A strategy to grow wealth and augment income (2013).

I am primarily investing for income and in my last blog post, in what has become a yearly practice, I revealed my full year income from S-REITs as well as how they fit into my investment strategy. They are relevant to income investors but with the spectre of rising interest rates in the years ahead as well as a peaking in the real estate cycle here, it is sensible not to be overly optimistic about S-REITs in general.

So, apart from a large purchase made in Saizen REIT in the middle of 2012, I have devoted most of my resources to stocks. These should be undervalued and are likely to continue growing for years to come. Since I want to have income from my investments, I would also like for these stocks to pay dividends.

Marco Polo Marine's yard in Batam.

Now, with these stocks, the main strategy is to buy and hold. However, I am not averse to trading around my investments. So, I could divest partially or fully if it is a good idea to do so. For 9M 2013, I revealed that I locked in gains of S$188,625.13. Has the number changed?

Well, I mentioned that I partially divested my investment in Sabana REIT last month. This added S$12,860.03 to gains from trading in 2013.

So, total trading gains in 2013 is S$201,485.16.

What about adding to my long positions?

What I hope to do primarily is to identify good companies, initiate long positions in them at fairly good prices and then wait to add to these positions if there should be bad news which send their share prices down. These are companies which I am comfortable to stay invested in for years, knowing that they possess some competitive advantages which differentiate them.

Warren Buffett famously said that we should invest with the thought that the stock market could close the next day and not reopen for five years. What does this mean?

Invest in stocks of companies which we are confident will do better over the next five years. We wouldn't be bothered by any volatility in their stock prices in the meantime unless it is to add to our long positions with greater margins of safety. If we understand this, we will know what stocks to avoid. How? Do an inversion.


With this in mind, in the last three months, I added to my long positions in NeraTel and Yongnam as their share prices declined due to bad news which I believe are neither long term nor recurring in nature. I have received fairly good dividends from these stocks and I also made some money trading these stocks earlier in the year.

I also added to my long position in SPH. I was paid both the special dividend and the year end dividend for this as well.

Marco Polo Marine is still my single largest investment although its share price has not declined significantly enough for me to add to my long position. The much higher dividend per share paid out recently was a bonus.

I also retain long positions in CapitaMalls Asia and Wilmar International. These are strong companies and leaders in their fields. They are likely to do better in future.

So, was anything new added to my portfolio?

I initiated a long position in Croesus Retail Trust and even added to this position by using funds freed from a partial divestment of Sabana REIT.

Wait a minute? Didn't I say that I am wary of rising interest rates and a possible peaking of the real estate cycle? Yes, I did but Croesus Retail Trust owns malls in Japan and the BOJ is bent on keeping interest rates really low. Abenomics demand this. The Trust has a relatively low cost of debt which is locked in for 5 years.

Luz Shinsaibashi.

Japan has also suffered from continual deflation for 20 years. If anything, the real estate cycle should have a greater chance of bottoming than peaking. Anecdotal evidence tells of a recovering real estate market in recent months that is likely to pick up speed in future.

Although my strategy, with a generous dose of luck, has worked well this year, I can only hope that it will continue to work in the new year.

To grow wealth and augment income? Yes, indeed, that is the plan.

Related posts:
1. 2013 full year income from S-REITs.
2. Yongnam: Substantial shareholder increased stake.
3. NeraTel: Added to my long position.
4. Marco Polo Marine: Exciting times ahead.

ASSI turns four! Merry Christmas!

My plane landed in Singapore at 5am this morning. Still in need of sleep. Yawn.

I took naps and unpacked. Will have to catch up with my emails, readings and blogging. Will also have to get up to speed with work when I return to the office on Boxing Day. Groan.

Today, ASSI also turns 4! Time really does fly!

Here are some photos I took on my vacation:

Luz Shinsaibashi in Osaka by night.



Very early on a Sunday morning!

Weather in Osaka? Brrrr.... but a nice change from Singapore.

OK, a couple of photos to bring in some festive cheer:



In an underground mall in Osaka.

Pretty lights in Kyoto.



In a mall in Kobe.



Merry Christmas!

Related posts:
1. ASSI celebrates 3rd birthday!
2. Croesus Retail Trust.

Croesus Retail Trust: Motivations and risks........ (Updated on 16 Sep 15 with a video and list of key take-aways.)

I was having a conversation with a friend in a chat box and he asked me what are the risks investing in Croesus Retail Trust. I rattled off a list of risk factors and I am sure it wasn't even exhaustive.

Every investment has risk factors and the important thing for me is to ask if these are acceptable. How do I know if they are acceptable? I would have to know my motivations as an investor.

So, if we are investing for income, then, we should ask which risk factors are more significant to us. What are the things we should be paying more attention to.

If Croesus Retail Trust should consistently produce an 8.5% yield for me as an investor for income, this is one factor that would keep me quite contented. I would have less problem with keeping the status quo.

Over the next two years, with a currency hedge in place, distributable income in S$ terms is more or less predictable. After that, assuming zero growth in distributable income in JPY terms, income received in S$ terms will depend on the prevailing exchange rate. Of course, the manager could continue hedging exchange rate risk and it could be a sensible thing to do at that point in time. It is hard to say anything conclusive about this now.

They might not have to do so since my own experience with the JPY tells me that it is now near its lowest point since I first really visited the country in 1998. The lowest in recent months was S$ 12.20 to JPY 1,000. Although it could go lower, I suspect that it wouldn't go very much lower than that.

As the BOJ has mentioned many times before, Abenomics is not about devaluing the JPY. A devalued JPY would cause immense hardship for the Japanese people and it is not in any government's interest to have hyper inflation.

So, the JPY is likely to strengthen from current levels or stay where it is once Mr. Abe gets the 2% inflation that he wants for the economy. This is all in the realm of reason.

Of course, if Japan should experience a 2% inflation, logically, interest rate should go up. This would translate into a lower level of distributable income in JPY terms, everything else remaining equal.

If the JPY should appreciate against the S$ by then, a higher interest rate could be a non-issue. Otherwise, we could see DPU in S$ terms reducing. How much would interest rate increase to? How much would DPU reduce to in such a case?

Well, if the Trust should pay 1% more in interest on its debt, roughly, we could see a 10% reduction in DPU. What about 2%? Maybe, a 20% reduction. This is the best we can do. Estimates. Then, ask if a 10% to 20% reduction in DPU would still make the Trust an attractive investment for us.

At $1.18, Croesus Retail Trust didn't make my list.

$1.07? Still a "NO".

$0.965? Maybe.

$0.845? Looking attractive but where was the floor?

$0.87? Found a floor, perhaps. Buy some.

Of course, I did consider other risk factors before deciding that Croesus Retail Trust would make a decent investment for income. 

Read related posts and some of the comments generated therein by following the links provided at the end of this blog post, if you are interested.

Once we know our motivations, we know what risks are acceptable and we will know what to do.

Finally, we might not get the best prices but if we could get in at a fairly good price to start with, that is good enough.

Update (16 Sep 15):
Video by PhillipCapital



Key take-aways for me:

- 71.9% leases expiring beyond 2019.

- Mallage Shobu accounts for 20% of GRI.

- Rental reversions upwards of 20%.

- ONE's Mall and Mallage Shobu to contribute to higher income through positive rental reversions.

- Consumption likely to improve due to real wage growth and falling unemployment.

- Shopping habit in Japan changing, preferring large shopping malls.

- Croesus Retail Trust's occupancy cost* is 8 to 9% while CMT is about 17% and FCT is about 15%. Average occupancy cost for sub-urban malls in Japan: 12 to 15%. This means that Croesus Retail Trust has room to increase rent.

*Occupancy cost is the tenant's cost of occupying its space divided by sales.

Thanks to Raymond Ng for the tip off.

Related posts:
1. Invest in Japanese real estate.
2. Added more Croesus Retail Trust.
3. Initiated long position at 87c.

Croesus Retail Trust: Initiated long position at 87c.

I love Japan and with the Japanese Yen so low now, I am planning a trip to the Land of the Rising Sun in December. 

This might have something to do with why I initiated a long position in Croesus Retail Trust. You think so? Nah.

Croesus Retail Trust is a business trust which owns 4 shopping malls in Japan. Its IPO in May priced its units at 93c a piece which meant a slight premium of 3.3% over its NAV of 90c a unit.


Luz Shinsaibashi is a new retail building in Osaka.

The Trust dangled a distribution yield of 8% and investors lapped it up, pushing the unit price to a high of $1.18 on the first day of trading. 

An auspicious number for the Cantonese people perhaps as it sounds like "prosper everyday" but not for those who bought some then. 

Unit price declined over the next 4 months to touch a low of 84.5c on 17 Sep for an almost 29% drop.

Buying at a discount to NAV and getting a relatively high yield is an attractive combination for me. The bug bear is the relatively high gearing level of about 44%. 

Any yield accretive acquisition will probably be funded through a blend of debt and equity. So, for someone who might not have the resources to participate in a rights issue, this is something to bear in mind.

Although trading at a discount to NAV and offering a relatively high distribution yield, there was nothing to prevent unit price from declining further after touching 84.5c on 17 Sep. The good news for unit holders is that it did not.

Indeed, unit price seems to have found a floor with many times tested support at 85.5c. The confluence of the 50d and 20d MAs form the immediate support at 87c. 

With the downtrend broken and unit price moving sideways now, I decided that downside risk has reduced from a technical perspective.

The 180 days lock-up for the sponsor and their strategic partners in the Trust will end sometime this month. Will they sell 50% of their stakes? 

With trading volume so low, it could drive unit price down by quite a few notches if they should do so. Well, I simply don't know.

What I do know is that at 87c per unit, I am buying at a 3.33% discount to NAV and I will receive an estimated 8.5% distribution yield. 

If price action should test the support at 85.5c, I might buy more because there would be a bigger margin of safety then.

Now, I look forward to the Trust's first income distribution which is expected to be paid in March 2014.

Related post:
Invest in Japanese real estate: Croesus Retail Trust.

Fukushima and investing in Japanese real estate.

I have real estate investments in Japan through Saizen REIT. So, naturally, I am concerned about whether there is any progress made at the Fukushima nuclear power facility.

Prime Minister Shinzo Abe seems to be doing all the right things to kick start an economy that has been in deflation for 20 years. He has also openly asked for help from the international community to help manage the problematic Fukushima power plant. Is a solution close at hand?


Radioactivity levels at Japan's Fukushima nuclear power plant on Thursday were 6,500 times higher than the previous day's readings. 19 October 2013.

The situation does not seem to have improved.

Although Saizen REIT does not have buildings within a 20km radius of the power plant, the nearest being 60km away in Koriyama and 100km away in Sendai, the inability of Japan to handle the problem in an effective manner raises pertinent questions since earthquakes are likely to occur again. If nuclear plants in other parts of Japan should face the same problem in future, what then?

Having said this, if we believe that the Japanese economy is turning around and if we want to invest in Japanese residential real estate, it would make more sense to invest in a REIT than to invest in specific properties in Japan. This will lower the risk of a total loss due to natural calamities.

Related posts:
1. Saizen REIT: Sendai, Koriyama and Morioka.
2. Invest in Japanese real estate.
3. December 2011 in Japan: Hakone.

Tea with Elsie: A few photos from Japan.

A reader, Elsie, just came back from a holiday in Japan! Envious...

My last visit to Japan was slightly more than a year ago. The JPY was very expensive then.

With the JPY so cheap now, I hope to visit again very soon.

Here are some photos which Elsie sent to me by email to tempt me:

Cherry blossoms, ladies in Kimonos and rickshaws in Kyoto! Lovely!

Too beautiful to eat! The Japanese are really creative people.

When I visited Kyoto with my family a few years ago, my mother went quite mad buying handkerchiefs and purses. Beautifully made, I can understand why she almost bought the whole shop.

I think Elsie must have read my mind! Totoro was the first Japanese animated fantasy film I watched probably some 20+ years ago. It has a special place in my heart.

Yokoso Japan!

Related posts:
1. Cute snack from Japan.
2. My photos in Japan.

Saizen REIT: A brief break through.

Saizen REIT had a high volume, white candle day. Could it be that Mr. Market is more than warming up to this once upon a time unloved REIT? It certainly looks that way.

Draw some Fibo lines and we see why 21c was a strong resistance today. With volume as high as today's, however, it would be natural for any chartist to wonder if there could be a follow through in the next session.

Of course, the very long upper wick on the candle suggests the presence of very strong selling pressure as unit price tried to push higher. Look at the CMF and we see a lower high and a lower low which suggest to me that money was flowing out of the counter as price pushed higher. This could limit upside in the short term.

Fundamentally, the NAV/unit of Saizen REIT as well as its DPU in S$ terms could reduce somewhat due to the weaker JPY. Against the S$, the JPY has weakened some 20% in the last one year. So, it would not be wrong to expect lower distribution yields, all else remaining equal.

However, Saizen REIT has been on an acquisition path and this would mitigate any reduction in NAV/unit as well as DPU in S$ terms. Indeed, unit holders would have been very pleased when a higher half yearly DPU of 0.66c was paid out recently. That was a bit higher than the DPU six months earlier.

On 31 December 2012, the REIT's NAV/unit was JPY 19.21.  Based on the exchange rate of S$13.30 to JPY 1,000 today, NAV/unit works out to be S$0.255. So, at 20c a unit, Saizen REIT is still trading at a discount to NAV. Almost 22%, actually.

If units of Saizen REIT should trade at S$0.25, with an annualised DPU of 1.32c, we are looking at a distribution yield of 5.28%. For a portfolio of freehold residential properties in Japan which has seen a consistent occupancy rate of above 90%, is this good enough for Mr. Market?

There are really no comparable REITs listed in Singapore and we have to look at J-REITs to get a clue as to why Saizen REIT could look very attractive even at today's price. J-REITs' average distribution yield is just slightly above 4% now. So, at 20c a unit and with an annualised DPU of 1.32c, the 6.6% distribution yield from Saizen REIT looks extremely attractive.

With an aggressive Bank of Japan bent on their own brand of quantitative easing (QE), we could see the Land of the Rising Sun experiencing rising prices again. So, we could see Saizen REIT's portfolio of properties being valued higher in JPY terms over time. This could bump up NAV/unit in S$ terms.

However, if we look at the experience of the USA, it could take years and more than one QE before we see positive results. So, any optimism in the short term should be tempered but the longer term picture is very promising.

If Mr. Market is ready to accept a lower distribution yield of 5.5% from the REIT and 5.5% is still much higher than comparable J-REITs' distribution yields, then, we could see unit price trading higher at 24c in time to come, everything else remaining equal.

So, is Saizen REIT still undervalued now? Yes, even now, I believe that it is.

Technically, however, selling pressure was very strong as unit price tried to push past 21c. CMF shows an increase in the outflow of money from the REIT as unit price moved higher today. So, if you took some gains off the table today, I think it was a great idea. Just make sure to get back in at supports if given a chance.

Related posts:
1. Saizen REIT: Still a buy?
2. Saizen REIT: DPU 0.66c.

Tea with AK71: Cute snack from Japan.

Cute packaging:

Strawberry flavoured chocolate snack. Cute!

From where? Japan.

Now, it is in my tummy. Burp.

Fly with AK71.

These were two shots I took from my window seat as the plane was flying over Narita, Japan.

These sights made the very uncomfortable flight more bearable.

See some of my past vacation photos in Japan: here.

Related post:
Singapore-Japan-USA

Seeking Alpha.

In my early days as a blogger, I was much more active in commenting on other platforms.

Just now, I visited "Seeking Alpha" and found an old Instablog I did for them and some comments which I wrote as well. I think these must be at least 2 years old.

See the Instablog:
http://seekingalpha.com/user/736173/instablog

See the comments I wrote:
http://seekingalpha.com/user/736173/comments

I am giving in to nostalgia today. Hahaha... The good old days.

Related post:
REITs: When to buy?

Flew United Airlines SG-Japan-USA (but never again).

Added on 12 April 2017:

OMG! This is what they do on United Airlines these days?



I won't fly United Airlines anymore.
------------------
I am back! It is good to be home.

It has been a while since I went on a trip to the USA. I no longer enjoy very long flights and flying to the USA takes a VERY long time. 

Then, there is the time difference which I find harder to adjust to as I grow older. 

Then, there are all those pre-dawn flights which means being at the airport at 3 or 4am which means waking up in the middle of the night. 

Then, there is the returning to Singapore past midnight. Really tiring.

There is always a need to layover in an Asian city and although some would complain about this, I actually enjoy such layovers. 

I always fly American airlines like United, Northwest or Delta to the USA and the layovers are always in Narita, Japan. 

It is the same this time.

A two to three hours layover is just about right. I would have enough time to have a hot meal and do some window shopping in the airport as well. 

On this trip, I had a bowl of hot udon soup on my outbound journey and a very delicious cheese and ham toast on my inbound journey.

Many hungry for a hot meal!

A bowl of hot udon soup for 750 Yen. Think this is expensive? Try ordering the same in the USA!

DOUTOR has more than 900 outlets in Japan! 

Croque Monsieur is a toast with three types of cheese and ham!
Add a bottle of Genmai Cha for 550 Yen. Heavenly!

Ah, makes me feel like going on a holiday to Japan again. The JPY has weakened quite a bit since my last trip in December 2011. Should I? Hmm...

See photos of my December 2011 trip to Japan: here.

Ascendas Hospitality Trust: Am I interested?

Over the weekend, a friend asked me if I would be interested in Ascendas Hospitality Trust although he knew that I am generally not interested in IPOs. He was just asking for my thoughts on the Trust.

Ariake Sunroute Hotel, Japan.

Ascendas Hospitality Trust (A-HTrust) will be offering 437.33 million stapled securities at 88 cents each for mainboard listing in its initial public offer (IPO) in Singapore.

(Source: The Business Times, 18 July 2012)

What are stapled securities?

Stapling simply means that two different securities are "stapled" together for the purposes of trading or transfers. Stapled security could comprise two or more of the same or legally different instruments, for example, a share in a company and a unit in a trust.

The trust(s) and the company(ies) can hold assets and operate businesses, but active business, such as asset management and development are typically conducted by the company while passive investments in property or funds are undertaken by the trust. In practice, the trust and the company effectively operate as one entity although the company continues to be a separate legal entity from the trust.

Source: http://www.invested.hk/invested/en/html/section/index.html

For example:

CDL Hospitality Trusts is a stapled group comprising CDL Hospitality Real Estate Investment Trust ("H-REIT"), a real estate investment trust, and CDL Hospitality Business Trust ("HBT"), a business trust.

Well, what do I think of Ascendas Hospitality Trust? I won't do a thorough analysis of the Trust because I don't really have the inclination although I will share why I am not interested in it (now).

ibis Beijing Sanyuan Hotel.

Initially, the Trust will hold 10 hotels in its portfolio. These hotels are in the countries of China, Australia and Japan with Australia contributing to some three quarters of its income. The Trust also projects an 8% distribution yield in the year 2014.

I feel that I need to be conversant in the economies of three countries and the health of their respective tourism sectors to analyse how well they could continue doing. I would also need to take into consideration that income would be collected in three foreign currencies and converted to S$ for distribution to unitholders. Foreign exchange rates would affect income in S$ terms.

So, analysing this Trust and forecasting its future income is somewhat more challenging. It is less straightforward.

Then, what about my investment in Saizen REIT? Isn't that Japanese?

I won't say that I am conversant with the Japanese economy or its housing sector but I am a bit better informed in the area. Also, it is one country, not three and I only have to look at a pair of currencies, not three.

Saizen REIT is also holding residential properties, not hotels. Demand for housing is more inelastic compared to demand for hotels and with the type of properties Saizen REIT owns, there is lesser correlation with the ups and downs of the economy. Demand for hotels, however, is very different.

Ascendas Hospitality Trust is going to demand a lot of time and effort from me if I were to be become a unitholder. An eventual 8% distribution yield? I will need a higher distribution yield to entice me into this one in view of the work I have to do.

Low interest rates' a double whammy for some.

Central banks in many large economies around the world are keeping interest rates really low, near zero in countries like the USA and Japan, in fact. Low interest rates are seen as the way to encourage economic growth by making borrowings cheaper.

To revive their sickly economies, the relevant countries' low interest rates could be instrumental. However, as money would go to where it is treated best, a lot of this cheap money is finding its way to Asia. Although the USA would like to see inflation in their economy, their money printing has also caused inflation in Asian economies.

Declining value of the US$. Source: Wikipedia.

The low interest rate environment is hurting people who save. They get less interest income for their savings and they are also impacted by higher prices like everyone else. They are being paid less and forced to spend more! A double whammy!

Savers have to put their money to work if they want to be paid more than the paltry interest rates on savings offered by the banks. This means taking on risks by investing their savings. This sounds simple enough but we have to remember that not everyone should be taking risks. What about the elderly?

I get worried when my mother and others her age are telling me now that they should invest their money in real estate, bonds or the stock market because they are getting next to nothing for their savings in their bank accounts. Do they have a choice?

Related posts:
1. Perpetual bonds: Good or bad?
2. Money continues to flow into Singapore.
3. To protect our wealth, we have to take risk.

Stocks rise, Neptune Orient gains
Tuesday, 27 March 2012

© 2012 - The Edge Singapore

Saizen REIT: Acquisitions and long term loans.

Although I divested a large part of my investment in Saizen REIT, I still like the idea of owning freehold residential real estate in Japan where two thirds of its population rent the homes they stay in.

The Japanese Yen has strengthened against the S$ quite a bit and this could translate to higher income distribution in 2012 for unitholders. Add YK Shintoku's contribution to income distribution and the recent acquisitions which were funded by debt, we could see DPU a bit higher than my last estimate of 1c. Whether the difference is going to meaningful would also depend on how many remaining warrants would be exercised before the next distribution.

I have said that I like the amortising feature of the loans taken by the REIT before. What I also like are the relatively long terms of the loans taken by the REIT. This logically lowers refinancing risks.

The REIT recently took on a loan of JPY500m which partially funded the acquisition of a property in Kumamoto. This is an amortising loan with a 20 years tenure. The interest rate is 3.35% per annum.

For any investor who bought at 13.8c/unit today, if I were to stick to an estimated DPU of 1c per annum, we are looking at a distribution yield of about 7.25%. Of course, I am hoping for a higher DPU.

REITs, NOL, ARA and Hyflux.

Hope everyone had an enjoyable long weekend and is not missing the holidays too much.

The bullish movement in the stock market should put smiles on the faces of long holders. Has the bear been vanquished? I think it is too early to think so. So, we might want to make use of the bullish sentiment to lighten our long positions.

For me, I am still heavily invested in selected S-REITs as they could continue to deliver predictable passive income even in a zero growth environment. This is quite different, however, from thinking that S-REITs' unit price would not suffer in tandem with the broader market in the event of a crash. Indeed, it would be naive to think so although, with stronger balance sheets, we should not see the same magnitude of decline as in the last global financial crisis.

If we believe that money should go to where it is treated best, any significant decline in the unit prices of the S-REITs in my portfolio would tempt me with higher yields to add to my long positions. For now, I am keeping the status quo with regards to my S-REITs portfolio.

What about lightening my long positions? Share prices of certain companies went up quite a bit yesterday and I tried to sell some.

Today, my sell order for NOL at $1.22 was filled. With this partial divestment, I made some pocket money from Mr. Market. Why $1.22? That was the high of early September. Indeed, a safer resistance to sell at would be $1.18 as it has been tested many times. I took a chance that the buying momentum could push price pass $1.18 and it paid off. Indeed, price touched a high of $1.23.

However, the formation of a shooting star on the back of higher volume today suggests that NOL's share price could be heading lower from here. If $1.18 cannot serve as support, we could see price retreating to $1.10 which is where we find the 50d and 100d MAs merging.

I was not so lucky with another two counters, ARA and Hyflux.

People would say that ARA's trading volume is so thin most of the time that TA is inaccurate here. I didn't really bother using TA this time as I simply remember selling at $1.30 the last time and tried to do it again this time. Its share price did touch $1.30 last evening but my sell order was not filled. Trying to sell again today at $1.30 proved to be futile.

Well, it is back to the waiting game. If $1.30 should be taken out, I wonder if the next target is $1.45? Allow me my little day dreams.

As for Hyflux, the many white candle days on the back of expanding volumes led me to think that we could possibly see gap closing at $1.365 or even see a test of the support turned resistance of $1.39. Deciding not to be too greedy, I entered a sell order at $1.36. Unfortunately, it turns out that I was still too greedy.

Anyway, looking at the chart, immediate supports are at $1.24 and $1.225. The formation of a black candle on the back on lower volume is good news for long holders. However, that the black candle covers more than half of the preceding day's white candle is ominous. The MACD is rising strongly but it is still in negative territory. So, things could go awry.

I partially divested some of my investment, locking in a small gain in the process. I am just simply managing risk here by reducing exposure. If price should continue its upward trek, I would still stand to gain.

Finally, turning our attention away from the stock market, I have put up new blog posts on my recent trip to Japan. See them at Travel Photos and Videos. More to come. :)

Outside Lumine, Shinjuku. Kitty, "Hey! You can do it!" Believe it!

Related post:
Hyflux: Broke resistance.

Tea with AK71: Mechanical car parks.

I am back in Singapore. Got home at 2am and slept at 3am. Woke up at 8am. Unpacked, read the news a bit and replied to comments here in my blog.

Thanks to everyone who sent me well wishes for my trip and apologies to those whom I did not manage to reply to till this morning.

I did not look at the stock market or my blog while I was on holiday in Japan the last 10 days or so. When I looked at my watchlist this morning, nothing has really moved. My portfolio's value has remained almost unchanged.

It is interesting that the HDB is thinking of introducing mechanical car parks for older estates where there is little or no space to build more car parks. I took some photos in Japan of such car parks.

In fact, land shortage is so chronic in Japan that they even have mechnical parking for bicycles!

Some families who own two cars but have only enough space at home to park one car also mechanised the space so that they can park two cars instead of one!

It will take me a while to get back to speed with life in Singapore but it is good to be home. :)

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.

Help Japan and donate generously.

Eating emergency rations in shelter.

In life, sometimes bad things happen. I had a couple of things that went wrong at work today and was feeling somewhat grouchy but they are so insignificant compared to really bad things that could happen in life. How many truly holy and selfless people do we know?

In the aftermath of the earthquake and tsunami that rocked Japan, I watch scenes of destruction and misery on the TV and YouTube. My heart aches and I want to contribute to the aid efforts. I was advised to wait for an official donation line that would benefit the victims in Japan directly. One such line is now available at the Singapore Red Cross:

A child at an evacuation centre.

How we can help?

The Singapore Red Cross is accepting monetary donations towards this disaster. Donors may do so with the following:

Cash Donation :

For walk-in donations, the SRC is open during the hours:
Mondays to Fridays 9.30am-9pm,
Saturdays, Sundays and Public Holidays 9.30am – 6pm.

Address: 15 Penang Lane, Singapore 238486.

Cheque Donation:

Cheques to be made payable to the “Singapore Red Cross Society” At the back of the cheque, please indicate:

i) Name
ii) IC/Passport No.
iii) Address and Contact Number
iv) “Japan Disaster 2011”

SMS Donation

Donors may donate via their mobile phones to 75772. For every sms, S$50 will be donated to the “Japan Disaster” fund.

*Please take note that all donations to this disaster are non tax-deductable.

I think the most convenient way to make a donation is by SMS. Since the donations are non tax-deductable, there is no difference whether they have my name and IC number or not.

Please help the victims in Japan. Many have lost their homes and loved ones. Let us help them to overcome the current difficulties and aid their efforts in rebuilding their lives.


Watch this video:


This is a sincere appeal and please accept my heartfelt thanks for your compassion and generosity.

You may visit the website of Singapore Red Cross here to verify the information given above.

Japan disaster: dead, missing toll tops 15,000. Read article here.
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Another avenue to make a donation:

I was just doing some internet banking and found that DBS is facilitating donations to the Red Cross Japan Disaster fund and I have made my donation via internet banking. It is really easy for anyone who does ibanking with DBS. In the consumer reference space, fill in your telephone number.

16 Mar 2011 07:55 PM  Singapore

Your transaction is completed. You may wish to print out a copy of this confirmation for your reference. Payee Name RED CROSS JAPAN DISASTER  Pay From POSB Savings ***-*****-* Latest Available Balance ******** Amount S$**** Consumer Reference No. ******** Date of Payment Immediate  Transaction Reference ***********

Step 1: Log in to your DBS/POSB bank account

 

Enter your DBS/POSB internet banking User ID and PIN, and click Submit. Make sure you have your iBanking Secure Device with you. Enter the Secure PIN and click Submit.

Step 2: Go to Bill Payment

Once you're logged in, go to Payment Services and click Bill Payment Select Red Cross Japan Disaster from the droplist

Step 3: Add Red Cross Japan Disaster as a bill payee on your DBS/POSB iBanking account

 

To set up Red Cross Japan Disaster as a bill payee, here's what you'll need to: Enter your telephone number as your Consumer Reference Number Select the bank account you wish to debit your donation from Then, click Submit.

Step 4: Confirm Red Cross Japan Disaster as a bill payee