Starhub: Testing support.

Technically, this counter looks a bit weak. $2.38 has been established as a strong resistance while $2.30 is a many times tested support. Volume was rather high today as price started at $2.38 and travelled all the way down to test the support at $2.30 before closing just 1c higher at $2.31.  Could the rising 50d and 100d MAs lend support to $2.30 or would the support break?

The declining MFI suggests that demand has weakened while the declining MACD suggests that the shorter term MA is losing altitude.  All in, a rather ominous picture for the bulls. Support at $2.30 is critical. If this support level holds as momentum oscillators decline, that is a sign of strength. If it were to break, $2.22 would be the immediate downside target.

STI drops 0.3% to 3,014.77 at closing.

Hyflux (HYF SP), Singapore’s biggest water treatment services provider, increased 1.6% to $3.28. The company said it and Mitsui & Co. will start a venture to buy stakes in four water treatment plants in China and offer to take Hyflux Water Trust (HYFT SP) private. The trust surged 11% to 76 cents. The venture will offer to buy 205.5 million shares in Hyflux Water at 78 cents each.

Tuesday, 03 August 2010

© 2010 - The Edge Singapore

AIMS AMP Capital Industrial REIT: New SS.

There is a new substantial shareholder for this REIT: Dragon Pacific Assets Limited.

No. of Shares held before the change: 38,985,000

No. of Shares which are subject of this notice: 66,693,000

No. of Shares held after the change: 105,678,000
As a percentage of issued share capital: 7.21%

Reason given:  Acquisition for investment purposes.

Many are probably wondering who are the sellers as this is probably a married deal. The volume is really very high.  Fundamentally, more substantial shareholders with a longer term investment horizon is good for the REIT. They would give a stronger floor to the unit price and, therefore, a firmer platform for possible future price appreciation.

Technically, the big sell down today at 22.5c sent the MFI crashing into the oversold region. The MFI has also formed a lower high.  What we see now is a negative divergence with price which has moved up to test the long term resistance of 23c in recent sessions.  23c remains a formidable resistance.

OBV dropped a notch and the MACD seems ready to form a bearish crossover with the signal line.  With XD date approaching in another 3 days, a pull back in the unit price of this REIT is probable.  In such an instance, expect initial support at 22c and a stronger support at 21.5c, the midpoint of the trading range (20c to 23c).  Good luck to fellow unitholders.