Help Japan and donate generously.

Eating emergency rations in shelter.

In life, sometimes bad things happen. I had a couple of things that went wrong at work today and was feeling somewhat grouchy but they are so insignificant compared to really bad things that could happen in life. How many truly holy and selfless people do we know?

In the aftermath of the earthquake and tsunami that rocked Japan, I watch scenes of destruction and misery on the TV and YouTube. My heart aches and I want to contribute to the aid efforts. I was advised to wait for an official donation line that would benefit the victims in Japan directly. One such line is now available at the Singapore Red Cross:

A child at an evacuation centre.

How we can help?

The Singapore Red Cross is accepting monetary donations towards this disaster. Donors may do so with the following:

Cash Donation :

For walk-in donations, the SRC is open during the hours:
Mondays to Fridays 9.30am-9pm,
Saturdays, Sundays and Public Holidays 9.30am – 6pm.

Address: 15 Penang Lane, Singapore 238486.

Cheque Donation:

Cheques to be made payable to the “Singapore Red Cross Society” At the back of the cheque, please indicate:

i) Name
ii) IC/Passport No.
iii) Address and Contact Number
iv) “Japan Disaster 2011”

SMS Donation

Donors may donate via their mobile phones to 75772. For every sms, S$50 will be donated to the “Japan Disaster” fund.

*Please take note that all donations to this disaster are non tax-deductable.

I think the most convenient way to make a donation is by SMS. Since the donations are non tax-deductable, there is no difference whether they have my name and IC number or not.

Please help the victims in Japan. Many have lost their homes and loved ones. Let us help them to overcome the current difficulties and aid their efforts in rebuilding their lives.


Watch this video:


This is a sincere appeal and please accept my heartfelt thanks for your compassion and generosity.

You may visit the website of Singapore Red Cross here to verify the information given above.

Japan disaster: dead, missing toll tops 15,000. Read article here.
----------------------------------------------------------------------------------

Another avenue to make a donation:

I was just doing some internet banking and found that DBS is facilitating donations to the Red Cross Japan Disaster fund and I have made my donation via internet banking. It is really easy for anyone who does ibanking with DBS. In the consumer reference space, fill in your telephone number.

16 Mar 2011 07:55 PM  Singapore

Your transaction is completed. You may wish to print out a copy of this confirmation for your reference. Payee Name RED CROSS JAPAN DISASTER  Pay From POSB Savings ***-*****-* Latest Available Balance ******** Amount S$**** Consumer Reference No. ******** Date of Payment Immediate  Transaction Reference ***********

Step 1: Log in to your DBS/POSB bank account

 

Enter your DBS/POSB internet banking User ID and PIN, and click Submit. Make sure you have your iBanking Secure Device with you. Enter the Secure PIN and click Submit.

Step 2: Go to Bill Payment

Once you're logged in, go to Payment Services and click Bill Payment Select Red Cross Japan Disaster from the droplist

Step 3: Add Red Cross Japan Disaster as a bill payee on your DBS/POSB iBanking account

 

To set up Red Cross Japan Disaster as a bill payee, here's what you'll need to: Enter your telephone number as your Consumer Reference Number Select the bank account you wish to debit your donation from Then, click Submit.

Step 4: Confirm Red Cross Japan Disaster as a bill payee

Saizen REIT: Update on properties in Sendai and insider buying.

"In the areas affected by the earthquake and tsunami, all 6 properties in Morioka and Koriyama, and 17 out of 22 properties in Sendai have been viewed by the property managers thus far, and preliminary reports have confirmed that these properties appear to have sustained only minor damage and to have remained intact.

"To-date, we have not received any reports of tenant casualties, and none of the properties viewed appear to have been vacated.... None of Saizen REIT’s properties are within the current evacuation zone surrounding the nuclear power plant at risk.

"Moody’s Investor Service has issued an announcement today which stated that it sees no immediate impact of the earthquake on Saizen REIT's Caa1 corporate family rating."

Read announcement here.

On 14 March, Argyle Street Management Limited, a substantial shareholder of Saizen REIT, increased its holdings from 14.920 % to 15.036 %  (from 175,048,912 to 176,648,912 units) through open market purchases. Announcement here.

Related post:
Saizen REIT: Staying calm and rational.

CapitaMalls Asia: Japanese properties are safe.

Quite a few people I know have their eyes on CapitaMalls Asia and they are hoping that it would go closer to its NAV/share to buy some or more shares of the company. Its NAV/share is currently $1.50.

There is some concern amongst investors that the company's Japanese properties might have suffered from the quake. The company has released a statement today reassuring investors "the properties comply with strict seismic safety standards and have not suffered any material structural damage".

"CMA’s investments in Japan, which as at Dec. 31, 2010, accounted for approximately 2% of its total assets, are primarily held through its 26.29% stake in the CapitaRetail Japan Fund which owns seven retail properties in Tokyo, Osaka, Hokkaido and Kobe."

Technically, even though price touched a low of $1.57 today on high volume. The volume is relatively lower than 28 Feb when price touched a low of $1.69. This suggests that the weakness is from a lack of buyers and not from an abundance of sellers. I would also look out for positive divergence in the making on the daily chart. The positive divergence on the weekly chart between lower price and higher MFI is still quite obvious.

CapitaMalls Asia at all-time low; the Japanese properties it has investments in “were not materially affected by the earthquake and tsunami which occurred on 11 March 2011.” CMA says the properties comply with strict seismic safety standards and have not suffered any material structural damage, while operations at the properties have resumed.
Tuesday, 15 March 2011

© 2011 - The Edge Singapore

AIMS AMP Capital Industrial REIT: Bought more at 20c.

Back from hot yoga. I think the heat is somewhat challenging. I should try yoga without the "hot" next.  Anyway, time to catch up on my blogging.

Apart from Cache Logistics Trust, I bought some units of AIMS AMP Capital Industrial REIT today at 20c/unit.

Fundamentally, at 20c/unit and a DPU of 2c per annum, I am getting a 10% distribution yield. The manager also released some re-assuring news yesterday:

1. There appears to be no structural damage to the Asahi Ohmiya Warehouse located in Tokyo, Japan, which is located approximately 345 km from the epicenter of the earthquake which struck Japan on Friday 11 March 2011.

2. A sale and purchase agreement was struck on on 21 February 2011 for the sale of the property for a consideration of JPY1.49 billion. Completion of the sale of the Property was originally scheduled to take place today.

3. The Purchaser has no right to rescind the Sale and Purchase Agreement and the completion of the sale of the Property will be rescheduled to the first practicable date following completion of the investigation and any required repairs.
Read announcement here.

This, I believe, is good news as the sale of its Japanese property is something the REIT has been working towards. The apparently good condition of the property after the quake would also mean that the REIT would  not be incurring any hefty repair costs.

Technically, we could see price going lower as the selling down at 19.5c today was quite strong with 6,599 lots sold down at that price. 19c? Possible. Maybe even 18.5c. So, why don't I wait? Well, can we tell for sure if it would go that much lower? I can't. So, I buy some now. In fact, forming a doji today tells a story in which bulls were quite strong at the closing too.

I would also pay attention to the MACD and whether it could form a higher low as price forms a lower low. That would be a positive divergence and could indicate a short term trading opportunity. I have put in a buy queue at 19.5c for tomorrow.

Something on Cambridge Industrial Trust:

Cambridge Industrial Trust rated 'buy' by DMG. Stock trades at 10% FY2011 yield, attractive relative to its peer average of 7.3% and its pre-crisis yield of 6.7%. DDM-based target price of 61 cents. MAINTAIN BUY.
Tuesday, 15 March 2011

© 2011 - The Edge Singapore

Cache Logistics Trust: Initiated long position at 91.5c.

"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." This was what I said in my blog on 8 March, a few days before the terrible disaster hit Japan. Today, I bought some units of CLT at 91.5c.

With the acquisitions the manager announced yesterday, this REIT is looking more attractive as its gearing level remains under 30% while its DPU could bump up by a few percentage points. Could its unit price weaken further? It could as its downtrend is technically very much intact.

Well, 91.5c/unit was my target entry price and, I dare say, is a fairly good one with a smallish 3.98% premium to NAV/unit which is at 88c. I have gotten my foot in the door, so to speak.

I have a few more blog posts which I would like to put up this evening but it really depends on my condition later on. My second hot yoga session is in less than an hour!

Related post:
Cache Logistics Trust: Why not buy at 94.5c?
Cache Logistics Trust: Acquisitions.

Cache Logistics Trust rated 'buy' by OCBC. Initiate buy on CLT with a fair value of $1.03 largely on valuation grounds.
Tuesday, 15 March 2011

© 2011 - The Edge Singapore

Cache Logistics Trust: Acquisitions.

Cache Logistics Trust is making its maiden acquisitions.

"The two unrelated transactions were signed with APC Distributors Pte Ltd (“APC”) for the acquisition of 6 Changi North Way for a purchase price of S$30.9 million and with Kim Heng Tubulars Pte Ltd (“Kim Heng”) for the acquisition of 4 Penjuru Lane for S$8.9 million."


Some important numbers:

1. Both acquisitions are expected to be accretive to Cache’s distribution per unit. The combined NPI yield is expected to be 8.0% which compares favourably to the NPI yield of 7.7% for the existing portfolio of Cache as at 31 December 2010.

2. Both acquisitions will be fully-funded by debt. The aggregate leverage of Cache will increase from 23.7% (as at 31 December 2010) to 27.6% as a result of the acquisitions.

Read press release here.

I remain interested in initiating a long position in this trust.

Saizen REIT: Staying calm and rational.

Many would like to know what am I doing next with regards to Saizen REIT. I have replied to readers in this blog and in emails that I am holding my position and waiting for more announcements from the managers.

I would stay calm and think through the situation rationally, knowing the current financial strength of the REIT as well as the possible maximum loss of NAV and income it could suffer if all possibly affected buildings were destroyed. I hope I have done a good job so far. Indeed, I have been sharing my findings and thoughts here in my blog.

It has now been confirmed that, of the 14 buildings visited, all are still standing and have only suffered minor damages. There are also no casualties amongst the tenants. So, the loss of NAV and income which could be suffered is much reduced now. Consequently, any probable negative impact on income distribution to unitholders is reduced. There are 14 more buildings to be visited in Sendai and we will have to await the next report from the REIT's managers.

Technically, price action today formed a white hammer after a gap down to 13.5c with an intra-day low of 13c, a price last seen on 9 Nov 2009.

In my blog post this morning, I mentioned that the selling is overdone and that panic was in the air. I stand firm by my statement. In the following days, we could see the gap covered and we could see the former support at 15c providing resistance. Now, for anyone looking to reduce exposure, that would be a fairly good time to do so.

Do I think that major investors are abandoning the REIT? I do not think so. Saizen REIT has more than a billion units in issue. The total trading volume for today, although higher than usual, is only under 14 million units.

A total of 7,954 lots were bought up today with 4,010 lots bought up at 14c alone. This compared to a total of 5,723 lots sold down today. Total buying up numbers trumped selling down numbers. It is my guess that many investors recognise that the REIT is very undervalued and could be using this opportunity to accumulate at even lower prices. If the unit price were to weaken further, I would buy more.

Saizen REIT: Divestment of Wealth Meinohama.

Saizen REIT divested another property, Wealth Meinohama, which is located in Fukuoka, from the property portfolio of YK Shingen. It was built in December 1998 and comprises 12 residential units and 1 parking lot.

The property was sold to an independent private investor for a cash consideration of JPY 59,500,000 (S$0.9 million).  This was at a 3.1% premium to the property's valuation of JPY 57.7 million.

"The proceeds from the Current Divestment will be deployed towards Saizen REIT’s working capital until such time when they are required for other purposes, including the refinancing of the loan of YK Shintoku (if such refinancing is possible)."  Read announcement here.

Saizen REIT: More buildings confirmed standing.

This is the latest from the managers:

"The property managers have managed to view a further 5 properties in Sendai and 3 properties in Morioka. In total, all 6 properties in Morioka and Koriyama, and 8 out of 22 properties in Sendai have been viewed by the property managers thus far, and preliminary reports have confirmed that these properties appear to have sustained only minor damage and are not in any imminent danger of collapse.

"To-date, we have not received any reports of tenant casualties, and none of the properties viewed appear to have been vacated.... All the 28 affected properties are located outside the evacuation zones surrounding the nuclear power plants at risk."

Of the 14 properties yet to be viewed, 9 belong to the portfolio of YK Shintoku which does not contribute to income distribution as its CMBS is in default.  Read announcement here.

Saizen REIT: Update on properties in Sendai, Koriyama and Morioka.

Panic selling of units of Saizen REIT from the opening bell this morning was evident as price gapped down and started the day at 13.5c. As of now, it seems to have found support at 13c, the price at which I started investing in the REIT in 2009.

The management of the REIT has issued an update on the situation in Japan:

"The property managers have managed to view 6 properties so far, as set out below. Preliminary reports have confirmed that these 6 properties have sustained only minor damage and do not appear in any imminent danger of collapse. However, the full extent of damage can only be ascertained after more detailed assessments.

"The property managers have managed to view 3 out of 22 properties in Sendai....It should be noted that 11 out these 22 properties (with annual rental income of approximately JPY 152.8 million (S$2.4 million)) belong to the YK Shintoku portfolio. Revenues from YK Shintoku’s properties currently do not contribute to distributions. (This was a point I made in an earlier blog post as well. See it here.)

"The property managers have managed to view all 3 properties in Koriyama.... The property managers have not managed to view any of the 3 properties in Morioka.... It should be noted that 1 out these 3 properties (with annual rental income of approximately JPY 30.6 million (S$0.5 million)) belongs to the YK Shintoku portfolio." See announcement here.

The selling this morning is overdone but it is to be expected, I suppose. If I did not have a thorough understanding of the REIT's current financial standing and how much it could suffer on the downside in the worst case scenario, I could have been one of the sellers too. Good luck to us all.

Related posts:
Saizen REIT: Properties in Sendai and YK Shintoku.
Saizen REIT: Sendai, Koriyama and Moriokas' positions in relation to the two distressed nuclear power plants.

Saizen REIT: Sendai, Koriyama and Moriokas' positions in relation to the two distressed nuclear power plants.

There is much concern that the two nuclear power plants could suffer a meltdown. "However, experts said Japan should not expect a repeat of Chernobyl. They said pictures of mist above the plant suggested only small amounts of radiation had been expelled as part of measures to ensure its stability, far from the radioactive clouds Chernobyl spewed out 25 years ago." Read full story here.

"Favourable winds will likely blow possible radioactive pollution from a blast at a Japanese nuclear power plant out over the Pacific Ocean, the French Nuclear Safety Authority said Saturday." Read full story here.

Personally, I like to look at the worst case scenario. What if meltdown should happen at the two nuclear power plants? Would Saizen REIT have to abandon the buildings in the cities of Sendai, Koriyama and Morioka even if they were not destroyed by the earthquake and tsunami?

Looking at the above map, the two nuclear plants in danger of a reactor meltdown are Fukushima 1 and Fukushima 2. Authorities have, so far, said that areas beyond 20km of the reactors are safe. This could, of course, change in time.

Sendai is about 100km away from the two plants while Koriyama is more than 60km west of the plants. I checked Saizen REIT's website and found that Morioka is north of Sendai and is therefore farther from the plants.

It would be indeed optimistic to expect zero damage to Saizen REIT's properties in the biggest earthquake to hit Japan in more than a century. This is undoubtedly a blow to Saizen REIT but the reduction in NAV and loss of rental income should be capped at about 15%. Now, knowing that the properties, if still whole, are safe from any repercussions of a nuclear meltdown at the two plants is a consolation.

In an earlier blog post, I suggested that the reduction in income distribution to unitholders could be less severe than first estimated as 13 of the 28 possibly affected properties are in the portfolio of YK Shintoku which is currently not making any contribution to income distribution. However, there would be costs involved in the restoration of the buildings affected, if restoration should be a viable option. This could impact income distribution although the extent of the impact is hard to estimate at the moment. We will have to wait for a more detailed report by the management this week.

Related posts:
Saizen REIT: Properties in Sendai and YK Shintoku.
Earth shattering news: Japan's earthquake and Saizen REIT.

Tea with AK71: A very old handkerchief.

In LP's cbox, a conversation took place on whether we should use handkerchiefs or tissue paper. Some went on to say that guys who use handkerchiefs are romantic. I have been using handkerchiefs forever! No one has ever said I was romantic. In fact, some people think that I am a dinosaur.

This is my favourite handkerchief, one that my mom bought for me when I was in secondary school. So, it must be at least 24 years old by now. Actually, I suspect it is a couple of years older.

I have decided to stop using it after its last wash because it has started tearing. Quite threadbare by now. How many packets of tissue paper have I saved because I was using this handkerchief for more than two decades? Just a rhetorical question. I don't have the answer. ;)

Saizen REIT: Properties in Sendai and YK Shintoku.

The quake that rocked Japan affected the city of Sendai the most. Saizen REIT has 22 properties in that city and we are still awaiting news on the extent of the damage. Here are photos of some of the properties in Sendai taken from Saizen REIT's website :

In a reply to a reader, I mentioned that of the 28 properties possibly affected (3 more each in Koriyama and Morioka), 13 properties are in the portfolio of YK Shintoku. I wonder how this would play out since YK Shintoku is still in default of its CMBS and not contributing to income distributions to unitholders.

If the 13 properties in question were totally destroyed, YK Shintoku's portfolio NAV would lower significantly. In such an instance, perhaps, it would not make much sense to continue trying to pay off the CMBS which is in default. It would make more sense to let YK Shintoku go into foreclosure. After all, Saizen REIT's other investments are ring fenced from YK Shintoku and are doing quite well without any contribution from YK Shintoku.

Of course, I am just raising a hypothetical scenario assuming that all 13 properties concerned were destroyed. A portfolio with a NAV higher than its outstanding loan is worth rescuing but a portfolio with a NAV lower than its outstanding loan should be considered for foreclosure. It is just good business sense, I believe.

Golden Agriculture: Testing the 200dMA.

Crude palm oil (CPO) price was down 2.75%, "touching their lowest level in four months as key crop data pointed to a surprise increase in stock levels." Source: Dow Jones Newswires.

Doing a one day contra on my most recent foray into Golden Agriculture was an example of how a little less greed could be a good thing. The counter's share price sank to retest support provided by the 200dMA at 64.5c in the last session on the back of higher volume. Could price go lower to test the lower Bollinger band at 62c? It could. If that were to happen, could it be time to buy? It is too early to say but it could be.

Pay attention to the MACD and see if it forms a higher low if price were to retreat further. A positive divergence would be a good signal that we could go in for another trade.

Related post:
Golden Agriculture: A one day gain of 7 to 9.4%.
Golden Agriculture: To sell or to hold?

Baby in pram by the beach.

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.

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. :)

Mapletree Logistics Trust, Saizen falls on Japan quake
Friday, 11 March 2011

© 2011 - The Edge Singapore

GLP slumps on Japan quake; company checking properties
Friday, 11 March 2011

© 2011 - The Edge Singapore

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.

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.