GLP versus ProLogis.

I was just reading an article in The EDGE and wonder what this would mean for GLP and its shareholders:

"GLP was listed on the SGX last year after it acquired the Japanese and Chinese portfolio of Prologis with the Singapore Government Investment Corp. (GIC) in 2008.

 "Last December, GLP had to clarify that it did not disclose during IPO that a non-compete agreement with ProLogis was due to expire this February as the deal requires GLP not compete with ProLogis in Japan while ProLogis reciprocally does not compete in GLP’s core market of China.

 "The clarification was made in response to a report in The Business Times that the prospectus for GLP’s initial public offer last October did not specifically disclose that the non-compete agreement was expiring in a couple of months."

Question. Was the non-disclosure misrepresentation on the part of GLP during its IPO? This is especially grave if the information omitted could have serious consequences for GLP's shareholders. I learned in business law many years ago that misrepresentation by omission is just as grave as misrepresentation through the giving of false information.

From a purely business perspective, I wonder how things would pan out in the next few years as ProLogis becomes more aggressive in its pursuit of growth in Asia. Is GLP up to the challenge? It did buy ProLogis' assets. I liken this to Akira asking an OEM to produce its products. Obviously, the OEM is the party with the knowledge and the production capabilities. If the OEM were to offer its products directly to the market, it could do so with an in-house brand and at a more competitive price. Consolation? Akira has a more established brand name but see what good it did for Akira? Did GLP have enough time to establish a strong brand name?

Of course, I am just thinking aloud here and playing the Devil's advocate. I am throwing the floor open to anyone, vested or not vested in GLP, to share any pertinent thoughts on the matter.

Prologis to double Asian holdings after biggest REIT deal
Saturday, 04 June 2011

© 2011 - The Edge Singapore

Related post:
GLP: A falling dagger?

Of primates and their diet!

The title of this blog post belies the gravity of the subject on hand. Before we go into the subject proper, a bit of background information is necessary for the uninitiated.

Some might know of an infamous cbox owned by LP, the blogmaster of Bully the Bear. LP is a very decent sort of chap and is always concerned about people, having their best interests at heart. LP is also G.O.D. (Gorilla of Design) in his realm (i.e. his blog and cbox).

G.O.D.? Yes, LP is able to decide on how things look, how emoticons should be abbreviated and how abbreviations would turn out in his cbox. Most of the time, he is a benign G.O.D. but he is fully capable of dishing out caustic remarks and more. He also has the ability to excommunicate any recalcitrant cboxer and eradicate spamsters! Now, that is power!

In the zoo that is LP's cbox, there are larger primates of the gorilla class and smaller primates of the spider monkey class.  I am sure there are also baboons, orang utans and, maybe, a Yeti or two. The primates of different sizes represent investors and traders of different financial means.

In the cbox, we also refer to Sabana REIT as banana REIT just for fun. I cannot remember who started it but it was probably by some disgruntled investor who bought into the REIT at $1.05 a piece thereabouts. Some have referred to it as an expensive banana.

Regular readers would know that I blog about Sabana REIT regularly, starting from its IPO days. However, I only initiated a long position at 92.5c a piece, weeks before it started trading CD with a maiden DPU of about 3c. This was where FA and TA married nicely. FA identified a good undevalued buy and TA gave some hints as to when to buy. If only I am so consistent every time.

Last night, someone whom I believe to be of gorilla class in LP's cbox told me that I was being "suan" (Hokkien for "teased") by a fellow blogger. I went to read the blog post and I share LP's opinion that the blogger was most probably trying to warn spider monkeys to behave like spider monkeys and not behave like gorillas. So, a gorilla might be able to eat a few kgs of bananas in one sitting, a spider monkey could suffer from heartburn doing the same thing or worse! This is generally good advice, of course.

Then again, I have met spider monkeys with great appetites. They could eat a lot of bananas and not grow fat, avoiding the complications of over-eating. Some might say that the complications could come much later in life. Well, this could indeed be the case.

What do I think? Personally, if I have identified something which I believe is a winner, I would go in big. By this, I mean building up my position in the company to be at least 10% of my total portfolio. I am also not averse to building it up to be 20% or more of my total portfolio.

I remember a time when my portfolio size was much smaller, ST Engineering and SPH were the lion share of my total portfolio. In mid 2009 to early 2010, Healthway Medical, Golden Agriculture and Saizen REIT formed the lion share of my total portfolio. How did I do? Quite well, I believe.

However, the recent triple disasters to hit Japan dealt a blow to my investment in Saizen REIT which by that time was about 40% of my total portfolio. 40%? Yes, I liked the fundamentals and I liked the turnaround story which did finally pan out by end of May 2011 with YK Shintoku's CMBS fully repaid.

Unfortunately for me, the triple disaster wrecked a picture of recovery, technically and fundamentally. Informed by TA, I partially divested my investment in the REIT and suffered a small loss. This is a pitfall of a strategy of concentration as compared to diversification. Potential rewards are greater but the level of risk would be proportionally higher. So, we have to stay nimble as circumstances are fluid. This applies to all primates, from gorillas to spider monkeys.

In conclusion, if a spider monkey sees a gorilla wolfing down bunches of bananas and if the spider monkey wants to eat just as many bananas, it could. If it did, I would not say that it would, for sure, suffer from indigestion since it could be a spider monkey with a huge appetite although it might. I would say that it could suffer from malnutrition because it might not have seen what other food the gorilla could be eating as well. Primates are, after all, omnivores.

Oh, if anyone is interested to know, my overnight buy order for more Sabana REIT units at 92c was filled this morning.

Capitaland, CapitaMalls Asia and NOL.

This is going to be a quick blog post as I am feeling somewhat enervated this evening.

Capitaland is causing some people some concern. Is the price going to retreat further after touching a new low of $3.07? I believe questions like this are futile. Nobody knows the answer. TA is about probability after all.

However, we can say that chances of a rebound, if not a reversal, are higher now. With a lower low in price, the MACD spots a higher low. Yes, we have a positive divergence. However, it does not mean that price could not go lower, mind you.

In the event that the positive divergence delivers the goods, look to the declining 50d and 100d MAs for resistance, currently at $3.28 and $3.37 respectively.

CapitaMalls Asia saw volume increasing significantly today with its previous low at $1.57 tested, forming a  black candle in the process. It remains to be seen if $1.57 could hold up as support or, if a lower low were to form, whether the MACD could spot a higher low. Yes, looking out for a positive divergence.

Things look pretty dicey right now.

NOL is yet another counter which is spotting a positive divergence. Lower low in the share price but a higher low in the MACD. However, with such a persistent downtrend and with a narrow trading range, it could take a mammoth effort for share price to break resistance provided by the declining 50dMA in case of a reversal effort.

Let's see if the share price could open and close higher than $1.81 (today's high) in the next session. If successful, we could have a morning star setup, a three stick reversal pattern. That would be promising.

NOL completes US$1.1b loan agreements
Thursday, 02 June 2011

© 2011 - The Edge Singapore

Tea with AK71: A loaf of bread.

I enjoy convenience and I have told quite a few people that I do not like to spend too much time preparing food or eating. Food to me is a necessity. That, very much, is it.

However, I do enjoy spending hours in a nice restaurant with good company. It is the company that makes it worthwhile for me in such instances.

Some of my earlier blog posts on the types of low cost food I enjoy attracted myriad comments, some encouraging, some discouraging and quite a few incredulous! Well, here is another.

I have been trying to avoid wheat because it is bad for my blood type, apparently. Unfortunately, I like bread very much and I particularly like those with raisins!

Raisins are good for my blood type and maybe, they would cancel out the negative effects of wheat. Oh, this loaf has rolled oats as well and oats are good for my blood type too. Two against one! This loaf of bread has my stamp of approval!

Blood type diet aside, this is a loaf of bread that is loaded with goodness. Periodically, I would buy a loaf and it would usually last me 2 to 3 days. 2 slices and I am full. There are about 10 slices or so per loaf. So, that makes 5 meals for me.

Cost? This loaf of bread usually retails at S$2.95 each. It was going for S$2.50 each at NTUC Fairprice. I don't know if  the special offer is still on though.

Convenient, low cost and something I enjoy. This formula never fails. :)

FSL Trust: Acquisition.

Nothing much has been happening to FSL Trust lately although its unit price has suffered from weakness. I suspect that the weakness of the US$ and the shipping sector as a whole could have been a dampener.

The latest news is an acquisition of a "Long Range II (LR2) product tanker from TORM Singapore, a wholly-owned subsidiary of TORM A/S for US$46 million ($56.7 million).... The transaction will be immediately cash flow accretive to the trust and will increase the trust’s total remaining contracted revenue to US$602 million, excluding extension options. The average remaining lease term of the trust’s portfolio will also remain at the current 6.8 years."

Will this be a positive catalyst enough to send its unit price higher?

First Ship Lease Trust to acquire long-range tanker for $57m
Wednesday, 01 June 2011

© 2011 - The Edge Singapore

Indofood Agri: Rebounding.

Indofood Agri Resources assured investors that PT SIMP’s listing will not dilute its earnings as much as analysts had feared. So, is this a good time to go picking up some shares of the company?

A long white candle was formed on the back of high volume today as price broke resistance at $1.69 to close higher at $1.71. The MFI and RSI have been spotting a positive divergence with its declining share price and we could see the rebound in price test the next resistance at $1.78.

This counter's downtrend is still very much intact and if I were to go long here, I would choose to do so as close to the immediate support of $1.69 as possible. I would also watch the declining 20dMA and the trendline resistance as possible price targets for divestment. Good luck to all involved.

Indofood Agri up after it downplays unit’s IPO.

Indofood Agri said its earnings per share in 2010 will be 835 rupiah ($0.12) after the IPO, down from 974 rupiah previously. However, its net asset value per shares after the listing would rise to 7,843 rupiah from 7,605 rupiah.

Wednesday, 01 June 2011

© 2011 - The Edge Singapore

Hyflux: $800 million bridge loan (UPDATED JULY 2018).

In 2011, I wished all Hyflux investors good luck.

Now, 2018, again, I wish them good luck because they need it more now than ever.

I have always been concerned by how Hyflux kept borrowing money (and why their cost of borrowing was always relatively high in an environment of very low interest rates).

I also said that I would not lend Hyflux any money.

Chat with a reader in Nov 2017.

Being a retiree, I feel sorry for the retirees who put in a lot of their money in Hyflux.

I just hope that they did not put all their eggs in the same basket.






A retiree wanted more updates on the divestment of the plant and what that means when the 4.25 per cent bonds that he had invested S$250,000 into mature this September.

“There isn’t a conclusion and everything still hinges on the sale of Tuaspring and at what price. But my investment is due in September and that’s what I’m most concerned about,” he told Channel NewsAsia.

“I’m retired so this was going to be a key part of my income but now, not just the income, I have to be worried about my capital. My kids are going to university soon so I have to figure another way out.” 

Source:
https://www.channelnewsasia.com/news/business/hyflux-shareholders-townhall-meet-management-first-time-10545662






----------
It was not so long ago that Hyflux offered $200 million of perpetual preference shares. 

At that time, I wondered why Hyflux had to pay a 6% annual dividend yield on those shares.

6% seemed a tad expensive to me in an environment where interest rates are very low. 

I concluded that Hyflux could be having some difficulty getting long term financing from financial institutions at even an interest rate of 6% per annum.

Now, Hyflux has approached a group of banks for a $800 million bridge loan. 



Bridge loans are usually short term in nature (i.e. not more than a year) and are usually perceived as lower risk and would attract a lower interest rate.






There is no question that Hyflux is a growth company and one with huge capital expenditure requirements. 

It could turn out very nicely for shareholders if its business chugs along as planned. 

Good luck to all shareholders.






-->

Hyflux said to approach banks for $800m bridge loan Wednesday, 01 June 2011

© 2011 - The Edge Singapore

Related post: 
Hyflux director divested all his shares!

First REIT: MSCI Singapore Index.

The reason for First REIT's strong performance in recent sessions is now apparent:

First Real Estate Investment Trust says it has been included in the MSCI Singapore Index with effect from 1 June 2011.

MSCI is a leading provider of investment decision support tools worldwide, including indices, portfolio risk and performance analytics and corporate governance services.

The MSCI indices are among the most widely tracked global equity benchmarks covering companies with good operational results and growth prospects. By being a constituent stock on the MSCI Singapore Index, First REIT can be better tracked by a wider group of institutional investors and funds on a global platform.

First REIT's unit price failed to close higher today. Could it be a case of "sell on news"? A long legged doji formed today and this is ominous as it suggests indecision in an uptrend. A pull back could find immediate support at 77c, a previously many times tested resistance.

Immediate resistance at 80c was tested today with only 1 trade of 3 lots done. I am still in the queue to sell some at 80c and 80.5c. A pull back to the longer term support would see me buying more.

Related post:
First REIT: Partial divestment at 77c and 79c.

First REIT makes it to MSCI Singapore index
Wednesday, 01 June 2011

© 2011 - The Edge Singapore

Sabana REIT: Global Small-Cap Indices.

It seems that Sabana REIT will no longer be unloved and the following development probably explains the after market large volume buy up at 94c per unit in the last session:

Sabana Real Estate Investment Management Pte. Ltd., the Manager of Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (“Sabana REIT”), announces that Sabana REIT has been included in the Morgan Stanley Capital International “(MSCI”) Global Small-Cap Indices.

Commenting on Sabana REIT’s inclusion in the MSCI Global Small-Cap Indices, Mr Kevin Xayaraj, Chief Executive Officer and Executive Director of the Manager, said, “The MSCI Indices are widely tracked global equity benchmarks covering companies with good operational results and potential. The inclusion puts Sabana REIT onto the ‘radar screens’ of a much wider group of institutional investors and funds seeking value and performance from markets round the world. We are greatly encouraged to have achieved this major milestone and feel very honored for Sabana REIT to be selected as one of the constituent stocks, considering that it has been listed for only six months.”

Read annoucement here.

With greater exposure to international investors, this could only be good thing for the REIT. Sabana REIT is my second largest investment, together with First REIT, when I last looked. I am looking forward to possibly stronger unit prices in time to come.

Related post:
Sabana REIT: Resistance at 93c demolished.

Saizen REIT: YK Shintoku's CMBS repaid.

The Board of Directors of Japan Residential Assets Manager Limited, the manager (the “Manager”) of Saizen Real Estate Investment Trust ("Saizen REIT"), is pleased to announce that the loan of YK Shintoku had been fully repaid on 31 May 2011 (the “Repayment”).

Following the completion of the Repayment and the cancellation of the mortgage over YK Shintoku’s property portfolio, YK Shintoku’s portfolio of 27 properties which is valued at approximately JPY 4.3 billion (S$65.6 million) will become unencumbered. Together with the property portfolios of YK Keizan, YK Shingen and GK Chosei, the total value of Saizen REIT’s unencumbered properties will amount to approximately JPY 14.9 billion (S$227.5 million).

After the Repayment, Saizen REIT’s borrowings comprise five loans amounting to approximately JPY 9.0 billion (S$137.4 million), with the nearest loan maturity due in June 2013. Saizen REIT’s gearing after the Repayment is approximately 24%.  

Verify announcement here.

This is, of course, what I have been waiting for since I started investing in this REIT in late 2009. It is really a pity that the triple disasters hit Japan when it did. Otherwise, I have no doubt that Saizen REIT's unit price would be much higher than it is now.

As it is now, technically, further upside could be capped at 15.5c while downside could be limited at 14.5c. Could the repayment of YK Shintoku's CMBS provide a strong enough catalyst for the REIT's unit price to breakout on the upside?

Related post:
Saizen REIT: Sanity prevails with more good news.

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Golden Agriculture: Accumulate on weakness.

I plan to accumulate Golden Agriculture on weakness. This would mean at 67.5c support as provided by the trendline support connecting the lows of 6 and 25 May 2011. I would not, however, throw in the kitchen sink. This is because if 67.5c should break and if price were to close lower, we could see price going to 65c and the long term uptrend would still be intact. Buy more at 65c is what I would do if that should happen.

The ADX suggests a lack of trend for Golden Agriculture's share price. In such a situation, I look to the Stochastics for clues. With it closer to the overbought region and forming a lower high although price touched a higher high at 71.5c, the chance of a further decline in price is high.

However, the decline in price in the last two sessions were on the back of lowering volume. This paints a picture of a low volume pullback. So, although further price decline could take place, it could take place due to a lack of buyers and not an increase in sellers. Indeed, the CMF shows a decline in buying pressure but not an increase in selling pressure.

Related post:
Golden Agriculture: Watch the 100dMA.

Sabana REIT: Resistance at 93c demolished!

After the market closed, sleepy and some might even say unloved Sabana REIT saw 2,514 lots bought up at 94c which led to a wickless white candle being formed on higher volume, breaking resistance provided by the declining 50dMA like a hot knife on butter!

The bullish divergence between MACD and price action has delivered and did so in a smashing manner. A test of the declining 100dMA as resistance is most likely and we could see 95c and 95.5c tested next. Although there is no bearish divergence to speak of, locking in some gains is a tempting proposition. I might just divest partially in the face of a rapid appreciation in price.

Related post: Sabana REIT: Still waiting for a 10% yield?

First REIT: Partial divestments at 77c and 79c.

I mentioned on Sunday that First REIT could see 77c tested soon and it did so with aplomb today. Indeed, it went on to close higher at 79c on the back of much higher volume with a total of 3,413 lots changing hands.

With 1,022 lots bought up at 79c after the market closed, there is a good chance that price could test resistance provided by the declining 200dMA at 80c in the next session. Actually, to be exact, the 200dMA would be at 80.5c in the next session and that is also where we find the 161.8% Fibo line. 80c is where we find the 150% Fibo line.

Today, I sold some units at 77c and at 79c, respectively the immediate resistance and 2 bids lower than the resistance at 80c identified in my previous blog post on the REIT. Selling at resistance is conventional wisdom but in an uptrend we could see resistance become support. The bearish divergence between the CMF and price action has been negated with today's explosive move upwards in price. Buying pressure has intensified suddenly and fiercely. Could 77c become the new support? Would I continue to sell more?

The 200dMA is a long term moving average and I expect it to provide significant resistance. At 80c, we would also see distribution yield of First REIT decline to just 8%. Beyond 80c, its yield falls below 8%. I would queue to sell some at 80c and 80.5c but I would not divest fully on the off chance that price action might overcome resistance provided by the 200dMA and push higher.

Related post:
First REIT: Partial divestment?

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First REIT: Partial divestment?

I like First REIT and it remains one of my largest investments. I like the low gearing and high yield. I like the strength of its sponsor and what it has planned for the future. In a blog post, I said fair value for First REIT is at 80c per unit. I still believe it to be so. In fact, I bought more at 73c and 73.5c in early April 2011.

Today, over lunch with some friends, there was mention of a bearish divergence in First REIT's chart. I decided that this bears looking into since LP, the blogmaster of Bully the Bear, who is definitely more accomplished in TA than I am recently divested some units at 76.5c. Indeed, in my blog post of 11 April 2011, I wondered whether First REIT could retest 77c, the high of January 2011 and if there is a bearish divergence, a partial divestment at 77c might not be a bad idea.

Looking at the daily chart, we see the declining 200dMA approximating 80c, a happy coincidence with my perceived fair value of the REIT per unit. However, the high of 77c in January 2011 is obviously a major resistance to overcome before a test of 80c is possible.

Price action is pushing the upper Bollinger and the momentum oscillators are bordering overbought. It seems that there is positive momentum and support. However, looking at the Chaikin Money Flow (CMF), we get a hint of possible weakness to come.

The CMF is an oscillator that measures buying and selling pressure over a period of time. The CMF in this case has been negative and getting more so as price moved higher. This gives rise to a bearish divergence. Buying pressure has reduced. It could be, therefore, prudent to divest partially.

As usual, TA is about probability. If price were to break resistance at 77c and move higher, I expect strong resistance at 80c.  If price were to move lower, I expect strong support in the region of 74c. So, a partial divestment at 77c could mean possibly losing a further 3c gain or being able to buy back at 3c lower.

Related post:
First REIT: XR and fair value.
First REIT: Bought more at 73c.
First REIT: Bought more at 73.5c.