STI declines again: CapitaMalls Asia, Golden Agriculture and Sabana REIT.

I caught a hint of panic in the air today. It is not abject terror but a slight panic.

STI declines 1.3% to 3,113.76 at closing, lowest since 31 March 2011. Shares on the measure trade at an average 14.3 times estimated earnings, compared with about 15.6 times at the end of 2010, according to data compiled by Bloomberg. The world’s biggest builder of oil exploration and production platforms declined as crude oil futures fell for a third day on concern demand will weaken as stockpiles rise in the U.S., the world’s biggest consumer of the commodity.
Wednesday, 04 May 2011

© 2011 - The Edge Singapore

Is this hint of panic a good opportunity to load up some stocks on the cheap? Well, I took the opportunity to load up on some:

CapitaMalls Asia: The last time I bought some shares in this company was at $1.80 per piece. Today, my overnight buy order at $1.70 was filled. I had another buy order at $1.68 which was not filled. Incidentally, $1.68 was the low of the day. What is next?

Looking at the daily chart, expecting a more bearish scenario could see the 150% Fibo line, which coincides with the lower limits of the MA envelope, providing stronger support at $1.64 next. We might even see the strongest of the 3 golden ratios tested on the downside. The 161.8% Fibo line approximates $1.62.

Golden Agriculture: Look at the daily chart and find the uptrend support originating from 28 October 2008. This is a very long term support and likely to be a very strong one.

It is approximating the lower limits of the MA envelope which is at 62.5c in the next session. With the support at 65c, which is where I bought more of the stock today, compromised on higher volume, we could see price weakening again in the next session. With the fundamentals strong and the longer term uptrend intact, I am buying more on weakness.

Sabana REIT: I bought more units of this REIT today at 93.5c/unit. For reasons unknown, the REIT was sold down heavily today.  Two transactions, each with more than 1 million units, sold down the REIT at 93.5c /unit. It is strange that the individuals or institutions responsible for these two transactions did not sell in the last three sessions when unit price touched a high of 95.5c but chose to sell at 2c lower today instead. This is especially puzzling as the units are still being transacted CD.

A DPU of 3.04c will go XD on 10 May, next Tuesday. Paying 93.5c/unit today is a good deal, I believe, representing a discount of 5.6% to NAV/unit and a relatively secure distribution yield of 9.4%. Until next Monday, I am accumulating on any further weakness.

Courage Marine: Profit warning.

Courage Marine's management issued a profit warning, expecting 1Q 2011 to turn in a loss: "The Board of Directors of the Company wishes to inform Shareholders that, despite efforts by the Group to secure deployment of its fleet, fleet utilisation was low during the first quarter of 2011. The Chinese New Year holidays in February resulted in a decrease in our fleet utilisation over the period. In addition, the Japanese quakes, tsunami and nuclear power plant disaster had temporarily halted the shipment of cargo to and from Japan, which resulted in a temporary over-supply of vessels within the Asian region. In addition, freight rates during the period remained generally low, with the BDI averaging around the 1,500 level during such period." Read announcement here.

I took the opportunity to divest most of my investment in the company at 22c/share when the price spiked on news of dual listing plans by the management. This was on 18 Jan 2011. I still retain a small investment in the company despite dismal BDI numbers as I want to see if dual listing would help reflect the value of the stock more accurately. Well, we win some and we lose some. Here is the latest BDI chart:

Technically, the counter had been range bound with resistance at 19.5c and support at 17c. Today, price broke support and touched 16.5c briefly before closing at 17c.

Gapping down today, we could see gap fill happening at 18c and that would be a good price to reduce exposure or to divest completely. Sell at resistance, that is what I would do. Panic selling would not do us any good.