CitySpring Infrastructure Trust: Thoughts on divestment.

On 5 Oct, OCBC reported that they were suspending coverage on CitySpring Infrastructure Trust as they see limited positive price catalysts in the near term. Furthermore, Hydro Tasmania which is owned by the Australian government is proceeding with dispute resolution and is demanding for A$6.9m in commercial risk sharing mechanism (CRSM).

For a long time now, I have regarded my investment in CitySpring Infrastructure Trust as a mistake. I blogged about it in "High Yields: Successes, failures and the in betweens."

With a quarterly DPU of 1.05c, the yield is 6.94% at the current unit price of 60.5c.  As of 30 June 2010, it had S$1,450,941,000 in borrowings against S$2,014,838,000 of total assets. This gives a gearing level of 72%. This is being optimistic as intangibles account for S$432,026,000 of total assets. Yield is not fantastic and gearing level is extremely high.

Comparing CitySpring Infrastructure Trust with K-Green Trust, we see that the latter has a similar yield but with zero gearing, it is almost immediately apparent that K-Green Trust presents a more compelling proposition.

At CitySpring Infrastructure Trust's current unit price, removing it from my frozen portfolio would result in a small loss but with the many quarters of income distribution collected, I would probably end up with a small gain.  Time to close a chapter, I think.

View slides here.

Related post:
K-Green Trust: Possibly stabilised.

Genting SP: Bollinger bands narrowing.

The Bollinger bands are narrowing on Genting SP's chart.  This usually precedes a large magnitude price movement. Would it be up or down? Your guess is as good as mine.

Yesterday, I mentioned that "the 20dMA was breached as recently as last week (and) does not inspire confidence that it would be a strong support". Today, price broke under the 20dMA and it seems that $2.02 is now resistance but this needs confirmation. Price could retreat to the recent low at $1.85 which could act as immediate support. If that breaks, we could see the rising 50dMA as the next support.

The MACD continues to decline beneath the signal line in positive territory while the MFI has formed a lower high. The correction is in earnest but overall momentum is still positive.

Related post:
Genting SP: Fatigue.