Sabana REIT: Shariah compliant.

We have another IPO coming up and it is a Shariah compliant REIT: Sabana REIT.

The REIT will sell about 605.8 million units at $1.00-$1.10 each with a distribution yield of 8.45% for 2011 and 8.48% for 2012 based on the minimum offer price.

Singapore’s Sabana REIT to raise at least $605.8m in IPO. Sabana controls 15 industrial properties in Singapore with an aggregate floor area of about 3.3 million square feet.
Tuesday, 09 November 2010

© 2010 - The Edge Singapore

What does it mean to be Shariah compliant?

Shariah prohibits the payment or acceptance of interest fees for loans of money, for specific terms, as well as investing in businesses that provide goods or services considered contrary to its principle. Source: Wikipedia.

So, we can imagine that businesses which deal in alcohol and pork would not be allowed as tenants, for examples. It would be interesting to see how this REIT performs in time. Something different to enrich the REIT landscape in Singapore.

Golden Agriculture: Negative divergence.

On 8 Nov, I mentioned that "Even though a very long white candle formed today to close at the day's high of 78c, it is worth noting that volume was not as high as 13 Oct. The picture of negative divergence between volume and price is still present. Price moved higher today due to a lack of sellers and not an abundance of buyers. It would take a very brave person to load up to go long at this stage."

Although Golden Agriculture reported commendable results today with a 41% year on year increase in net profit to US$99 million (S$127 million) for the third quarter ending 30 Sep (3Q2010), the attempt by price to go higher was half hearted as it touched a high of 78.5c before closing at 76c. The very long upper wick on this short bodied white candle hints of strong selling pressure. Volume is relatively low and the negative divergence between price and volume is still all too visible.

Immediate support is at 75c and if this breaks, we could see 70c tested. This could well happen as both MFI and RSI are bordering on overbought and could retreat to retest their respective trendline supports. Buying on pullbacks is still the prudent thing to do.

Golden Agri-Resources sees 41% rise in 3Q net profit to $127m. Golden Agri-Resources says demand for palm oil, which is predominantly used for food purposes, is expected to be well-supported into the medium to long term by the growing consumption of edible oils and fats particularly by the growing middle class in highly-populated developing countries such as China, India and Pakistan.
Thursday, 11 November 2010

© 2010 - The Edge Singapore

Kim Eng cautions against palm-oil over-exuberance. “Ultimately, supply shortfalls mean that there is less inventory of CPO for these companies to sell. CPO price increases would simply be offsetting this, and likely revenue-neutral.”
Thursday, 11 November 2010

© 2010 - The Edge Singapore

Related post:
Golden Agriculture: Breaking resistance.