AIMS AMP Capital Industrial REIT and Singapore's 5.8% growth in October exports.

Singapore's economy is humming along nicely.  Manufacturing is doing well.

Strong Singapore exports signal inflation - StanChart 
Tuesday, 16 November 2010

© 2010 - The Edge Singapore

A REIT which I like very much is an industrial properties S-REIT, AIMS AMP Capital Industrial REIT.  With the economy chugging along and exports doing well, this REIT is likely to benefit.

At 10.43AM, there was a single transaction buying up 8,652 lots at 22.5c. That's big money.  At the end of the day, 19,221 lots changed hands making AIMS AMP Capital Industrial REIT the top volume REIT today. 15,090 lots were BUY UPs of which 752 lots were BUY UPs at 23c which is the upper limit of the current trading range and the resistance to watch.

My immediate target for this counter is 26c. How did I arrive at this value? Fundamentally, this would mean a yield of 8% with an annualised DPU of 2.08c for 2011. This, I feel, is fair for a smallish REIT with leasehold industrial real estate in Singapore. Technically, 26c would be the upper limit of the next trading band of 23c to 26c, if we believe that the current trading band is 20c to 23c which has been the case since the counter's CR days.

"Singapore's non-oil domestic exports (NODX) surged a better-than-expected 34.5 per cent from a year earlier, in line with a rebound in shipments out of Asia in October."  Read article here.

First REIT: Bought more at 95c.

Last Friday, I mentioned that "I have been waiting the whole day for someone to sell me some First REIT units at 95c but to no avail. Some people are puzzled why am I so interested in getting some at 95c when I am already vested at 40+c and 70+c. Well, with the proposed acquisitions and rights issue, buying more even at 96c could be quite rewarding. With an average price of 70c, post rights, if we were able to buy at 95c now, a yield of 9.1% is not impossible with an estimated full year DPU of 6.4c in 2011. As the XR date is 1 Dec which is almost 3 weeks away, I will continue to wait patiently at 95c. Wish me luck."

To all my readers who wished me luck, thanks! My overnight buy queue at 95c was filled. Now, I will wait to buy at a lower price if there are people who are willing to sell cheaper to me. This is quite possible since the XD date is 1 Dec.  Many things can happen within these two weeks.  When I mentioned this, someone said that he does not think it is probable since the counter is offering deeply discounted rights. I replied that there might be people who cannot afford to pay for the rights and might choose to lock in their capital gains now by selling the units they have. Never say never.

Technically, the doji formed when First REIT's price touched a high of 99c on 9 Nov was a warning of a possible reversal. It also formed lower highs on the MACD, the MFI and the RSI on that day.  This has painted a picture of negative divergence between price and all the momentum oscillators. OBV confirmed the bearish picture as it plunged, suggesting massive distribution.

So, I have suggested that I would be buying more if people are willing to sell to me cheaper. At what price would I buy more of? Using Fibo lines, I see 138.2% at 93.5c and 161.8% at 92.5c.  Assuming that I buy more at 92.5c, I would have an average price of 92.5c x 4 + 50c x 5 /9 =68.9c and a yield of 9.29% with an estimated annualised DPU of 6.4c in 2011.

92.5c, I am waiting.  Once more, wish me luck. ;-)

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Saizen REIT, First REIT, Golden Agriculture and Genting SP.