Sabana REIT: Recent developments.

The REIT has proposed the acquisition of 39 Ubi Road 1. The property has a remaining tenure of about 40.4 years and is valued at $32m. The vendor, Ascend Group Pte. Ltd., will take a master lease of the entire premises for a term of 5 years. Extension works is ongoing and will add approximately 41% to the building's existing gross area. The acquisition will be funded by debt and will increase gearing level from 25.1% to 27.7% upon completion. My thoughts? With what information is available at this point in time, I like it as it would probably bump up DPU marginally for unitholders without asking us for more funds while gearing level remains very comfortable.  See announcement here.

Al Salam Bank Bahrain BSC increased its investment in the REIT by 1,909 lots at a price of 94c per unit on 2 August 2011. It now holds a 5.14% stake in the REIT. See announcement here.


The REIT received a 'BBB-' long term corporate credit rating from Standard & Poor's Rating Services. This reflects "Sabana REIT’s moderate leverage with good access to diversified funding channels and stable cash flows. The ratings also take into account the quality of Sabana REIT’s industrial property assets in Singapore and minimal capital expenditure needs. The stable outlook was based on the REIT’s balanced business risk profile as well as its adequate cash flow protection measures" and "is a significant first step that will allow Sabana REIT to access investment grade Shari’ah compliant debt and capital markets." See announcement here.

Rules for investing in difficult times.

There isn't very much that I want to say tonight because I have probably said all that I want to say in my recent blog posts. 

I just did some reading which is something I do every evening and came across an article by Aaron Task who is someone I enjoy watching on Tech Ticker.





Aaron shared 4 time honoured rules:

1. If you can't take the heat, get out!  

This is something I did not talk about but I have said time and again that investors should just do what they feel comfortable with. 

Anything we are not comfortable with, avoid. 

Aaron is quite specific in who are the people who should get out.






2. Don't panic! 

This one sounds very familiar. 

Aaron says that many investors simply cannot take the pain and are cutting and running. 

Historically speaking, many investors sell out of stocks at important market bottoms. 

This is a reason why I refuse to sell when prices are forming new lows and would only sell if they rebound to test resistance. 

Aaron is quite specific in who are the people who should not panic and should stay the course.

The 8 immortals each had his or her own way of crossing the sea.

3. Have a plan! 

Sounds familiar again. 

Aaron says it differently from me but the essence of the message is the same. 

We must understand our motivations for investing in the stocks we are invested in. 

The tools we employ and the attitude we have must be appropriate to our motivations. 

That way, we will stand a good chance of doing better with a consistent strategy and this is so both financially and emotionally!






4. Learn from your mistakes! 

Do we need to say more about this? 

Life is about learning and more learning. 

Regular readers would know that I am still learning and would have read my story. 





New readers might be interested in reading this: 

Excuse me, are you an investor?

Aaron ends his article by asking us to ask ourselves three questions, go read his article and see how you would answer these three questions. 

Could be revealing. 

Enjoy "4 rules for the see-saw market".




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STI drops 0.9% to 2,796.22 at closing Thursday, 11 August 2011

© 2011 - The Edge Singapore

Why do I not panic? Added Sabana REIT.

In my last blog post and probably a couple more before that, I mentioned that we should stay calm and rational, have a plan and act upon it. This is my personal mantra and it has not changed.

Some wonder how I could act so confidently and decisively. Here are some reasons:

1. I am not investing using borrowed funds or funds which I need in the near future for other purposes.

2. Of my total investible cash, only 50% or so has been deployed in the stock market. In the last few sessions, it could have bumped up by a few % points.

3. I am informed by FA on a counter's value and by TA on a counter's price. I buy when I see value and when prices are at supports.

4. 80% or more of my investments in equities are for passive income and I sleep well with the knowledge that I will have regular cashflow from my investments.

5. I know I will divest partially if prices should rebound to test resistance levels. Yes, I am not one to fall in love with my investments.

This list is probably not exhaustive but they are five reasons off the top of my head.

Today, the only counter that hit my target buy prices is Sabana REIT at 88c and 87c. At these unit prices, we are looking at distribution yields of slightly more than 10% per annum. My overnight buy orders at these prices were filled.

Some ask me if I will be buying more units of Sabana REIT if its unit price were to weaken. Looking at the chart and using three sets of Fibo lines, I have identified stronger supports at 83c and 80.5c. If the immediate support at 86.5c should break, those are the prices where I will be adding to my long position.

Related posts:
Seven steps to creating passive income from the stock market.
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STI drops 2.2% to 2,821.09 at closing
Wednesday, 10 August 2011

© 2011 - The Edge Singapore

Bloodbath continues and AK71 went shopping!

Another day of heavy selling. Lots of panic! Pandemonium even! What should we do? Stay calm and be rational. Have a plan and execute it. I took my own advice and did exactly that.

I am currently about 50% invested in the stock market. Of this 50%, about 80% is invested for income and much of this is from S-REITs. Currently, my five largest investments in S-REITs are:

1. AIMS AMP Capital Industrial REIT
2. Sabana REIT
3. First REIT
4. LMIR
5. Cache Logistics Trust

In my last blog post on AIMS AMP Capital Industrial REIT, I suggested that 20c would be a very strong support and that I expected many to want to buy at 20c. So, why not queue 1 bid higher at 20.5c too?

Today, my buy order at 20.5c was filled while the buy order at 20c was almost half filled. However, as my buy order at 20c was some 10 times bigger than the buy order at 20.5c (which was more of a hedge), I am quite happy that almost half of it was filled.

Regular readers would remember that I partially divested AIMS AMP Capital REIT at 21.5c/unit to get more Sabana REIT at 92c/unit some time back. So, buying at 20c today was a sweet moment for me. Having only bought back some 25% of what was sold at 21.5c/unit, I am fully prepared to buy more if price were to retest the REIT's historical low of 19c/unit.

Last Friday, I loaded up on Sabana REIT at 92c. Today, I loaded up again at 91c and 90c which were the two support levels identified in my last blog post on the REIT. 90c is the historical low and more than half of the total units that changed hands today happened at 90c.

There is some support, no doubt, but if support at 90c were to be compromised, we could see unit price hitting 88c or 87c if the Fibo lines are anything to go by. At 88c and 87c, we would be looking at a distribution yield in excess of 10% per annum and I would not be able to resist buying more.

Finally, I loaded more units of First REIT. If you refer to my last blog post on the REIT, you would see that I drew 3 horizontal lines at 77c, 76c and 74.5c. These were the supports I identified. The buy orders I put in at all three levels were filled today.

A these prices, we are looking at a distribution yield of about 8.5% on average. With more acquisitions in the pipeline, distribution yield could increase and the very low gearing the REIT currently has means a lower chance of equity fund raising.

Could we see price going lower to test 72.5c or 71.5c? We could. Then, I would buy again.

STI drops 3.4% to 2,891.86 at closing
Monday, 08 August 2011

© 2011 - The Edge Singapore

CapitaMalls Asia: Did I panic and sell?

CapitaMalls Asia did not start the day higher than the closing price of the last session. So, the bullish reversal signal formed in the last session failed to deliver and price touched a lower low of $1.21.

So, did I panic and sell? No, I only sell when prices test resistance, not when they are going lower. Downtrends are rivers of hope.

The MACD still looks like it could form a positive divergence although it would look less probable with each successive down day. Trading volume is lower today as price moved lower, suggesting that there is some fatigue on the part of sellers.

Indeed, a cross between a white hammer and a white spinning top was formed at the end of the session. Another reversal signal. We could see a rebound in the next session and a gap close at $1.325 could happen. If that were to happen, I would reduce exposure to this counter.

Waiting to increase exposure to AIMS AMP Capital Industrial REIT and First REIT.

Continuing from my last blog post, which I said we should get ready and be greedy, I am interested in accumulating more units of AIMS AMP Capital Industrial REIT and First REIT as well if prices should weaken in the next few sessions.

AIMS AMP Capital Industrial REIT, as mentioned in my last blog post, has the honour of closing with its unit price unchanged in a sea of red in the last session.

I suppose Mr. Market recognises the REIT's stronger numbers and astute management. However, Mr. Market is also known to be whimsical. If there should be a sell down, I am ready to buy more. Buy? At what price?

Since April, price moved higher as the MACD formed lower highs. A negative divergence. So, buying recently at 22c or 22.5c would have been unrewarding. In fact, selling some would have been a good idea. A correction is to be expected.

Where is a strong support? I see 20c as a very strong support. Apart from being a nice round number, it is also where we find the 138.2% and 150% Fibo lines approximating, both golden ratios.

Fundamentally, 20c would be a very nice price to add to my long position as well. That would give a distribution yield in excess of 10% per annum and it would be purchasing at a 30% discount to NAV.

Regular readers would remember that I divested some of my investment in the REIT recently as I balanced its weighting in my portfolio with that of Sabana REIT. With its stronger numbers which includes a higher DPU and plans to redevelop 20 Gul Way, accumulating on weakness is what I will be doing.

However, many are also queueing to buy at 20c. So, one bid higher? 20.5c? Why not?

As for First REIT, its very low gearing and defensive quality of its assets are very attractive. The management also has a very good track record to boot. Closing at 79c, it is now offering a distribution yield of more than 8% per annum once more.

The uptrend on the MACD has been broken in the last session. Could price go lower? It could and if it does, I expect strong support at 77c next. That is a natural support level as it was the top of an interim basing process. It is also where the rising 100dMA will be approximating soon. Buy more at 77c? Probably.

Related posts:
AIMS AMP Capital Industrial REIT: Higher DPU and 20 Gul Way.
First REIT: 2Q 2011 results.

STI down 3.6% on heavy selling! Be fearful? Get ready and be greedy!

Today, almost all of the counters in my watchlist registered a loss. Almost? Yes, although none of the counters registered an increase in share price, one counter closed unchanged. That honour goes to AIMS AMP Capital Industrial REIT.  This demonstrates the relative resilience of the REIT's unit price. Given the bloodbath seen in the stock market today, this is impressive.

The action in the stock market was so exciting that I actually wrote two blog posts in the late morning today. There was a lot of fear to the point of being petrifying. However, if we have already planned for a scenario like this, just execute the plan and there is really nothing to fear.  What? Nothing to fear? Yes, why fear opportunities to collect on the cheap?

In my opinion, the only people who would fear a sharp decline in the stock market are people who are fully invested in the stock market and who

1. Borrow money to invest.

OR

2. Use money which they need for other purposes in the near future to invest.

If we are 50% invested or less and if we are not using borrowed funds or funds we need in the near future, I do not see why we should panic. Stay calm and rational.

As revealed in my two earlier blog posts today, I bought more units of Sabana REIT at 92c and more shares of CapitaMalls Asia at $1.265. Could prices go lower next week? They could, of course. Who can be sure?

Looking at CapitaMalls Asia's chart, we see a huge gap down at the start. Price hit a low of $1.25 before closing at where it started the session at $1.28. That is a nice long legged doji and a bullish one too. It is a bullish reversal signal.

In case you are whooping for joy, remember that signals could fail. If we see price opening higher than $1.28 in the next session, the signal is most probably confirmed and we could see price closing the gap at $1.325. Otherwise, be prepared for possibly more downside.

Sabana REIT's unit price also gapped down in the morning but by the end of the session, it closed at 92c, the same price it started the day at, forming a dragonfly doji in the process.

Volume was relatively high and yet volatility was very low as we saw units changing hands at 92c and 91.5c only. This says something about support for the REIT. If its unit price should retest the 90c low, I will probably buy many more units.

Stay calm and get your warchests ready. There could be many more buying opportunities if the selling persists. Good luck.

Related posts:
A sea of red! Have a plan and execute it!
CapitaMalls Asia: Bought more at 161.8% Fibo line.

STI sinks 3.6% to 2,994.78 at closing
Friday, 05 August 2011

© 2011 - The Edge Singapore

CapitaMalls Asia: Bought more at 161.8% Fibo line.

Just two sessions ago, I bought shares of CapitaMalls Asia at $1.335. Then, I commented on the very high volume behind the long black candle and wondered if price could go lower.

I used Fibo lines to estimate where the stronger supports would be in case of further selling and $1.265 is where the 161.8% Fibo line approximates.

My overnight buy order at $1.265 was filled this morning as price gapped down following the drastic overnight sell off in the US and European stock markets.

$1.265 is beyond the lower boundary of the MA envelope and if volume remains relatively low at the end of the day, things would look more benign.

Panic and sell now? No.

A sea of red! Have a plan and execute it!

US stock market plunged 5% overnight. European markets plunged overnight. The Singapore market opened some 100 points lower. Such ferocity in selling, I have not seen in some time.

Panic is palpable. Fear can be petrifying. However, if we have a plan, fear could be less so.

My plan is to continue investing for income and I like AIMS AMP Capital Industrial REIT and Sabana REIT.

Today, I bought more units of Sabana REIT at 92c. Looking at the chart, 92c should be a natural support level but we have to see how it closes this evening.

If it is unable to close above 92c this evening, we could see price going lower to test 91c and 90c for support. I would buy more then. Good luck.

HPH Trust: 2011 Interim Financial Results.

On and off, I would look at HPH Trust because there seems to be so much interest in this business trust from readers. Anyway, as I invest primarily for income these days, HPH Trust fits into my strategy but is it attractive enough for me?

Before I continue, I will say that  I do not like the fact that it is denominated in a foreign currency and in US$ to boot. On my investment journey, I have only once bought a non S$ denominated stock, TCIL, and that was in HK$. It is a bit messy having to take into consideration exchange rates.

These days, with the S$ strengthening against the US$, chances of exchange rate losses are even higher. So, for me to be strongly interested in HPH Trust, there must be a bigger margin of safety. This, fundamentally, would take the form of a higher distribution yield at the most basic level.

HPH Trust released 2011 Interim Financial Results recently and declared a DPU of HK 14.3cents. It has a NAV/unit of HK$ 7.80.

Closing price on 3 August was US 73.5cents.

Now, isn't this one confusing counter? We have to contend with US$ and HK$. Of course, being in Singapore, we have to convert everything to S$. Wah, I am getting a bit giddy already!

US$1.00 = S$1.174
HK$1.00 = S$ 0.15056
(Source: UOB, 4 August 2011)

Unit price:
US 73.5cents = S$ 0.853

DPU:
HK$ 0.143 = S$ 0.0215

Well, let us see if HPH Trust is able to deliver the full year DPU of US 5.9c as per their forecast. This would be a DPU of S$ 0.0693 or a distribution yield of 8.12% at the unit price of US 73.5c.

If we were to believe that HPH Trust would deliver as per forecast, I would not enter at the current price either. Why? Well, I can get more than 9% distribution yield from Sabana REIT and AIMS AMP Capital Industrial Trust without all the messy foreign exchange calculations now anyway. A 8.12% yield from HPH Trust does not even come close.

Then, fundamentally, would I ever be interested in HPH Trust? If it were to offer a 10% distribution yield, why not? That would give me the larger margin of safety I am looking for. Everything else remaining equal, it would mean a unit price of US 59c before I get my feet wet. Wishful thinking? Well, I shall wait and see.

See financial statement here.
Added (1 Feb 17):

http://www.hphtrust.com/distribution.html

CapitaMalls Asia: TA and FA.

CapitaMalls Asia sank lower although it is still trading cum dividend. I added to my long position at $1.335/share today based on the following considerations:

1. Fundamentally, CMA has a NAV/share of $1.52. At $1.335, it is trading at a 12+% discount to NAV. CMA is likely to do better in time.

2. Technically, the MACD seems set to form a higher low as the counter's share price forms a lower low. A positive divergence is almost a given.

Flip side of the coin?

A. Fundamentally, CMA's increasing exposure in China is a double edged sword. China's efforts to temper inflationary pressures could lead to a slowing down in its economy which could affect CMA's business negatively as retailers feel less confident taking up more space in the malls.

B. Technically, after a gapping down and the formation of a long black candlestick on the back of very high volume, we could see price going lower in the next session. The selling pressure is very strong, no doubt about it.

In case we see a reversal in price action, we could expect gap cover at $1.395 to take place. A quick trade once again? Perhaps.

In case price declines further? Let me use Fibo lines to see where we might find stronger supports.

See how price hit the 123.6% Fibo line before closing a bit higher today? However, this is not a golden ratio and further weakness could see price testing $1.30 (138.2% Fibo line),  $1.285 (150% Fibo line) or $1.265 (161.8% Fibo line) for support.

Good luck!

Choppy, choppy, chop, chop.

Global stock markets weakened today after strengthening the session before on news that the debt ceiling in the USA would most likely be raised successfully. Why?

Fundamentally, raising the debt ceiling means that the USA would not default and they will be able to continue paying their bills. Sounds like a good thing. However, closer at hand are still many problems which are worrying Mr. Market.

1. US credit rating could still suffer a downgrade. This could make borrowings more expensive.

2. Manufacturing has weakened in global economies. This could make debt problems worse.

Read full article here.

3. With all eyes on China as the bastion of economic prowess, news that its manufacturing growth slowed in July tempered sentiments.

Read full article here.

In response to a reader who said that the USA is the strongest country in the world since the day he was born, I put forth the question as to whether it still is the strongest country in the world today.

It is clear to me that USA's strength is an illusion built on borrowed funds and borrowed time. In fact, Putin calls USA a parasite which is unable to live within its means.

"Putin was insistent Monday that the world should be seeking new reserve currencies for trade and savings." Read full article here.

What about the Chinese? They are the largest holder of US Treasuries worth some US$1.16 trillion (more than a third of its US$3.2 trillion reserves).

A declining US$ is most damaging for the Chinese and they are not impressed by efforts in the USA which it says "was hiding "risks and troubles" for the world economy" and that "its sovereign debt problems remain unresolved". Read full article here.

If anything, global stock markets are likely to continue seeing choppy action. It is important for us to remain calm and collected in the midst of this.

I am ready to add to my long positions if I see value. If there should be some crazy run up in price, I am ready to reduce my long positions.

Anything else? I think that's about it for retail investors like us.

Sheng Siong's IPO and the American debt ceiling.

I received two emails today from readers. The first asked me about Sheng Siong's IPO and the second commented on how the Americans have come to a compromise on raising the debt ceiling.

To the first reader, I said that it has been a long time since I took part in any IPO, believing that they do not offer good deals for investors most of the time. I rather wait and see if I could get the shares when they provide better value for money.

Many believe Sheng Siong's business to be recession proof and that is probably correct. However, the business might be recession proof but the share price could be less so.

The business could be quite robust but negative sentiments in the broader market could drive prices down all the same during hard times. Mr. Market is given to extreme emotions, after all. I would buy if the shares become undervalued.

To the second reader, I said that I would not be too sure about the Americans raising their debt ceiling successfully until President Obama signs on the dotted line. After all, remember how "rebels" within the Republican ranks were unhappy with the compromises made?

Now, how will the Democrats react to some concessions made by President Obama to the Republicans? Apparently, he gave in and agreed not to increase taxes on the rich.

Of course, I am playing the Devil's advocate here but, like I always say, never say never. We can only hope for the best.

Read article here.

Tea with AK71: Tartlets and a view of the city.

Life is unpredictable. Sometimes, we get nice surprises and, sometimes, we get nasty ones. Today, I had a surprise which resulted in me being quite free of work. So, I suppose this is a nice surprise. However, I found myself wondering what to do today.

I did the laundry in the morning, had breakfast with a friend in town and came back home. After washing up, I checked my blog, replied to comments and emails. Hmm... What to do next on a restive Sunday?

I took a couple of photos with my trusty IXUS and here they are:

I like these tartlets from Arnotts's but they are pretty expensive. So, I hardly buy them. However, a budget store that I visit regularly at Redhill Market was selling these at $1.05 per packet (150 gm). Irresistible!

Three flavors available: Blueberry, Raspberry and Strawberry. Er.. you don't see the strawberry flavored ones in the photo because those tartlets already found their way into my stomach.

This photo was taken from my balcony. I like being near the city but not in the city, if you know what I mean.

It is a nice view of the city, isn't it? I will miss this view as I have sold my place and moved back to stay with my parents in the western part of Singapore.

Not going to think of investments and finance for the rest of the day. Maybe, I will take a nap. Have a good Sunday, everyone. :)

U.S. Senate scuttled emergency legislation!

So many want to have a two party government in Singapore. Personally, I always say that if something is not broken, don't fix it. Seeing how the two parties in the US government are acting, I am thankful Singapore is not on the same boat.

With National Day just round the corner, a week after the 2 August deadline for the US to raise its debt ceiling, I am counting our blessings. We never know we have a good thing until we have lost it. Let's not lose it.

Latest update on the US situation:

In an unforgiving display of partisanship, the Republican-controlled House approved emergency legislation Friday night to avoid an unprecedented government default and Senate Democrats scuttled it less than two hours later in hopes of a better deal.

"We are almost out of time" for a compromise, warned President Barack Obama as U.S. financial markets trembled at the prospect of economic chaos next week. The Dow Jones average fell for a sixth straight session.

Lawmakers in both parties said they were determined to avoid a default, yet there was little evidence of progress -- or even significant negotiations -- on a compromise during a long day of intense political maneuvering...


...Administration officials say that without legislation in place by Tuesday, the Treasury will no longer be able to pay all its bills. The result could inflict significant damage on the economy, they add, causing interest rates to rise and financial markets to sink.

Executives from the country's biggest banks met with U.S. Treasury officials to discuss how debt auctions will be handled if Congress fails to raise the borrowing limit before Tuesday's deadline.

But Carney said the administration did not plan to provide the public with details Friday on how the government will prioritize payments...

Read full article here.

How will a default by the US affect Singapore?

I read an article in the newspapers today and it confirmed my fears that Singapore could once again suffer a severe downturn if the US government does not raise its debt ceiling come 2 August. Many would have to face extreme hardship once more.

Salient points in the article:

1. US banks account for some 15% of domestic lending in Singapore.

2. If US defaults, US banks will withdraw their funds from Singapore.

'Should the US default and a credit crunch happen, it would make the fall of Lehman look like a picnic,' Robert Prior-Wandesforde, Credit Suisse.

I remember what happened when Lehman Brothers collapsed. The stock markets went into tailspins. All the buyers disappeared. Real estate was similarly affected as prices of condominiums here in Singapore declined some 30% in some cases.

I remember at the time, Soleil at Sinaran was newly launched and many buyers actually forfeited their 5% deposits and did not exercise their options to purchase. It was that bad.

My Geology professor once said to us that economists have made a mess of the world and it would be impossible for me to comprehend the mess totally. Thus, it would suffice for me to know what actions to take to position myself for whatever eventuality.

If the debt ceiling should be raised, the party will continue. Inflation could get worse and the stock market could see a new high. What to do? Stay invested.

If the debt ceiling fails to be raised, the party will end. Credit will become hard to come by or at least be more expensive. This affects costs in all its forms and will affect all businesses and individuals. What to do? Divest.

We should take a position that will allow us to benefit if either scenario should come to pass. How do we do this? The simplicity of my answer might just disarm you: be 50% invested.

Good luck.

Read article in The Straits Times here.

Debt ceiling gridlock: Who will get paid?

Banks are slashing jobs!

Banks are retrenching. Should we be worried? Is a recession round the corner? Your guess is as good as mine. Best to have our emergency funds ready just in case. If we are thinking of buying shares on the cheap, make sure we have a war chest ready as well. Oh, make sure it is not empty. ;)

HSBC will slash more than 10,000 jobs as part of the global banking giant's recently announced cost-cutting drive, a report said.

Broadcaster Sky News said senior executives at the bank "are close to finalising costs cuts that will result in thousands of jobs being axed across the bank's sprawling global empire."

The report on Wednesday said London-headquartered HSBC may chop more than 10,000 positions across its operations, citing unnamed sources.

A bank spokeswoman in Hong Kong on Thursday declined comment on the report.


Read full report here.

Swiss banking giant Credit Suisse said on Thursday that its second quarter net profit plunged 52 percent, adding it would cut about four percent of its workforce worldwide.

Net profit for the three months ending June fell to 768 million Swiss francs (US$957 million, 667 million euros) from 1.6 billion francs a year ago, amid "disappointing performance" by its investment bank unit.

Concerns over the European debt crisis and weakening global economic indicators led to weak client demand and a poor trading environment, said the group.


Read full report here.

Good luck to us all.

Cache Logistics Trust: 2Q 2011.

The decision to use funds from the partial divestment of Saizen REIT to invest in Cache Logistics Trust at the right prices a few months ago continues to be rewarding.

The management has declared a DPU of 2.086c for 2Q 2011 which is much higher than the DPU of 1.71c the same quarter last year in 2010. At the high of 99c/unit hit this morning, the REIT had an annualised distribution yield of 8.43%. Income distribution will go XD on 2 August and is payable on 29 August.

Current gearing level is 29.1% and this will increase to 30.2% upon completion of acquisition of a warehouse facility in Loyang belonging to Air Market Express. This acquisition is expected to contribute 0.05c in DPU in time.

I also like how its cost of borrowing has come down with its all in interest cost now at 3.92% compared to 4.37% in the last quarter. This contributes to a higher level of distributable income.

Some other numbers:
NAV/unit: 88c.
Interest cover ratio: 9.2x


Interest cover ratio came down from 9.5x in the last quarter. This suggests that interest expense in dollar terms has gone up faster than net property income (NPI). However, at 9.2x, it is still much healthier compared to AIMS AMP Capital Industrial REIT, Cambridge Industrial Trust or even Sabana REIT. So, I am not unduly worried. Just have to keep an eye on things, as always.

See announcement here.
See presentation slides here.

Related post:
Cache Logistics Trust: 1Q 2011.

Sabana REIT: 2Q FY2011.

I have been accumulating units in Sabana REIT even after it went XD the first time round, convinced that it has many high quality assets and that the income distribution is sustainable for the foreseeable future.

Last night, it released results for 2Q FY2011 and results were largely in line. DPU of 2.18c was declared, slightly less than my expectation of 2.2c. At the current unit price of 94.5c, it means a distribution yield of 9.23%.

Some numbers:
NAV/unit: 98c.
Gearing: 25.1%
Interest Cover Ratio: 7.6x

Nothing exciting but I will be keeping an eye on gearing and interest cover ratio. Gearing increased by 0.2% while interest cover ratio went down from 7.9x to 7.6x. There was also a higher drawdown of rental support for 9 Tai Seng Drive. In the near future, these are perhaps not really big concerns but if they persist, they could be.

Better quality assets aside, if the management is not doing a good job, they could destroy a good thing. Well, we will have to wait and see. Meanwhile, enjoy the dividend.

See presentation slides here.

AIMS AMP Capital Industrial REIT: Higher DPU and 20 Gul Way.

AIMS AMP Capital Industrial REIT has once again delivered results which are above expectations. I was expecting a quarterly DPU of 0.5c but, instead, 0.53c has been declared. XD: 2 August. Payable on 14 September.

What's more? This is only 96.8% of total amount for distribution, not 100%. Annualised, it would be 2.12c which means a distribution yield 9.64% at the unit price of 22c/unit.

Gearing level has decreased to 30.4%.

Interest cover ratio has increased to 6.4x. It was 5.0x before.

NAV/unit is at 26.8c. So, the REIT is still trading at a significant discount to NAV.

It has been said before that many of the REIT's properties have great potential for redevelopment or Asset Enhancements as many of its properties have not maxed out their plot ratios. Unitholders have been waiting for this and today, the management announced that it will be redeveloping the property on 20 Gul Way.

20 Gul Way, currently with total gross floor area of 378,064 sq feet will become a five storey ramp up warehouse facility with total gross floor area of 1,159,536 sq feet! The total value of assets under management for the REIT will cross $1b upon completion of works in two phases!

Upon completion of both phases, everything else remaining equal, we are likely to see an increase in DPU per year by 0.293c if the redevelopment were to be funded 100% by debt. However, we must remember that it will take years to complete redevelopment work.

Phase 1 is estimated to take 15 months to complete while Phase 2 is estimated to take another 13 months to complete. The whole redevelopment is estimated to be completed in 2013 and is definitely a step in the right direction.

See 1Q FY2012 results here.
See announcement on 20 Gul Way here.

Noble Group: Another quick trade.

Technical analysis (TA) is dynamic. Day to day, charts have new information and TA will provide new insights.

Not too long ago, I wondered if Noble Group's share price might hit $1.90. Read blog post here.




If you guess that I must have been waiting to sell at $1.90, you are right.

However, doing a bit of charting last night revealed that we might not see $1.90 although there is still a chance we could.

The declining 20dMA is now at $1.89 while trading volume has dwindled lately.

Today, it hit a high of $1.875 before closing at $1.865, forming a white spinning top (almost) in the process.

There is obviously some struggle between bulls and bears at this level.





Half an hour before the market closed, seeing how $1.875 presented a respectable resistance and is only three bids from $1.89, I decided to divest at $1.87, selling straight instead of queueing at $1.875.

That is 4 bids below $1.89 but it gives me a gross gain of 5% in less than a fortnight.

It seems that I have made another quick trade after the recent one with NOL.

Conditions are not easy for long traders in recent months.






Counter trend trading demands that I stay nimble footed and less greedy.

A 5% gain here and there? Why not?

I am still learning.