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.