and 15.5% of its NAV.

In a timely report by its co-CEO, Mr. Chang Sean Pey, it is revealed that "the asset manager of Saizen REIT are in the process of contacting the local property managers in Sendai, Koriyama and Morioka to find out their well being and to assess the impact of the Earthquake on Saizen REIT’s property portfolio.....(and) will continue to make appropriate announcements as and when it receives updates on the above matter." Read announcement here.

There is not much else we can do but to wait and I won't lose sleep over this. Why? The unit price of the REIT fell and hit 15c at one point before closing at 15.5c which is a support I just blogged about yesterday. It is where we find the upturned 100wMA now. Read blog post here.


Fundamentally, if Saizen REIT did not insure any of the buildings concerned and this is very unlikely, we could expect a revised NAV of about 22.67c/unit and a reduced DPU of 0.88c, bearing in mind that this could be 50% higher if not for the amortising nature of its loans. These numbers do not include potential contributions from YK Shintoku which is in default of its CMBS. Weaker numbers, no doubt, but not catastrophic.

So, stay calm and rational, wait for the management's report and if the market should overeact on the downside, I would buy more. That's what I'm doing and I am going to enjoy the weekend. You should too. :)



Cambridge Industrial Trust: Friends again.

I chose a rather amusing title for this blog post (some might even say cavalier) and it shows that there are no forever friends or forever enemies in this world.

I was wondering if there would be a sell down of CIT's units today but I guess market participants are savvy to the benefits of this rights issue. The buy queue at 50.5c is very long.

So, I had a choice of either buying up at 51c or just wait and see how much the nil-paid rights would trade for later this month. The biggest attraction of buying up at 51c is that it would allow me to apply for excess rights which would bump up the distribution yield for me if I should be successful in getting some. Going by past experience, chances of success should be rather high.

Now, I am, once again, a CIT unitholder. I bought up 17 lots at 51c/unit today. This is a small investment to get my foot in the door, so to speak. This would guarantee me 3 lots of rights as I would basically apply for excess rights to round up the odd lot. The average price per unit would be (51c x 17 + 42.9c x 3) /20 = 49.785c. With a DPU of 5.07c, it would mean a distribution yield of 10.18%.

Without the attraction of possibly getting some excess rights, I would not have bothered to buy up at 51c today. So, assuming that I am awarded 1 lot of excess rights (on top of what is required to round up the odd lot), that would bring my average price per unit down to 49.457c which would mean a distribution yield of 10.25%. I hope I would be able to get more excess rights than just 1 lot.

I will also be keeping an eye on the price of the nil-paid rights when they start trading. In my last blog post on the subject, I mentioned that the rights should not trade higher than 7c. It would not make sense to buy at a higher price than 7c. In fact, at 7c, I would not bother either because it would mean a final price of 7c + 42.9c = 49.9c which is higher than my expected average price, post rights.

If the nil-paid rights should trade at 4c to 5c, it would be quite attractive as that would translate to 46.9c to 47.9c per unit which would have a distribution yield of 10.58% to 10.81%. Any price less than 4c would be a steal!

Related post:
Cambridge Industrial Trust: 1 for 8 rights issue.

Cambridge Industrial Trust: 1 for 8 rights issue.

As a retail investor and minority shareholder, I prefer a rights issue to private share placement as it allows me to participate in the enlarged capital base of the business entity. Cambridge Industrial Trust (CIT) is having a rights issue to help fund three acquisitions in Singapore. I won't go into the details. You can get all the details here.

Foremost on my mind is how can I benefit from this rights issue. Although I am no longer invested in the REIT, I will not let my past experience stop me from a possible money making opportunity. Rights issues have, so far, been profitable for me.

The rights are at an issue price of 42.9c each. 1 rights unit for every 8 units of CIT owned.

Current price is 50.5c/unit. 

Current DPU is 4.89c. Current NAV/unit is 61c. Current gearing is 34.7%.

Post rights, DPU will be 5.07c. NAV/unit will be 58c. Gearing will be 35.9%.

Therefore, if we are after a 10% distribution yield, getting units in CIT at 50.5c or lower would secure that for us. So, we could either buy some units at the current price and take part in the rights issue or we could wait to see how much the nil-paid rights would go for when they start trading later this month. Since the rights are at an issue price of 42.9c, the nil-paid rights should go for 7c at the highest. It would not make sense to pay more for them.

If the unit price of CIT were to be hammered down for some reason or if the nil-paid rights were to be sold at very low prices when they start trading, we could have ourselves a bargain.


Important dates:
Last day of CR: 15 March 2011.
Trading of nil-paid rights: 23 March to 31 March 2011.
Last date for acceptance and payment: 6 April 2011.

Saizen REIT: Support provided by the 100wMA.

Thursday, March 10, 2011

Anyone vested in this REIT would have noticed some strength in its unit price lately. There has been plenty of buy ups and yesterday saw 408 lots bought up at 17c in a single transaction. That all this is happening after the REIT went XD just a few weeks ago is rather impressive.


The OBV shows a picture of steady accumulation since hitting a low on 12 Nov 2010. The MACD has completed a bullish crossover with the signal line in negative territory while the MFI and RSI have risen to test their respective 50% lines.

While we cannot say for sure that Saizen REIT is going much higher from here, we can say that the downside seems pretty limited. On the daily chart, 15.5c is established as a strong support. A retest of 15c is possible but the probability of it happening is much lower. Looking at the weekly chart, we understand why this is so.


The 100wMA has completed its turn up and is currently providing support at 15.5c and should limit further downside. Strong resistance on the upside could be found at 17.5c while strong support is at 15.5c. The darkest days of this REIT are more or less over.

Related post:
Saizen REIT: Divestment of Kinyacho Grande.

CapitaMalls Asia: A basket case?

Someone in LP's cbox who was rather vocal in his support of CapitaMalls Asia, in recent days, has voiced his displeasure and how he is losing patience with the counter's lacklustre performance. So, is CapitaMalls Asia a basket case or is it not for people with little patience?

Fundamentally, it is a very strong company. Technically, it looks pretty interesting to me. Volume hit a high on 28 Feb as a black hammer was formed. A low of $1.69 was hit that day too, a cent lower than the support I identified before at $1.70 using two sets of Fibo lines.


Now, notice that volume has reduced visibly as the share price drifts on. A picture of reducing interest from market participants. As this happens, higher lows were formed on the MFI and the MACD. Positive divergences? Looks like it. If validated, a move to the upside would meet with immediate resistance at $1.80 which is where we find the downtrend resistance and the declining 20dMA.

Related post:
CapitaMalls Asia: Up or down?

Golden Agriculture: To sell or to hold?

When I divested my small trading position recently in Golden Agriculture at 68.5c and 70c, I made the following comment: "A one day gain of 7% to 9.4%, risk free, is good enough for me. There could be another 2 or 3c gain from here but the risk is definitely higher now.....A look at the weekly chart shows that 72c is likely to be a strong resistance. Notice also how the MFI and RSI are forming lower highs and lower lows. We could be experiencing a very strong rebound and when the energy is spent, price is probably heading lower." See blog post here.

Someone asked me today what should he do as he did not divest and was hoping that price would go higher. I told him I do not have an answer for him. He has to decide for himself to hold or to sell. I can only describe what I see in the charts and where are the supports and resistance.


What am I doing? I am waiting for a chance to go long on this counter again and I have yet to spot a fairly good entry. The counter is still in a downtrend. Although it broke out of a primary downtrend that started on 4 January, it is now in a secondary downtrend if we join the highs of 4 Jan and 4 Mar.

The immediate support of this secondary downtrend is the declining 20dMA which was tested today. It is crucial that this support holds up, otherwise we could see support at 200dMA tested sooner than later and this is currently at 64.5c. Forming a lower high would confirm the secondary downtrend.

In a downtrend, selling at resistance is conventional wisdom.


Related post:
Golden Agriculture: 72c resistance.

Tea with AK71: Another budget meal!

My friends are constantly amazed by my budget meals and it happened again today. I shared in LP's cbox that I was going to have an 80c lunch. More precisely, it was going to be a packet of nasi lemak with chilli, ikan bilis and ikan kuning wrapped in banana leaf. What some said:

jewel: wow still got 80c nasi lemak in sg
 Piggybank: all that only 0.8 ?

Guess what. I was mistaken. It was 70c and not 80c! My lunch:


Sometimes, I also like a cup of tea after lunch and here is a picture of my cup of tea today:


What is that twig in the water? That is Gan Chao (liquorice), a chinese herb. This is good for the heart, spleen, lung and stomach. It detoxifies and removes heatiness. I would throw a piece into a mug of warm water and let it steep. Here is a picture of a packet (almost depleted) which I bought from my favourite Chinese medicine hall a few months ago:


And the price? A picture is worth more than a thousand words:


Cheap? You bet. Gan Chao tea is good for our health and gentle on our wallets! In case you are wondering if the health benefits from a cup of Gan Chao tea would cancel the unhealthy effects from a packet of nasi lemak, I don't know but I'm happy. Haha... ;)

Related posts:
Tea with AK71: 60c soya beancurd et al!
Tea with AK71: $1.20 Ice Kachang.
Tea with AK71: A simple meal.

To protect our wealth, we have to take risk.

Wednesday, March 9, 2011

By end of March, we would have received all of the income distributions for the last three months of 2010 from the REITs we might be vested in. The next income distribution for those which are paid quarterly would be in the months of May and June.

Someone who recently became more concerned with inflation's wealth eroding strength asked me what could he do to make his savings work harder. He knows about the stock market but he fears losing his money in the stock market whereas his money is safe in a savings account with a local bank.

I explained that he would still have his money in nominal terms, perhaps, if he keeps it in a savings account with a local bank. However, his wealth is definitely eroding away as inflation outpaces interest earned. That caused him greater anxiety. 

So, quite calmly, I presented him the following options:


1. Leave his money in a savings account with a local bank and make 0.1% per annum.

2. Leave his money in a fixed deposit with a local bank and make 0.45% per annum and be subject to a lock up period of 12 months.

3. Invest in certain REITs without any lock up period.


REITs are, of course, traded on the stock market like any stock. We could make some money or lose some money as unit price would fluctuate. The nice thing about REITs is their regular income distributions which, in the current day environment, are pretty dependable.

I presented him with these REITs which would be distributing income in May or June:


1. AIMS AMP Capital Industrial REIT:  Possibly a much lower DPU of 0.215c payable in June due to an advanced distribution payable on 28 March. At the current price of 21c per unit, that is a 1% yield in about 3 months.

2. First REIT: Estimated DPU of 1.6c at the end of May. At the current price of 74c per unit, it would be a 2.16% yield in less than 3 months.


Basically, in the short term, distribution yield from these REITs would beat bank deposit rates by quite a bit and that got him sufficiently interested in investing for income. 

Of course, he asked the usual questions as to whether his money is safe in these REITs. 

Well, the risks might be higher than leaving his money in a local savings account but the rewards could also be much higher.

To have peace, be prepared for war. 

To protect our wealth, we have to take some risk.

Related posts:
1. AIMS AMP Capital Industrial REIT: Acquisition of Northtech.
2. First REIT: Is the bear just resting?
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Saizen REIT: Divestment of Kinyacho Grande.

Saizen REIT divested another property, Kinyacho Grande, which is located in Hiroshima, from the property portfolio of YK Shintoku. It was built in January 2004 and comprises 50 residential units and 8 parking lots.

The property was sold to an independent private investor for a cash consideration of JPY 390,000,000 (S$6.0 million).  This was at a 6.9% discount to the property's valuation of JPY 419m.

The original balance of the YK Shintoku Loan was JPY 7.953 billion (S$122.4 million). The application of (i) net sale proceeds totaling JPY 2.2 billion (S$33.8 million) from the divestments of 18 properties of YK Shintoku and (ii) operational cash flow of YK Shintoku of JPY 0.4 billion (S$6.2 million) towards loan repayment had reduced the balance of the YK Shintoku Loan to JPY 5.4 billion (S$83.1 million) as at the date hereof. Following loan repayment from sale proceeds of the Current Divestment, the remaining balance of the YK Shintoku Loan is estimated to be approximately JPY 5.1 billion (S$78.5 million).

Taking into account applicable cash reserves of JPY 0.4 billion (S$6.2 million) maintained by YK Shintoku under the loan agreement, the net outstanding loan of YK Shintoku amounts to approximately JPY 4.7 billion (S$72.3 million).

Lots of buying up of Saizen REIT units lately. This morning, it touched 17c/unit with 408 lots bought up at that price. Is the market warming up to the REIT once more?

Cache Logistics Trust: Why not buy at 94.5c?

Tuesday, March 8, 2011

More than one person asked why not I buy units in Cache Logistics Trust at 94.5c since I like its fundamentals. Well, it is just like asking why not I buy an Audi A3 at the current price since I like it. It is not really a question of affordability. As usual, it is a question of value for money.

At 94.5c, I would be buying at 5.5c above NAV. That is a 6.18% premium. Regular readers would know that I loathe to pay above NAV for a REIT. It is just like many loathe to pay COV for HDB flats but in those instances, sometimes, they do not have a choice or they really like a particular flat. After all, it could be one of a kind thing. (Ask LP at Bully the Bear. He would tell you his experience.) With a REIT, however, I am willing to wait for the right price.

So, what is the right price for this REIT for me? Well, I said in an earlier blog post that I am willing to pay a small premium above NAV which is acceptable for a lower risk investment. So, if a retest of the low of May 2010 at 91.5c were to happen, I could buy some units. Didn't I say 92.5c could see me buying some too? Yes, even at  92.5c.

What are the chances of its price going lower? Well, looking at the weekly chart, I would say there is a fair chance of it happening, given more time. In fact, we could be seeing the formation of a down trending channel.


A look at the MACD and we see a lower high. The previous low has already been surpassed and a lower low is a given. Look at the OBV and we see obvious signs of distribution over the longer term. However, the higher lows on the MFI and RSI show that some support is forming as price declined. So, downside could be limited.

Accumulating on weakness should be a fairly safe thing to do but for anyone who is willing to stomach the possibility of a 2c to 3c paper loss and would like to buy in at 94.5c, it's your call. Don't let my ideas affect you.

Related post:
Cache Logistics Trust: A retest of 91.5c low?

Burger King Tender Grill Chicken Burger at $1.00!

BURGER KING® expresses his shock over the launch of the latest burger. BURGER KING® believes that customers should have it the real way when they order a ‘grilled’ product, meaning that it is grilled over a real fire. 

In fact, the King is so inflamed, he has thought of a good way to use those flames. That is why on the 10th of March, BURGER KING® is offering a one-day only $1 Tendergrill Chicken Burger promotion to encourage his customers to taste the superiority and authenticity of a flame grilled chicken burger. The King never chickens out of challenges, and of real flames.

Redeem a coupon for a $1 Tendergrill Chicken Burger now at this link
http://www.churpchurp.com/AK71SG/share/burgerking


Cute!

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Tea with AK71: Taking taxis in Singapore.

I took a day's leave from work to run some errands. I sent my car for regular maintenance, went to the bank to sell some silver, did some laundry and, of course, blogging. See: Silver: Divestment for an 86% gain.

I would take the MRT usually if I were to be without a car. However, in some instances like from the car workshop, it is really far to walk to the nearest MRT station. I estimate it would be a 20 or 25 minutes walk and under a hot sun if I were to do it just now. Really didn't feel like perspiring too much. So, I flagged down a taxi.

It was my first time in a red color taxi. I think the company was TransCab. It was also my first time in a Toyota Wish. Not bad. Very spacious and it was a comfortable ride. The taxi driver was polite and asked me which route I would like to take to town too.

These days, if I do take a taxi, I make it a point to avoid those older Toyota Crowns. For some reason, they make me feel like throwing up. They handle corners like a ship in stormy seas and, for some reason, I could smell exhaust in the cabin.

Hyundai Azera
The Hyundai Sonatas are really comfortable and I got an Azera when I came back from my recent vacation. My first time in one and it was very comfortable, more so than the Sonata. Of course, the best are still the Mercedes Benzes and London Cabs.

I enjoy my occasional taxi rides because I could look out the side windows and enjoy looking at Singapore, the people and places. When driving, I have to keep my eyes on the road. So, sitting in the back of a taxi is a real treat for me. A simple pleasure.

First REIT: Is the bear just resting?

Monday, March 7, 2011

I scanned the charts of the counters I am vested in and, for the first time in a while, I don't really have anything to say. I was actually thinking of not blogging tonight. However, the last chart I looked at gave rise to some thoughts, some bearish thoughts. The chart was a weekly chart belonging to First REIT.

Let us first look at the daily chart. First REIT is in the grip of a downtrend that started on 20 January. This downtrend is very much intact. In fact, the recovery of its unit price from recent lows with price bouncing off support at 72c as provided by the 100dMA seems to have hit a wall this session as a black candle was formed. The reducing volume as price rose is surely not encouraging.


The MACD although having completed a bullish crossover with the signal line is still in negative territory. The recent price recovery could just be a rebound. Without an increase in volume as price tries to move higher, it could indeed be just that. It might also interest investors to look at the OBV which suggests continual distribution since price peaked in middle of January 2011. This could be short term and mild in nature but we should keep it at the back of our minds nonetheless.

Fundamentally, this is still a very attractive REIT for anyone investing for income. However, it does not look very attractive from a technical perspective at the moment. A pullback to the 100dMA at 72c could happen again and I am not discounting a possible pullback to the 200dMA either which is now at 69.5c.


Look at the weekly chart and the bulls would feel somewhat happier because the longer term uptrend is obviously intact. All the weekly MAs are rising nicely. However, pair this picture with the lower highs and lower lows on the MFI and RSI, we have negative divergences. Not so happy anymore? Well, at the most basic level, it shows that longer term momentum is weak.

Remember this blog post: First REIT: Buying more? Well, the technicals are suggesting caution even in the longer term. The recent pullback to 72c (the 100dMA) could just be a precursor. After all, price goes down a river of hope. Never say never and the 200dMA could be called upon as support in the next flush downwards. You could see me loading more units of First REIT then.

Related post:
First REIT: Buying more?

High Yield Portfolio - Update.

Sunday, March 6, 2011

Sometimes, we just stumble upon a good thing. One of my inaugural blog posts when I started ASSI on Christmas Eve 2009 remains the most popular blog post today. I am talking about "High Yield Portfolio".

In October last year, a reader asked if I would do an update on the portfolio and I did. However, it was a "Reply from AK71" kind of thing and were mostly one-liners. See it here.

Have I deviated much from the first time I introduced this portfolio for investors who are more interested in investing for income? Not much. I am still invested in all six counters although the weight of each counter in the portfolio could have changed somewhat.

My largest investment is based on rather contrarian ideas and has attracted some skepticism, putting it mildly. I started investing in Saizen REIT at 13c a unit and I kept loading up.  Even at 16.5c a unit, I bought some. For sure, this is an under-performer in terms of capital appreciation. However, I invested in this with a view that it is grossly undervalued and that things could not get any worse. So, if we take care of the downside, the upside should take care of itself. The annualised DPU of about 1c is much lower than my estimates from a year ago and, at first glance, seems unattractive. I did not take into account the amortising nature of its new loans then. However, when we realise that the DPU could actually be 50% higher if not for the amortising nature of its loans (unlike all the CMBS before), it is immediately apparent how strong this REIT's cashflow from operations actually is. See: 2Q FY2011 results.

My second largest investment is also rather controversial: AIMS AMP Capital Industrial REIT. Reading some other blogs as well as comments left in my blog, I realise how there is still deep seated mistrust of its management. This is despite the fact that it is quite a different animal from its MI-REIT days. It is financially stronger and it has two strong sponsors. It has all its financial requirements well looked after and even managed to refinance its loans at a lower interest rate. Some people say that they were the early investors in the REIT during its MI-REIT days and that they would never recover their money. It might surprise them to know that I was also an early investor but when the REIT was recapitalised, I looked at the numbers and decided that at 20.5c, it was a safe investment promising an almost 10% distribution yield. I increased my investment in the company by some 5x right away and I have recovered all my losses and more since, especially with the rights purchased at 15.5c/unit in September last year. See: Rights issue. Would I buy more now? At 20.5c and with an estimated DPU of 2c for a distribution yield of 9.76%, why not? See: Acquisition of Northtech.

My third largest investment is now in First REIT after its recent rights issue. A blog post of mine says that this one is for keeps and I still believe it is so. See: This one is for keeps. Actually, it is more so now after the rights issue and acquisitions. An expected DPU of 6.4c and the current price of 74c, it will deliver a distribution yield of 8.65%. With gearing low at 15% or so, it has more headroom to gear up for future acquisitions which could bump up DPU. See: FY2010 results.

My fourth largest investment is in LMIR. The investment was premised on a robust Indonesian economy with 60% of its GDP from domestic consumption. However, I do not like the idea of the management losing lots of money in foreign exchange forward contracts. See: Foreign exchange forward contracts. I do, however, recognise that this is a stable passive income generator and exchange rates (Rupiah/S$) should be quite stable from here. DPU for FY2010: 4.44c and at a unit price of 54c, that's a distribution yield of 8.22%.

My fifth largest investment is in SPH. No need to say much here. SPH is one of the highest yielding blue chips I know of. Although it is synonymous with The Straits Times and other publications, it is really its exposure to real estate that I really like. I especially like the fact that it owns and manages The Paragon on Orchard Road. I also like that fact that it is a co-owner of the soon to be completed Clementi Mall. Would I buy more now? The yield is still about 6.5% even at recently traded prices. I might buy more if price were to weaken further. See: Final dividend.

My smallest investment in this High Yield Portfolio is in Suntec REIT. This REIT was something I went in big at about $1.00/unit, give or take few cents, with a view that it would be a beneficiary of the expected improvement in tourist arrival numbers and improving office rentals. Technically, it was also looking good then. I think it is quite boring now with price at $1.50/unit or so. I have divested most of my investment in this REIT and still retain a small investment. Expected DPU for 2011: 9.7c. See: Buy calls.

Do I have any counters I would consider adding to this High Yield Portfolio? Yes, there is one: Cache Logistics Trust. I have blogged about it regularly and did so recently again. Read it here. I could replace Suntec REIT with Cache Logistics Trust if the conditions were right.


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