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AIMS AMP Capital Industrial REIT: 4.35% Fixed Rate Notes.

Friday, November 30, 2012

AIMS AMP Capital Industrial REIT is raising $30m in the debt market from the issue of unsecured 4.35% fixed rate notes in a private placement. This is the second series of such notes to be issued.


The first series of such notes was issued in August 2012 and was 5x oversubscribed. Those notes were at 4.9% fixed rate and mature in 4 years in 2016. That exercise raised $100m.

The second series of notes are to be issued on 5 Dec 2012 and will mature on 5 Dec 2019. The money raised will go to repaying a $28.8m secured bank loan due in Feb 2014.

There are improvements in the second series over the first:

1. The cost of debt is lower at 4.35% compared to 4.9%.

2. The tenor is longer at 7 years compared to 4 years.

These improvements are significant as they suggest that there is a strong demand for debt issued by the REIT. The demand is so strong that lenders are willing to accept a lower yield for a longer tenor. This bodes well for future issues and also lends confidence to investors in the REIT as funding concerns are addressed.

One of the major criticisms of the REIT model was that the long term investments in real estate were accompanied by short loan tenors, usually three years, from lenders in the past which were the CMBS (now exinct) or banks. Longer loan tenors provide stability.

However, the longer tenors of medium term notes attract a higher coupon rate when compared to shorter term bank loans. The higher coupon rate also reflects higher risk to lenders from the notes being unsecured. The bank loans AIMS AMP Capital Industrial REIT secured in the past have an average of 3.3% in annual interest burden, if I remember correctly, which is much lower than the coupon rate of the current exercise but I guess we cannot have everything.

AIMS AMP Capital Industrial REIT has the same BBB- credit rating as CDL-Hospitality Trust and I expect the REIT to issue more of such notes in future. Could we perhaps see a 10 years tenor and a 3.5% coupon rate in the next issue?

Related post:
AIMS AMP Capital Industrial REIT: 2Q 2013.

Useful information on the REIT:
Corporate Profile Seminar Presentation (17 Nov 2012)

Capitamalls Asia: Longer term uptrend.

Thursday, November 29, 2012

Earlier this month, I mentioned that we want to accumulate shares of Capitamalls Asia on any correction in price. Well, it happened while I was away in the USA and anyone who bought some then for a trade would book a 10% gain by now.

Daily chart


Weekly chart

As price rose, volume has been falling. The MACD, a price momentum oscillator, has not formed a higher high even as share price did. The MFI, a momentum oscillator that takes in both price and volume, likewise is lethargic. The negative divergences thus formed suggest a possible correction in share price is near.

In the longer term, share price is likely to continue strengthening as the uptrend is intact with all the MAs rising. So, the appropriate strategy for me continues to be to add at supports. I would look to the 50d MA for guidance as to when to add to long positions.

Related post:
Capitamalls Asia: Any correction is a buying opportunity.

Top 1,000 websites in Singapore.

Wednesday, November 28, 2012

In my first year or so as a blogger, I would track and analyse my blog's traffic and I even published reports complete with charts every few months. A reader said that I was producing quarterly reports like listed companies. Anyway, after slightly more than a year doing it, I stopped. I guess the novelty wore off.

Today, I look at Alexa and was pleasantly surprised to find that ASSI has made its way into the top 1,000 websites in Singapore. I feel that this is probably a milestone and so, I am sharing this bit of discovery here with my readers. If ASSI were indeed a business like some people tell me it should be, I guess a special dividend could be declared. ;-p


Related posts:
1. Alexa (Part 2).
2. ASSI 1Q 2011 quarterly report.

Singaporeanstocksinvestor.blogspot.sg's three-month global Alexa traffic rank is 348,802. Visitors to the site view an average of 1.4 unique pages per day. The site is relatively popular among.
  
Alexa Traffic Rank
 

 
Singapore Flag995
Rank inSGTraffic Rank in Country
A rough estimate of singaporeanstocksinvestor.blogspot.sg's popularity in a specific country.

The rank by country is calculated using a combination of average daily visitors to singaporeanstocksinvestor.blogspot.sg and pageviews on singaporeanstocksinvestor.blogspot.sg from users from that country over the past month. The site with the highest combination of visitors and pageviews is ranked #1 in that country.
 

 
 




Buy stuff from your favourite online stores and get them to ship over to Singapore using vPost! Three lucky customers will win a dream vacation!

Details here: vPOST.

Marco Polo Marine: Patience will be rewarded.

Tuesday, November 27, 2012

I added to my long position in Marco Polo Marine as long term support was tested. Today, its share price touched a high of 35c before closing at 34.5c on the back of rather high volume. The positive divergence between the CMF and price action has played out. The MACD is rising in the negative territory and we could see price going higher and momentum going positive once more. A retest of 37c, the high of the double top, could happen.

Daily chart.

Weekly chart.

Fundamentally, Marco Polo Marine presented an impressive set of numbers:



All-time high net profit of S$21.3 million against consecutive 8 years of record high revenue at S$89.8 million and record high gross profit at S$29.2 million for FY2012.


Record gross profit and net profit attained with margins at enhanced levels of 32.5% and 23.8% for FY2012, representing increases of 4.4% points and 3.0% points over FY2011 respectively.

Operating cashflow position reversed from a net cashflow used in operations to a net cashflow generated from operations of S$34.5 million in FY2012.


EPS of about 6.3 Singapore cents for FY2012, representing an increase of 23.5% over FY2011, while NAV per share increased by 14.4% to 41.4 Singapore cents as at 30 September 2012.

Declaration of a special interim dividend of 0.8 Singapore cents per share for Q1 FY2013.

See: Media Release.

In earlier blog posts, I stated my reasons for believing that Marco Polo Marine's share price is too low and that we could see a much higher price over time.

If we expect Marco Polo Marine's shares to trade at similar valuation to its peers, a PE of 8x would value each share at 50.4c. This implies a 46% gain from the last closing price of 34.5c.

Patience will be rewarded.

Related post:
Marco Polo Marine: Accumulation mode.


Vending machines in the USA.

Monday, November 26, 2012

On this last trip to the USA, I came across a couple of vending machines that I have never seen before anywhere else.

Guess what this one was selling?
Scratch and win cards! US$3.00 each.
What about this one?
Electronics! Amazing, isn't it?

In a situation where there is a shortage of space and labour, vending machines could be the answer for products which might not really need salespeople.

In Singapore, we see machines selling drinks, snacks and even Gardenia bread. However, we have not even touched the tip of the iceberg. They could be one of the answers to Singapore's problem with high rentals and a shortage of labour.

Related post:
Distinctly Japanese.

Yomeishu: Win Megumi and a beverage mixer!

The everyday person works very hard on a daily basis, taking a toll on their health.


Yomeishu is able to restore and maintain your well-being with natural ingredients.

You can win the goodness of Megumi (a liqueur made with 13 oriental herbs for everyday relaxation), and a Japanese beverage mixer just by answering a simple question!


20 winners will be picked each week for 5 weeks.

This week’s entries close on 28th November 2012.

You could be a winner at:
Yomeishu Guess & Win!

Be cautious even as we accept higher risks.

Sunday, November 25, 2012

When I did a Diploma in Business, I had to study Business Law. One thing I remember is that something we buy has to be "fit for the purpose it was built for" and be "of merchantible quality".


So, let's say you bought a contraption which was supposed to keep food fresh but it did not; then, it was not fit for the purpose it was built for. If the contraption really did keep food fresh but it started to fall apart within the first week of use, then, it was not of merchantible quality.

Singapore's Lemon Law which kicked in on 1 September 2012 stipulates a 6 months period in which buyers now have to take action on any defective product. This addresses the issue of "merchantible quality".

In the weekend edition of The Business Times, I read an interesting article on whether conventional wealth management wisdom which says that people nearing retirement should have more of their wealth in conservative bonds is "fit for purpose". This actually raised a question in my mind as to whether wealth managers are providing products which are fit for purpose or are they self serving sales people.

In the few encounters I had with wealth managers, I was advised to be more aggressive with my investments because people in their 30s and early 40s could afford to do so. One asked me why was I so conservative when I told him I was not interested in any of his proposals which sounded rather risky to me. I was then advised that only people nearing retirement should be more conservative.

So far, my personal experience with wealth managers has not been positive, having lost much money through products they sold to me. Unlike physical goods, wealth managers do not have to provide any guarantees as to a financial product's performance. This could be the reason why when the Mini Bonds and other structured products offered a "capital guaranteed" feature, they drew so many investors. Of course, they were not of "merchantible quality" but no buyer could tell until things fell apart. Unlike physical goods, it was too late to do anything.

In an environment of very low interest rates and high inflation, we have to seek higher returns on capital to protect our wealth. However, we have to exercise caution even as we accept higher risks.

Related posts:
1. Low interest rates' a double whammy for some.
2. To protect our wealth, we have to take risk.
3. Fraud: Like taking candy from a baby.


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