CapitaMalls Asia: Rebounding.

At this point in time, the recent upmove of CapitaMalls Asia's share price is still a rebound. The MACD made a bullish crossover with the signal line but momentum is still negative. Make no mistake. The downtrend is still intact.

Volume has been declining over the last three sessions. How do we interpret this?

Although the bears were roughed up three sessions ago, bulls seem to lack conviction in following through. We can only wait and see if they do in the next session. For now, bears are staying sidelined, nursing their wounds, while bulls remain somewhat cautious.

Price touched a high of $1.375 in the last session which coincides with the resistance presented by the 50dMA. Overcoming this resistance could see gap fill at $1.395 and that is where I have put in my next sell order.

If we look at the orange line I have drawn, we will see that $1.395 also approximates the immediate downtrend resistance in the next session.

Breaking the immediate downtrend could send share price higher to test resistance provided by the declining 100dMA which is currently at $1.52.

Related post:

CapitaMalls Asia: Gap closed at $1.325.

Tea with AK71: Sambal mooncake.

There was much talk about mooncakes in LP's infamous cbox over at Bully the Bear today.

Fancy having some sambal mooncake at tea time? This must be the most "innovative" mooncake I have ever had.

My parents got this in a box of mooncakes from Star Cruises.

Quite clever the way they separated the spicy centre from the lotus paste, using dried coconut as a wall.

The taste is surprisingly good although for some who do not like spicy food or dried coconut, it might be difficult to accept.

Cache Logistics Trust: Gap closed at 96c.

The unit price of Cache Logistics Trust closed the gap at 96c in the last session.  A white candle with an extremely long upper wick was formed, suggesting strong selling pressure at 96c. 96c is also where we find the flatlined 50dMA which should also act as resistance.

I decided last Friday to put in a sell order over the weekend at 96c for a partial divestment in case gap resistance should be retested today. My sell order at 96c was filled this morning and I made some pocket money.

For people who believe in mini double bottoms, we could see the unit price test $1 if 96c should be taken out convincingly. I would divest more then. Otherwise, we could see unit price retreat to test recent lows once more and that is at 91.5c, my entry price months ago.

I will also be collecting income distribution from the REIT today. So, this is a nice combination of investing for income and capital gains. Regular readers would know that I am not averse to trading my investments in REITs from time to time.

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

Tea with AK71: Family, friends, Abercrombie & Fitch and BPA free water bottles.

I had a restive long weekend. Long weekend? Yes, for someone who has to work half days on weekends, this was a nice long weekend for me. Hmmm, well, I did visit a customer for slightly more than an hour on Saturday but that's not really work. Just delivered mooncakes and had a chit chat.

So, what did I do this "long weekend"? I had tim sum with my family, caught up with some friends and did some shopping. Spent some money (quite a lot by my standards) and helped to stimulate the economy, not that the economy needs much stimulating. The restaurants were packed! The shopping malls were packed!

Tim sum was at East Ocean Teochew Restaurant in Shaw Centre. I took some photos of the more creative pieces (only available on weekends and public holidays) with my trusty Samsung phone camera (as usual):

Penguins! These had lotus paste and salted egg fillings. Yummy!

So cheerful, right? Almost couldn't bear to eat it.

The one on the right didn't look as cheerful but it was still cute. :)

Called "Ugly Ducklings", these were a bit like "wu kok".

These were filled with "mei cai", the same vegetable that they would have with stewed pork.

Looks like a duckling, doesn't it?

This is a photo of the gigantic poster at Knightsbridge (the former Crown Prince Hotel) some two or three stories tall where Abercrombie & Fitch  is going to have their second branch in Asia.

Apparently, it caused a Singaporean auntie some distress, enough to write in to the papers, saying that it was indecent and that people turned away when they walked past it. I don't see why is it indecent.

Actually, I saw people (male, female, young and old) taking out their phones and snapping pictures of it while waiting to cross at the traffic lights. So, what do you think of it?

Apart from spending money at restaurants and cafe, the only other place I spent money at was in a Nike shop, where I bought four BPA free plastic water bottles for myself and my family.

Barley drink not included.

I think not enough people realise that harmful chemicals leach from plastic water bottles into the water they hold. We should make sure that the plastic water bottles we use are BPA free.

I also paid my bills at an AXS machine, got a friend a belated birthday present, got a pair of socks and had a haircut at QB House in 313 Somerset. I like the haircut too. Definitely a nice weekend!

Tuesday is a holiday again! Selamat Hari Raya! Yeah!

CapitaMalls Asia: Gap closed at $1.325.

The last time I blogged about CapitaMalls Asia was on 15 August. At that time, I detailed the reason for not adding to my long position. That reason was technical in nature and is still valid today.

I did not sell as price went lower, saying I would only sell as price rebounds to test resistance. Downtrends are rivers of hope.

Yesterday, CapitaMalls Asia's share price rose dramatically on extremely heavy volume from an oversold position. Such moves usually have strong momentum which would carry over to the next session. This morning, it did just that and my overnight sell order at $1.325 was filled.

Why $1.325? This is where we find a gap resistance and gaps would usually be filled. Price touched a high of $1.33 and if we look at the chart, this is where we find the immediate downtrend resistance.

If $1.33 should be overcome convincingly, we would almost certainly see the counter's share price going higher. Why? Closing above $1.33 would signal to market participants that the immediate (and steeper) downtrend is broken. Long holders might return and more short sellers would cover their positions. This is a powerful combination that would usually push price higher.

In case the immediate downtrend is broken, we will find the next two gap resistance at $1.395 (approximating the 50dMA) and S$1.55 (approximating the 100dMA). I also expect the next downtrend resistance (which I drew in orange color) to be more formidable.

Related post:
CapitaMalls Asia: Pre-emptive strikes failed.

Money continues to flow into Singapore.

Singapore continues to attract inflows of money. I have friends from USA and Europe who are parking their money in savings accounts in Singapore although they get only 0.1% interest. Why? The Singapore Dollar has been appreciating against their home currencies and is likely to get stronger.

Singapore also has a AAA rating when it comes to sovereign bonds. This has been attracting much attention. The latest to announce intention to invest in Singapore bonds is Schroder Investment.

Does it stop at bank deposits and bonds? Emphatically, no. Hot money is hungry for productive assets in Singapore. The rising supply of money has kept interest rates low, creating a credit boom. This is a big reason why prices of condominiums, especially those in the luxury segment, have shot through the roof in recent times.

The last I heard, some people with a lot of money have turned their attention to industrial properties in Singapore as yields on residential properties are relatively low at about 4% now. Will industrial properties see their prices pushed up next?

The rising value of the Singapore Dollar and continuing inflow of money into our country has created problems for our industries as well because our exports become less competitive. As it is, our GDP shrank 7.8% in the last quarter.

I believe that the Monetary Authority of Singapore has to limit hot money inflows or cap gains on the Singapore Dollar and soon.

Singapore bonds attract Schroder with Asia’s sole AAA ratings
Thursday, 25 August 2011

© 2011 - The Edge Singapore

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Saizen REIT: Full Year 2011 results.

I have not blogged about Saizen REIT for some time now because there is nothing really significant to analyse after its CMBS for YK Shintoku was successfully paid up a few months ago.

I divested my investment in the REIT partially when its unit price rebounded after hitting a low in the aftermath of the triple disaster of earthquake, tsunami and nuclear crisis in March this year. This is because of the possibly more difficult economic circumstances which would plague the country as it feels the impact of the immense damage fully over time. Technically, it also looked as if further upside in unit price could be capped. As the situation lacks a level of clarity which I would require to invest with a peace of mind, partial divestment was the way to go.

Yesterday, Moody's cut Japan's government bond rating to Aa3 from Aa2. The new rating is three notches below Moody's top Aaa rating.

While pointing out that more than 90% of Japan's debt is held domestically, I have also acknowledged in the past that debts will have to be repaid in time as its ageing population draws down on its savings increasingly. While the downgrade by Moody's is hardly surprising and does not mean that Japan is collapsing in the immediate future, it does remind us that Japan's slide downwards has not stopped.

Having said this, I still retain a rather significant investment in Saizen REIT in absolute dollar terms as I still like the idea of having exposure to freehold residential property in a country where two thirds of its population rent the homes they stay in.

The REIT's gearing level has also dropped to just 24% and its NAV per unit (adjusted for warrants) is a relatively high 29c. Interest cover ratio is a tad low at 3.1x. DPU of 0.5c has been declared for 2H 2011 (payable on 16 Sep). An annualised DPU of 1c with a unit price of 14.9c would mean a distribution yield of 6.7%. Pretty decent.

In 1H 2012, six months later, we could see a higher DPU as a full six months income generated by YK Shintoku would be distributable to unit holders. However, bearing in mind that many properties were divested to repay its CMBS, some might question if such contribution would be significant? From memory, YK Shintoku had a very large portfolio of properties and, again based on memory, we could see DPU bumping up some 10% possibly.

The same rating agency that downgraded Japan's debt rating raised Saizen REIT's debt rating from Caa1 to B1. This is good news as it could make financing more readily available and at a lower price for the REIT. The management has mentioned its desire to raise gearing level to 35% and the better rating should help.

Saizen REIT remains a recovery story in the making. We can only wait and see if the expected more difficult economic conditions in Japan will present any challenges for the REIT in time.

Read article here:
Moody's downgrades Japan's debt rating citing large budget deficits and government debt.

See Full Year 2011 presentation slides: here.

Related articles:
Japan's debt issue and Saizen REIT.
Sanity prevails with more good news.