Golden Agriculture: Accumulation mode.

Anyone who has been following my blog recently would know that I have been accumulating shares of Golden Agriculture. Today, I bought more shares in the company at 66.5c a share. Do I intend to buy more if price should weaken? Yes, I would.

I am confident that the demand for crude palm oil (CPO) will strengthen as an edible oil as well as for the production of bio-fuel. With increasing affluence in Asia, especially in India and China, consumption is on an upward trajectory. With crude oil once again north of US$100 a barrel, we could see a stronger return of bio-fuel as a less expensive alternative. The fundamentals support higher CPO prices in future.

CPO has retreated to RM3,270 a ton from a high of RM3,960 in February. This is a decline of more than 17%. There are signs that the steepest part of the correction is over as price has managed to stay above RM3,230 a ton since late March.

Golden Agriculture's fortunes are probably the most levered to the price of CPO amongst the CPO companies listed in Singapore. Its share price took a dive from a high of 83c on 4 Jan 2011 to just 61c on 23 Feb 2011 for a loss of 26.5%. Devastating for anyone who got in at or near the high? Quite. Could price continue to move south?

Well, technically, I get the impression that the counter is oversold. As the ADX is at 11 and the DIs approximate 20, there is no strong trend or a trend per se. Volume has reduced again today as price found support at 66c and this is where the uptrend support which originated on 23 Feb is found. Stochastics is still in oversold territory and could we see it forming a higher low?

I always say that TA is about probabilities and never certainties. So, in the event that price moved lower, where is the next support? If the trendline support originating from the low of 23 Feb were to break, I see the next support at 65c. This is also a more ideal entry price I identified some time back when I was thinking of re-initiating a long position in this stock. More ideal because it was the top of a very lengthy basing process which started in early January 2010 and ended in October of the same year.

By drawing a Fibo fan using the low of 23 Feb and the high of 11 Apr, 65c is also where we would find the 78.6% Fibo fan line next week. For good measure, I used the low of 25 May 2010 and connected it to the low of 23 Feb 2011 which gave me another trendline support. Guess what. This line actually approximates the 78.6% Fibo fan line mentioned earlier.

65c could be the next strong support. If price were to test 65c, I am buying more.

LMIR: 1Q 2011 results.

LMIR is one of my long time investments. My only grouse is with its losses which stem from foreign exchange forward contracts. In 1Q 2011, it lost $2.1m from these contracts. Some degree of hedging is necessary, I believe, but in an environment which has seen the Indonesian economy and its currency strengthening quarter after quarter, 100% hedging is unnecessary. Distributable income could have been almost 20% higher if not for these contracts.

DPU: 1.17c
Payment date: 31 May.

Gearing: 10%.
NAV/unit: 86c.

See presentation slides here.

Related post:
LMIR: 4Q FY2010 results.

What did AK71 buy today?

Sabana REIT at 94.5c.

In the morning, before the letters "CD" came on, there was some heavy selling but it was rather well absorbed and there was a long buy queue at 94c. This was after the price touched a high of 95.5c. After some initial hesitation, I decided to add to my long position and bought more units at 94.5c which happens to be where we find the 50dMA.

Technically, things continue to look up for this REIT's unit price. OBV shows strong accumulation. The MACD looks like it would be crossing into positive territory soon, heralding the return of positive momentum. MFI spiked upwards, suggesting strong demand. All in all, rather encouraging. Immediate resistance is at 96c which is where we find the 100dMA approximating.

See earlier blog post on Sabana REIT here.

Golden Agriculture at 67c.

I increased my long position in Golden Agriculture today at 67c as the 200dMA was retested as support. Volume today is the lowest in at least a week as price pulled back to 66.5c at the trendline support which originates from the low of 23 Feb 2011.

ADX is below 20 and the DIs are approximating 20 which suggest that there is no trend. Look at the Stochastics and we see an oversold situation. Indeed, price action has reached the lower Bollinger band.

Time for a rebound? Very likely. In such an event, it would be interesting to see if price could form a higher high and that would mean higher than 73.5c, the high of 11 April. This could turn out to be quite rewarding.

See earlier blog post on Golden Agriculture here.

Cambridge Industrial Trust: 1Q 2011 results.

I must say that Mr. Chris Calvert, CEO of Cambridge Industrial Trust, has not failed suspicions that he could underdeliver. He did so and did so stupendously.

DPU declared for 1Q 2011 is 1.001c (XD 5 May 2011). This is to be paid on 14 June 2011. Annualised DPU is provided by the management as 4.06c. This is much lower than the DPU of 4.84c, post rights, as suggested by the manager. I blogged about the tricky nature of the rights issue and DPU forecast in an earlier blog post. Read it here.

At today's closing price of 51c, the annualised DPU of 4.06c would mean a distribution yield of only 7.96%. This is greatly disappointing! Has Mr. Chris Calvert outdone himself? A rhetorical question.

Property manager's fees increased a whopping 46.4% while manager's management fees increased 8% year on year. All these while the gross revenue of the REIT increased only 3.8% year on year.

Regular readers know that I do not have a high opinion of Mr. Chris Calvert and I have blogged about how the Trust has failed to deliver in the past. An example? Please read blog post here. However, I decided to be friends with Cambridge Industrial Trust again (read blog post here) and it seems that I could have been too forgiving.

Given a chance for a small gain, I would probably divest my smallish investment in this Trust. Yes, the consolation is that my investment in this Trust is a very small one. Perhaps, a wary subconscious prevented me from foolishly investing too much in this Trust.

With gearing at 33.3%, an interest cover ratio of only 4.8x and a distribution yield of less than 8%, I am better off investing in Cache Logistics Trust, AIMS AMP Capital Industrial REIT and Sabana REIT. All of these have lower gearing, higher interest cover ratios and higher distribution yields. Cambridge Industrial Trust is a loser.

See manager's report here.
See presentation slides here.

Sabana REIT: DPU of 3.04c.

While chatting with some friends, I mentioned that I expect a maiden DPU of no less than 2.8c for Sabana REIT. I also said that I could be wrong and the DPU could be higher. I am happy to be wrong and a DPU of 3.04c was announced. The REIT will go XD on 10 May and the income distribution will be made on 16 June.

Some important numbers:

NAV/unit: 98c.
Gearing: 24.9%
Interest cover ratio: 7.9x

See presentation slides here.

Not too long ago, I initiated a long position in Sabana REIT very close to its low and, similar, to my investment in Cache Logistics Trust, I would not be averse to some profit taking if its unit price were to rise meaningfully in the near future.

Immediate resistance is provided by the declining 50dMA at 94.5c. This is more likely than not to give way and the next resistance level is at 96c which is where we find the 100dMA as well as the 138.2% Fibo line, the first of three golden ratios. I am hopeful that we could see 98c tested as per my previous blog post on this REIT.

Related post:
Sabana REIT: Turning positive.

Sabana REIT announces distributable income of $19.3m for Nov 26-Mar 31
Wednesday, 27 April 2011

© 2011 - The Edge Singapore

Cache Logistics Trust: Reverse head and shoulders.

I am rather excited by the price action of Cache Logistics Trust today. Price formed a wickless white candle as it closed at 96c, the neckline of the potential reverse head and shoulders pattern I mentioned in earlier blog posts. It remains to be seen if this resistance could be overcome. 96c is also where we find the 200dEMA.

If resistance at 96c were taken out, using Fibo lines, I see more significant resistance provided by the golden ratios at 98c (138.2%), 98.5c (150%) and 99c (161.8%). I initiated a long position in this trust at its lowest not long ago and added to my position shortly after. So, if the resistance levels identified should be tested, I would not be averse to some profit taking. Locking in some nice gains? Sure, why not?

Related post:
Cache Logistics Trust: 1Q FY2011 results.

First REIT: Weakness on XD.

First REIT went XD today and its unit price gapped down, closing at 73.5c on the back of higher volume. Could its unit price continue to weaken? Acknowledging the lack of trend, let's look at the Stochastics and it is obviously falling from overbought territory. It could continue falling and we could see First REIT's unit price testing the support of its trading range at about 72c, given time. However, this might  not happen since price is currently at a confluence of MAs (i.e. 20d, 50d and 100d) which could act as support.

What would I do? Sell at resistance and buy at supports. If price should have a bounce up, selling at 74.5c or a bid lower at 74c could be a good idea. If price were to retest 72c support, buying more is what I would do. If you guess I am putting more faith in the possibility of the REIT's unit price weakening further in the short term, you are right. Just remember, however, that I could be wrong. ;-)

Cache Logistics Trust: 1Q FY2011 results.

Higher DPU than forecast: 1.952c.
XD: 3 May.
Payable: 30 May.

NAV/unit: 88c.
Gearing: 26.4%.
Interest cover ratio: 9.5x

See presentation slides here.

The numbers are nice and strong. Although its distribution yield is lower than AIMS AMP Capital Industrial REIT, I believe that it is a premium that is well worth the money.

Looking at the chart, a potential reverse head and shoulders is quite obvious. Of course, I could be counting the chicks before they hatch here. The neckline is at 96c and if the pattern is a valid one, we could see $1.00 tested again. Good luck to fellow unitholders.

First REIT: Climbing the wall.

First REIT's unit price rose and closed at 76c today. It seems to have hit a wall. Looking at the daily chart and the EMAs, it is easy to see why. The 100dEMA is at 76c. EMAs give greater weightage to more recent prices and are useful in identifying shorter term resistance and supports.

Although the +DI is rising strongly and has the advantage and although the ADX seems to have begun rising as well, RSI and Stochastics have gone into overbought territories while the MFI could face resistance as it approaches its 50% line.

So, although there is little downside risk, upside could be capped. If 76c could be overcome successfully, the next resistance level is at 77c, the high achieved in January 2011. This is followed by 78.5c which is resistance provided by the 200dEMA.

Sabana REIT: Turning positive.

The last time I wrote about Sabana REIT exclusively was on 4 April when I mentioned that a positive divergence was rather obvious. I also mentioned that "a significant resistance presented by the declining 20dMA at 94c would have to be cleared first." The declining 20dMA has flattened at 93.5c by now and, today, price closed at 94.5c.

For the first time in a very long time, we see the +DI having the advantage. The MACD continues to rise above the signal line in negative territory while the MFI suggests that the REIT is still oversold. The RSI and the Stochastics have both bounced off their respective 50% line, suggesting that there is some support for this REIT at the current price level. We could be seeing the end of basing activity.

If we look at the daily chart, we can estimate the neckline of a potential double bottom formation to be at 95c. If we take the low of 92c and project the 3c difference from 95c, we would get an upside target of 98c. This is, of course, if the pattern is a valid one. With the REIT's manager due to make the announcement on its maiden income distribution in a matter of days, there is reason to believe that we could see its unit price moving higher rather than lower.

Golden Agriculture: Long term uptrend is intact.

I have felt bulllish about crude palm oil (CPO) since 2009 and made some money divesting my investment in Golden Agriculture in 2010 when its share price shot through the roof. With the fundamentals of CPO still strong and likely to strengthen with the higher price of crude, I am convinced that Golden Agriculture will do better in time and I traded its shares on a few occasions as well.

However, I refused to chase as Golden Agriculture's share price rose higher and hit a high of 83c on 4 January. In fact, I was warning readers of the glaring negative divergence which saw the MACD forming lower highs and the share price formed higher highs. Patience will be rewarded (usually) and today I got back in on the long side once again at 67c/share which is where we find the rising 200dMA.

If we remember how in the last two occasions when the 200dMA was tested, it failed to hold up, we would treat any buying at this support as a hedge. So? A smallish long position just in case it does hold up. Put in a larger buy position at the trendline support which I have drawn in red. This is a long term support which started on 26 May 2010. If this were to fail, the next long term support is the one which originated at the bottom on 28 Oct 2008. This trendline support, I have drawn in orange color. I will accumulate if there should be further weakness.

CapitaMalls Asia: At support.

CapitaMalls Asia retreated 5c or 2.7% today, closing at $1.79 after touching a low of $1.78. Question on the minds of many people would be whether it would go lower? Who knows for sure? Looking at the daily chart, it is clear that $1.78 is an important support defined by the 50dMA as well as the 61.8% Fibo fan line.

Looking at the ADX, the suggestion is that there is no trend per se. In such a situation, look to the Stochastics and we see that it is gently declining but it is not oversold. Look then to the OBV and it does not show any distribution. In fact, since 15 March, the picture is more of accumulation than distribution. The volume today was not very heavy although a black candle was formed. 

If we believe that CapitaMalls Asia has gone into a range as suggested by the horizontal orientation of the Bollinger bands, then, buying at the lower end of the range would make sense if it should happen at all. That is at $1.72. Keep an eye on $1.78. If it does not break, we could see price going higher and breaking the longer term trendline resistance eventually.

Why am I sanguine about the situation? If we look at the weekly chart, since the week of 14 March, in weeks when white candles were formed, trading volume was higher than in weeks when black candles or dojis were formed. This is encouraging for the bulls. The pull back is possibly a chance for accumulation.

First REIT: Breaking resistance.

To any chartist, it is clear that First REIT broke an important resistance at 74.5c in the last session. Volume expanded significantly on a day when a wickless white candle was formed.

With the MACD rising into positive territory and with the RSI rising from the borders of its oversold territory, we could be seeing the beginnings of an earnest attempt to move higher in price. We could see stronger resistance starting from 76c with 77c being a significant many times tested resistance which also approximates the 150% and 161.8% Fibo lines at 76.8c and 77.2c respectively.

Looking at the weekly chart, we see the rising 100wMA approximating the upper Bollinger band at 78c. Possible target? Why not? Declining 50wMA is at 82c. Possible target? Again, why not? However, this is the weekly chart. So, it gives us insights into the longer term picture. If price were to climb higher, it is going to do so on a wall of worries.

Related post:
First REIT: 1Q 2011 results.

Cache Logistics Trust: Weekly chart.

For quite a while now, I have been investing for income. However, friends and readers of my blogs in the early days would know that I am not averse to investing for capital gains as well. Logically, who would be averse to investing for capital gains?

For a longer term picture, I like to look at weekly charts. Looking at the weekly chart of Cache Logistics Trust, it is obvious that it has been in a downtrend for months, well, since mid September 2010. I feel that a rebound is probably on the cards, if not a reversal. Why? The MACD has formed a double bottom and the distance with the declining signal line has narrowed. We could see a bullish crossover in time although it would almost certainly happen in negative territory.

Next, look at the OBV. Since forming a low in the week of 21 February, it has not formed a lower low and this is although price went on to touch new lows. This suggests that smart money is accumulating units in this REIT as price weakened in the longer term.

In terms of candlesticks, a white hammer was formed last week. This is following the preceding week's big black candle. This is a bullish signal which, of course, needs confirmation. If confirmed, immediate resistance are at 95.5c (20wMA) and 96.5c (50wMA). Overcoming these resistance levels would give a target of 98.5c which is resistance currently provided by the trendline resistance which approximates the upper Bollinger band.

With the next income distribution due to be announced on 26 April, chances of an upward movement in unit price is rather good. I have been accumulating and wish fellow unitholders the best of luck.

Related post:
Cache Logistics Trust: Testing supports.

Tea with AK71: Dishonest merchant.

More than three years ago, I was given a present, a Canon IXUS 860 IS digital camera, in Hong Kong. It was, at the time, a somewhat expensive item.

Recently, the rechargeable battery was not holding its charge and even someone who is not savvy with high tech stuff like me knew that the battery probably had to be replaced. This is what the battery looks like:

When I showed the battery to a very good friend of mine, he told me that the battery is not a Canon original. I told him it came with the camera and it must be original. Well, my friend who is more tech savvy than I am told me firmly that he has quite a few Canon digital cameras and what I showed him was definitely not the real deal. Oh yes, I forgot to mention that this friend is also very rich.

Anyway, I was somewhat upset that my present, although given to me three years ago, probably suffered some monkey business at the hands of some dishonest merchant in Hong Kong!

As you can see from the photo above, the original from Canon, which I bought from Canon's showroom at Vivo City recently looks quite different from the battery that came with my camera. Price: S$89.00.

Dishonest merchants are everywhere. I ought to warn my friend in Hong Kong who bought this camera for me not to buy anything from that shop again, wherever they are.

Saizen REIT: A new loan.

More good news. Saizen REIT secured a new loan for the amount of JPY 500 million (S$7.5 million) from a Japanese financial institution, the Kumamoto Dai-ichi Shinkin Bank on 20 April 2011. This is for a term of almost 20 years up to 10 March 2031 and has an interest rate of 3.5% per annum.

The money was used towards the repayment of YK Shintoku's CMBS and taking into account YK Shintoku’s cash reserves, the net outstanding loan of YK Shintoku amounts to approximately JPY 0.7 billion (S$10.5 million).

The day when YK Shintoku would be unencumbered by any loan is drawing nearer by the day.

First REIT: 1Q 2011 results.

Feeling somewhat tired and was thinking of not checking my blog today. Then, I remember that First REIT would have announced their results this evening. All as well since I found some comments waiting for my replies. Would not do to make loyal readers wait too long. ;-)

First REIT delivered a set of results that is very much within expectations. I had expected a DPU of about 1.6c. It turned out to be 1.58c. Close enough. Gearing is at 13.8% which leaves the REIT plenty of room to gear up for future acquisitions. After all, the REIT plans to grow its portfolio from the current S$584.6 million to S$1 billion in the next 2 to 3 years.

Some numbers:
NAV/unit: 78.25c.
Interest cover ratio: 11.6x.
See presentation slides from AGM here.

The counter would go XD on 27 April 2011 and distribution would be made on 30 May 2011.

Could we see price moving higher from here? I am inclined to believe that it would although it should hit resistance at 76c to 77c in the immediate future if so.

Related post:
First REIT: Bought more at 73.5c.

AIMS AMP Capital Industrial REIT: 4Q FY2011.

A higher DPU of 0.54c was achieved for fourth quarter ended 31 March 2011 (4Q FY2011). This is partly due to the release of distribution retained in previous quarters which bumps up the distributable income for the quarter by S$708,000.

Since an advance distribution of 0.285c per unit was paid out on 28 March, 0.255c per unit would be paid out on 8 June 2011. XD on 26 April 2011.

Some numbers as of 31 March 2011:
NAV/unit: 27c.
Gearing: 32.0%.
Interest cover ratio: 5.7x
Weighted average debt maturity: 3.5 years.
Weighted average interest rate: 3.36% per annum
Weighted average lease expiry: 3.4 years.
Weighted average land lease expiry: 42.0 years

Substantial shareholders:
AMP Capital: 15.35%
Dragon Pacific Assets Limited: 11.98%
APG Algemene Pensioen Groep N.V.: 9.42%
Universities Superannuation Scheme Limited: 8.19%
George Wang: 7.19%

See presentation slides here.

AIMS AMP Capital Industrial REIT achieves DPU of 0.54 cents for 4Q
Tuesday, 19 April 2011

© 2011 - The Edge Singapore

Related post:
AIMS AMP Capital Industrial REIT: Stronger numbers.

CapitaMalls Asia and NOL: Increased exposure.

The STI retreated 19.01 points today to close at 3,125.37. Volume was rather low with only 1,075,913,210 shares worth a total of S$1,329,106,068 changing hands. Low volume on a down day is good news for bulls as it suggests a lack of conviction on the part of sellers. Today, I increased exposure to CapitaMalls Asia and NOL.

CapitaMalls Asia's trading volume reached its highest in 5 days and my buy queue at $1.80 was filled as price touched a low of $1.79. In my last blog post on this stock, I said I would accumulate on weakness but only on further weakness and not $1.83. $1.80 would be a hedge while I would accumulate further if price were to test $1.76.

Could $1.76 be tested in the next couple of days? Possibly since that would be also be a test of the 61.8% Fibo fan line. Momentum oscillators are all declining and could be testing 50% soon for support. Downside could be pretty limited from here. This counter has a compelling story to tell and the dual listing exercise once underway could provide it with some strong upward momentum. In the meantime, the descending 100dMA provides resistance and I could do a contra if price were to go that high in the next two days.

Earlier on, I had thought of NOL as forming a mild uptrending channel. That picture is now changed as a new low was formed today at $1.88. I bought more at $1.89 or 1 bid lower than the support of the range which I have identified as between $1.90 and $2.01. I like how a white spinning top was formed as price declined on reduced volume compared to the session before.

I also like how the MACD has a higher low even as price formed a lower low. Momentum is still encouraging and coupled with the white spinning top, we could have a rebound as the Stochastics seem to have declined into oversold territory too quickly. A retest of the 20dMA at $1.96? Perhaps so and that would be a nice price for a contra.

Related posts:
CapitaMalls Asia: Accumulate on further weakness.
NOL: Going higher?

CapitaMalls Asia: Accumulate on further weakness.

CapitaMalls Asia has a strong resistance at $1.88. That is quite obvious. This resistance level was breached in many recent sessions although price did not close any higher. If the counter's share price were to move to retest this resistance level again, it could very well give way to higher prices. In the meantime, a pull back is underway.

Today, only 123 lots out of a 3,434 lots changed hands at $1.83. This is the immediate support identified before. The next support level is at $1.80, which was a weak resistance which gave way on 5 April. This weak resistance could be a stronger support as it is where we find the golden cross formed by the rising 20dMA and the flat 50dMA. If this should break, I see support at $1.76 which is suggested by candlesticks and the approximate position of the 61.8% Fibo fan line.

What am I going to do? Well, seeing how the pull back is on rather low volume, I am inclined to accumulate on weakness. However, seeing the momentum oscillators still bordering on overbought, it would not be wrong to wait for further weakness before accumulating. So, a buy queue at $1.80 as a hedge and another buy queue at $1.76? Perhaps.

Related post:
CapitaMalls Asia: Waiting for a correction.

Healthway Medical: Technically interesting.

I have blogged enough on the fundamentals of Healthway Medical for regular readers to know that I would not increase exposure anytime soon. The management has some way to go to prove themselves, that they could execute their strategies successfully.

Technically, however, it is looking somewhat interesting as the 20dMA is rising and could form a golden cross with the 50dMA. It suggests that the share price could have found a floor for now. Stochastics is now in the oversold territory and +DI has the advantage. Squeezing Bollinger bands suggest reducing volatility of late and we could see the counter's share price moving sharply up or down in the near future.

Successfully overcoming the nearest trendline resistance could see price testing a high of 14.5c/share.

Related post:
Healthway Medical: 1 for 8 rights issue.

Cache Logistics Trust: Testing supports.

In my last blog post on this Trust, I said that we should watch for a retest of supports at 93c and 92.5c. Today, those prices were tested as price touched a low of 92.5c before closing at 93c. Although volume was much higher relative to the preceding sessions, it is lower compared to 23 Feb, 15 and 24 Mar when the same prices were tested and even breached in the case of 15 Mar. This is an important development as it suggests that selling pressure has seemingly reduced.

As the ADX still suggests a lack of trend, look to the Stochastics for guidance. It suggests that the counter is now oversold. The potential for a reverse head and shoulders pattern remains just a potential for now. Although I think that there is a nice chance it could come to fruition, Mr. Market could have other plans. I would hedge and I have put in my buy queue at 92.5c. If the support should hold, I would then buy more.

Related post:
Cache Logistics Trust: Accumulate on weakness.

Golden Agriculture: Waiting to increase exposure.

Although I might not blog about it as much as before, regular readers of my blog would know that I like Golden Agriculture as I feel that CPO's price has only one direction to go in the foreseeable future. Golden Agriculture, amongst the CPO counters listed in Singapore, is the most levered to CPO's price.

I have been waiting for a meaningful pull back to increase my exposure to this counter. In an uptrend, it would mean waiting for a retest of supports before buying. The instances when I was impatient and when I chased prices higher were instances which I regretted, more often than not.

So, is Golden Agriculture in an uptrend? No doubt about it. When to buy more? Ah, that's the question that is more interesting for most people, I am sure.

If we connect the highs of 4 March and 11 April, we get a trendline resistance.  If we connect the lows of 23 Feb and 15 March, we get a trendline support. If we take a step back, we might see that this is an uptrending channel. If we look at the candlesticks, we see significant resistance at 72c and support could be found at 65c.

Price touched a low of 68.5c in the last session which is where we find support provided by the 50dMA. If this were to break, we could find the rising 200dMA tested for support and this is at 66.5c. Having failed twice as support before, it does not seem very trustworthy and people could possibly choose to err on the side of caution and wait for a retest of channel support which should approximate 65c next week. Buy some if the 200dMA should be tested (as a hedge) and buy more if channel support should be tested later? Sounds like a strategy I would employ.

The chances of price going lower are high. The +DI now coincides with the -DI and the ADX is under 20. There is no trend per se and we could see the Stochastics move lower to test its own trendline support. A bearish crossover on the MACD is a foregone conclusion while the MFI and RSI have broken their respective trendline supports. I will wait to accumulate at stronger supports.

Related post:
Golden Agriculture: Alarm bells aplenty?

Hyflux director divested all his shares!

Lee Joo Hai, a director of Hyflux, divested his shares completely at $2.18 per share in open market sale at own discretion on 15 April 2011. 

Total: 375,000 shares. 

As an insider, could he know something that we retail investors don't? Probably.





In my last blog post on the subject, I had mentioned that 

"the news that Hyflux is issuing preference shares with an annual dividend rate of 6% is somewhat surprising to me. In an environment of low interest rates, isn't paying a 6% interest a bit expensive? 

"It would only make sense to do this if borrowing from a financial institution would be costlier and it would only be costlier if the company and/or its business is perceived to be high risk."





Judging by how well the response is to the placement shares, which were 7x oversubscribed, I expect the ATMs to see long queues as people try to get their hands on some of these preference shares. 

Application closes on 20 April and the shares will start trading on 26 April. 

Good luck to those interested.

Related post:
Hyflux: 6% perpetual Class A preference shares.

Industrial rent forecasts strongest for Singapore.

This research paper on Asia Pacific real estate by DTZ Research was published on 23 February 2011. DTZ Research rates properties as HOT, WARM or COLD.  HOT refers to properties severely undervalued. WARM refers to properties somewhat undervalued to somewhat overvalued. COLD refers to properties which are very much overvalued.

It is very interesting to see that Singapore properties are rated as HOT for all three markets researched, namely, office market (-12%), industrial market (-14%) and retail market (-8%).  In more detail, HOT refers to an investment where investors can expect to make returns higher than the risk adjusted rate of return. Markets estimated to be more than 5% under-valued are classified as HOT. To put things in perspective, the office and industrial markets in Hong Kong are rated COLD. Taipei's industrial market is also rated COLD.

As I am heavily invested in industrial properties S-REITs, notably in AIMS AMP Capital Industrial REIT and more recently, in Cambridge Industrial Trust, Cache Logistics Trust and Sabana REIT, I am pleased to have affirmation from DTZ Research when I read this:  "Singapore, a traditional powerhouse in trade and logistics, is expected to be the best industrial performer over the forecast period in terms of rental growth, forecast at 3.6% pa." Refer to page 8 of the research paper. See it here.

Related post:
Higher rents to benefit industrial properties S-REITs.

Tea with AK71: Hainanese pork chop rice.

I like Hainanese pork chop rice. I know there are two versions: with curry or with tomato sauce watered down. This one at Redhill Market (supposedly a branch of a famous stall in Chinatown) sells the former while I know quite a few hotel cafes serve the latter.

Pork chop (very yummy), chap chye (stewed vegetable) and a hor pau dan (sunny side up, Chinese style) on steamed rice drenched in curry! Price: S$2.50.

Cambridge Industrial Trust: Excess rights results.

I checked my savings account and saw the partial return of funds used in the acceptance of rights and application of excess rights in Cambridge's rights exercise.

In total, I have 4 lots of rights units: 2,125 accepted rights and 1,875 excess rights. Add this to the initial 17 lots which I bought at 51c per unit, I have 21 lots now at an average price of 49.46c per unit. Let's just round it up to 49.5c per unit. With a DPU of 4.84c, post rights, that's a distribution yield of 9.78%.

Related post:
Cambridge Industrial Trust: Going for excess rights.

Cache Logistics Trust: Accumulate on weakness.

We could be seeing the final move in the formation of a reverse head and shoulders pattern. Volume has been reducing as price weakened from a high of 96c on 4 April. The counter closed at 93.5c today.

What do I like?

1. Low volume pull back.

2. ADX suggests a lack of trend. Looking at the Stochatics, it has entered oversold territory.

3. Potential reverse head and shoulders pattern. Watch out for price possibly testing 93c or even 92.5c for support.

4. Results and income distribution will be announced on 26 April. Expecting that to be a catalyst to send price higher.

So, if the pattern is valid, how high could the price go? Well, the low of the pattern was seen on 15 March and that's at 91c. The neckline of the pattern is at 96c. Projecting this difference forward would give us a target of $1.01. Not too bad, if I do say so myself. I am accumulating on weakness.

How to identify investment opportunities?

Macquarie Capital Securities (Singapore) Pte. Limited's quarterly seminar is here again. This time, hear from TRADING Central, the global independent chart specialists. They will be speaking for the first time in Singapore!

Hear from Mr Jun Zhang, Head of Asian Research for TRADING Central. He will be giving his views on the outlook for the global and regional equity markets. He will also be offering some insights as to how TRADING Central identifies investment opportunities for clients globally.

Mr Zhang has a Masters in Finance from the University of Paris and a Masters in Mathematics from the University of Shanghai. In his current role, he provides daily trading strategies for the Asian stock markets.

There will also be a short presentation on warrants and how to leverage your trading views without the risk of margin calls.

Admission to the seminar, as usual, is FREE.

Register soon as seats are limited: http://www.warrants.com.sg/en/seminar/seminar_e.cgi

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