AIMS AMP Capital Industrial REIT: Stronger numbers.

The REIT's properties have been revalued higher year on year by 4% as at 31 March 2010. This means NAV per unit improves by 1c. See announcement here.

The REIT's unaudited financial results for the financial year ended 31 March 2011 will be released on 19 April 2011. See announcement here.

I am expecting the following:
DPU: 0.215c
NAV per unit: 27c.
Gearing: 32%.

DPU of 0.215c is, of course, due to the advance distribution of 0.285c earlier last month to exclude placement shares from income distribution for the period prior to the placement exercise.

NAV per unit, I have left unchanged despite the 4% higher property valuation because the REIT did dispose of Asahi Ohmiya Warehouse in Tokyo last month.

Gearing level is lower at 32% because funds from the same said divestment will be used to repay debt.

If my estimates are accurate enough, the REIT is currently trading at a 24% discount to NAV and a distribution yield of 9.76% (annualised DPU of 2c). A 32% gearing level is pretty safe considering the fact that property prices seem to be rising. There is also the fact that debts were refinanced last year at a much lower interest rate of 2.16% and the loans are not due for another two years at least.

I continue to like this REIT's fundamentals and would accumulate on any weakness.

Related posts:
AIMS AMP Capital Industrial REIT: Insights.
AIMS AMP Capital Indsutrial REIT: Lower gearing.

CapitaMalls Asia: Testing $1.83 resistance.

CapitaMalls Asia tested support turned resistance at $1.83 for the first time today. The fact that its share price pulled back and closed at $1.81 shows the existence of strong selling pressure closer to and at $1.83. The fact that this happened on much higher volume shows some weakness in the upward movement today. My sell order at $1.83 was not done.

The MFI, a measure of demand, has flattened despite the higher price and volume while the RSI has flattened in overbought territory. OBV, however, is rising which suggests ongoing accumulation. What are the possible scenarios now?

Given the fact that the MFI and RSI are near overbought and overbought, respectively, upside could be limited from here. $1.83 remains the immediate resistance while further upside could be capped at $1.88 (78.6% Fibo fan line and 100dMA) in the event that $1.83 is overcome.

Downside? Immediate support is at $1.80 although this could be a weak support. Stronger support could be found at $1.78, a many times tested resistance which coincides with trendline support as well. If this were to go, the uptrend would have been compromised and the next support would be at $1.72.

I have divested some at $1.78 and have put in a sell order at $1.83 for tomorrow. If price were to weaken to $1.72, I could buy in again. TA is never about certainty. It is about probability and we should plan accordingly. Good luck to fellow shareholders.

Related post:
CapitaMalls Asia: Partial divestment at $1.78.

Sabana REIT: Positive divergence.

In an earlier blog post, I mentioned that we should "Keep an eye on the MACD and see if a higher low forms as price forms a lower low. We are on the lookout for a potential positive divergence." A higher low has formed in the MACD and we have a positive divergence.

The formation of a positive divergence does not mean that the unit price is going to fly higher right away. A significant resistance presented by the declining 20dMA at 94c would have to be cleared first. Drawing a Fibo fan, it is also interesting to note that price is currently at the 23.6% Fibo fan line. This is not one of the three golden ratios and is a weaker resistance but it is a resistance nonetheless.

Overcoming immediate resistance at 94c would see price going higher. Long suffering unitholders of this underperforming REIT could have a respite soon if this should be the case. Good luck.

Related post:
Sabana REIT: Initiated long position.

Cache Logistics Trust: When would I buy more?

Cache Logistics Trust went as high as 96c/unit today before closing at 95c/unit, forming a gravestone doji in the process. Buying more at current levels means a smaller margin of safety, for sure. Volume was also lower as price tried to move higher. A picture of negative divergence is forming: rising price and falling volume.

Connecting the lows of 15 March and 24 March gives us a trendline support. Waiting for price to pull back to this support level before loading more would be sensible. This is currently at 94c which is also where we find the flattening 20dMA. In rather bearish circumstances, we could even see price breaking support, be it a whipsaw or not, to touch 93c. I could buy more then.

Having said all this, if a person is worried about missing the boat and would really like to initiate a long position, 95c could be a hedge. Why? Well, the momentum oscillators are all rising nicely: the MACD lookings like it could be crossing into positive territory soon. Using a Fibo fan, we also see that  95c is exactly where we find the golden ratio 61.8% and if this were to be established as a support, unit price could touch 97c in the near future.

Cache Logistics Trust has strong fundamentals and its technicals have strengthened. However, I am not one to chase after rising prices. If the opportunity presents itself, I would buy on weakness.

Related posts:
Cache Logistics Trust: Initiated long position at 91.5c.
Cache Logistics Trust: Positive divergences.

A movie: Space Battleship Yamato.

I watched "Space Battleship Yamato" today and thoroughly enjoyed it. It is somewhat different from the anime I watched as a young boy but that's to be expected since the anime spanned tens of episodes and the movie lasted only 131 minutes. Here is the official website of the movie: http://yamato-movie.net/en/movie.html

After watching the movie, I was so full of nostalgia that I decided to search for the anime I watched as a young boy. I found what I was looking for on YouTube and would like to share here with readers who might have the same feelings that I do. You know what, I like the anime more. ;-p

English version (known as "Star Blazers") here:


Japanese version (the original "Space Battleship Yamato") here:
http://www.youtube.com/watch?v=SDLifAZiRrg&playnext=1&list=PL025131FA84B9B71F

Hint: The Japanese version is better. More authentic. Enjoy. :-)

Tea with AK71: Aloe Vera flowers?

I have told friends that my Aloe Vera plant at home has flowered a few times before and all were incredulous. Do Aloe Vera plants flower? I must admit that I was quite surprised myself when the plant first flowered. Well, it flowered again and I have taken a few photos over a period of 3 days to share here in my blog:

To see a field of Aloe Vera plants flowering, there is a very nice photo at this link here.

Golden Agriculture: Alarm bells aplenty?

I missed the last leg up on Golden Agriculture as its share price formed a higher low on 15 March at 62.5c. The counter touched a high of 71.5c in the last session before closing at 70.5c.

The MACD has been rising and is now in positive territory heralding the return of positive momentum. However, the question to ask is whether this is durable. Notice that OBV is not higher than it was on 4 March when share price touched a high of 72c. This shows distribution going on as price retests highs. The MFI and RSI are both bordering overbought regions. The suggestion is that upside could be limited. If alarm bells are going off in your head, you are not alone.

If you believe like I do that the counter's share price has not spotted a strong trend in a while, we have to look at the Stochastics which is currently in overbought territory. So, a pull back is more likely than not to happen in the near future. More alarm bells? I think so.

Connecting the lows of 23 Feb and 15 Mar gives us a trendline support. For anyone considering a long position in this counter, a retest of this support could be a much better option. So, is there no possibility of a breakout which could see price going higher? The possibility of a breakout exists, of course. Like I said before, TA is about probability, not certainty.

Related post:
Golden Agriculture: Testing the 200dMA.

ASSI 1Q 2011 Quarterly Report.

ASSI had 32,200 unique visitors in the month of January 2011. In the following month, the number reduced only a tad to 31,815. Given the fact that February is a short month, the average number of unique visitors per day actually increased. In March 2011, the number of unique visitors saw a spike to 40,832 while the number of returning visitors also formed a new high of 20,554. In all three months, ASSI registered more than 1,000 unique visitors a day on average.

Comparing the quarterly numbers since January 2010, 1Q 2011 has the best showing. Page loads increased from 78,184 to 161,049 year on year for a 206% increase. Number of unique visitors increased from 39,151 to 104,847 year on year for a 268% increase.

Quarter on quarter, page loads increased from 147,742 to 161,049 for a 9% increase. Number of unique visitors increased from 88,558 to 104,847 for an 18.4% increase. Returning visitors increased by 18.2% as well, quarter on quarter.

I enjoy blogging since discovering it in late 2009 and would probably continue doing it just as a pastime. However, such strong readership numbers provide me with that extra motivation to blog regularly. I am only human and respond well to positive reinforcement. Thanks to all regular readers for spreading the word and a hearty welcome if you are new to my blog.

Related post:
ASSI 2010 Annual Report.

Healthway Medical: 1 for 8 rights issue.

I just went to an ATM to subscribe for the rights by Cambridge Industrial Trust earlier this evening. Now, I have another rights issue to contend with. Healthway Medical is also having a 1 for 8 rights issue. See announcement here. The rights will be priced at 7.5c per piece.

On 2 March, I suggested that no investor would put money in the company at 14c per share because it was trading at a PE ratio of 100x! I also said that "Immediate support is at 13.5c but if this were to break, we could see 12.5c next." Its share price went on to test 12.5c for 7 sessions later in the same month. Price closed at 13.5c today.

Technically, the counter is still in a downtrend and this is defined by the 50dMA which coincides with the trendline resistance. Resistance is currently at 14c. The MACD is rising in negative territory and it looks like it could cross into positive territory if the strong momentum of late continues. Does this mean that, for some reason, market participants like the rights issue which is heavily discounted?

What would I do? I still have a small investment in the company. Fundamentally, it does not make sense to throw more money into a weak business. Technically, unless I see some hints of a reversal, I won't bother going in either. So, I could simply sell away the nil-paid rights and sit this one out.

Related post:
Healthway Medical: 4Q 2010 results.

First REIT: Bought more at 73c.

On 26 March, I mentioned that "In a change of plan, I would increase exposure to this REIT on any weakness and this would be at 73c (100dMA), 72c (lower Bollinger) and 71.5c (the recent low of 17 Mar)." Today, I bought more units of First REIT at 73c a piece. With an expected DPU of 6.4c for 2011, this latest purchase would have a distribution yield of about 8.77%.

Today's selling down was somewhat aggressive as volume was very high, the highest since 14 Feb 2011. A long black candle was also formed. The lower shadow on the black candle suggests that there is support for this REIT. I also like how the MACD has been slowly rising even as price touched a recent low of 71.5c.

The REIT's price action looks rangebound and if we believe that there is no trend, we should pay attention to the Stochastics which suggests that the REIT is correcting from an almost overbought position. So, more weakness to be expected? Possibly and I am waiting to accumulate on any further weakness.

Related post:
First REIT: Accumulate on weakness.

Sabana REIT: Initiated long position.

Initiated a long position in Sabana REIT at 93c and 92.5c today. 93c was, of course, a hedge, while 92.5c was the price I have been waiting for since late last year shortly after the REIT's IPO.

The IPO price was at $1.05/unit. So, getting in at the prices that I did today represents a discount of more than 11% from the IPO price. The NAV per unit is 99c and my entry prices today represent a discount of more than 6% to NAV. With an estimated DPU of 8.63c for 2011, my investment today will enjoy a distribution yield of about 9.3%. With a gearing level of 26.5%, I believe this REIT is a fairly safe investment in the next couple of years.

Technically, the REIT looks rather weak and is suffering from some heavy selling which saw its price touch a low of 92c today. A single sell order at 9.42AM accounted for 1,215 lots sold down at 92.1c per unit. It seems that someone is selling down the REIT and we see 100 lots being sold down regularly throughout the day at 93c per unit. Volume was really heavy. More downside seems likely.

What's next? Fundamentally, any further price weakness would make this REIT even more attractive to me. However, I am not in a hurry to accumulate. After all, I have gotten my foot in the door today. I will now monitor the technicals until there are more favourable signs to add to my initial long position. 91c next? Possibly. Keep an eye on the MACD and see if a higher low forms as price forms a lower low. We are on the lookout for a potential positive divergence.

After all, given the fact that Sabana REIT should be announcing its first income distribution soon, could we not see a reversal of its downtrend in the near future? The REIT, as per its prospectus, "will make distributions to Unitholders on a quarterly basis, with the amount calculated as at 31 March, 30 June, 30 September and 31 December each year for the three-month period ending on each of the said dates."

Good luck, mon ami.


Related post:
Sabana REIT: Being stubborn?

New or Resale Property – Which One Is a Better Investment?

The following post is excerpted from the newly launched Secrets of Singapore Property Gurus, in an interview with Getty Goh, Director of Ascendant Assets.

Based on the research my company has done, we found that buyers will have a higher chance of getting value-for-money deals by buying resale properties. If you think about it, it is actually quite intuitive. After all, developers are in the business of selling properties for profits. With many of them having ample financial reserves, how cheaply do you think they will sell their new units for? 

Resale properties on the other hand are bought from other owners, who can be selling for a variety of reasons. While some of the homeowners may be savvy investors, there will definitely be others who need to dispose their property urgently and are prepared to sell their unit at a discount.

It is possible to get a good deal on a resale property

I have personally come across numerous value-for-money deals. Let me share one such deal that my company helped a client secure. In late 2009, I was helping a client find an investment property. As he did not want to over-stretch himself, the investment budget was set at $700,000. After several weeks of searching, we eventually found a suitable unit that was going for $650,000. Based on my company’s research, we knew that it was a good deal as the asking price of similar sized units in the same development was about $100,000 more than the asking price for that unit. In addition, we found out that the seller was parting with his property for a loss of more the $50,000. All these were indications of a value-for-money unit and we were confident that my client would have easily made a tidy profit had he decided to flip the unit.

We later found out that the owners were willing to let the unit go at a discount because they were going through a divorce and wanted to quickly divide the assets. From this experience, it reaffirmed my belief that there are plenty of good resale deals. It is just a matter of how diligent we are in our search to find them.

The benefits of buying directly from the developer

That said, I am not implying that buyers should totally avoid new sales as there are advantages to buying properties direct from developers. Firstly, when someone buys a property directly from developers, they will be entitled to a one year Defects Liability Period (DLP) that starts when the development receives its Temporary Occupancy Permit (TOP). During the DLP, any defects found will be rectified by the developer. Resale units do not have such liability periods and buyers will have to rectify any defects at their own expense.

Another advantage in new sale purchases is that buyers generally are able to choose the unit they want. However this is dependent on how buoyant the property market is at that point in time. Nonetheless, under normal market conditions, buyers are able to select the units they desire.

Lastly, payment schemes for new and resale purchases are different. New sale buyers can opt for a progressive payment method, while resale buyers will have to start serving their mortgage based on the full loan amount after the sale is completed. While there are pros and cons for new and resale properties, I feel that resale properties will be a better bet for those who are looking for value-for-money deals.

Sabana REIT: Being stubborn?

I have been waiting for a chance to initiate a position in Sabana REIT at 92.5c, its historical low. I have been described by some as stubborn for not giving in and buying at 1 bid higher. Well, it was this same stubborn behaviour that got me into Cache Logistics Trust at 91.5c instead of 94.5c recently. I am investing for income and yield is a major consideration and, therefore, the entry price is a major consideration.

Of course, I am not blind to the power of market sentiments and that is where TA comes in. If you remember, I changed tact on First REIT and revised my buying price higher because of technical signals which suggested strength recently. I also bought more units in Cache Logistics Trust at 92.5c. Nothing is set in stone.

With Sabana REIT, the technicals are still weak and there is a chance of its unit price going lower. So, I will continue to wait at 92.5c. OK, as a hedge, I would put in a buy queue at 93c too. To those who have said I am stubborn, well, this shows that you are wrong and this makes me happy.

Easily contented, I am, and to bed with a smile, I will.

Related post:
Sabana REIT: 92.5c is near.

CapitaMalls Asia: Partial divestment at $1.78.

In my last blog post on CapitaMalls Asia, I suggested that I could divest at $1.78 and I did so today. Using a Fibo fan, it is interesting to see how opening at $1.78 today is exactly where we find resistance provided by the 61.8% fanline. 61.8%, being one of the three golden ratios, is likely to be a strong resistance and so it was today.

If price action should break the resistance provided by the 61.8% fanline in the next couple of sessions, we could see the 100dMA tested as resistance ultimately. This is currently at $1.89. Sounds exciting? Of course it does but there is $1.83 to contend with first as that is likely to be a very strong resistance too. Sounds tougher now, doesn't it? This is especially so when we realise that volume has been reducing in the last few sessions (see orange line).

One wonders if the trendline support that started on 15 March could hold or would it break. If price should pull back in the next session, support is at $1.73. If the hypothesis that we could be entering a rangebound, sideways trading turns out to be correct, we should take heed of the Stochastics which shows a bearish crossover to be completed in overbought territory. This hypothesis finds support in the ADX as well which, at the moment, suggests that there is no strong trend in this counter's price action.

Having made a partial divestment at $1.78 today, I would still benefit from a continuing upward movement in price if it should take place. If price should weaken instead, I would be able to load up with less reservation.

Related post:
CapitaMalls Asia: Testing resistance.

AIMS AMP Capital Industrial REIT: Insights.

With the advanced distribution of 0.285c per unit on 28 March, the next distribution is going to be modest and I estimate it to be about 0.215c per unit. This is likely to be payable sometime in June.

In the recent madness of heavy selling, I increased my exposure to this REIT at 20c and 19.5c. It is currently my largest investment in the stock market by market value. With an expected DPU of 2c per year and with a set of stronger numbers in its books, this is a strong proposition for anyone who is investing for income.

As it is climbing out of oversold territory after the recent sell down, there could possibly be room for capital appreciation as well from the current levels. The ADX is declining and this suggests that the downtrend is weakening and the -DIs are falling as well. The MACD is rising and already set to form a higher high. Things are looking more benign but I am under no illusion that any upward climb would be up a wall of worries and that the REIT's unit price remains in a longer term downtrend which started on 17 Sep 2010. That resistance is currently at 22c.

In an article today in The EDGE, it was revealed that the manager "also aims to grow its portfolio by about $200 million, its chief executive officer Nicholas McGrath told Reuters in an interview. “We have an increasing bias towards business parks and high-tech space,” said McGrath". So, more rights issues and private placements are probably to be expected. As long as these are beneficial to unitholders, I have nothing to complain about. Indeed, I am sitting on some nice paper gains from its last rights issue while the distribution yield remains very attractive.

Apart from acquisitions, "AA Reit is also looking at redeveloping and enhancing several of its warehouses, logistic and manufacturing facilities as they currently have underutilized plot ratios. This would help the reit to boost its gross floor area and rental income, McGrath said." This, I find most heartening. I am looking forward to more good news from this REIT.

Aims Amp Capital eyes more business parks to boost growth: Update
Wednesday, 30 March 2011

© 2011 - The Edge Singapore

Related post:
AIMS AMP Capital Industrial REIT: Lower gearing.

Saizen REIT: Insider buying again at 14c/unit.

Insiders know the situation of their companies best. It is reasonable to assume that they would not want to throw money down the drain as well. Saizen REIT's insiders have been steadily buying up more units at the current depressed price.

Argyle Street Management Holdings Limited, on 28 March 2011, bought 1,275,000 units at 14c a piece. On 29 March 2011, it bought another 200,000 units also at 14c a piece. See announcement here.

It seems to me that they are being very savvy and are patiently waiting for people to sell down the shares at 14c a piece. They are not pushing up the unit price. It would be sensible to take a leaf from their book and do the same, don't you think?

On a side note, this is the 1000th blog post for ASSI. :-)

Related post:
Saizen REIT: Insider buying more at 14c/unit.