Saizen REIT: Update and sale of Johnan Building III.

We have more good news for Saizen REIT.  Firstly, Royal Hills Katagiri, which is located in Sendai, was viewed by the property manager today and was reported to be intact. This was the last of the 28 buildings which were reported as potentially affected by the earthquake and tsunami. "In the areas affected by the earthquake and tsunami, all 28 properties in Sendai, Morioka and Koriyama appear to have sustained only minor damage." Read announcement here.

Johnan Building III

Separately, the manager of the REIT reported the sale of another building today and this is really good news because it shows that investors' interest in Japanese residential properties is still very strong. This is especially remarkable given the recent disasters which shook the country.

The property divested is Johnan Building III. This is located in Fukuoka and is from the property portfolio of YK Shintoku. It was built in June 1983 and comprises 24 residential units, 6 commercial units and 21 car parking lots.

The property was sold to an independent private investor for a cash consideration of JPY 312,577,516 (S$4.9 million).  This was at a 0.5% discount to the property's valuation of JPY 314 million. Read announcement here.

Good news all round for Saizen REIT and we should see the REIT's unit price recovering gradually although to recover to the pre-crisis high of 18c could be difficult. Psychologically, there would be a shadow of doubt in the minds of investors. Although I have little doubt that gap close at 15c would happen, I believe that it might not be easy going beyond and that 15.5c and 16c would be formidable resistance levels.

Fundamentally, there would be some repair costs to contend with. It is also reasonable to assume that there could be some downward pressure when it comes to rental income for contracts which are up for renewal if the Japanese economy suffers a setback from the triple disaster. The Japanese Yen could stay strong in the short term but the longer term picture is clouded as the massive injection of liquidity by the Bank of Japan could weaken the Yen in time.

After taking into consideration the gloomier technical and fundamental pictures, it is still truly a relief that my worst case scenario of a total loss of the 28 buildings did not come to pass. Of course, the development at the Fukushima power plant needs monitoring as a meltdown which seems less likely with the passing of each day could impact the 3 buildings in Koriyama which are less than 60km away.

It could be too early to pop the champagne but the worst does seem to be over.

Cache Logistics Trust: Mixed signals.

Cache Logistics Trust's price action formed a hangman today, not a bullish signal, surely. However, closing at 94c is bullish since it is beyond the trend resistance. So, is the downtrend broken? It would seem so.

The momentum oscillators are encouraging and are still trending upwards with higher lows. A continuation of the upward movement would see immediate resistance at 96c which would be a good price to divest perhaps partially for a quick trade. Price could even touch 97c if sentiments are very bullish.

Related post:
Cache Logistics Trust and CapitaMalls Asia.

AIMS AMP Capital Industrial REIT: Positive divergence.

I am seeing positive divergence in the daily chart. Do you see it? Look at the higher low in the MFI which has just risen out of oversold territory. The upmove could see an immediate target of 21c and it could even test 21.5c before a pull back happens. Good for a trade, perhaps.

Related post:
AIMS AMP Capital Industrial REIT: More upside?

CapitaMalls Asia: Low volume retreat.

Although the stock touched a low of $1.57 in the recent sell down, the immediate support is still at $1.60. This is something I established sometime back using Fibo lines. If retested, $1.60 is likely to be a strong support as it has been tested twice since the low of $1.57 and held up successfully on both occasions.

Since the formation of a white spinning top three sessions ago, price has been retreating but on declining volume. The counter is not experiencing a massive sell down but a lack of buyers.

The MACD is rising again and we could be seeing a basing process for the stock. With the MACD still in negative territory, it is still too early to tell if the stock is going to emerge from its downtrend but the worst could be over. Buy more at $1.60 if support holds up? I just might do that.

First REIT: Rising on low volume.

In my last blog post on the REIT, I suggested that the downside proposition looked more persuasive but I was also beginning to see positive divergences. Today, the MACD turned up and formed a higher low.

Price moved higher and closed at 73.5c. I think the positive divergence has been validated. However, rising on rather low volume is lacking in persuasive power.

Technically, the REIT is still in a downtrend which started on 20 Jan 2011. The trend resistance is at 74c. If price is able to break 74c convincingly, by this I mean with higher volume, we could see old highs tested as the downtrend breaks.

Unable to break the trend resistance at 74c could see the REIT trading lower and I would not be surprised then if the rising 200dMA should be tested for support. This is still at 70c.

Related post:
First REIT: Buying more?

Cache Logistics Trust and CapitaMalls Asia.

Cache Logistics Trust: On a day with lower volume, price could not break out of the downtrend. Instead, a doji, suggesting indecision, was formed.

Could we see price overcoming resistance and test the merged 50d and 100d MAs at 96c? Although the positive divergences are plain to see, we need volume to expand on any move upwards in order to overcome the trend resistance. Immediate support is at 92.5c in case of a pull back.

JP Morgan reduced its holdings on 15 March from 6.97 % To 5.83 % (44,210,000 units to 37,032,000 units).  That's a reduction of 7,178 lots. That was the day the trust touched 91c.

CapitaMalls Asia: No breakout today which obviously means that the downtrend is intact. Immediate support is at $1.66. If that were to break, keep an eye on $1.57. If it were to be retested intact on lower volume, it would be bullish.

A breakout would see immediate resistance at $1.75, $1.78 and, ultimately, $1.83.

Related posts:
Cache Logistics Trust: Positive divergences.
CapitaMalls Asia: At resistance.

Saizen REIT: Stabilising.

Congratulations to fellow unitholders who did not panic and sell at 13c. It does seem as if things are improving at the Fukushima plant and let us hope that things would continue to improve.

The management has yet to report on the final property in Sendai, Royal Hills Katagiri, which has not been visited. If the research by a reader, Data, which says that this property is located only 2km from the coast of Sendai is correct, it could cost a lot of money to repair the building, if at all possible. This property is 0.6% of the REIT's NAV and contributes to 0.4% of the REIT's annual income. So, the impact is not likely to be great even if it were to be written off.

Technically, there is still a chance that the counter could attempt a gap close at 15c and for people waiting to reduce exposure or to cut loss, 15c is still a preferred price compared to 13c or, indeed, 12.5c at the height of the panic selling last week.

Insider buying:
Beagle Capital Limited bought 20 lots of Saizen REIT warrants at 5c per warrant on 18 March.
Beagle Capital Limited bought 900 lots of Saizen REIT units at 13.72c per unit on 18 March.
Argyle Street Management Holdings Limited bought 150 lots of Saizen REIT units at 13.3c per unit on 18 March.

Related post:
Saizen REIT: Insider continues to buy as price recovers.

CapitaMalls Asia: At resistance.

Volume expanded visibly as price moved higher in the last session, touching a high of $1.75 before closing at $1.72, forming a white spinning top in the process. I don't like a spinning top in the current picture as it suggests indecision. Also, closing at $1.72 means that the downtrend is still intact.

If the 20dMA should be overcome in the next session, the downtrend would have been broken and we could see price rising to test $1.83, a previously strong support which should be a strong resistance now. In the event that $1.83 were breached, price could touch a high of $1.87. My refusal to sell in the recent price weakness would then be rewarded.

However, a continuation of the downtrend would find support at $1.60.

Related post:
CapitaMalls Asia: Green in a sea of red.

First REIT: Buying more?

I like First REIT and it is a large investment in my portfolio. Although, fundamentally, I think 72.5c/unit is a fairly attractive price, technically, it looks rather weak. This is why I have not added to my long position in the REIT in the current environment.

Technically, the REIT tested resistance at 72.5c in the last session on the back of low volume. If it did manage to break immediate resistance, it would meet with resistance at 73.5c and 74c. If volume stays tepid, chances of resistance at 72.5c being overcome are rather low. Of the 450 lots which changed hands in the last session, 321 lots were sold down at 72c.

The downside proposition looks stronger. The rising 200dMA should provide stronger support at 70c which is a psychologically important round number. I would probably add to my position closer to this level. Having said this, I might be seeing the beginnings of positive divergences on the daily chart and we could see price rebounding quite smartly if they are valid.

Referring to the weekly chart, it is quite obvious that the uptrend is intact and this, to me, means that any short term weakness is an opportunity to accumulate on the cheap.

Related post:
First REIT: Is the bear just resting?

Cache Logistics Trust: Positive divergences.

I initiated a long position recently in this Trust on 15 March at 91.5c. That decision was made mostly on fundamentals. The technical consideration was that 91.5c was the lowest it ever hit since its IPO but it went on to touch 91c on the same day. I was even musing as to whether it would hit 88c next which, incidentally, is its NAV/unit.

Today, I decided to rely on the many positive divergences in the daily chart of CLT and I added to my long position with additional purchases at 92.5c. The counter closed at 94c today, forming a long wickless white candle in the process. Volume was higher than the session before too.

However, closing at 94c means that the downtrend is still intact. If there should be a follow through next week, we would see the downtrend broken and price could rise to test resistance at 96c as provided by the merged 100d and 50d MAs or even 97c which is where we find the 200dMA.

Related post:
Cache Logistics Trust: Initiated long position at 91.5c

AIMS AMP Capital Industrial REIT: More upside?

I bought more of this REIT at 20c two days ago and I bought more again yesterday at 19.5c. My overnight buy queue at 19c was not filled today although some 6 transactions, totaling merely 68 lots, sold down the REIT at 19c today. At 19c /unit, the distribution yield would be 10.53%.

Do I think the price is going higher or lower?

Fundamentally, there is nothing wrong with the REIT. Financially, it is very much stronger than its MI-REIT days. It has also reported on the status of its Japanese property in Tokyo and the situation is benign. Read blog post here. With an expected DPU of 2c per annum, the REIT looks very attractive at 20c per unit, the price it closed at today. In fact, on closing, 4,543 lots were bought up at 20c per unit.

Technically, the downtrend is quite obvious. However, forming a dragonfly doji is bullish. So is the higher low on the MACD histograms. Looking at the OBV, I see something interesting and that is how the OBV formed a higher low in the recent sell down compared to the low formed in late February when price was somewhat higher. This means that there is ongoing accumulation as price weakened recently.

I see immediate resistance at 20.5c which is where we find the steepest trendline resistance. A fair upside target in the event of a follow through is 21.5c which is where we find the next trendline resistance and the declining 100dMA.

Related post:
AIMS AMP Capital Industrial REIT: Bought more at 19.5c.

Saizen REIT: Insider continues to buy as price recovers.

Argyle Street Management Holdings Limited, a substantial shareholder of Saizen REIT, bought another 600 lots at 13c/unit on 17 March. This increased their holdings from 15.201% to 15.252%. See announcement here.

Saizen REIT recovered today by 1c or 7.7% to close at 14c. There is news that Japan could restore power to cooling systems at the nuclear power plant as early as tonight. If it pans out well, we could see the unit price of Saizen REIT closing the gap at 15c next week.

On the weekly chart, a white candle was formed. Technically, this is encouraging under normal circumstances but the circumstances now are not normal. Let's see how things turn out in the next few days.

Related post:
Saizen REIT: Hold or sell as insider buying continues?

Hutchison Port Holdings Trust: A weak debut.

Many were expecting HPH to open underwater and that was exactly what it did. I have not tried my hands at IPOs in years, taking to heart what Warren Buffet said about how IPOs are never undervalued and never good for investors. Of course, we could make money from IPOs in very bullish circumstances but Warren Buffet was referring to value and not price.

HPH touched a low of 94c before closing the session at 95c today.

Hutchison Port Holdings Trust not the cheapest container port play - CLSA. The house says based on the IPO range of US$0.91-US$1.08, “we are borderline buyers at US$0.91, (which would represent 28% upside to its target valuation at US$1.16)...at any pricing level higher than that we would rather buy China Merchants (0144.HK), rated Buy, as it has greater upside with added hinterland exposure.”  
Friday, 18 March 2011

© 2011 - The Edge Singapore

Hutchison Port traded below IPO in gray market, BTIG says. Units of the container-terminal owner were sold for 98 cents yesterday in deals brokered by BTIG Hong Kong, Managing Director Christian Kielland said by e-mail. The trust, which holds assets from Li Ka-shing’s Hutchison Whampoa, priced units in its IPO at US$1.01.
Friday, 18 March 2011

© 2011 - The Edge Singapore

Saizen REIT: All but one property have been visited.

"In the areas affected by the earthquake and tsunami, all 6 properties in Morioka and Koriyama, and 21 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.

"The remaining property yet to be viewed by the property manager due to transportation contraints is Royal Hills Katagiri, belonging to the TK operator YK Shingen."

Royal Hills Katagiri

Read announcement here.

Please read this:
Help Japan and donate generously.

CapitaMalls Asia: Green in a sea of red.

The positive divergence observed in the weekly chart many times before could be playing out. Today, price rose strongly on the back of higher volume as a long wickless white candle was formed. Price was $1.60 at the open and $1.69 at the close.

Positive divergence between declining price and the MFI is quite obvious on the daily chart now. Price would likely continue higher in the next session with immediate resistance provided by the declining 20dMA at $1.73.

If the bulls are very strong, we could see $1.83, a formerly strong support tested as resistance this time round. $1.83 is also where the declining 50dMA is approximating.

Related post:
CapitaMalls Asia: Japanese properties are safe.

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Help Japan and donate generously.

SPH: Time to utilise my CPF OA?

As a rule, I am very careful with my CPF money and first utilised the money in my CPF OA during the global financial crisis some two years ago. I used the money almost exclusively for the purchase of shares in SPH which is my favourite blue chip for its high yield.

I have divested all the shares bought using the money in my CPF OA as the market ran up last year. So, for some time now, my CPF OA has been 100% cash waiting for another opportunity to buy shares of strong blue chip companies again. Of course, I am keeping an eye on SPH.

SPH's share price has been retreating and in the last three sessions, trading volume was rather high. Technically, it looks very weak as the MACD completed a bearish crossover with the signal line in negative territory and the 20dMA completed a bearish crossover with the 200dMA.

If we look at the weekly chart, the longer term 100wMA has turned up some time back and is rising nicely. With price action having broken the support provided by the 50wMA, I would look to the 100wMA for support. For now, I like $3.60 as that is where we find the 161.8% golden ratio as well as the rising 100wMA.

It seems that the time to use my CPF OA to buy some shares of SPH could be drawing near.

Please read this:
Help Japan and donate generously.

Sabana REIT: 92.5c is near.

Sabana REIT is beginning to look attractive. "Sabana REIT has an aggregate leverage of 26.5% which is comfortable... Its NAV per unit is 99c... The estimated annualised DPU for 2011 is 8.63c and for 2012 is 8.67c." Read my analysis: Sabana REIT: Fundamental Analysis.

On 10 December, I said that 92.5c would probably be a strong support. Price touched 92.5c, missed my buy order and off it rose. The REIT closed at 93c per unit today and it seems that 92.5c is within reach once more.

However, 92.5c/unit now is probably different from 92.5c/unit back in December as broader market sentiments are decidedly more bearish. Having said this, I would still enter on the long side with a small position just to put my foot in the door if price should weaken further.

Related post:
Sabana REIT: Possibly bottomed.

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Help Japan and donate generously.

AIMS AMP Capital Industrial REIT: Bought more at 19.5c.

There was a single transaction today where 14,600 lots were sold down at 19.5c. This was at 4.01pm. That wiped out the buy queue at 19.5c. I went in and bought more units at 19.5c shortly after. It was a bargain and I could not resist it.

Substantial shareholder, Dragon Pacific Assets Limited, on 16 Mar increased its stake from 11.41% to 11.65%. This is an increase of 5,274 lots. Today, it increased its stake to 11.98%. This is an increase of more than 7,300 lots. Insider buying is taking place as price declines, it would seem.

Could we not see 19c or 18.5c per unit? In this current market, we could. Sentiments are still very negative and people do become irrational in times like this. I already have a buy queue at 19c.

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

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Help Japan and donate generously.

Saizen REIT: Hold or sell as insider buying continues?

On 15 March, Argyle Street Management Limited, a substantial shareholder of Saizen REIT, increased its holdings from 15.036 % to 15.201% or an increase of 1,942,000 units. Average price per unit: 13.06c. This is their second open market purchase two days in a row. Announcement here.

On 16 March, Starich Resources Limited, bought 1,000,000 Saizen REIT warrants. Read announcement here.

The continual purchases by insiders reinforce my own perception that at 13c/unit, we are pretty close to the floor, if not the bottom. In the worst case scenario, a total loss of the 28 buildings in the affected areas should limit losses to NAV and DPU to 15%. In fact, losses to the DPU could be lower as almost half of the 28 buildings in question belong to YK Shintoku which is not making any contribution to income distribution.

However, we have to bear in mind that the REIT would have to incur repair costs to the affected buildings even though the damages are seen to be minor so far. Given the healthy cash holdings the REIT has now, I do not foresee any problem with its ability to pay for the repair work unless it should run into tens of millions of dollars. So, there is no need for the REIT to seek extra cash from unitholders.

The one thing that could go wrong now is the situation at the Fukushima nuclear power plant. If the reactors or the spent fuel should suffer a complete meltdown, we could possibly see the current 30km evacuation zone widen.  I read somewhere that the USA suggested an 80km evacuation zone and this would mean the 3 buildings in Koriyama would have to be abandoned since those are within 60km of the nuclear power plant.

There is hope that things would improve: "Engineers were focusing their efforts on restoring the power supply to a quake-damaged nuclear plant in an attempt to reactivate its cooling system and avert a meltdown." Read article here.

I have many people asking me whether to sell or to hold. I cannot provide advisory but my own preference is to hold because I think we are pretty much near the bottom. I like to sell at resistance and not at supports, if I can help it. Of course, there is no guarantee that I am right. So, if you feel like selling and if that would give you a peace of mind, why not?

Please read this:
Help Japan and donate generously.