China Minzhong: Share price to go higher.

Templeton International, Inc. became a substantial shareholder of China Minzhong last year in May 2012. Their additional purchase of 980 lots at 84.56c a share pushed their ownership from 4.91% to 5.08% of the company.

As of 10 Dec 2012, Templeton owns some 13.05% of China Minzhong's common stocks. They bought more when the share price sank and they have also been buying as share price recovered. They are accumulating continually and some might even say, aggressively.

Dr. Mark Mobius of the Templeton Emerging Markets Group said this on 11 Dec 2012:

Successful investing is not only about picking the right stocks, but also finding values others may not recognize. We think the best way to determine if a stock is a value really boils down to growth.

During market downturns many stocks can be cheap, but if there is no future growth potential, than that stock could be considered a value trap. If a company is inexpensive and growing (and our earnings projections for it look good), then there can be a good case to invest.

When the current market isn’t recognizing this potential and we’re able to buy stocks at a discount to what we think they’ll be worth five years out, then that’s where we see value.

During a severe market downturn, you’ve got to be willing to go into the market, then wait. The global market downturn in 2008-2009 is a good example of this.

Patience and a willingness to go against the crowd mentality is a very difficult thing for most investors to do, but we believe it is critical as a long-term investor.

It is also interesting that China Minzhong was mentioned in an email sent out by The EDGE.

Apparently, the Australian investment bank, Macquarie, thinks that China Minzhong is a prime beneficiary of the country’s move to modernise and promote large-scale farming under the Five-Year Plan.

“Its large-scale vegetables origination and processing business in China is well poised to grow given the burgeoning population and increasing urbanisation trend,” says Macquarie, which has a $1.40 price target on the counter.

I like the fundamentals of China Minzhong but I am also corrupted by technical analysis. So, looking at the chart, I see a natural resistance level at 99c, give or take a couple of cents, which must be overcome convincingly before we could see the next resistance level tested.

The last session's high volume white candle tested the immediate resistance level but failed to take it out. Could it happen next Monday?

In case of a retracement, I expect strong support to be provided by the rising 100d MA. That support if ever re-tested would be where I would buy more.

Related post:
China Minzhong: What are we to do?

More smoke free areas from 15 Jan!

NEA is going to step up enforcement in the next 3 months and people who flout the new rules could be fined up to $1,000.



Of course, we know that smoking is bad for smokers. We also know that it hurts the health of the people around them. Then, why smoke?

Furthermore, with cigarettes so expensive, it makes sense for Singaporeans who are smokers to consider quitting. Buy a pack of stuff only to light up and inhale pollutants into the body?

Burning money and messing up the body. That's what smoking is. Where is the good sense in that?

Smokers beware! The bigger expenses will come in future in the form of medical and hospitalisation bills. Smoking kills in more ways than one!

People who are investing for a more secure financial future should not smoke.

Marco Polo Marine: Still cheap.

I have not sold my shares in Marco Polo Marine as its price rose in recent weeks. In fact, I am looking to add to my long position if its share price should do a retracement to support.

OSK Research on 18 Jan 13:
Marco Polo Marine is enjoying 20% premia on its vessel charter rates in Indonesia, yielding a 50 - 60% gross margin on its Offshore Support Vessels (OSVs), due to the severe supply shortage in the country caused by the cabotage law. Target price: 61.0c.

Marco Polo Marine could be continually re-rated upwards over time.

For anyone patient enough, investing in Marco Polo Marine could be very rewarding. It is still under-appreciated and I hope it stays this way for a while more.

Drawing a Fibo fan, it is easy to see that the 20d MA is the immediate support and it also coincides with the 50% line. Share price could move higher from here, hit the 38.2% line before retracing to test the 61.8% line for support or it could move up from here in a fresh attempt to form a higher high. The resistance to watch is at 43c.

Related post:
Marco Polo Marine: Will buy more on pull back.

Good and cheap(er) pineapple tarts.

Chinese New Year is round the corner and I see pineapple tarts for sale everywhere! I have a severe weakness for pineapple tarts, you know.

I felt so tempted by the yummy looking tarts but they were all so expensive. $18 to $20 for a small container is quite normal. Nope! I refuse to give in to temptation. Actually, being turned off by the price tags made it easier to deny myself any gastronomical satisfaction.

Lucky for me, a friend recommended this brand which is being sold at NTUC Fairprice supermarkets.

450gm of yum yum!

Now, it is not the cheapest on offer at $7.80 for 450 gm but it looks quite good. I brought it home, left it in the kitchen and the next day my sister told me that my niece ate 6 pieces at one go. Verdict, it must be good!

Actually, it reminds me a bit of the ones sold at Bengawan Solo but with a smaller price tag.

Er, I am not related to the "Chewly" brand in any way and this is not a paid advertorial. Just sharing what I think is good value for money. Enjoy!
-------
P.S. I just looked at my Deals.com banner in the right sidebar. They have some special offers from more atas establishments for pineapple tarts. You might want to check these out. (9.50AM)

This sounds like good value for money:
CNY Cookies (Choice of any 3 Boxes)
– Only $20 instead of $54
- pineapple tarts ($7.80 for 1 box instead of $18)
For your convenience, here's the link: Pineapple Tarts.

Sabana REIT: An 8.14% yield even now!

Sabana REIT's unit price rose today as expected. It closed 3c higher per unit. Annualised, anyone who bought at $1.185 today would be looking at a distribution yield of 8.14%.

UOB KayHian has a BUY recommendation on the REIT and a target price of $1.30 which means a yield compression to 7.42%. Don't ask me how they determined the target price. I have no clue. However, their call could help push the unit price of the REIT higher if there are enough people who believe the recommendation.

What do I think?

Well, I wrote a piece not too long ago in response to a friend's question as to whether he should buy into Sabana REIT. Anyone who is thinking of buying into Sabana REIT or any other REIT for that matter might want to read that blog post: 5 steps to take in REIT investment.

What about my opinion on Sabana REIT in particular?

Well, although an 8.14% distribution yield is relatively high even when compared to AIMS AMP Capital Industrial REIT which currently yields some 6.4%, I would say that we should exercise caution as almost half of Sabana REIT's leases by gross revenue would be expiring this year.

Although I am optimistic that most, if not all, of the leases would most probably be renewed and with some positive rental reversions to boot, there is always a chance that things could go wrong. Mr. Market will be Mr. Market. Or am I wrong to say this?

For anyone who is attracted to the distribution yield and we can understand why this is so especially in the extremely low yield environment which we find ourselves, having a long position as a hedge even at the current price could be considered. However, bear in mind that we could see unit price retracing once the REIT goes XD in a few days from now.

You know yourself best (I hope). So, if seeing the unit price decline by a few percentage points would cause you anxiety, please think twice about buying now. Of course, there is no guarantee that a decline would take place but the probability is for this to happen than for price to go higher when the REIT goes XD.

For those who already have a long position in the REIT, buying when there is a retracement to support would seem like a more logical thing to do. Buying last month when unit price was at about $1.10 instead of now at $1.185 would give you an idea of what I mean.

Anyway, I will leave you with this technical picture and let's see if you can spot the signs which would suggest that caution on the part of bulls would be rather wise.

Have a good weekend.

Related posts:
1. Sabana REIT: 4Q 2012 DPU 2.41c.
2. 5 steps to take in REIT investment.

Sabana REIT: 4Q 2012 DPU 2.41c.

The management of Sabana REIT have once again exceeded their own forecast and they have announced a DPU of 2.41c for 4Q 2012.

The REIT goes XD on 23 Jan 13 and the income distribution is payable to unitholders on 28 Feb 2013.

Gearing: 37.6%

Interest cover ratio: 5.4x

NAV/unit: $1.07

All in financing cost: 4.3%

The numbers are all good except for the fact that 44.7% of leases by gross revenue are still expiring this year. There is no news on any progress made towards the renewal of these leases and that could explain Mr. Market's more cautious attitude towards this REIT.

Sabana REIT's distribution yield is currently the highest in the S-REIT universe. Annualised, we are looking at a distribution yield of some 8.38% based on the last closing price of $1.15 per unit.

Unless it is able to assure Mr. Market that all of the expiring leases in 2013 are being renewed and with positive rental reversions to boot, its unit price could find it harder to rise much higher.

In the meantime, however, we could see unit price moving higher as the REIT goes CD tomorrow.

See presentation slides: here.

Related post:
Sabana REIT: 3Q 2012 DPU 2.34c.

Bona fide invitation or phishing site?

I received this in my mailbox today. Highly suspicious!

Here, phishy, phishy, phishy!

Hello,

You were recently chosen to represent your professional community, deeming you eligible for the inclusion in the new 2013 Edition of Worldwide Registry for Business Professionals.

We are pleased to inform you that your candidacy was formally approved on October 1st, 2012. Congratulations!

Click here to verify your profile and accept the candidacy

The Publishing Committee selected you as a professional based not only upon your current standing, but focusing as well on criteria from executive and professional directories, associations, and trade journals. Given your background, the Director believes your profile makes a fitting addition to our publication.

There is no fee nor obligation to be listed. As we are working off of secondary sources, we must receive verification from you that your profile is accurate. After receiving verification, we will validate your registry listing within seven business days.

Once finalized, your listing will share prominent registry space with thousands of fellow accomplished individuals across the globe, each representing accomplishment within their own geographical area.

To verify your profile and accept the candidacy, please click here.

Please kindly note that our registration deadline for next year's publication is January 31st, 2013. To ensure you are included, we must receive your verification on or before this date.

On behalf of our Committee I salute your achievement and welcome you to our association.


Sincerely yours,

Robert C. Anderson
Vice-President, Publication Division
Worldwide Registry for Business Professionals

1833 Tennessee Avenue
Southfield, MI 48075
248-317-0041



So sweet! Must be bad for me!

I wonder what achievement are they referring to? Light on details and heavy on flattery. The Chinese have a saying for this. I can't quite remember the exact words. Help!

The email invitation doesn't even have my name on it! Oh, in case you think it was sent to my office email address, no, it was sent to my private email address. Duh.

Phishing is the act of attempting to acquire information such as usernames, passwords, and credit card details (and sometimes, indirectly, money) by masquerading as a trustworthy entity in an electronic communication. (Source: Wikipedia)

You might also be interested in:
ASSI received US$15m offer!

Staying optimistic about 2013.

Feeling worried about 2013? At least the Americans should be feeling optimistic. Well, that is according to Warren Buffet et. al. in this video clip:



At the end of the clip, everyone seemed to be saying the best time to buy stocks and to start a business is when the economy is in the doldrums. Words of wisdom.

If the American economy finds its feet again, logically, that would be good news for Asia.

We can only wait and see, I suppose, but if these people are right, the worst could be over. Then, the bull market could have legs!

Related post:
Why is Warren Buffet the world's greatest money maker?

AK's AEI for Changi Airport!

These photos were taken in Las Vegas:

Looks like a casino?

Where is this place? There is a clue in the photo...

Gasp! The airport?! Bingo!

Singapore Changi International Airport could learn from this and generate extra revenue or not?

We have to make sure that the jackpot machines are found in designated areas only with attendants on duty to prevent under 18s from entering and losing their pocket money, of course.

Instead of painting yellow boundary lines around such areas, let us use green paint (the color of money) to differentiate them from the smoking areas.

You know what is the fantastic thing about this idea? Our country's airport already looks so fantabulous! There is no need to spend gazillions like MBS and RWS did just to house these jackpot machines!

Make full use of existing floor space! S-REITs call it AEI (asset enhancement initiatives)! I like it!

If Singapore takes to this idea, I hope the authorities would credit me with the idea.

Paying me a token (7 figure) sum in appreciation wouldn't hurt either. ;p

See photos of my recent trip to Las Vegas: here.

Related post:
Is gambling a bad thing?

Yongnam: Looking forward to further weakness.

I have made an interesting observation with regards to Yongnam's share price.

Do you see it? Supports and resistance levels seem to be at 1.5c intervals. I am looking forward to further weakness so that I could buy more at 23.5c or even 22c per share.

Related post:
Yongnam: The ADR effect.

Wilmar: Conflicting signals and what they could mean.

Wilmar's share price broke resistance at $3.64.

Volume has been declining as price pushed higher. Remember, volume is the fuel that drives rallies. Without rising volume, rallies could eventually sputter and die out. However, Chaikin Money Flow shows that smart money is still flowing into the counter.

The conflicting signals here suggest that Wilmar could do a correction using time and we might not see any hefty price correction. In case a price correction should take place, immediate support is at $3.64 and a stronger support is at $3.53.

The rising 20dMA will intersect the declining 200dMA at some point in the near future to form a golden cross. This suggests that the bulls have the upper hand and that any retracement in share price is likely to attract much buying interest.

It is always dangerous to try looking into the future with technical analysis but let me see if I am clairvoyant. With a healthy dose of patience and with a bit of luck, we could see $4.44 tested in the next two or three months. There. My powers are spent.

Related post:
Wilmar: Testing resistance with strong momentum.

Saizen REIT: Still a buy?

There is no doubt that anyone who bought units of Saizen REIT about half a year ago when its warrants approached expiry would have done very well with some 45% capital gains (based on the current price of 18.8c per unit). We would also have collected a DPU of 0.63c which translates into a half year distribution yield of 4.85% if we had bought at 13c per unit.

I have been asked by quite a few people whether Saizen REIT is still a good buy. So, is it?

A street in Shinjuku at night.

With the JPY having declined by some 17% since the last time I looked at it, Saizen's NAV/unit is probably closer to 25c/unit now. The REIT is flushed with cash from the exercise of its warrants last year and its gearing level is relatively low.

The rapid decline in the value of the JPY is a bug bear for investors who are after regular income. All else being equal, DPU would decline in S$ terms and at the exchange rate today, a DPU of 1.05c per year is a fair estimate. At 18.8c per unit, it would mean a distribution yield of some 5.59%.

Saizen REIT has acquired more residential buildings and is likely to continue to do so with its much stronger balance sheet. The type of residential buildings in Japan that Saizen REIT invests in are mostly selling at below replacement cost. Translation: they are good value for money.

There is a definite growing interest in real estate in Japan. Private investors from Europe, USA and China have been active investors. So, Saizen REIT's portfolio could see its value increase over time as its buildings are revalued. This could cancel out the effect of a declining JPY as it pushes up the NAV of the REIT.

As for distribution income, I would expect the management of Saizen REIT to employ some form of hedging strategy to protect DPU in S$ terms. This is necessary as Mr. Abe, the new Japanese Prime Minister, is determined to cheapen the JPY and to herald in an inflation target of 2% per annum for the country.

Over time, I expect DPU in S$ terms to be relatively stable although it could take a hit from the declining JPY in the next payout in March. In fact, DPU could increase in the longer run as Saizen REIT:

1. Embarks on more acquisitions.
2. Continues with share buy backs.
3. Has loans which are amortising in nature.
4. Negotiates for lower interests on new loans.

Fundamentally, Saizen REIT is still very much undervalued. Would I, therefore, say it is still a buy? Well, theoretically, it is. However, I would caution that compared to 13c per unit, the margin of safety that investors like to have is very much diminished now.

Know what you are buying, know the worth of it and decide if you are comfortable with the asking price.

Related posts:
1. Saizen REIT: Daily share buy backs.
2. Saizen REIT: 2H FY2012.

Bears and Samsung washing machines.

Samsung was having its new ad for the EcoBubble range of washing machines shot in British Columbia out in the snow when a huge bear surprised the crew!

See what happened next: Huge Bear Surprises Crew on EcoBubble Photo Shoot in BC