Saizen REIT: Sanity prevails with more good news.

Since starting my investment in Saizen REIT in the later half of 2009 at a price of 13c/unit, the REIT gained in market value and I also received income distributions from the REIT twice. However, the totally unforeseen triple disaster of earthquake, tsunami and the following nuclear power plant crisis wrecked a steadily improving picture.

As I was consistently buying more units in the REIT, to say that I was not in the least mentally or emotionally affected would be untrue. Some were asking me to dump my investment in the REIT, painting horrific images. Some left comments in my blog with words to the same effect and more. Also, news that countries around the world were asking their citizens to leave Japan (due to perceived radiation risks) didn't help.

However, throughout the crisis, I tried to stay calm and rational and, by my own standards, I did it fairly well. I analysed the situation early on and came up with a worst case scenario which suggested that at 13c/unit, the REIT was oversold by panic stricken investors. I stood by my analysis and the fact that insiders were buying reinforced my belief that the unit price was at a floor, if not the bottom.

I could stay calm and rational partly because I was not using any borrowed money or money which I would need in a hurry elsewhere. That we should never invest using borrowed funds or funds needed in the near future is an important principle for all investors.

Some friends would say that I have an added advantage of sitting on a thick cushion of investment gains and dividends accumulated since late 2009. This is, perhaps, true, since at the back of my mind, I knew that I would not be losing any of my capital in the crisis even if the unit price were to weaken further.

The REIT's fundamental and technical pictures have altered somewhat due to the disasters. These changes, I mentioned in an earlier blog post. Read it here. As an investor, we must not be stubborn and I recognise the new reality for what it is and decided to reduce exposure to the REIT when the time is right. When would this be? I have mentioned in a few blog posts that 15c would be the resistance to watch as the gap closes.

Divesting my investment in Saizen REIT partially when it tested and broke support turned resistance at 15c today was something quite mechanical for me. It was the thing to do and I did it. I am not one to be married to my investments.

What does this say about me? I never like selling at supports or what I perceive to be supports. Even in a downtrend, prices would go down a river of hope and selling in rebounds and, hopefully, at resistance is the thing to do.

Does the partial divestment of my investment in Saizen REIT mean that I am turning my back on the REIT? No. I have not closed my position in the REIT, merely lightened it. I remain vested and might even add to my position if the unit price should weaken once more.

Although the partial divestment has erased some of my investment gains, my overall portfolio remains in the black and my capital is intact. Rebuilding my investment gains means that the game is once again afoot.

Oh, if you are wondering what the good news for Saizen REIT is, they have announced a plan which could possibly see YK Shintoku, the last portfolio with a CMBS, unencumbered by end of May 2011. Details? I am going to be lazy here. Please read the announcement here.

Related post:
Saizen REIT: Staying calm and rational.

AIMS AMP Capital Industrial REIT: Stronger numbers.

The REIT's properties have been revalued higher year on year by 4% as at 31 March 2010. This means NAV per unit improves by 1c. See announcement here.

The REIT's unaudited financial results for the financial year ended 31 March 2011 will be released on 19 April 2011. See announcement here.

I am expecting the following:
DPU: 0.215c
NAV per unit: 27c.
Gearing: 32%.

DPU of 0.215c is, of course, due to the advance distribution of 0.285c earlier last month to exclude placement shares from income distribution for the period prior to the placement exercise.

NAV per unit, I have left unchanged despite the 4% higher property valuation because the REIT did dispose of Asahi Ohmiya Warehouse in Tokyo last month.

Gearing level is lower at 32% because funds from the same said divestment will be used to repay debt.

If my estimates are accurate enough, the REIT is currently trading at a 24% discount to NAV and a distribution yield of 9.76% (annualised DPU of 2c). A 32% gearing level is pretty safe considering the fact that property prices seem to be rising. There is also the fact that debts were refinanced last year at a much lower interest rate of 2.16% and the loans are not due for another two years at least.

I continue to like this REIT's fundamentals and would accumulate on any weakness.

Related posts:
AIMS AMP Capital Industrial REIT: Insights.
AIMS AMP Capital Indsutrial REIT: Lower gearing.

CapitaMalls Asia: Testing $1.83 resistance.

CapitaMalls Asia tested support turned resistance at $1.83 for the first time today. The fact that its share price pulled back and closed at $1.81 shows the existence of strong selling pressure closer to and at $1.83. The fact that this happened on much higher volume shows some weakness in the upward movement today. My sell order at $1.83 was not done.

The MFI, a measure of demand, has flattened despite the higher price and volume while the RSI has flattened in overbought territory. OBV, however, is rising which suggests ongoing accumulation. What are the possible scenarios now?

Given the fact that the MFI and RSI are near overbought and overbought, respectively, upside could be limited from here. $1.83 remains the immediate resistance while further upside could be capped at $1.88 (78.6% Fibo fan line and 100dMA) in the event that $1.83 is overcome.

Downside? Immediate support is at $1.80 although this could be a weak support. Stronger support could be found at $1.78, a many times tested resistance which coincides with trendline support as well. If this were to go, the uptrend would have been compromised and the next support would be at $1.72.

I have divested some at $1.78 and have put in a sell order at $1.83 for tomorrow. If price were to weaken to $1.72, I could buy in again. TA is never about certainty. It is about probability and we should plan accordingly. Good luck to fellow shareholders.

Related post:
CapitaMalls Asia: Partial divestment at $1.78.

Sabana REIT: Positive divergence.

In an earlier blog post, I mentioned that we should "Keep an eye on the MACD and see if a higher low forms as price forms a lower low. We are on the lookout for a potential positive divergence." A higher low has formed in the MACD and we have a positive divergence.

The formation of a positive divergence does not mean that the unit price is going to fly higher right away. A significant resistance presented by the declining 20dMA at 94c would have to be cleared first. Drawing a Fibo fan, it is also interesting to note that price is currently at the 23.6% Fibo fan line. This is not one of the three golden ratios and is a weaker resistance but it is a resistance nonetheless.

Overcoming immediate resistance at 94c would see price going higher. Long suffering unitholders of this underperforming REIT could have a respite soon if this should be the case. Good luck.

Related post:
Sabana REIT: Initiated long position.