AIMS AMP Capital Industrial REITs: Buy ups!

It is widely acknowledged even amongst private investors that Singapore's industrial real estate provides probably the highest yields compared to all other classes of real estate. Personally, I know of some really rich people who own one or a few industrial properties in Singapore. As I am not in the same league, I seek exposure through investments in industrial properties S-REITs.

I would draw your attention to a couple of past blog posts and if you have missed reading these, you might want to check them out:
1. Higher rents to benefit industrial properties S-REITs
(7 April 2011).
2. Industrial rent forecasts strongest for Singapore.
(17 April 2011).

Buying units of REITs which are trading below NAV is still something I do with the exception of Cache Logistics Trust which I bought at a smallish premium to NAV. I usually go for industrial properties S-REITs offering higher distribution yields, preferably closer to 10% per annum (adding to my investment in AIMS AMP Capital Industrial REIT when its price hit 19.5c and 20c in recent past and buying heavily into Sabana REIT in the last two weeks as its price hit a low of 90c).

Currently, I have investments in the following industrial properties S-REITs:

1. AIMS AMP Capital Industrial REIT
2. Sabana REIT
3. Cache Logistics Trust
4. Cambridge Industrial Trust

Of the four, I am only interested in adding to Sabana REIT for reasons I discussed in an earlier blog post. Please read it here. I also said that I am waiting for an opportunity to partially divest my stake in AIMS AMP Capital Industrial REIT and to move the funds into Sabana REIT. The opportunity should take the form of a rebound and when resistance is tested.

Remember I blogged about my disappointment in Cambridge Industrial Trust in an earlier blog post? It did not mean that I would dump my units at whatever price available at that point in time. I meant that I would divest at a price which is to my advantage. There is a time to buy and a time to sell. We can only hope that we get them right.

I was somewhat saddened when some readers told me that they sold away their units in the Trust after reading my blog post and the counter was still trading CD at the time. Read blog post here.

Now, with AIMS AMP Capital Industrial REIT, we are seeing consistent buying ups for two sessions now. Today, a dragonfly doji was formed with 4,851 lots bought up at 21.5c and only 43 lots sold down at 21c.

Could the reverse head and shoulders I blogged about on 18 May be valid? Read blog post here. If valid, it would provide a chance for me to partially divest my stake in the REIT.

NOL and Golden Agriculture.

Today, my buy order for NOL at $1.80 was filled. NOL is in a persistent downtrend. Why am I buying more shares at $1.80 a piece? Well, it seems to me that a positive divergence is forming. As price broke the previous low formed on 5 May 2011, volume reduced comparatively. Sellers are less enthusiastic this time round.

The MACD histograms seem to be forming a higher low while the MACD has not turned up yet but could form a higher low too. A rebound could see a test of $1.88 as resistance in the near term. If it should happen, I would reduce my long position in the stock.

Today, my buy order for Golden Agriculture at 67c was also filled. This is at 1 bid higher than the support at 66.5c I identified in an earlier blog post. A hedge, nothing more. Why? Remember that I said we could be seeing the early stages of a head and shoulders formation when the price failed to form a higher high (that is higher than 73.5c)? I said that the neckline of that potential formation is at 65c. This case is still a possibility.

Of course, TA is about probability, not certainty, and we should make our moves accordingly. Today's white hammer formation is promising with price closing at 68.5c on relatively high volume. If price were to continue moving higher, immediate resistance is found at 70c. Closing above 70c could see 72c tested next.

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!