Indofood Agri: A crash by any other word.

Indofood Agri's decision to list PT SIMP, its subsidiary, could lead to earnings dilution and we could see EPS reducing by as much as 12%. This is according to Goldman Sachs. Indofood Agri's share price, however, declined some 15.7% today, closing at $1.72 after touching a low of $1.69. Could there be an opportunity to buy some shares on the cheap?

I do not understand what is going on sufficiently and how the valuation is being carried out. Therefore, I will avoid. Good luck to anyone vested.

Indofood Agri falls on unit’s IPO pricing. “The IPO could pose downside risks to our IFAR earnings estimates through potential EPS dilution, as well as possible holding company discount once its main operating asset is listed separately,” said Goldman Sachs in a report.
Monday, 23 May 2011

© 2011 - The Edge Singapore

STI, Golden Agriculture, Capitaland and CapitaMalls Asia.

The STI closed 58.06 points lower at 3,110.48. There is probably some pain and some panic in the air and we have the usual doomsayers out in force today. So, going by what I have said, am I a bull more than a bear? I am neither a bull nor a bear. I like to think that I am a pragmatist.

Most of my portfolio is made up of REITs. Today, we see AIMS AMP Capital Industrial REIT, Sabana REIT, Cache Logistics Trust, First REIT, LMIR, Suntec REIT and even Saizen REIT holding up rather nicely. So, I am not really affected by the sell off.

So, what did I do today?

1. Bought some Golden Agriculture shares at 68.5c a piece. You might remember that I said I sold all my shares in this company by mistake. I really want to keep some of its shares, believing in the longer term future of crude palm oil. The share price closed at 69c today.

I am not firing all my guns yet because we have to be wary of a potential head and shoulders formation. The neckline of this formation approximates 65c. If 65c were to be tested successfully on lower volume, we could add more aggressively to our long positions believing that, probably, the longer term uptrend is still intact. Of course, there is no way of knowing. So, I hedge by buying at supports. 66.5c support, if tested, would see me buying more. After all, buying at supports in an uptrend is conventional wisdom.

2. Although the trading volume of Capitaland increased today compared to the session before, it is still quite low if we compare it to 11 and 12 May which were black candle days too. Today, a black spinning top was formed and this is a reversal signal.  It needs confirmation, of course. Well, will price move lower? It could, of course. Keep an eye on $3.08, the previous low. It has to hold up in order for price to have a better chance of a near term rebound.

I bought more shares at $3.10 a piece today. This is a hedge as a retest of the previous low is a relatively safe entry as I am, after all, buying at supports. However, bearing in mind that supports can easily become resistance in a downtrend, the additional investment is a smallish one.

3. There is some similarity between CapitaMalls Asia's chart and Capitaland's. The volume is relatively lower compared to the volume back when the previous low was formed. I am also on the lookout for a possible positive divergence between the MACD and price.

I bought more shares at $1.60 a piece today as there seems to be a lot of fear in the air.

Allgreen: Privatisation offer at $1.60 per share.

I did a piece on Allgreen Properties on 12 April 2011. It seems that I have missed the boat ... for good. Well, these things happen. Absolutely no way to tell. Congratulations to all vested.

Read the post here.

Malaysian billionaire Kuok offers to buy rest of Allgreen stock. Brookvale Investments, owned by members of the Kuok group of companies, offered $1.60 in cash for each share in Singapore-based Allgreen, according to a filing by the developer to the Singapore exchange today. The stock last traded at $1.15.
Monday, 23 May 2011

© 2011 - The Edge Singapore

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CapitaMalls Asia: Mixed signals.

CapitaMalls Asia's chart is technically mixed. What is clear is that it is in a long term downtrend and, going by the momentum oscillators, it is very much oversold. A rebound from oversold conditions could see price retesting the trendline resistance which started on 6 October 2010. $1.82, perhaps.

With price closing at $1.64 on relatively high volume in the last session, below the natural support of $1.68, it remains to be seen if it could retest the low of $1.57 touched on 15 March 2011. Watch out, therefore, for a potential double bottom formation.

We want to see volume drying up if price should go closer towards the low of 15 March 2011 in such an instance. A higher low on the MACD would be promising too. The time to buy more shares of CapitaMalls Asia could be near.

Related post:
CapitaMalls Asia: Quiet resilience.

Cabernet Sauvignon (and beer).

This is my favourite wine as it is inexpensive and very drinkable. If I remember correctly, it costs about $14 a bottle at NTUC Fairprice:

I would have some wine once in a while but it would take me three nights to finish a bottle as I am not in the habit of having wine every night. So, often, I would have some leftover which I would have to throw away which is a pity. Here's the first glass I poured tonight:

Red wine is good for the heart and, of course, it warms up the body like all alcoholic beverages. It also promotes better sleep quality and I know I am in need of this recently.

Tonight, I drank more than I would usually. Only half a bottle left. I have stoppered what's left and, hopefully, I would be in the mood to finish it tomorrow night.

Cheers!
--------------------
Update: December 2016.

LMIR: Thoughts on partial divestment.

It has been a long time since I looked at the technicals of LMIR. Someone asked me if I would consider adding to my position in the REIT and I explained that I am still unhappy with how the management is losing millions of dollars quarter after quarter due to their foreign exchange forward contracts. So, not adding. Well, not unless price were to decline to provide a distribution yield closer to 10%. Nonetheless, the discourse got me curious enough to look at LMIR's chart.

The first thing that I saw was a negative divergence. As price moved higher, the MACD formed a lower high. In the last lower high on the MACD, price formed a lower high too. This is ominous. We have a potential head and shoulders formation. The neckline of this formation coincides with the rising 200dMA and would approximate 53c in the near future. If price were to break this neckline, we could see price going much lower. How low? 48c is a possibility. That would give me a distribution yield that is attractive enough to increase my investment in the REIT.

Should I sell now? Well, TA is about probability and not certainty. The head and shoulders formation could fail to deliver. However, as the bulk of my investment in LMIR was made in mid 2009 when prices were very depressed, a partial divestment to lock in some gains seems attractive in light of a possible significant decline in price.

Of course, these investments have already benefited from two years of income distributions as well and are likely to continue receiving regular distributions. There is no overarching need for me to partially divest but if I do, what price would be good for a partial divestment?

I would like to sell at resistance and it is obvious to me that immediate resistance is at 55c. However, Lippo is going to buy a big chunk of LMIR units from Mapletree LM Pte. Ltd. at 56c a unit. So, I think price could possibly go to 56c in the open market too. I have put in a sell order at 56c. Read announcement here.

How would things turn out? Only time can tell.

Bridgewater to buy 9% Lippo-Mapletree retail stake for $54.8m
Monday, 23 May 2011

© 2011 - The Edge Singapore

Related posts:
LMIR: 1Q 2011 results.
To protect our wealth, we have to take risks.

Golden Agriculture: Divestment at 70.5c.

I am feeling the effects of age as it catches up with me or, perhaps, I just have too much on my mind lately.

It was my intention to divest partially at resistance and to keep some in case price should go higher. This has always been my style. Today, I made a mistake and sold all my stake in Golden Agriculture at 70.5c, the immediate resistance.

It makes sense to sell some at 70.5c not only because it is where we find the declining 100dMA, it also makes sense because of the declining volume as price tried to move higher in the last three sessions. A pull back would not be unreasonable.

Indeed, with the ADX suggesting a lack of any strong trend and the Stochastics showing signs of overbuying, we could see a pull back. A pull back would find immediate support at 68.5c. Breaking that could see price going lower to 66.5c. In a pull back, we want to see a higher low formed.

Of course, we could also see price moving higher although the candlesticks formed in the last two sessions, together with declining volumes, are somewhat uninspiring. Next resistance is still at 72c. Good luck to all still vested.

Tea with AK71: Korean noodles for lunch.

I had Korean noodles for lunch. No, I did not go to some fancy Korean restaurant nor did I go to a food court. I cooked the noodles myself in my office. Yes, you guessed it. Instant cup noodles! Well, in this case, it would be more accurate if we call it instant bowl noodles because it came in a big bowl! Oh, fork included too.

I have seen these noodles before and they are usually quite pricey. Yesterday, while shopping at NTUC Fairprice, I saw it under the "Must Buy" section and they were sold at $2.95 for three bowls! That is less than a dollar per bowl! Irresistible and I finally got to find out why so many people I know like it so much.

Chopsticks not included. I always have spare disposable chopsticks at work as I would take an extra pair each time I make purchases at the food centres. They come in useful in times like this, I dare say.

The noodles were cooked in five minutes. The spicy aroma was really mouth watering.

The noodles are thicker than the usual Myojo or Maggi variety. The soup base was full bodied and spicy. Not for anyone who would find hot food a challenge though. One bowl of noodles and I was really full. A tasty and value for money lunch!

Perennial China Retail Trust.

Perennial China Retail Trust (PCRT) is focused specifically on shopping malls but with a China focus. Although I am not usually interested in IPOs, I am curious about this one since I have vested interest in CapitaMalls Asia which has a large exposure in China.

PCRT has two objectives:
1. Provide unitholders with long-term capital growth from a steady growth in net asset value (NAV).
2. Provide unitholders with regular distributions from the income of its completed and stabilised assets.

PCRT will have an initial portfolio which includes:
1. 50% stake in Red Star Macalline Global Home Furniture Lifestyle Mall, Shenyang.
2. 50% stake in Shenyang Longemont Shopping Mall, Shenyang.
3. 100% stake in Foshan Yicui Shijia Shopping Mall, Foshan.
4. 100% stake in Chengdu Qingyang Guanghua Shopping Mall, Chengdu.

Only Red Star Macalline Global Home Furniture Lifestyle Mall, Shenyang, which was completed on 30 Sep 2010 is income contributing at listing date. The rest of the initial portfolio is expected to be completed from 3Q 2010 to 2Q 2014. If we are investing for income, this is not very reassuring.

However, PCRT has zero debt. This is attractive and also important as it would seek NAV growth through acquisitions. It has at least S$3.0 billion of pipeline projects in prime high-speed railway commercial development projects. Zero debt would probably mean that it would not have to be overly reliant on equity fund raising in the form of share placements and rights issues, at least in the early days.


PCRT's IPO has a price range of 70c to 76c and would raise between S$785,187,000 and S$852,580,000.

PCRT's forecast distributions (representing at least 90% of PCRT's distributable income):
2011's DPU 3.71c, representing a yield of 4.88% to 5.3%.
2012's DPU 3.86c, representing a yield of 5.07% to 5.51%.
Distributions are made half yearly.

From 2013, PCRT will distribute at least 50% of its distributable income. This might or might not mean a lower DPU since the rest of its initial portfolio would be contributing to distributable income by then with the exception of one property.

NAV per unit at date of listing is estimated at 67c.

Up till this point, there is little to interest me in the IPO. A distribution yield of 4.88% to 5.51% in the years 2011 to 2012 also does not provide enough compensation for the risks which investors are being asked to bear, in my opinion.

How does PCRT compare to CapitaRetail China Trust (CRCT)? Here are the numbers, as of 31 March 2011:
NAV/unit: $1.10
Gearing: 32.6%
Annualised DPU: 8.6c
Last done price: $1.26 which means a distribution yield of 6.83%.

With zero gearing, could PCRT do better than CRCT in future? Will the management be able to execute its future plans successfully? Forecasts are easy to make but whether the numbers would be realised is something else.

If PCRT's unit price were to fall to a much lower value and, in the process, offer a much higher distribution yield to compensate for the perceived risks, I could be interested then. Not now.

See PCRT's prospectus here.
See CRCT's 1Q 2011 presentation here.

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Perennial seeks to raise $843m in Singapore IPO: Update
Thursday, 19 May 2011

© 2011 - The Edge Singapore

Golden Agriculture, Sabana REIT and AIMS AMP Capital Industrial REIT.

This is going to be a very quick post. Well, I hope it would be anyway as I am really tired today from work, mostly housework. All the housewives and maids have my deepest respect.

Golden Agriculture

Golden Agriculture provided some excitement today as patience finally paid off. A wickless white candle was formed on the back of much increased volume, breaking resistance provided by the 20d, 50d and 200d MAs in the process.

Immediate resistance is found at 70.5c as provided by the declining 100dMA. The strong buy up momentum today could probably spill over to the next session. We could see 70.5c tested and even broken. If it were to break, we could see the next resistance at 72c tested.

72c was a resistance level tested many times in the first half of April last month and it even broke briefly. Could we see price forming a higher high this time? Well, the upward trending channel suggests that this is a possibility but taking some profit at resistance can't be wrong either.

Sabana REIT

My thesis that Sabana REIT is going through a basing process could be right after all. The Stochastics is turning up from oversold territory while the MACD has turned up to close the distance with the signal line in negative territory.

So, no matter whether we believe Sabana REIT's unit price is range bound or trending down, support is obvious and downside is pretty limited for now.

90c remains the support to watch while continuing upward movement in price could see gap closed at 93c  and that would be the resistance to watch.

AIMS AMP Capital Industrial REIT

High volume white candle day. If we believe that price action saw the formation of a reverse head and shoulders pattern earlier in the year from February to April, we could see price going higher as the neckline at 21c has, once again, been overcome.

Could we see price breaking out of the downtrend this time round? Resistance at 21.5c remains rather formidable as it is provided by the 200dEMA and this was what prevented the unit price from moving higher in the second half of April last month. We shall have to wait and see. Good luck to fellow unitholders.

Well, this effort at a quick post took me almost an hour. I failed in my attempt. ;)

Related posts:
Golden Agriculture: Eyeing 96c per share.
Sabana REIT: Still waiting for a 10% yield?
AIMS AMP Capital Industrial REIT: 4Q FY2011.

Tea with AK71: Some of my stuff (Part 3).

No prizes for guessing how many years I've had this mug for. ;-)

I still remember buying this when I was in Secondary 4. 

It was a small luxury for me in those days as a student. It was also the first time I had my own mug at home. I would only use this mug from that day on. 

Of course, over the years, I accumulated another few mugs but this is still my first love. ;-p

A beautiful full moon tonight. I took a shot with my IXUS from my balcony. I guess this is the best I could do with the zoom and all. I am feeling somewhat nostalgic tonight. Growing old.

Related posts:
Some of my stuff (Part 1).
Some of my stuff (Part 2).

CapitaMalls Asia: Quiet resilience.

In generally weak conditions, CapitaMalls Asia's share price has shown a quiet resilience. It closed at $1.70 in the last session, down by only 1c, after being sold down to as low as $1.67. Volume was relatively light. This is important if we compare the volume to that of 6 May 2011 when price reached a low of $1.65 which saw trading volume many times higher.

This tells me that sellers are less enthusiastic now and that, perhaps, all the ones who want to sell at the current prices have sold. The MACD is closing in on the signal line in negative territory. Could we see a positive crossover and a rebound in price soon?

The MFI and RSI are both in oversold territory while the RSI has formed a higher low. Going long at $1.68 could be a good idea. Immediate resistance is provided by a confluence of the 20d and 50dMA at $1.76.

A stronger resistance is at $1.82 which is where we find the declining 100dMA although we could see price going above it if past experience is anything to go by. A breakout on higher volume could just make that happen.

Related post:
CapitaMalls Asia: A reversal signal.