Which stocks have I been accumulating in June 2013?

As share prices decline over a prolonged period, Mr. Market's hope for a swift recovery becomes weaker and weaker. As Mr. Market despairs, he is going to sell stocks at even lower prices. Everything else remaining equal, this means that we can buy stocks with greater margins of safety from Mr. Market.

However, remember that Mr. Market is a fickle creature. His mood swings are well known. So, although waiting for the market to bottom sounds like a great idea, it is only possible to really call the bottom once it has come and gone. Therefore, I made a list of stocks which I would like to buy more of, including the prices which might be good to do so at.

Mr. Market's negativity is centred around expectations of a reduction in global liquidity and increase in interest rates. However, such concerns are really premature since what is really going to happen is a reduction in the growth of global liquidity and, by Ben Bernanke's admission, any increase in short term interest rates is farther into the future.

This suggests that S-REITs which are fundamentally sound will continue to deliver, distributing the income which I have become accustomed to receiving. With prices 15 to 20% lower than the peaks achieved not too long ago, valuations are more reasonable now although I would not say compelling.

So, which stocks have I been accumulating in the current correction?

Marco Polo Marine

I bought more shares of Marco Polo Marine at $0.37 to $0.375. I really like the news that the company bought a new 9,000 BHP AHTS at a bargain from a distressed yard. It would take the company's shipyard 18 months to build one from scratch and buying this AHTS allows Marco Polo Marine to more quickly meet market demands in Indonesia.

"Given the robust demand for OSVs and the gradual and consistent rise in daily charter rates experienced over the past  few months, the Group expects its offshore business to continue to spearhead the growth of its overall chartering revenue," Mr. Sean Lee, CEO, Marco Polo Marine.

Marco Polo Marine's listed Indonesian subsidiary has another 2 AHTS on order and these are being built in their own shipyard. Expected to be delivered sometime in 2014, Marco Polo Marine is likely to register much stronger performance next year. Buying at $0.37 to $0.375 is also a bargain as it is at >15% discount to NAV.

SPH

I got more shares of SPH at $4.22. That is some 10% lower than the top of $4.68 touched in early April a couple of months ago. Volume has also been reducing as price weakened. Sellers are less enthusiastic but without strong buying interest, price could drift lower.

Well, as Mr. Market would have it, SPH's share price went even lower today, closing at $4.16, the low of the day. The optimism surrounding SPH's plan to bundle Paragon and Clementi Mall into a REIT seems to have evaporated, hinting at the pessimism surrounding all things S-REITs at the moment.

At this time, remind ourselves that the listing of SPH REIT is a good thing for SPH's shareholders. It strengthens SPH's balance sheet without really compromising its revenue stream from its real estate holdings. SPH will see its gearing level reducing to almost zero.

With the promise of a special dividend of 18c per share, post SPH REIT's listing, there is a cushion against further decline in share price which, using Fibo retracement lines, will find support at:

$4.11 (123.6%)
$4.04 (138.2%)
$3.99 (150.0%)
$3.93 (161.8%)

Remember that TA shows where the supports are. There is no promise that the supports will be tested.

Certainly, if the opportunities should present themselves, offers at $3.93 or $3.99 a share cum special dividend of 18c would be more attractive propositions.

NeraTel

This is a stock which I got in at 40.5c a share some time back. This was after the failed take over bid by ST Engineering. I didn't do much research on this company on my own. Neither did I have any experience with it. Instead, I relied on some advice by a very good friend who has been a shareholder for years.

This is a net cash company and has a record of paying consistent and meaningful dividends. Its last payout was 4c a share with an EPS of 5c. At today's closing price of 61c, we are looking at a dividend yield of 6.56% which is very decent. With its recurring revenue streams, dividends are probably sustainable.

So, I bought more shares of NeraTel as its share price retreated from a high of 69.5c. With buy prices of 60c to 63c, the dividend yields are from 6.35% to 6.67%. Any further weakness and a possible test of the rising 200d MA (approximating 57.5c now) for support would see me increasing my long exposure.

Certainly, I cannot tell how share prices will move tomorrow. So, I cannot tell if my additional investments made recently will result in paper losses but I can tell if I have made relatively sound decisions.

By looking at charts, I can tell where supports are expected to be found. So, I can tell where I might be adding to my long positions, given the chance.

Some things we know. Some things we don't.

I know, for sure, that we should have a plan and we should stick to it.

Related posts:
1. Spotlight on Marco Polo Marine.
2. SPH: A REIT investment.
3. REITs: When to buy?
4. REITs: Are we asking the right questions?
5. Be cautious climbing the S-REIT tree.
6. Have a plan, your own plan.

SPH: A REIT investment.

It was almost a year ago when I mentioned in a blog post that investing in SPH could be better than investing in a retail S-REIT. Then, in March this year, news that SPH could establish a REIT sent its share price rocketing. Yesterday, more details were released and we could see a SPH sponsored REIT by July 2013.

From what is available in the news, SPH will hold 70% of the REIT. This is good news for the future REIT unit holders because a sponsor with a big share of units is more likely to have its interests aligned with those of smaller unit holders.

So, how will SPH shareholders benefit from this? The most obvious benefit is a special dividend of 18c per share, post IPO. A longer lasting benefit is ownership of an SPH with an even stronger balance sheet with NAV increasing and net gearing reducing, both significantly.

In terms of income, post IPO, SPH will receive a 70% share of income distributions from the proposed REIT and will also collect a fee as the manager of the REIT.

For me, as a shareholder, apart from doing nothing and collecting dividends which is pretty much what I have been doing for so many years, I will also look at possibly making an application at the IPO of the REIT.

I like the assets (i.e. Paragon and Clementi Mall). I like the sponsor. I like how the sponsor will retain a 70% stake in the REIT. Next, I will need to know the estimated distribution yield and gearing. If they compare favourably to established retail S-REITs, then, I will be making a beeline for the nearest ATM.

The last I checked, the distribution yield of established retail S-REITs ranges from 4.5% for CMT to 5.2% for FraserCT. Gearing ranges from 30.5% for Starhill Global to 40.9% for Mapletree Commercial.

So, if SPH REIT were to offer a distribution yield closer to 6% and with a gearing closer to 30%, Mr. Market should respond more favourably.

It seems that boring SPH has become a more exciting investment.

Related post:
SPH: Better investment than retail S-REITs.

Voices, noises and choices.

The amount of information out there is enough to make one feel somewhat overwhelmed or even faint. I have not been reading blogs as much in the last one week and kept my reading primarily to Channel NewsAsia, The Business Times and Yahoo!Finance. Even so, it probably is enough to make heads spin.

Some proclaimed that the U.S. housing market has bottomed and is picking up! Conventional wisdom says that the U.S. housing market must pick up before we see a return to sustainable economic growth. On the same day, another article claimed that the U.S. economy is sliding back into recession!

Then, the stock markets around the world rallied because European banks can now be recapitalised directly from bailout funds. There are those who then said this is only a relief rally and it won't last. Their advice? Don't believe the rally! Sell the rally!

S&P500                       +2.49%

DAX                              +4.33%

What about the Singapore stock market? Some say that it is being re-rated upwards because stocks here are up 9.8% in H1. Some say that it is because of window dressing in the first half that has pushed the STI upwards. Huh? Which came first? The chicken or the egg?

Hey, don't believe me, go get a copy of the weekend edition of The Business Times today. (Er, in case some are wondering, no, this is not a paid advertorial by The Business Times although you could be helping me a tiny bit as I am a shareholder of SPH.)

OK, if you have not fallen off your chair or reached for a bottle of medicated oil by now, good.

So, what are we to do? Do we join the bullish camp or the bearish camp? Regular readers would have guessed my answer. I would say neither. Stay practical. Stay invested but have a war chest ready.

Staying 100% or mostly in cash is not a good idea. It is unproductive as higher than average inflation chips away the value of our cash on hand. In fact, The Business Times has an article today which says that although the Singapore labour market is tight and although people might receive increments to their salaries, they are seeing little gain due to high inflation. Like what we learned in economics, there is nominal wage increase but not much real wage increase.

Actually, businesses are finding rising costs a struggle to deal with. Restaurants have reduced the size of portions being served and have, in some cases, increased prices.

At Ichiban Boshi, my family like to order soft shell crabs because we find that $5.50 for 2 soft shell crabs (cut into halfs) is not too bad. However, when we ordered it again a month or so ago, we only found 3 halfs on the plate. We thought perhaps 1 half fell on the kitchen floor or something. Anyway, when we ordered it again on a more recent visit, there were still 3 halfs only.  Inflation had spirited away half a soft shell crab although price stayed at $5.50 a portion. Sheesh!

There are many costs of doing business and rent is a big one here. Rental rates in Singapore have been going up and up. Thus far, the only sector that has seen a decline in rent is in prime office space due to more than ample supply. There were signs very early on which is why I have been underweighting this sector in my porfolio of S-REITs. However, we can expect this sector to recover rapidly if the global economy picks up again. Just bear in mind that office tenants are a rather footloose bunch.

SPH's Clementi Mall.

Generally, however, it is a very good time to be landlords. For the vast majority of us who are not financially able to participate by owning shops and buildings directly, investing in selected S-REITs and SPH is the next best thing. In fact, some might say it is even better as we do not have to worry about the day to day operations of the properties. Well, there are pros and cons, to be sure.

There are many voices out there and we have many choices. However, we have to always remember not to be intimidated by all the information being stuffed in our faces. What is worse than having no information? It is to be drowning in too much information.

Know what matters. Everything else is just noise, is it not?

Related posts:
1. Office S-REITs VS Industrial S-REITs (4)
2. Staying postive on S-REITs.
3. Bearish or Bullish?
4. SPH: Better investment than retail S-REITs?

SPH: Better investment than retail S-REITs?

SPH is still my largest investment in a Singapore blue chip and it is an important part of my high yield portfolio. CIMB now suggests that investing in SPH is better than investing in retail S-REITs. It would be a happy coincidence for me if CIMB should be right as my only exposure to retail S-REITs is a small long position in Suntec REIT, much smaller than my investment in SPH.

Singapore Press Holdings is becoming increasingly like a retail real estate investment trust (REIT), CIMB Research said, noting its growing retail property arm and stable media business, as well as typical payouts of more than 90%...


The broker also said SPH is a cheaper alternative for investors seeking exposure to retail Singapore REITS after the stock’s underperformance, offering yields of 6.4% versus an average of 6.1% for retail Singapore REITs...


CIMB said revenue compound annual growth rate for SPH’s “gem asset”, Paragon shopping mall in Singapore, stood at 8.3% over 2006-2011, outstripping growth for comparable assets under retail Singapore REITs.


Related post:
SPH: Interim dividend of 7c per share.

CIMB says SPH a “pseudo retail REIT”. It upgraded its rating on SPH to outperform from neutral and raised its price target to $4.19 from $4.13.
Tuesday, 19 June 2012

© 2012 - The Edge Singapore

SPH: Interim dividend of 7c per share.

SPH remains my largest investment in a blue chip. Over the years, it has been very good to me. Last year, I had hoped to buy more SPH shares if price should dip to $3.60 a piece but it never did.

Clementi Mall.

Singapore Press Holdings’ (SPH) 2QFY12 PATMI came in at S$83.9m, or 5 S-cents per share, which was 16% higher YoY. 1HFY12 PATMI now make up 46% of our full year forecast, falling short mainly due to lower investment income.

2QFY12 topline was S$298.5m - in-line with our expectations - and making up 50% of our full year forecast. An interim dividend of 7 S-cents was declared.

We continue to view SPH favorably as it continues to ramp up on its retail mall strategy - a stable counterweight to its print business going forward. Group investible funds currently stand at S$0.9bn, which points to sufficient capacity for further allocation into its retail strategy ahead.

Maintain BUY with a higher fair value estimate of S$4.05 (versus S$3.99 previously) mostly due to stronger assumptions for Clementi Mall.

Source: OCBC Research, 16 April 2012.

SPH: Time to utilise my CPF OA?

As a rule, I am very careful with my CPF money and first utilised the money in my CPF OA during the global financial crisis some two years ago. I used the money almost exclusively for the purchase of shares in SPH which is my favourite blue chip for its high yield.

I have divested all the shares bought using the money in my CPF OA as the market ran up last year. So, for some time now, my CPF OA has been 100% cash waiting for another opportunity to buy shares of strong blue chip companies again. Of course, I am keeping an eye on SPH.

SPH's share price has been retreating and in the last three sessions, trading volume was rather high. Technically, it looks very weak as the MACD completed a bearish crossover with the signal line in negative territory and the 20dMA completed a bearish crossover with the 200dMA.

If we look at the weekly chart, the longer term 100wMA has turned up some time back and is rising nicely. With price action having broken the support provided by the 50wMA, I would look to the 100wMA for support. For now, I like $3.60 as that is where we find the 161.8% golden ratio as well as the rising 100wMA.

It seems that the time to use my CPF OA to buy some shares of SPH could be drawing near.

Please read this:
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High Yield Portfolio - Update.

Sometimes, we just stumble upon a good thing. One of my inaugural blog posts when I started ASSI on Christmas Eve 2009 remains the most popular blog post today. I am talking about "High Yield Portfolio".

In October last year, a reader asked if I would do an update on the portfolio and I did. However, it was a "Reply from AK71" kind of thing and were mostly one-liners. See it here.

Have I deviated much from the first time I introduced this portfolio for investors who are more interested in investing for income? Not much. I am still invested in all six counters although the weight of each counter in the portfolio could have changed somewhat.

My largest investment is based on rather contrarian ideas and has attracted some skepticism, putting it mildly. I started investing in Saizen REIT at 13c a unit and I kept loading up.  Even at 16.5c a unit, I bought some. For sure, this is an under-performer in terms of capital appreciation. However, I invested in this with a view that it is grossly undervalued and that things could not get any worse. So, if we take care of the downside, the upside should take care of itself. The annualised DPU of about 1c is much lower than my estimates from a year ago and, at first glance, seems unattractive. I did not take into account the amortising nature of its new loans then. However, when we realise that the DPU could actually be 50% higher if not for the amortising nature of its loans (unlike all the CMBS before), it is immediately apparent how strong this REIT's cashflow from operations actually is. See: 2Q FY2011 results.

My second largest investment is also rather controversial: AIMS AMP Capital Industrial REIT. Reading some other blogs as well as comments left in my blog, I realise how there is still deep seated mistrust of its management. This is despite the fact that it is quite a different animal from its MI-REIT days. It is financially stronger and it has two strong sponsors. It has all its financial requirements well looked after and even managed to refinance its loans at a lower interest rate. Some people say that they were the early investors in the REIT during its MI-REIT days and that they would never recover their money. It might surprise them to know that I was also an early investor but when the REIT was recapitalised, I looked at the numbers and decided that at 20.5c, it was a safe investment promising an almost 10% distribution yield. I increased my investment in the company by some 5x right away and I have recovered all my losses and more since, especially with the rights purchased at 15.5c/unit in September last year. See: Rights issue. Would I buy more now? At 20.5c and with an estimated DPU of 2c for a distribution yield of 9.76%, why not? See: Acquisition of Northtech.

My third largest investment is now in First REIT after its recent rights issue. A blog post of mine says that this one is for keeps and I still believe it is so. See: This one is for keeps. Actually, it is more so now after the rights issue and acquisitions. An expected DPU of 6.4c and the current price of 74c, it will deliver a distribution yield of 8.65%. With gearing low at 15% or so, it has more headroom to gear up for future acquisitions which could bump up DPU. See: FY2010 results.

My fourth largest investment is in LMIR. The investment was premised on a robust Indonesian economy with 60% of its GDP from domestic consumption. However, I do not like the idea of the management losing lots of money in foreign exchange forward contracts. See: Foreign exchange forward contracts. I do, however, recognise that this is a stable passive income generator and exchange rates (Rupiah/S$) should be quite stable from here. DPU for FY2010: 4.44c and at a unit price of 54c, that's a distribution yield of 8.22%.

My fifth largest investment is in SPH. No need to say much here. SPH is one of the highest yielding blue chips I know of. Although it is synonymous with The Straits Times and other publications, it is really its exposure to real estate that I really like. I especially like the fact that it owns and manages The Paragon on Orchard Road. I also like that fact that it is a co-owner of the soon to be completed Clementi Mall. Would I buy more now? The yield is still about 6.5% even at recently traded prices. I might buy more if price were to weaken further. See: Final dividend.

My smallest investment in this High Yield Portfolio is in Suntec REIT. This REIT was something I went in big at about $1.00/unit, give or take few cents, with a view that it would be a beneficiary of the expected improvement in tourist arrival numbers and improving office rentals. Technically, it was also looking good then. I think it is quite boring now with price at $1.50/unit or so. I have divested most of my investment in this REIT and still retain a small investment. Expected DPU for 2011: 9.7c. See: Buy calls.

Do I have any counters I would consider adding to this High Yield Portfolio? Yes, there is one: Cache Logistics Trust. I have blogged about it regularly and did so recently again. Read it here. I could replace Suntec REIT with Cache Logistics Trust if the conditions were right.

At what age to start investing in the stock market?

A blog post at Bully the Bear has generated much interest and discussion: The youth and the stock market.

Although I have some ideas of my own, I was feeling lazy and didn't want to comment but a cboxer, Evolution of the "lobster taller than small girl , ak's t shirt older than evo" fame, put me in the hot seat and asked "Ak , whats ur view on LP's new post".

I said that I have introduced my 9 year old niece to investing in the stock market. Yes, she is in primary 3 this year. She has some savings in the bank which is paid a paltry sum of interest. 0.2% per annum for young savers? Maybe it is more, I am not very sure but still paltry.

Anyway, she has some shares in SPH for more than a year now bought using my account and she has collected one year's worth of dividends. It is quite a lot of money for a 9 year old and she's happy with the dividends, needless to say.

Getting dividends from investing in SPH has demonstrated to my niece the power of delayed gratification. 

By not using her savings on things she wants to buy and by investing for income, she is able to use the passive income to buy the things she wants later on without touching her savings at all. 

I heard from my sister that my niece is very frugal these days and I heard from my mom that my niece would sometimes ask her what's the latest share price of SPH.

Sound ideas in personal finance and investment, I believe, should be taught to children as soon as they are able to understand them. Teaching them the importance of thrift and savings is but the first step. How to make their savings work harder? 

Now, that's a big second step.

I remember how I would save all my pocket money when I was a boy in order to buy the toys I wanted. 

If only I had someone to tell me I should save all my money and how to make my money work harder for me then.

Related posts:
1. Teaching young children financial literacy.
2. Little book that beats the market.

SPH: Breaking the 100dMA.

A reader recently asked me at what price should he buy more shares of SPH? Well, I always like to buy on weakness. Today, SPH closed at $3.90.  This was after breaking the support provided by the 100dMA at $3.95 last Friday.

Although the MACD is in decline, the MFI suggests that there is some support as the counter gets sold down. Of course, this could change quickly.  In such an instance, using Fibo lines, we see the next support at $3.86. However, the 138.2% Fibo line at $3.83 should be a stronger support being one of the three golden ratios. This is followed by $3.81 and $3.79.  I could add to my position then.

$50k in annual passive income: Year end status.

The last time I wrote about my attempt to achieve an annual passive income of at least $50k was on 5 Sep when I concluded that "With Saizen REIT's contribution, I would probably exceed the target I have set for myself which is "to create a minimum of $50k in annual passive income from investments in the stock market alone."  I shared this aim here in my blog on 27 Feb 2010, more than half a year ago. Like with everything, however, this needs confirmation. Let us see what happens in December 2010." Read blog post here.

For quite some time now, my focus has been on my top three investments when I talk about building a reliable stream of passive income from the stock market.  They are Saizen REIT, AIMS AMP Capital Industrial REIT and LMIR.

One of my friends told me that this is inaccurate since I do not include dividends received from my other investments in the stock market such as First REIT, Suntec REIT and SPH. I must admit that I have not been fastidious that way. However, my investments in other counters are so dwarfed by my top three investments that, for the sake of simplicity, I have excluded them. Also, funds from the complete divestment of CitySpring Infrastructure Trust and Cambridge Industrial Trust as well as the privatisation of Hyflux Water Trust have largely been redeployed to AIMS AMP Capital Industrial REIT and Saizen REIT.

So, for this blog post, again, I will just focus on my top three investments to see if I have managed to hit the said target. I don't think we need to wait till December to see how things will turn out since both LMIR and AIMS AMP Capital Industrial REIT have declared their final distributions for the year.

Saizen REIT

Saizen REIT's next income distribution is in March 2011. I overlooked the fact that this REIT pays half-yearly. So, without any contribution from Saizen REIT in December, I would probably not be able to hit the $50k target this year.

Also, my estimate of an annualised 1.6c DPU for Saizen REIT was somewhat optimistic earlier in Sep and it was partly premised on the successful re-financing of YK Shintoku. A more realistic annualised DPU is probably about 1.2c if YK Shintoku's loan was refinanced successfully sooner than later. This is after learning at the AGM that continual divestment of properties in YK Shintoku is necessary in order for refinancing to be viewed more favourably by potential lenders. For me, this means a reduction of 25% in estimated passive income from this investment.

Needless to say, such a reduction is not helpful towards achieving the annual passive income target I have set but in absolute dollar terms, I still expect this REIT to contribute a lion's share of my passive income for 2011.

Read my comments here.

AIMS AMP Capital Industrial REIT

This REIT had a successful rights issue recently which made its existing unitholders somewhat richer. I was very pleased with the rights issue and I have not sold any of my rights units exercised at 15.5c as they will enjoy a yield of 13.4% in 2011 when the annualised DPU of 2.08c kicks in. Of course, trading at 22.5c a unit now, I have a handsome 45% capital gain (on paper) for these rights units as well.

However, the last income distribution came in weaker at DPU of 0.3968c. In my blog post of 29 Oct, I said, "This is because of the issue of 513.3 million rights units on 14 October 2010 and 7.2 million units to the Manager on 19 October 2010 for payment of the acquisition fee in relation to the acquisition of 27 Penjuru Lane. Distributable income from 27 Penjuru Lane would be included in the next distribution, not this one, since the acquisition was done in 3Q FY2011 and not in 2Q FY2011."  Read blog post here.

Of course, this does not change the fact that the lower DPU this time round (payable in December) is not going to help me hit my passive income target this year.


LMIR

Although I am still somewhat disappointed with the management, this REIT is a stable passive income generator. Their latest DPU of 1.09c is marginally higher than the previous quarter's 1.04c.  This is largely in line with my expectations, that "I expect the S$ to appreciate more robustly in future and it is unlikely that the DPU would reduce much more.  Conservatively, I estimate the DPU to be 1c per quarter or 4c per year from December 2010." Read blog post here.

Obviously, at a more conservative estimate of 4c DPU per annum, this is 20% lesser than the 5c DPU I was expecting at the start of the year.

So, based purely on these three investments, I have come up short this year with regards to my annual passive income target in the stock market.

Important development:

Recently, I have been buying more units of First REIT with a view that their recently announced acquisitions and rights issue are attractive propositions which would provide a distribution yield of 9% in 2011. Including the rights which I am entitled to and which I fully intend to accept and pay for, First REIT would rival LMIR as my third largest investment in the stock market.

So, from 1 Jan 2011, I will include dividends collected from First REIT in my calculations towards the target of $50k in annual passive income. I will continue to share my results here in my blog. Wish me luck.

Related posts:
$50k in annual passive income.
First REIT: Rights issue.

SPH: Negative divergence.

SPH's volume exploded as it declared a dividend of 20c to be paid in December. However, the explosion in volume only managed to produce a doji yesterday.  Not good.  Higher volume but price remained stagnant which means that the bears were too strong for the bulls.  Today, price plunged below the 20dMA ($4.20) to close at $4.18 on comparatively high volume.

I guess the market does not like the announcement that SPH "will restore the remaining portion of the pay cuts introduced in April 2009. In addition, SPH will give a special one-off sum to staff to thank them for the sacrifice and contributions they have made. These payments will take effect by January 2011 and will effectively restore the pay cuts in full. They will be paid together with the usual increments, and profit and performance related bonuses." Read announcement here.

Looking at the MACD, we see lower highs formed as price formed higher highs.  This negative divergence is a warning that recent price appreciation in the blue chip could be unsustainable.  $4.20 could be support turned resistance.  This needs confirmation.  

Next support is at $4.13 which is underpinned by the rising 50dMA on top of being a natural candlestick support level.  The uptrendline approximates the 50dMA and the lower Bollinger band at $4.10.  A break below this trendline would signal the end of the existing uptrend.  We could see a new and gentler uptrend forming if the 100dMA (now at $4.00) or the 200dMA (now at $3.91) hold up as the next support levels.

I remember someone asking me if it was too late to buy into SPH yesterday, if it was too expensive.  I guess the answer could either be found in the fundamentals or the technicals.  Technically, $4.10 to $4.13 seem to be pretty ok entry prices but if these go, there could be as much as a 5% downside which could be covered by the 20c dividend in December anyway.  Just my thoughts.  Not an inducement to buy. Vested. ;-)

Related post:
SPH: Final dividend.

SPH: Final dividend.

SPH is declaring a final dividend of 20c per share, comprising a Normal Dividend of 9c per share and a Special Dividend of 11c per share in respect of the financial year ended 31 August 2010. These dividends are on tax-exempt (one-tier) basis and will be paid on 23 December 2010. Together with the Interim Dividend paid during the year, total Dividend payout for FY 2010 will be 27c.

SPH remains my largest investment in a blue chip company. I continue to favour SPH amongst blue chip companies because of its generous dividend payouts.  At $4.22, the full year payout of 27c represents a 6.4% yield.

Highlights:

1. Net investment income of S$39.3m was a turnaround from a loss of S$6.2m for FY 2009.

2. Equity holdings consist mainly of M1and Starhub.

3. Paragon was revalued at S$2.28b as of Jul 2010.

4. Rental income increased by S$11.3m (9.2%) mainly from Paragon.

5. Final profit of S$154.2m was recognised for Sky@eleven, which obtained its Temporary Occupation Permit in May 2010.

6. Print advertisement revenue surged S$84.8m (13.1%) to S$733.1m.

7. Circulation revenue decreased by S$5.1m (2.4%).

See presentation slides here.

Related post:
SPH: Closing above $4.20.

SPH: Closing above $4.20.

SPH experienced a nice white candle day with price closing at $4.21.  This is the first time it has closed above the $4.20 resistance level in more than two years. That this took place on the back of volume expansion (volume was three times more than the previous session) gives hope that we could possibly see higher prices in the near future.

The higher highs in the OBV shows continual accumulation.  The MFI has formed a higher low and being at a very low level now, it has much room to rise before becoming overbought. The MACD has turned up and seems poised for a bullish crossover with the signal line.

Immediate support is now at $4.16 as provided by the 20dMA.  Immediate target is $4.30.

Related post:
SPH: $4.20 is still resistance.

SPH: $4.20 is still resistance.

On 9 September, I said "although a correction could be avoided if volume expands in the next few sessions as price pushes upwards, such a move would have a formidable sell queue to clear at $4.20. If ever this resistance was cleared, SPH's share price could fly.  At the moment, chances are slim that this would happen".  Well, $4.20 is still the resistance to watch.

Today, another black candle was formed, the third in a row, as price touched a low of  $4.13 before closing at $4.16.  The MACD seems set to form a bearish crossover with the signal line while the OBV continues to decline. Distribution is underway. The MFI has emerged from the overbought region which suggests that demand is no longer zealous.  The RSI although declining is still in the overbought territory and this suggests that we could see buying momentum slow down further.

The rising 20dMA should provide immediate support at $4.10 and this was also a natural candlestick resistance level. Would $4.10 hold as a support? We would have to wait and see.

Related post:
SPH: Touched $4.20.

SPH: Touched $4.20.

SPH touched $4.20 today but that price saw few transactions although volume expanded.  Few were willing to buy at that price, it would seem.  A short legged doji was formed and this could be interpreted as a day of tight price action with price closing ultimately unchanged from the opening. There is little conviction by either the bulls or the bears today although an increase in trading volume suggests that the tug of war grew in strength.

A rising OBV suggests more accumulation activities while the momentum oscillators are flattening in overbought territories. This suggests that demand is faltering and buying pressure is tapering off. A correction from oversold conditions could very likely be next.

Although a correction could be avoided if volume expands in the next few sessions as price pushes upwards, such a move would have a formidable sell queue to clear at $4.20. If ever this resistance was cleared, SPH's share price could fly.  At the moment, chances are slim that this would happen.  TA is all about probability after all.

Related post:
SPH: Waiting for elusive $4.20.

SPH: Waiting for elusive $4.20.

On 1 Sep, I mentioned "if SPH does retest $4.20, I expect that to be a strong resistance as many who missed selling then would sell now.  So, I would sell some at $4.20 and buy back if price retraces to the 20dMA."

I reckon that many investors and traders are able to read charts and many know that SPH's resistance is at $4.20. When too many people anticipate something happening, then the event might not take place. Market participants are wary of buying too close to $4.20 as they recognise that as buying close to resistance.  Market participants waiting to sell at $4.20 might sell at a few bids lower just in case the resistance does not get retested.  In such a scenario, we need a day or two of massive buy ups to clear all the doubt and suspicions surrounding the major resistance.  In this case, it is $4.20.  How likely is this? Your guess is as good as mine.

Technically, it is easy to spot a short term negative divergence between price and volume. This probably explains the weak push upward in price as volume is the fuel that drives rallies. Today, the MACD histogram turned red.  This is a warning that price could face more downward pressure in the near future. The MFI and RSI are rising strongly into overbought territory and such overbought situations could not last too long, normally. Notice how the rising OBV is much gentler in its gradient in recent sessions.  Although there is no distribution, accumulation is slowing down.

Should we panic? Should we sell? The uptrend is still intact.  I want to draw your attention to the orange color trend line support I have drawn.  This would approximate $4.10 soon.  You want to also take a look at $4.13.  This looks like a natural support level and should serve as immediate support but, of course, it needs confirmation.  I expect some semblance of support between $4.13 and the orange color trend line support in the immediate term.  If these supports break,  look to the individual rising daily MAs for the next supports.

Related post:
SPH: Another white candle.

STI little changed at 3,036.09 at closing
Tuesday, 07 September 2010

© 2010 - The Edge Singapore

SPH: Another white candle.

My favourite blue chip is in top form and has been advancing for several days in a row.  Today, another white candle was formed as price closed at the high of $4.13.  Could we see a retest of $4.20?

Some analysts are saying that there could be a bumper dividend and that is driving accumulation.  Some people are saying that it is just quarterly window dressing and that it is just a blip.  Which camp is right?  I don't know but volume has been pretty high in the last two sessions as MACD formed a bullish crossover and rose in positive territory. The MFI has formed an almost straight line up and seems set to cross into overbought territory in the next session. RSI has already peeked into overbought territory.  OBV, although rising, does not show very strong accumulation activity.

What would I do? If SPH does retest $4.20, I expect that to be a strong resistance as many who missed selling then would sell now.  So, I would sell some at $4.20 and buy back if price retraces to the 20dMA.  Good luck to fellow shareholders.

Related post:
SPH: Doji at $4.00.

SPH +0.7%; More upside as bumper dividend eyed: UOB
Wednesday, 01 September 2010

© 2010 - The Edge Singapore

SPH: Doji at $4.00.

SPH's price action formed a doji, closing at the $4 resistance level. With the 20dMA still declining and the MACD in negative territory, there is a chance that price could continue lower in the next week.

The MFI has been forming lower highs and the recent uptick in price could be a weak rebound, therefore. For sure, OBV is lacklustre and does not suggest any accumulation activity. Immediate support is found at $3.92, as provided by the 100dMA although a stronger support is at $3.80 or so, which is where we find the 200dMA.  Judging from the high of $4.20 on 30 July and the current resistance of $4.00, $3.80 is also a technical downside target in case of a continuing decline in price.

SPH: Black spinning top.

SPH has gapped down for two consecutive sessions.  Very bearish.  Today, it formed a black spinning top, closing at $3.97, just two bids above a natural support at $3.95.  Could $3.95 hold up as the immediate support or would it shatter?

The MACD crossed the signal line a few sessions ago and is fast declining towards zero.  The MFI formed a lower high which suggests weakening demand.  It is currently flatlining just above 50%.  Could 50% act as support? OBV shows some distribution taking place. Weakness is obvious.

TA is about probabilities and helps by letting us plan ahead.  What would we do if price goes up?  What would we do if price declines?

In this case, if price should rebound to test support turned resistance provided by the 20dMA, it might be a good idea to do a partial divestment.  This is currently at $4.06.  Price would probably encounter gap resistance at $4.04 in case of a rebound.  So, not to be greedy, this might be a better price to divest.  Just don't bang our heads against the wall if price does touch $4.06.  If price crashes through $3.95, I would wait to see if it would descend to the long term 200dMA before picking up more.  The 200dMA is now at $3.80.  Good luck to fellow shareholders.

SPH: A new high.

SPH hit a new high of $4.20 early in the morning of the last session and closed at $4.13, up three cents from the previous session.  Volume almost quadrupled from the previous session and this has corrected the negative divergence I have blogged about recently.

The MACD is once again pulling away upwards from the signal line in positive territory.  The MFI is rising after forming a higher low, suggesting that demand is healthy.  OBV turned sharply upwards, indicating ongoing accumulation.

Immediate support is resistance turned support at $4.08. Immediate resistance is at $4.20, the new high.

Related post:
SPH: Rising on low volume.