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CapitaMalls Asia: 20wMA, the resistance to watch.

Thursday, January 12, 2012

If you think the title of this blog post looks familiar, it should be. ;)

If you look at the weekly chart of CapitaMalls Asia, you would know why:

Compare this with:
Capitaland: 20wMA, the resistance to watch.


FoodieFC said...

having unrealised lost for this. Bought at 1.40++.

waiting for it to go up. But with the issues of bonds. looks like CMA need cash. and their income for dividends will be to their bonds first =S

AK71 said...

Hi FoodieFC,

CapitaMalls Asia's balance sheet is strong. They probably just want to have more money on hand. Why? If there should be a weakening in property prices, people with cash could pick up some bargains. ;)

Drizzt said...

There are a lot of unforseen risk. Lets just say that they will. Not priced the bond. At this attractive rate if their standing is this good. The good standing ones like sia in this low interest environment yield 2%. This to me is closer to hyflux which is higher risk.

Think from another perspective.

AK71 said...

Hi Drizzt,

For sure, there is risk and many things could possibly go wrong. We have to decide for ourselves if we can live with the risks and whether the potential pay offs would be worth it.

Personally, I like the story behind CapitaMalls Asia. I still believe that China is a growth economy and that the growing affluence in the country will demand better retail experience which is found in modern malls.

As for SIA, I am not so sure that it is in a better position than CapitaMalls Asia or Hyflux. They are different businesses. They each have their own problems. SIA has been facing stiffer competition from budget airlines and their own efforts at carving out a piece of the pie in the same niche has been lacklustre.

At the end of the day, we settle for what we know better and are comfortable with.

Drizzt said...

You totally mid understood why sia was brought up. That is merely as a reference the difference in credit rating between a blue chip and a spin off of one.

If you want to explain that way, the market is merely attributing to more believable profits from sia than unknown to profits from capitamall Asia. One is concrete the other is potential.

If you are willing to be of service your readers would be happy if you provide the profit impact in Europe when budget airlines came in and whether there is a correlation

AK71 said...

Hi Drizzt,

I understand where you are coming from. I was merely expanding the discussion to how I think SIA is facing headwinds.

Certainly, how much a company pays for debt has to do with its credit rating. SIA is, of course, a grand blue chip and has stronger ratings compared to CMA and Hyflux. Then again, people are beginning to question the reliability of rating agencies these days. Should they be rated too? ;p

I am not going to do a FA on SIA and the impact of budget airlines. No interest in that area. What I have said is based on what I have read in the papers and my own observations when I travel.

Drizzt said...

The ratings agency have a methodology in why these companies are accorded higher ratings. There should not be much smoke and mirrors. The question of rating agencies have more to do with their stating of things not easily valued in the sub prime.

I suspect not many would do such a comparison. Incidentally I am starting to see why the Singapore financial blog world is so loop sided in that two main trends emerge. The talk of dividend investing in reits and technical analysis. The former is easy to understand that we can just regurgitate while the later we can just put up a chart to explain itself.

Not seeing many pushing the limits a fair bit.

AK71 said...

Hi Drizzt,

I have imperfect knowledge and definitely I have much to learn. I do not understand how rating agencies work or how their methods work. So, I shan't pretend to know. ;p

Of course, having a blog, I share what little I know and hope I do not make a fool of myself too often. Haha..

I am sure that there will always be people out there who are more aggressive in pushing the limits. I leave the pushing in their good hands. ;)

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