Jade Technologies: Rights issue.

A friend asked me what do I think of Jade Technologies Holdings Ltd.  Apparently, it is issuing rights and my friend would like to have my take on this.  Frankly, apart from a faint impression that this company was involved in some scandal in the past, I do not know what it does.  So, I dug around for details.

It seems that the company is now investing in the production of titanium dioxide in China.  It has a substantial stake in Daqing XinLong Chemical Company Ltd, a titanium dioxide producer in China. The decision to move in this new direction has transformed Jade from a loss making company to a profitable one as it reported a profit of S$1.6m in its 3QFY2010 (ending June 2010) after experiencing losses in the first two quarters (and indeed for the last 9 years).  It would be interesting to see if it continues to be profitable by end of FY2010 (September 2010).  By all indications, it seems that it would be so.  See slides here.


As a result of its return to profitability, Jade’s Earnings Per Share (EPS) is now 0.02 cents for 3QFY2010, reversing from a loss of 0.10 cents in 3QFY2009. The Group’s Net Asset Value (NAV) per share also improved from 0.31 cents to 0.67 cents over the same corresponding period. Read announcement here.

Jade is currently trading at 1.5c. With a NAV of 0.67c, it is trading at more than twice its NAV. Assuming that its 4Q could turn in similar results as its 3Q (i.e. a net profit of S$1.6 million), it would mean a full year profit of >$2m.  Assuming that in FY2011, the company is able to replicate $1.6 million in profit every quarter, it would have a full year net profit of S$6.4m.  Based on approximately 2.461 billion shares in issue, it has a market capitalisation of S$36.9 million (at a share price of 1.5c) and we would have a forecast PE ratio of 5.77x.

What about the rights issue? The company is proposing 3 rights for every 4 shares owned.  For every 3 rights accepted and paid for, 1 warrant would be given free.  Price of rights at 1c each.  Warrants must be exercised within 2 years at a price of 0.3c each.  This effectively means that the number of shares in issue will double in the near future.  This means a halving of EPS and a doubling of the PE ratio, ceteris paribus.

Rationale of this exercise: The Company is currently exploring certain business expansion opportunities but none of these plans has progressed to a stage where they may be announced. The Company proposes to undertake the Rights Shares and Warrants Issue to raise funds and to strengthen the capital base of the Company for its expansion aspirations.  Read announcement here.

Anyone who is investing in this company and subscribing to the rights must be a firm believer that it could double (in order to keep its PE at the forecast FY2011 level), triple or quadruple its earnings (post rights and warrants) in the near future.

What's my take on MIT and GLP?

A reader sent an email asking me what is my take on the IPOs of Mapletree Industrial Trust (MIT) and Global Logistic Properties (GLP).  My reply was:

"I don't have enough data on hand to make an informed commentary on these.  That's why I have kept quiet about these although I have friends who would like me to blog about them.

"However, IPOs are not usually available at a bargain, especially in these bullish times. So, generally, I would avoid IPOs.

"With MIT, the expected yield of 7.6% seems ok. I do not know what is the NAV per share. I know it is using some of the proceeds to pay down debts to bring its gearing level to 30% to 35%.  Exact figures, I do not have.

"With GLP, it is being offered at a 10% premium to NAV. It does not even have any income distribution guidance. So, we don't know what is the yield.  What would be its proforma gearing level?  Too many unknowns. I would avoid."

Mapletree Industrial IPO priced at top of range. Mapletree Industrial will sell units at $0.93 each, which translates to an annualised dividend yield of about 7.6%.
Monday, 11 October 2010

© 2010 - The Edge Singapore

Singapore’s GLP confirms IPO price of $1.96 a share
Monday, 11 October 2010

© 2010 - The Edge Singapore

Saizen REIT's properties: Would I buy?

Saizen REIT reported on 8 Oct that they have managed to sell another property in its YK Shintoku's portfolio.  Villa Kaigancho was sold for JPY 250,710,000 (S$3.9 million) which was at a 3.9% discount to valuation. 

The proceeds would go to repaying partially YK Shintoku's CMBS. After this repayment, the remaining balance of the YK Shintoku CMBS is estimated to be approximately JPY 6.3 billon (S$99.1 million). See announcement here.

Saizen REIT has been announcing a slew of sales in recent weeks and I mentioned that this is a good sign as it signals the return of buying interest.  

Saizen REIT owns freehold residential real estate in Japan.  

I have also mentioned before that although the real estate values in Japan have been declining, rental rates have declined at a much slower pace. Buying residential real estate in Japan now and being a landlord is a very lucrative proposition.  

So, would I buy Saizen REIT's residential real estate in Japan, assuming that I have the spare cash and if I were allowed to do so under Japanese laws?  Without a doubt, I would.

Take for instance Villa Kaigancho located in Hakodate, comprising 50 residential units, 1 commercial unit and 24 car park lots. The buyer paid JPY 250,710,000 (S$3.9 million) for an annual revenue of JPY 41.4 million (98% occupied).  That is a gross yield of 16.5% per annum!  Remember, the property is freehold! 

In Singapore, if we invested S$3.9 million in a condominium, we would be lucky to get a 6% gross yield per annum!  Sadly, I do not have that kind of money.

Related posts:
Saizen REIT: Divestment of properties.

Golden Agriculture: CPO at a new high.

I am certain that price of CPO would go higher in time given all the economics which I have blogged about before.  Today, CPO price went to a new high of RM2,919, up RM159 or 5.76%.  I have been bullish on Golden Agriculture for the longest time given its inexpensive valuation and highly leveraged position to the price of CPO. I have made a few rounds of profits trading the shares of Golden Agriculture for more than a year now.

On 30 Sep, I mentioned that "56c is only one bid shy of 55.5c which is where we find the rising 200dMA which coincides with the uptrend support line.  This is, therefore, likely to be a rather strong support.  So, buying at 56c for anyone who would like to have a stake in Golden Agriculture seems fairly safe.  Personally, I am waiting for the dust to settle."  For those who went long at 56c, congratulations as Golden Agriculture broke out on extremely high volume today to touch a high of 61.5c before closing at 60.5c.

Unfortunately, Golden Agriculture's problems with the Roundtable on Sustainable Palm Oil (RSPO) and how it lost customers such as Burger King Holdings, Nestle and Unilever, who have said they will stop buying from Sinar Mas (which controls Golden Agriculture) because of environmental concerns, have cast a pall on an otherwise clearly undervalued proposition.

There is just too much uncertainty for my liking.  I rather err on the side of caution. By not having a substantial long position in Golden Agriculture anymore, I might not gain from any positive price movement but at least I would not lose money either.

Related posts:
Golden Agriculture: 56c support.
Golden Agriculture: Unable to break out.

Courage Marine: Steady as she goes.

On 30 Sep, I said "A friend asked me what I think of Courage Marine and I told him I like its numbers and I like how the BDI seems to have stabilised at $2,500 thereabouts.  I feel that Courage Marine shouldn't have bad news with regards to earnings. The main reason why I have not really talked about Courage Marine very much recently is the lack of anything newsworthy." Things have hardly changed since.

The BDI is currently at US$2,696 which is quite comfortable and at an investor meeting on Thursday, Chairman Hsu Chih-Chien said he was very bullish on the ability of China in particular to continue driving the market for bulk cargo going forward.

“Our Capesize vessel mainly transports coal, bauxite and iron ore while our four Panamax ships focus on thermal coal mainly for the energy needs of China. We feel there is huge potential for growth in the Chinese coal market,” he added.

“This country still relies on coal for the vast bulk of its energy needs. So if you want to know if I expect any slowdown in China’s coal demand, I would say – Not in my lifetime,” Mr. Hsu said.

My opinion that Courage Marine is a good investment at current prices has not changed and from what was revealed on Thursday, it seems that Courage Marine could continue to deliver a good set of numbers in time.  I remain vested.

Read complete article in Next Insight here.

Related post:
Courage Marine: Lengthy consolidation.

CitySpring Infrastructure Trust: Thoughts on divestment.

On 5 Oct, OCBC reported that they were suspending coverage on CitySpring Infrastructure Trust as they see limited positive price catalysts in the near term. Furthermore, Hydro Tasmania which is owned by the Australian government is proceeding with dispute resolution and is demanding for A$6.9m in commercial risk sharing mechanism (CRSM).

For a long time now, I have regarded my investment in CitySpring Infrastructure Trust as a mistake. I blogged about it in "High Yields: Successes, failures and the in betweens."

With a quarterly DPU of 1.05c, the yield is 6.94% at the current unit price of 60.5c.  As of 30 June 2010, it had S$1,450,941,000 in borrowings against S$2,014,838,000 of total assets. This gives a gearing level of 72%. This is being optimistic as intangibles account for S$432,026,000 of total assets. Yield is not fantastic and gearing level is extremely high.

Comparing CitySpring Infrastructure Trust with K-Green Trust, we see that the latter has a similar yield but with zero gearing, it is almost immediately apparent that K-Green Trust presents a more compelling proposition.

At CitySpring Infrastructure Trust's current unit price, removing it from my frozen portfolio would result in a small loss but with the many quarters of income distribution collected, I would probably end up with a small gain.  Time to close a chapter, I think.

View slides here.

Related post:
K-Green Trust: Possibly stabilised.

Genting SP: Bollinger bands narrowing.

The Bollinger bands are narrowing on Genting SP's chart.  This usually precedes a large magnitude price movement. Would it be up or down? Your guess is as good as mine.

Yesterday, I mentioned that "the 20dMA was breached as recently as last week (and) does not inspire confidence that it would be a strong support". Today, price broke under the 20dMA and it seems that $2.02 is now resistance but this needs confirmation. Price could retreat to the recent low at $1.85 which could act as immediate support. If that breaks, we could see the rising 50dMA as the next support.

The MACD continues to decline beneath the signal line in positive territory while the MFI has formed a lower high. The correction is in earnest but overall momentum is still positive.

Related post:
Genting SP: Fatigue.

Hock Lian Seng: Retreating.

On 5 Oct, I mentioned that there was "strong demand and accumulation but buying momentum (was) muted by strong selling pressure at resistance (32c)" and that "I sold some of my shares at the 32c target .... Although I still see strong support at 30c where we find the rising 20dMA, 30.5c could very well be resistance turned support."

Today, Hock Lian Seng retreated and closed at 30.5c, the support provided by the 20dMA. However, the retreating price is on the back of much reduced volume and does not worry me. Could the support at 30.5c hold? With the MACD on the verge of forming a bearish crossover with the signal line, we could see share price tested further on the downside.  This is especially true when we realise that the MFI has been entrenched in overbought territory for a few sessions now. This could be corrected in future sessions.  The RSI has formed a higher high which suggests to me that the buying momentum is intact.

What would I do? Notice that the 20dMA has been guiding the price of this counter higher? See the uptrend support is in between the 20dMA and 50dMA? This would be at about 30c.  The 50dMA is at 29.5c.  I would buy more at these price levels.  For anyone who is not vested but would like to be, buying some at the 20dMA (30.5c) could be a nice hedge.

Related post:
Hock Lian Seng: Target hit.

AIMS AMP Capital Industrial REIT: Resistance.

This REIT's price action is testing 23c resistance, the upper end of the old trading range (20c to 23c).  Looking at the trade summary, of the 58 trades done, more than half (36) were buy ups at 23c but the volume was only 260 lots out of a total of 2,339 lots which changed hands.  This suggests to me that the buy ups at 23c lacked conviction.  23c is still a significant resistance to watch, it would seem.

Could 23c be taken out? The MACD has completed a bullish crossover with the signal line in positive territory. The MACD histogram buy signal has been confirmed.  OBV is up, suggesting accumulation.  MFI has formed a higher low, suggesting that the longer term demand is intact.  There is a chance that 23c could be taken out.  Then, the next resistance would be the recent high of 23.5c.

With all the daily MAs rising gently, this REIT could be on a sustainable uptrend and I would accumulate on weakness.

Related post:
AIMS AMP Capital Industrial REIT: Good value.

Japanese Yen at 15 year high.

I have been following news reporting on the strength of the Japanese Yen as well as the actions taken by Prime Minister Naoto Kan's team.  I am, naturally, very interested in economic and financial news from the Land of the Rising Sun as I am vested in Saizen REIT.

I applaud Bank of Japan's (BOJ) decision to cut its interest rate to zero recently.  This would, in theory, make credit cheaper and more readily available in the country. This would encourage borrowing and could possibly give the economy a shot in the arm. However, taking note that the interest rate was near zero to begin with (at 0.1%), cutting its rate to zero could have limited positive effects.

For investors in Saizen REIT, a strong Yen is good because we receive income distributions in S$. However, a strong Yen is not good for Japan as, being an exporting economy, a strong Yen reduces Japanese companies' competitiveness. As Japanese MNCs repatriate earnings back to Japan, a stronger Yen reduces the value of repatriated earnings. A stronger Yen could also propagate the deflationary spiral which Japan is suffering from.

While, as investors in Saizen REIT, we want to have a strong Japanese Yen, we want it strong enough to give us good returns (i.e. an attractive yield on our investment) but we do not want it so strong as to jeopardise the well being of the Japanese economy as that would, in time, have negative ramifications for Japanese residential real estate.

Latest update:
The dollar was trading at 82.36 yen in Tokyo midday.
08 October 2010 1231 hrs, CNA.

Related post:
Japan's debt issue and Saizen REIT.

AIMS AMP Capital Industrial REIT: Good value.

On 28 Sep, I mentioned that I bought more units at 21.5c believing that the REIT still offered good value at this price with a yield of 9.67%.  I also said that "21.5c is psychologically important as it is the midpoint of the old trading range of 20c to 23c".

Today, we see some quiet buying up in this REIT. Of the 2,085 lots which changed hands, 1,672 lots were bought up at 22.5c. Technically, this has created a buy signal in the MACD histogram. The MFI has just dipped into oversold territory while the RSI is bordering on oversold.

There are some who believe that the price would suffer on the 15th when the rights units commence trading with pessimistic forecasts of as low as 20c. If people are willing to sell at 20c, well, I am willing to buy as that would give me a yield of 10.4% per annum.

Related post:
AIMS AMP Capital Industrial REIT: Cheaper please.

Genting SP: Fatigue.

Price gapped down today and formed a doji, closing at $2.03. It is quite obvious now that a lower high was formed yesterday and price is being supported by the 20dMA today. That the 20dMA was breached as recently as last week does not inspire confidence that it would be a strong support.

The MACD histogram has turned red, a sell signal, while the MACD continues its decline beneath the signal line in positive territory. The correction has resumed. MFI and RSI both formed lower highs which suggest reduced demand and slowing buying momentum. OBV suggests ongoing distribution.

Unless there is a sudden spike in volume in buying up, the odds are that prices could move lower and the next support, if $2 should break, is at $1.85.  Of course, just as prices do not move up in a straight line, prices would not move down in a straight line either. There is always a river of hope.

K-REIT: Immediate target.

I suggested that K-REIT's price action could be falling into trading bands.  If we look at the chart, it seems quite obvious.  Today, price traded at and above $1.34, the resistance identified on 14 Sep when I said "K-REIT seems to be trading in a 6c trading range recently: $1.16 to $1.22 and $1.22 to $1.28".  I also said "in the event that $1.28 resistance is taken out, one could therefore expect $1.34 to be the next resistance level."

With $1.34 now possibly resistance turned support, the next resistance level should be at $1.40.  This is likely to be a stronger resistance level as it is also a round number.  Fundamentally, at $1.40, K-REIT would be trading at a mere 4.8% discount to NAV and its yield would be pretty low at 3.8%. I would probably do a partial divestment if price does test $1.40.

Related posts:
K-REIT: Moving into the next band?
FCOT, CCT and K-REIT.

Buying gold? Wait for a correction.

Jim Rogers predicts "more turmoil" in the currency markets, more problems in the stock market, weakness in bonds and, ultimately, inflation.

 
Posted Oct 06, 2010 07:30am EDT by Aaron Task

"Gold could correct for a few months [but] the bull market in gold is not over - far from it," he says. "I'm much more bullish on agriculture than I am even on gold. I own both."

In the meantime, he owns the Swiss franc, euro and yen but is not actively short any currencies, including the greenback.

In case of a correction, I see immediate support at US$1,250 an ounce, followed by US$1,200 an ounce.

Related post:
Gold can double from here over the next 5 years.

FSL Trust: Approaching target.

On 9 August, I said that "I also have some units which I bought in the recent crash. Why? I explained that the purchases were made based on TA and are for a trade. Looking at the charts, FSL Trust's price has not just found a floor, it has most probably bottomed.  So, would I sell at the bottom?  No." and that "From a FA perspective, it is true that FSL Trust has very high risks and its propects seem bleak in the longer term but would it go belly up in the next few months? Rather unlikely as the world economy is still on the mend and the fortunes of the shipping industry are looking up."

On 4 October, I said "46c is still the resistance to watch although it was briefly taken out today on higher volume. Eventual target remains defined by the descending 200dMA, currently at 50.5c."

Today, a white candle was formed as price closed at 47.5c.  46c could possibly be resistance turned support and we are a step closer to the eventual target. MACD has been rising in positive territory. MFI has formed higher lows and higher highs. Things are looking benign. However, volume is lacking suggesting that a lack of sellers rather than an abundance of buyers is the reason behind the price appreciation. This puts into question the sustainability of the recent buoyant price action.

Related posts:
FSL Trust: Where to from here?
FSL Trust: Challenging resistance.

Gold and silver: New highs.

"Gold, up 2pc this year, is heading for its 10th consecutive annual gain, the longest winning streak since at least 1920. On Tuesday, bullion for immediate delivery added as much as $13, trading at $1,326.97 an ounce in early London trading....

"Also on Tuesday, silver advanced to a 30-year high, increasing 1.3pc to $22.2319 an ounce – the highest level since September 1980. "

Read complete article here.

Related post:
Gold can double from here over the next 5 years.
Buy more silver on weakness.

ASTI: Testing support at 11c.

ASTI's share price tried unsuccessfully in earlier sessions to stay above the 12c resistance. Today, share price closed at 11c amid weakening technicals.  The MACD just completed a bearish crossover in positive territory.  RSI is testing support at 50% which suggests weakened buying momentum.

11c is where we find the rising 50dMA.  A stronger support would be at 10.5c which is where we find the rising 100dMA which coincides with the uptrend support line. I believe that the fortunes of the semi-con industry would continue to improve and would, therefore, accumulate if ASTI's share price should retest support at 10.5c.

Related posts:
ASTI: A doubling of share price in time.
ASTI: Breakout, almost.

Hock Lian Seng:Target hit.

On 27 Sep, I mentioned that "A support seems to have formed at 30c for this construction stock.  Further upside would give a target of 32c." Today, Hock Lian Seng's share price touched a high of 32.5c before closing at 31.5c as volume exploded.

The MACD completed a bullish crossover in positive territory as the MFI spiked into overbought territory while the OBV turned up sharply. The RSI, however, is somewhat lukewarm and has yet to break out from a series of lower highs.  This coupled with a white candle formed today with a long upper wick puts into question the sustainability of today's upmove in price. Interpretation: Strong demand and accumulation but buying momentum is muted by strong selling pressure at resistance (32c).

I sold some of my shares at the 32c target today. Although I still see strong support at 30c where we find the rising 20dMA, 30.5c could very well be resistance turned support. I would buy again if it gets to those levels. Immediate resistance remains at 32c and if that breaks convincingly, the next target is at 34c.

Related post:
Hock Lian Seng: 32c target.

Raffles Education: A trading opportunity.

I have not done any trading for a long time.  Today, I took a look at Raffles Education's chart and it looks to me like a positive divergence is forming between the downtrend in price and the MACD.  As price formed lower highs, the MACD has been forming higher lows.  Last week, a higher low in price was formed.  This is a positive sign.

Look at the MFI and we see higher highs which suggest increasing demand. Look at the OBV and we see accumulation strengthening.  Look at the RSI and we see higher highs which suggest positive buying momentum.  These signs point towards a possible reversal of the downtrend.

Also, as price declined in the recent sessions, volume similarly declined which suggests that a classic low volume pullback is taking place. There is an absence of strong selling pressure.

Having said all these, immediate resistance at 29.5c has to be taken out convincingly.  If this is achieved, I see an eventual target of 34c (161.8% Fibo and also defined by the descending 200dMA) with some resistance at 32c.  Good for a trade? Perhaps.

Related post:
Raffles Education: Downtrend in force.

FSL Trust: Challenging resistance.

On 27 Sep, I mentioned that "Trading above the gap which was closed at 43.5c now brings the next resistance at 46c to play.  I see an eventual target as defined by the descending 200dMA, currently at 51c."

FSL Trust has been experiencing buoyant price action since then and 43.5c has been established as immediate support.  This is likely to be underpinned by the rising 20dMA. 46c is still the resistance to watch although it was briefly taken out today on higher volume. Eventual target remains defined by the descending 200dMA, currently at 50.5c.

Related post:
FSL Trust: Rising from the depths.

Genting SP: 38.2% Fibo.

On 1 Oct, I mentioned that "I feel that a resumption of a downward movement towards the 50dMA is likely and that further upside could be capped by the 38.2% Fibo line at $2.05."

Today, an effort to further advance the rebound in the last session sputtered as price hit a high of $2.10 only to retreat to close to $2.04, 1c lower than the resistance identified at $2.05. A white candle with a long upper wick was formed, suggesting the presence of strong selling pressure as price tried to move higher.

Immediate support is now at $2.00, underpinned by the rising 20dMA, on top of being a many times tested support and resistance level.  Immediate resistance remains at $2.05.


Related post:
Genting SP: A strong rebound.

Increasing demand for S-REITs.

Morgan Stanley says that S-REITs will benefit from low borrowing costs and a stronger S$. The high dividend yields make S-REITs attractive with limited downside.

Singapore’s high-yield REITs attractive. Yield spreads for REITs will remain high while interest rates are low, meaning cheaper funding costs for the trusts, Morgan Stanley says
Monday, 04 October 2010

© 2010 - The Edge Singapore

Although Morgan Stanley specifically mentioned Mapletree Logistics Trust and Ascott Residence Trust as being upgraded to Overweight, I believe that smaller S-REITs with even higher yields will get some attention soon as well. It is a matter of time and I will be patient.

Today, Saizen REIT saw its 15.5c sell queue bought up to the tune of 6,068 lots. There were three trades which were buy ups of 1,000 lots each. Could this REIT be attracting the interest of some deep pocketed investors?

Incidentally, I have accepted and paid for the rights of AIMS AMP Capital Industrial REIT this evening. I also applied for some excess rights.  Hope I get some. To fellow unitholders, please remember that the deadline is 7 Oct (Thu), 9.30pm for applications by ATM.

Related posts:
Office S-REITs VS Industrial S-REITs.
AIMS AMP Capital Industrial Trust: Rights issue.
Saizen REIT: Better than expected DPU.

Do you want to be richer?

The original title of this blog post was "Do you want to be rich?".  Then, I decided to change the last word as it would be more inclusive.  Almost everything is relative in this world, after all.  Few things are absolutes, such as death.  Even then, there could be debates on the different degrees of death. 

Oh well, modern society does complicate things.






This blog post was inspired by a recent late night chat in LP's infamous cbox. I was just sharing my ideas on how we could generate passive income from the stock market when a person mentioned that not everyone has $500k to begin with. 

Well, unless we are very lucky, I doubt anyone would have that kind of money from day one.  Then, a long discussion ensued in which I felt there wasn't any real engagement. 

Anyway, if someone feels that way, it could be possible that there are others who feel the same way.  Hence, the genesis of this post.

Let's go back in time. In an earlier blog post, I mentioned a personal aim for a minimum of $50k passive income from the stock market. I said that we just need $500k invested with a 10% yield.  I gave examples of REITs which I was vested in which I felt could help deliver this passive income target.  These are REITs which I blog about quite a lot and readers who are considering my strategy could be kept updated.






Question: How on Earth could an average worker amass $500k in capital through working and by being frugal? The operative word being "average". 

An example was given on how a Diploma holder making $2k a month would find it hard to achieve this. 

Well, if we were making $2k a month, we would have to make more money more quickly towards this end. 

However, if we did not do anything to change the status quo, we would continue making only $2k month. 

We cannot logically expect an improvement in our circumstances if we do not make an effort to change for the better. 

So, stop being "average".

For example, a certain full time private tutor I know managed to save $50k per annum! That's inspirational, if I do say so myself. He probably took on more students and worked harder. He should perhaps up his fees but that's just me. All of us could make incremental changes to our lives to be more productive.

What is the first step towards passive income generation? 

Find a job that pays us as much as we are worth or more than we are worth. Do not shortchange ourselves.  

If we are worth more than $2k a month, find people who are willing to pay us more.  If we are only worth $2k a month, find ways of increasing our value. Upgrade ourselves.

I would like to share another example here. I had a fellow soldier for a student when I was in the Army.  I gave him free English classes because he was not from a well to do family and the evenings in camp were pretty free anyway.  He took his 'O' Levels English paper twice before and he could not make the grade but he did not give up. 

I was then 24 years old and had just graduated from university but I was quite a bit older than he.

After a few months of lessons, I advised the student that perhaps there was another route that he could take. He should spend some time thinking of what he was really interested in and what he was good at.  Doing English was an uphill task for him.  

When I met him again a few years ago, he told me he was doing some IT stuff which involved laying cables and networking workstations. It was all Greek to me but he was doing very well with a pay of more than $6k a month! This is a success story which I still share with my students today.






Find your strengths and build on them.

Unless we are physically or mentally disadvantaged, if we would like to be richer, we could find ways of doing it.  

If we thought that making $2k a month was what we were supposed to make and that it was our fate, then, it would become a self-fulfilling prophecy. 

If we wallow in self-pity, the only people who would show us sympathy would be people with the same mindset. It becomes a reinforcing vicious cycle! 

We build our own traps!







If we want to be richer, make it happen. How? The will must exist and it must be strong. Where there is a will, there is a way! This rings true.

When we make money, we must know how to save money. Recognise what are our needs and what are our wants. Fulfill the needs and delay gratification of the wants. Save as much as we can. 

Once we have an amount of money which could cover a year or two worth of routine expenses, we can start thinking of investing the rest.

Must all that $500k capital be from working hard and being frugal? 

Going back to an earlier blog post, I mentioned that when we invest in income generating assets, the passive income generated could be re-invested or it could be spent. If we re-invest, our targets (be it $500k or $100k) could be achieved sooner.  

This is the power of compounding.

To illustrate the power of compounding, let me use an institution in Singapore that we are all familiar with: the CPF.  When I first started working, I was thinking of how probable it was for me to meet the CPF minimum sum set by the Singapore government by the time I retire. 

Most of our contribution goes into the Ordinary Account (OA) while a much smaller sum goes into the Special Account (SA). 

At the face of it, 2.5% interest for the OA and 4.0% for the SA have only a 1.5% difference per annum but think of it a bit more and we realise that that the SA pays 60% more in interest compared to the OA!  Furthermore, if we compound 4% per annum, it becomes a very powerful force!

So, I voluntarily transferred my OA money into my SA for the first few years of my working life. Then, I let the government and time help me meet the minimum sum required through compounding 4% interest per annum.  Every 10 years, the SA money would grow 50% even if the monthly contributions should stop.





Do you want to be richer? 

Obviously, you do, otherwise, you would not have reached this part of the post. How soon do I think we could amass S$500k from the day we start working? 

To give a specific time period is difficult because it would depend on each person's circumstances but my point is that if we have the will to achieve it, and if we are physically and mentally whole, we will find ways to do it.


Related posts:
1. How much to have or how much to use?
2. 7 steps to creating passive income from stocks.
3. Building and preserving our wealth.
4. A minimum of $50k in annual passive income.
5. Money management: Needs and Wants.

Singapore Flyer: Halloween.

I took the Flyer once before with my family and really enjoyed it. I thought that the ticket was a bit pricey but it was a family outing and it is the tallest observation wheel in the world, well, until the one in Beijing is completed, that is.

I was just surfing for promotions and good deals when I stumbled upon this.  On 16,17, 23, 24, 30 and 31 October 2010, the Singapore Flyer will have special attractions which are free in nature: "Spooky Rainforest" and "Halloween Photo Stand-in".

Read about it here.

New highs in September.

I just did a blog stats update in August and was planning to do another update in December which would make my updates thrice yearly.  However, September's numbers surprised me so much on the upside that I just have to blog about it.  Numbers improved and made new highs in all three categories. In September, my blog registered 38,987 page loads, 22,712 unique visitors and 11,841 returning visitors.

On top of these numbers, Alexa reported that readers are spending a lot more time reading my blog. This is a happy development as it probably means that I have readers who are combing my blog for older posts on subjects which interest them.  A summary from Alexa says:

Singaporeanstocksinvestor.blogspot.com has a three-month global Alexa traffic rank of 702,778. Visitors to it view an average of 2.7 unique pages per day. The fraction of visits to the site referred by search engines is approximately 2%. 

Singaporeanstocksinvestor.blogspot.com has attained a traffic rank of 2,437 among users in Singapore, where almost all its audience is located. Visitors to the site spend approximately two minutes on each pageview and a total of nine minutes on the site during each visit.

To everyone who has made my blog as popular as it is today, a big "THANK YOU". :-)

Related posts:
Blog statistics: January to August 2010.
Alexa (Part 2).

Genting SP: A strong rebound.

STI increases 1.1% to 3,130.90 at closing. The measure advanced 1.2% this week, its sixth weekly gain. Three stocks rose for each that fell on the 30-member gauge.
Friday, 01 October 2010

© 2010 - The Edge Singapore

Together with the STI's stellar performance, Genting SP staged a strong rebound.  The MACD histogram turned green, a buy signal but the rise in price was not accompanied by heavy volume.  This suggests that price rebounded on short covering and that it rose because of a lack of sellers and not because of an abundance of buyers.

This rebound was probably a good chance for bulls to reduce exposure. Personally, I feel that a resumption of a downward movement towards the 50dMA is likely and that further upside could be capped by the 38.2% Fibo line at $2.05. However, with an upgrade by OCBC, I wonder which way it would go.  It is a grand tug of war between research houses.

Genting up on short-covering, OCBC upgrade
Friday, 01 October 2010

© 2010 - The Edge Singapore

Golden Agriculture: 56c support.

Golden Agriculture seems to have found support at 56c. As the falling MACD made contact with zero, the histogram turned green: a buy signal.  Today's white candle is on the back of relatively low volume and that to me is not convincing of a recovery. However, this does not mean that price could not enjoy a respite and rebound.  If a rebound takes place, it would confirm the buy signal on the MACD histogram but could meet with immediate resistance at 57.5c.

Well, 56c is only one bid shy of 55.5c which is where we find the rising 200dMA which coincides with the uptrend support line.  This is, therefore, likely to be a rather strong support.  So, buying at 56c for anyone who would like to have a stake in Golden Agriculture seems fairly safe.  Personally, I am waiting for the dust to settle.

Related post:
Golden Agriculture: Breaking support.

Courage Marine: Lengthy consolidation.

A friend asked me what I think of Courage Marine and I told him I like its numbers and I like how the BDI seems to have stabilised at $2,500 thereabouts.  I feel that Courage Marine shouldn't have bad news with regards to earnings. The main reason why I have not really talked about Courage Marine very much recently is the lack of anything newsworthy.

Courage Marine's share price seems to be going through a lengthy consolidation period.  Nothing exciting either way. OBV is flat which indicates a lack of any distribution or accumulation activities. Seems like status quo to me. The MFI still suggests the presence of demand while the RSI has bounced off the 50% mark which suggests some buying momentum is present.

The 20d, 50d and 100d MAs have all merged at 19c.  19c could either become a strong support or a strong resistance in such a case. Which way would it go? Well, we have a buy signal on the MACD histogram and with the MFI and OBV more positive than negative, I would hazard a guess: up. In such an instance, I see resistance at 20c, 21c and 23c.  Good luck to my friend and fellow shareholders.

Related post:
Courage Marine: Awakening.

Genting SP: An orderly retreat.

No one likes to see his investment plunging in value but anyone who bought some Genting SP's shares towards the end of its run up to $2.18 could be nursing a huge paper loss now, if he did not cut his losses.

On 28 Sep, I mentioned that "we could see more selling pressure in the near term.  If $1.93 gives way, I see the next support level at $1.84, give or take a cent. Strong support should be provided by the rising 50dMA which is currently at $1.60." Today, price action formed a low at $1.85, just a cent shy of $1.84, before closing at $1.86.  That >5m shares were sold down at $1.86 post closing at 5.05pm suggests more downside to come.

The momentum oscillators are firmly downward moving and the OBV shows clear distribution underway.  It would seem that the 50dMA would be called upon as support in due course. What price would that be at?  If I were to hazard a guess, it could be close to $1.70 next week.  That is where we find the lower Bollinger band and it also seems like a natural candlestick support.  Of course, a nice round number is mostly psychologically important.

Do I expect any panic selling? That's a tough one to answer but looking at the volume of trade as the stock was sold down this week, it looks like an orderly retreat to me.  No spike in trade volume.  So, this is perhaps a consolation for shareholders.

Related post:
Genting SP: CEO pares stake.

Genting Singapore off 1.1%; Down 12.8% since peak.
Besides current broad market pullback, shares also bogged down by Macquarie's downgrade to Neutral from Outperform with lower target of $1.75 vs $2.10, citing market's "overly optimistic growth assumptions".

Thursday, 30 September 2010

© 2010 - The Edge Singapore

CIT: Show me the numbers.

I was asked by some if the proposed purchase by Cambridge Industrial Trust (CIT) is a good move. I went to SGX and downloaded the document on: PROPOSED ACQUISITION OF 25 TAI SENG AVENUE.

The property is valued at S$21.5m but is being sold at $21.1m to CIT and CIT has "sufficient financial flexibility and capacity to fund the Acquisition which is expected to complete by 4th quarter of 2010" which I interpret to mean that they do not need to do a share placement or rights issue.

I would rather like to have some numbers so that I could see if this purchase is income yield accretive but unfortunately, these numbers are not available.  Instead, the managers just say:

"The Manager believes that 25 Tai Seng Avenue is a quality industrial asset that has been purchased at an attractive yield which is comparable or better than yields of recent  transactions in the market.

"Additionally, the acquisition of 25 Tai Seng Avenue will further reduce the reliance of CIT’s income stream on any single asset and tenant, increase the weighted average lease tenure of CIT’s portfolio as at 30 June 2010 and reduce CIT’s lease expiry concentration in 2013 and 2014."

Can't do much analysis without the necessary numbers.

Saizen REIT: Divestment of properties.

Saizen REIT has managed to divest another four properties in its YK Shintoku portfolio.  A friend asked me if this is a good thing and my answer was an unequivocal "yes".  Why?

1. The plan to divest some properties of YK Shintoku to reduce the borrowing amount is with approval from the CMBS lenders. This shows that the lenders have no wish to foreclose YK Shintoku and would rather have their money back. In the meantime, they enjoy a rich 7.07% interest payment on the loan amount.

2. Saizen REIT's management is currently in negotiations with financial institutions to refinance YK Shintoku's loan and by divesting some properties, its absolute loan quantum is smaller and this makes it more palatable to potential lenders.  Like I mentioned before, a successful re-financing of YK Shintoku's loan would most likely result in a much lower interest rate which would lead to a positive re-rating of the REIT.

3. The properties divested are at smallish discounts to their most recent valuations.  The discounts are at 0.2%, 3.7%, 5.3% and 6.1% for the four different properties. This demonstrates the return of buying interest in the Japanese real estate sector as investors seek out better returns for their money.  This bodes well for Saizen REIT as the apartment buildings that they own are below replacement value.  This means that investors are unlikely to build new and would rather seek to buy in the resale market.

Following the loan repayment using sale proceeds from the divestments, the remaining balance of YK Shintoku's loan is estimated to be approximately JPY 6.6 billon (S$103.6 million). The loan was JPY 7.1billion (S$111.5 million) before.

See announcement here.

Related post:
Saizen REIT: Emphasis of matter.

Gold can double from here over the next 5 years.

"Despite all the hype about its multi-year rally, gold is actually lagging many other commodities in that it hasn't yet eclipsed its 1980 high on an inflation-adjusted basis, Holmes says, noting the same is true of silver."


Posted Sep 28, 2010 12:00pm EDT by Aaron Task

Gold hits another record high of US$1,308.00, the eighth time it has hit a new high in the last two weeks!  Read article here.

Related posts:
Buy more silver on weakness. 
Real value of gold.

SPH: Closing above $4.20.

SPH experienced a nice white candle day with price closing at $4.21.  This is the first time it has closed above the $4.20 resistance level in more than two years. That this took place on the back of volume expansion (volume was three times more than the previous session) gives hope that we could possibly see higher prices in the near future.

The higher highs in the OBV shows continual accumulation.  The MFI has formed a higher low and being at a very low level now, it has much room to rise before becoming overbought. The MACD has turned up and seems poised for a bullish crossover with the signal line.

Immediate support is now at $4.16 as provided by the 20dMA.  Immediate target is $4.30.

Related post:
SPH: $4.20 is still resistance.

K-REIT: In retreat.

The overbought buying momentum in K-REIT was corrected today as the RSI slipped out of overbought territory.  OBV shows that the trend of accumulation is intact and the MFI still shows rather strong demand.  So?  I won't be overly concerned with the selling down.

Immediate support is at $1.26 which is where we find the 20dMA.  Any further selling should find the next support level at $1.22, the top of a consolidation formation and this is also where we find the 50dMA approximating.  If $1.22 should give, which could, of course, happen, the next support is at $1.16.

Related post:
K-REIT: Moving into the next band?

Saizen REIT: Cheaper please.

Quite recently, in LP's cbox, I mentioned that I was watching Saizen REIT like a hawk, believing that there would be some people who would lose patience and sell down their stakes. Today, it happened and I was waiting at 15c.  Buying at 15c is similar to what we would have paid for Saizen REIT last year in December.

Saizen REIT was sold down heavily, most of it at 15.5c, today for whatever reason. The lack of interest by the market at large in this counter is quite obvious as the MACD has been hugging the signal line. At below zero, the momentum is clearly negative.  The MFI has been forming lower highs, a sign of flagging demand. RSI shows a slowing of buying momentum. 16c could possibly be a strong resistance now as that is where all the MAs are approximating.

The annual report would be out soon and I would take some time to go through it but I doubt I would find anything unexpected.  Value is what we get and price is what we pay.  If Mr. Market is willing to sell to me an undervalued stock at a lower price, I would graciously (or greedily) accept.

AIMS AMP Capital Industrial REIT: Cheaper please.

AIMS AMP Capital Industrial REIT's unit price declined today to hit a low of 21c. I was in the buy queues at 21.5c and 21c.  Didn't manage to get any at 21c.  With an estimated DPU of 2.08c, buying at 21.5c gives a yield of 9.67%.

Looking at the charts, I mentioned to some friends that getting some at 21c or even 20.5c is a distinct possibililty although 21.5c is psychologically important as it is the midpoint of the old trading range of 20c to 23c. I am keeping some powder dry as buying at 21c would give a yield of 9.9% while getting some at 20.5c, which is where we find the 100dMA, would give a yield of 10.15%!

Then, why not I wait for 20.5c and be done with it?  Well, TA only shows us the probable scenarios, not definite results. I always hedge. 9.67% yield is more than decent to me and quite acceptable.

Genting SP: CEO pares stake.

Genting SP rocketed to a high of $2.18 on 20 Sep which was also the day when OBV peaked and the MFI formed a higher high.  However, all parties come to an end or at least they need a break.  Genting SP's share price has retraced to support provided by the 20dMA at $1.93.  Will this support level hold? Or will we see more downside?

That the CEO sold down his stake to the tune of 900,000 shares yesterday at $2.047 each does not inspire much confidence in investors. We could see more selling pressure in the near term.  If $1.93 gives way, I see the next support level at $1.84, give or take a cent. Strong support should be provided by the rising 50dMA which is currently at $1.60.

Genting Singapore off 1.5%; CEO Tan Hee Teck’s sale of own shares in open market prompts other investors to follow suit. 
Tuesday, 28 September 2010

© 2010 - The Edge Singapore

Hock Lian Seng: 32c target.

Hock Lian Seng seems to be forming steps with the rising 20dMA pushing up the price at every step. The rising 20dMA would be at 30c soon.  A support seems to have formed at 30c for this construction stock.  Further upside would give a target of 32c.

While the OBV shows constant accumulation, the MFI shows lower highs forming.  So, accumulation is taking place amid lowering demand.  Not a powerful statement. A slow grind up is perhaps what we would see for this counter.

Related post:
Hock Lian Seng: Resistance broken.

FSL Trust: Rising from the depths.

It has been a while since I looked at FSL Trust. Today, it rose decisively.  Price action formed a wickless white candle, opening at 43.5c and closing at 45c. However, lacking in volume, one wonders if it would go on rising.

The rising 20dMA recently formed a golden cross with the 100dMA and this marks a strong support at 42c. Trading above the gap which was closed at 43.5c now brings the next resistance at 46c to play.  I see an eventual target as defined by the descending 200dMA, currently at 51c.

Related post:
FSL Trust: Where to from here?
FSL Trust: The skies are clearing up.

Golden Agriculture: Breaking support.

CPO price is at RM2,735, up RM34 or up 1.26%.  All CPO counters are up with the exception of Golden Agriculture which is affected by bad press.  It could potentially lose more customers.

On 25 Sep, I mentioned that "with the recent bad press and uncertainty as to whether things would worsen, it might be better to err on the side of caution and to stay sidelined".  Support at 57.5c gave way in this session as the counter closed at 56.5c, forming a bearish engulfing candle. Volume more than tripled compared to the previous session, a white candle day which I described as lacking in conviction.

The MACD continues plunging, increasing its distance from the signal line, as it heads towards zero.  MFI and RSI both formed lower highs with the latter breaking 50% as it heads lower.  OBV shows ongoing distribution. Technically weak, this counter could head lower unless there is some positive catalyst.

Next support level is at 55c, where we find the 100d and 200d MAs.  I have divested my remaining stake at 57.5c as the support broke and will wait for the dust to settle before deciding on re-entry.

Related post:
Golden Agriculture: Stay cautious.

Golden Agri down 0.9% as RSPO’s concerns weigh. Companies like Burger King, Nestle, Unilever have already stopped doing business with Sinar Mas following Greenpeace’s allegations of destructive planting practices.
Monday, 27 September 2010

© 2010 - The Edge Singapore