Cache Logistics Trust: Still on my watchlist.

I hardly talk about Cache Logistics Trust but regular readers would know that this is on my watchlist. With an annualised DPU of 7.76c, at today's closing price of 94c, the distribution yield would be 8.26%. Still not attractive enough for me but I recognise its strong numbers which would convince me to start a small long position if price would decline to test its historical low of 91.5c for a yield of 8.48%.

Here are the numbers as at 30 Sep 10:
Gearing: 23.4%.
NAV/unit: 88c.
Interest cover: 9.2x.
Portfolio 100% leased.
WALE: 5.8 years.

Substantial institutional shareholders:
JPMorgan Chase   9%
Morgan Stanley     7%
The Capital Group 6%
Amundi                 7%

How likely is it for the Trust to retest 91.5c? Since 22 Sep, the OBV has been in decline, though bumpy. This suggests that there is gradual distribution going on. The MACD has also been on a decline. Volume is, however, very thin. Price could be quite volatile.

Anyway, if I get some units here, it is a move to diversify my portfolio but it is not absolutely necessary. If the price does not decline to the level I feel comfortable with, I would give it a miss.

See 3Q 2010 slides here.

Related post:
Cache Logistics Trust: Low gearing.

First REIT: Quiet confidence.

First REIT experienced much lower trading volume today. The frantic selling of nil-paid rights was noticeably absent today.

Well, today is the last day of trading for the nil-paid rights. Without the option of an arbitrage, investors interested in First REIT would only have the option of buying the mother units from now on. I expect this to return greater stability to First REIT's unit price which could turn buoyant in the near future.

Immediate support at 68.5c, as provided by the 100dMA.  Immediate resistance at 70c, as provided by the 50dMA.

Related post:
First REIT: A bullish harami.

Golden Agriculture: Waiting for a pullback.

I have been saying to stay cautious on Golden Agriculture for quite some time now. Am I going to change my tune? Unfortunately, it is more of the same. Waiting for a pullback before loading up would be the prudent thing to do.

The negative divergences are too glaring for comfort. The MACD and MFI are both forming lower highs as the price formed higher highs. Trading volume has also been declining as price rose.

I will bide my time.

CapitaMalls Asia: Bought some at $1.85.

Just last night, I said "With all the momentum oscillators forming lower highs and the OBV showing obvious distribution, going long on this counter now would be most risky. Any upmove could simply be a rebound from oversold conditions and would find immediate resistance at $2, a recently many times tested resistance level and it is also where we find the declining 20dMA. I have my eyes on $1.88 and $1.85 as possible fair entry prices."

Well, my overnight BUY queue at $1.85 was filled. What is my plan now? Well, prices don't go down in a straight line. If there is a rebound, I expect resistance at $2.00 and that is where I would divest for a trade. The likelihood of this happening in the next few weeks is not at all remote.  Look at the MFI, it seems to be forming higher lows. There is still some underlying demand for this counter's stocks, it would seem.

However, looking at how the volume expanded dramatically today, almost tripling compared to yesterday, we cannot help but wonder if price could weaken further. Using two sets of Fibo lines, the first using $1.91 as the extreme low and the second using $1.84 as the extreme low, we see $1.65 showing up as 161.8% Fibo line in the former and 138.2% Fibo line in the latter.  That is the ultimate strong support in case of a continuing sell down with heavy volume. That's a fair bit to fall from $1.85 and I will have my warchest ready.

Related post:
CapitaMalls Asia: Testing historical low.

CapitaMalls Asia: Testing historical low.

On 9 Dec, I mentioned: "Closing at $1.92 is at support provided by the 138.2% Fibo.  38.2%, being one of the 3 golden ratios, is quite strong and if it breaks, the other 2 golden ratios are 50% and 61.8%.  The 150% Fibo and 161.8% Fibo lines are at $1.88 and $1.85 respectively. If the selling pressure keeps up, we could see prices go to those levels. Then, I would be sorely tempted."

Price formed a wickless black candle as it tested the counter's historical low at $1.91. The difference? On 7 May, when $1.91 was touched, a white candle was formed. It looked like a white spinning top with a long body which was a potential reversal signal and it delivered. This time round, a wickless black candle was formed as price closed at $1.91. The picture is more bearish now, for sure.

With all the momentum oscillators forming lower highs and the OBV showing obvious distribution, going long on this counter now would be most risky. Any upmove could simply be a rebound from oversold conditions and would find immediate resistance at $2, a recently many times tested resistance level and it is also where we find the declining 20dMA. I have my eyes on $1.88 and $1.85 as possible fair entry prices.

China Hongxing, Healthway Medical, Sabana REIT and First REIT.

I was wondering whether to take a break from blogging tonight but once I switched on my computer, I just had to check my blog. Before I knew it, I was blogging. This is a most serious addiction.


China Hongxing: Last night, "Closing at 17c is resistance provided by the falling 50dMA which just completed a dead cross with the rising 100dMA recently. Technically, China Hongxing has just broken out of its downtrend but it remains to be seen if 17c resistance could be turned into support. Falling back under 17c would mean that the downtrend is still intact." 

So, 17c is still resistance and I see strong support at 15.5c. If volume does not expand on the next upmove to push past resistance, the declining 50dMA could well prescribe the next downtrend resistance. However, with the MACD rising towards zero, we could see momentum turning positive. This counter bears watching.

Healthway Medical: Last night, "Price could first retreat to 16c, a many times tested resistance and now possible support, before closing the gap at 15.5c. In case the bearish reversal signals are nullified in the next session, the upside target is still 18.5c."

Its share price closed at 16c today and I fully expect 15.5c to be a strong support, if tested. Both MFI and RSI are retreating from the borders of their overbought regions and we could see them retreating to retest their uptrend support lines. This would mean a further weakening in price and a thinning in volume. I would want to see support holding up nicely before venturing with another long position here. Overly cautious? Perhaps but that's what I would do.

Sabana REIT: Last night, "the white spinning top, a possible reversal signal, formed today on low volume is encouraging. Volume was the lowest since the REIT started trading in late November. OBV also seems to be rising since 7 Dec, suggesting continual if mild accumulation since. Selling pressure has weakened and if 92.5c was ever tested again, it would be a stronger support as market participants would remember it as the price they missed out on to go long. The worst could be over."

Volume expanded nicely as price rose to hit a high of 96.5c before closing at 95.5c. There is some selling pressure as suggested by the upper wick of the white candle. However, selling pressure is much weaker now and OBV suggests that accumulation is ongoing.  For anyone who is thinking of investing in Sabana REIT, it would seem as if things have stabilised. Technically, 94c (the 38.2% Fibo line) and 93.5c (the 23.6% Fibo line) are fairly safe entry prices now.

First REIT: Last night, "What we see today is a textbook example of a bullish harami, a bullish reversal candlestick setup."

We have confirmation of the bullish signals formed yesterday. Buy signal seen on the MACD histogram. Price gapped up, starting the day at 68c, touched a high of 69.5c and closed at 69c. Resistance provided by the 100dMA at 68.5c was taken out with ease. With volume much lower, it suggests that there is a lack of sellers which allowed little buying to push up the price. 68.5c could be resistance turned support. Next resistance level is at 70c.

The rights closed at 17.5c today and for anyone who is thinking of investing in First REIT, buying the rights at 17.5c would make more sense than buying units in First REIT at 69c. There is a 1.5c difference which is a 2.18% savings. If there should be further selling down tomorrow, I would buy more, tomorrow being the last day for the trading of nil-paid rights. 22 Dec is the last day for the acceptance and payment of the rights.

First REIT: A bullish harami.

Volume expanded again today with a total of 12.21m units changing hands. This time, a white candle was formed. With price opening at 67c and closing at 67.5c, this is a wickless white candle. Also, this formed right in the mid-section of the previous session's black candle.

Remember, I mentioned yesterday that "the black candlestick formed this session is not as bearish as the three black candlesticks before it. It actually started in the middle of the previous session's candlestick and it also formed a lower wick unlike the previous three candlesticks. Support is at hand." What we see today is a textbook example of a bullish harami, a bullish reversal candlestick setup. As with all technical analysis, this will need confirmation in the next session.

It is my personal belief that the 200dMA support at 67c has been recaptured.  Further upward movement in price would find immediate resistance at 68.5c.  This will be followed by 70c and 71c. In due course, if these resistance levels were cleared, the counter could cover the gap at 73.5c. There are some who are still waiting to see how low the price could fall before buying in. Their hands could be forced in the next two days if price continues to be resilient and this would contribute to a further strengthening in price.

I count it fortunate that I managed to collect some rights at 16c yesterday (effective cost = 66c). I queued for more mother shares at 64.5c last night in case price weakened further today. 64.5c now seems rather remote as a possibility. With the OBV turning up sharply, the suggestion is that accumulation is back in force. Let us see if the long term support at 67c holds up from now.

Related post:
First REIT: Good bad news.

Sabana REIT: Possibly bottomed.

92.5c touched on 10 Dec could possibly be the bottom which worried unitholders are looking for. As with all bottoms, it is only apparent after some time. In fact, calling it a bottom now could be a tad early.

However, the white spinning top, a possible reversal signal, formed today on low volume is encouraging. Volume was the lowest since the REIT started trading in late November. OBV also seems to be rising since 7 Dec, suggesting continual if mild accumulation since. Selling pressure has weakened and if 92.5c was ever tested again, it would be a stronger support as market participants would remember it as the price they missed out on to go long. The worst could be over.

Related post:
Sabana REIT: Touched 92.5c.

Healthway Medical: Still at resistance.

Closing at 17c today, forming a doji on reduced volume suggests that the upward movement in price is losing momentum. This is confirmed by the falling MFI and RSI.  The fall in OBV suggests too that distribution is underway. 17c resistance is, therefore, intact.

Price could first retreat to 16c, a many times tested resistance and now possible support, before closing the gap at 15.5c. In case the bearish reversal signals are nullified in the next session, the upside target is still 18.5c.

Related post:
Healthway Medical: Good news.

FSL Trust: Higher volume and testing resistance.

Volume expanded today as price action formed a dragonfly doji. This is promising. The MACD has been rising above the signal line, although it is doing so in negative territory. The MFI has formed higher lows which suggest positive demand momentum. The OBV has turned up, suggesting that we are seeing some accumulation activity.

The 100dMA seems to be providing immediate and strong support with the Bollinger bands narrowing. A precursor of a breakout? Perhaps. Immediate resistance is at 44c and, in the event of a breakout, the eventual target is where we find the declining 200dMA, which is currently at 47c. Before that, expect resistance at 45c, the flattening 50dMA, and 46c, gap resistance.

Related post:
FSL Trust: Approaching target.

China Hongxing: Breakout.

On 29 Nov, I mentioned that "It pays to remember that 15.5c was itself a strong support which broke and it is where we find the gently declining 200dMA. It could prove a challenge to overcome this resistance level unless volume expands meaningfully on buy ups."

China Hongxing rose to the challenge today as volume expanded, taking out resistance at 15.5c. Closing at 17c is resistance provided by the falling 50dMA which just completed a dead cross with the rising 100dMA recently. Technically, China Hongxing has just broken out of its downtrend but it remains to be seen if 17c resistance could be turned into support. Falling back under 17c would mean that the downtrend is still intact. The jury is still out on this one. However, resistance at 15.5c is now immediate support.

Related post:
China Hongxing: Rebounding.

Healthway Medical and First REIT: Good news and good bad news.

First, the good news. In my last blog post on Healthway Medical, I mentioned that "If the buying interest follows through, we could see its share price rising to test resistance provided by the merged 100d and 200d MAs and that is at 17c." The counter closed at 17.5c today on expanded volume. Momentum oscillators have all turned up. Beyond 17.5c, I expect resistance to be found at 18.5c, a many times tested support and should be a strong resistance.

I expected 17c to be a strong resistance as it is where we find the merged 100d and 200d MAs as well as the downtrend resistance line.  So, a trading position entered on 22 Nov last month at 15.5c was divested at 17c today. I made some pocket money and that is the good news. Do I have any interest left in the company? Yes, I still retain 5% of my original stake in the company and I will continue to monitor its progress or the lack of progress in time to come.

Now, what's a good bad news? Well, it is a piece of news which seems bad but which is actually good. I am referring to the declining unit price of First REIT.

I mentioned in an earlier blog post that I see long term support at 67c as this was underpinned by the rising 200dMA. We see that 67c is also where we find the 123.6% Fibo line. Price, today, touched 66c which is where we find the 138.2% Fibo line.  38.2% is one of the three golden ratios and provided a stronger support.

My original intention was to wait to buy at 67c but, last Friday, I changed my mind and queued for the rights at 16c instead at the influence of fellow finance bloggers who bought the rights at 16.5c. Guess what, my buy queue for the rights at 16c was filled today. So, my effective cost would be 16c + 50c = 66c which means a yield of 9.7% based on the 2011 DPU guidance of 6.4c by the REIT's management. I am a happy man.

Am I not worried whether the price would decline further? No. Why should I worry? I cannot do anything to influence the price movement of the REIT. If the market is willing to sell a good thing to me at a lower price, I would buy. It's simple. So, would I buy again if the price declines further. Yes, I would. When?

If we look at the chart, we find the 150% Fibo line at 65.5c and the 161.8% Fibo line at 64.5c. As 65.5c is only a half cent difference from 66c (my effective buy price today), I would not bother putting in a buy queue at that price. I have put in a buy queue at 64.5c and I would be very surprised and very pleased if it could be filled in the next few days. At 64.5c, the yield would be 9.92%!

Some may be puzzled by how someone who bought more of First REIT at 95c and 96.5c, CR, could feel pleased with the declining unit price in recent sessions. Well, it is true that the TERPs of my purchases at 95c and 96.5c are 70c and 70.7c which are now in the red. However, let's be rational.

The recent weakness in First REIT's price is due to the selling down by one of its cornerstone investors, Golden Rainbow International Limited, which owned more than 9% of the REIT. I won't be surprised if they continued to sell down today. What's the reason for their massive sell-down?  Well, only they know the reason, I don't. It is a waste of time for me to guess why they have decided to sell.

The REIT's CEO, Dr Ronnie Tan Keh Poo, who is also a director, however, has been buying up the REIT's nil-paid rights as they got sold down. I like it when a REIT's management's interests are aligned with unitholders'. Dr Tan is unlikely to throw his hard earned money down the drain.

Technically, today's volume at 8.04m units is the REIT's highest in its history. However, notice how the black candlestick formed this session is not as bearish as the three black candlesticks before it. It actually started in the middle of the previous session's candlestick and it also formed a lower wick unlike the previous three candlesticks. Support is at hand. This is another reason I said that if my buy queue at 64.5c could be filled, I would be very surprised and very pleased. Good luck to us all.

Related post:
Healthway Medical: Broke out of resistance.
First REIT: Waiting at 67c.

Saizen REIT: Insider buying continues.

Saizen REIT remains my single largest investment in the stock market and I firmly believe that it offers value for money. I also believe that investing in a REIT where the management's interests are aligned with that of the unit holders is a big plus.

On 9 Dec, Mr Chang Sean Pey, bought 200 lots in the open market at 16c /unit.  Mr Chang now has 2,600 lots. Insider buying in Saizen REIT has become more the norm than exception.

Saizen REIT has 1,119,352,395 Units issued as at 12 November 2010. Apparently, more have exercised their warrants and the REIT has 1,122,909,819 Units issued as at 9 December 2010. It has 323,447,598 Warrants outstanding as at 9 December 2010.

Related post:
Saizen REIT: Insider buying and divestment.

AIMS AMP Capital Industrial REIT: Revised DPU and fair value.

This perhaps comes a bit late, the result of my blog being a one man show. Reading the Market Update dated 23 November, "Sale of 23 Changi South Avenue 2 Singapore above book value" which is expected to be completed by January 2011, I went and found out how much this property contributed to the REIT's rental income for the year ended 31 March 2010.  It was S$1.4549 million.  This is 3.49% of total income for the year ended 31 March 2010.

Doing some back of the envelope calculation, prior to the rights issue for the purchase of 27 Penjuru Lane, the DPU was 2.15c.  Post rights and acquisition, the estimated DPU was given as 2.08c.  If we remove 3.49% from the DPU of 2.15c, that would give us 2.075c.  So, post rights and acquisition, we would get a DPU of approximately 2c.

As the sale of 23 Changi South Avenue 2 will be completed only in January 2011, its contribution to rental income for the quarter October to December 2010 is unaffected.  With the contribution from 27 Penjuru Lane coming in, I expect the income distribution that would take place in March 2011 to be 0.52c per unit as per guidance.  For subsequent quarters, it should be about 0.5c per unit, everything else remaining constant.

However, with a bigger cash balance on hand, I fully expect the REIT's management to do some asset enhancement to increase lettable space for properties which have not maximised their plot ratios or to make new acquisitions which are NPI yield accretive in nature.  The former would be easier than the latter, I suspect, given the strong recovery in real estate values in Singapore.

At the revised DPU of 2c, the REIT still provides an attractive distribution yield of 9.3% at a unit price of 21.5c which is where I hope to load up more. There are still more positives about this REIT and there is probably more upside than downside in the next 12 months. After revising the annualised DPU to 2c and expecting the REIT to trade at an 8% yield, the fair value I ascribe to the REIT is now 25c /unit.

Note that I did not take into consideration the other positive developments in the Market Update which is the 100% occupancy achieved for 15 Tai Seng Drive (85.7% as of 31 March 2010) and 23 Tai Seng Drive (84% as of 31 March 2010).  Conservatively, this should add about $400,000 to the REIT's annual rental income.

Read Market Update.

OCBC upgrades S-REIT sector to overweight. Expects investors’ interest in S-REITs to remain piqued in 2011, being an inflation hedge, but says different sectors may experience different rates of recovery; says “the recovery is likely to be more pronounced for the office sector, followed by the industrial sector,” while retail is likely to remain subdued next year.  
Friday, 10 December 2010

© 2010 - The Edge Singapore

Related posts:
AIMS AMP Capital Industrial REIT: 2Q FY2011

Sabana REIT: Touched 92.5c.

Sabana REIT touched 92.5c, the support provided by the 150% Fibo line, and I was there waiting with my overnight buy queue but not many lots were sold down at that price and I did not get any. It would seem that the selling pressure is finally easing off. Am I sure of this?

Look at the OBV and we would see a double bottom pattern forming. Distribution activity has definitely declined. Look at the candlestick formed today and we would see a dragonfly doji. Market participants tried to sell down the REIT only to see price recovering to where it started the session. The bulls are fighting back. All this happened on a day with higher volume. Encouraging.

What do I think would happen from now? Well, there is no guarantee that the REIT would not weaken in price but the selling is definitely less intense now. I am hazarding a guess that, everything remaining constant, 92.5c would be a strong support.

Related post:
Sabana REIT

First REIT: Waiting at 67c.

I was waiting at 67c, the long term support provided by the 200dMA, with my overnight buy queue but First REIT was just teasing me. It went to 67.5c and there it stayed. Market participants seemed quite happy to buy up at 67.5c which would provide a yield of 9.48%.

I was in LP's cbox and some asked me to consider buying the nil-paid rights instead since they were trading at 16.5c. Including the 50c to exercise the rights, the price is only 66.5c, 1c cheaper than the mother share's 67.5c. In fact, LP (the blog master of Bully the Bear) and JW (the blog master of Wealth Buch) both bought the nil-paid rights at 16.5c today. I will have to consider this suggestion. From the queues today, it would seem that there is relatively strong support for the rights at 16c. Getting the rights at 16c would mean a unit price of only 66c and a yield of 9.7%!

Now, why are the nil-paid rights being sold off so cheaply? I had an idea that there are probably some who do not wish to fork out more money to exercise the rights. However, JW's broker sent him an email and it mentioned: "First REIT - SGX is selling the rights for those who are not entitled to the Rights Units (Investors with Foreign addresses)". So, there are also some who are not able to accept and pay for the rights. It would seem that First REIT has many such investors. Would they be interested in buying some First REIT units to avoid dilution? They just might.

This REIT is definitely a strong buy at these levels.

Related post:
First REIT.

Healthway Medical: Broke out of resistance.

On 29 Nov, I mentioned that "I am wary of being whipsawed out. With the MACD hugging the signal line, this counter could go either way. However, with a picture of low volume pull back intact, comparing the high volume sell downs in mid October, when support at 16c was broken, to the current thin trading volume, the suggestion is that most of the weaker holders have been shaken out."

Healthway Medical has been seeing some buying interest in the last few sessions. Today, price broke out of resistance provided by the declining 20dMA at 15c and closed at 15.5c with 1,504 lots bought up at 5.05pm. A total of 13,794 lots changed hands today. If the buying interest follows through, we could see its share price rising to test resistance provided by the merged 100d and 200d MAs and that is at 17c.

It would seem that the positive divergence observed in the recent past is playing out nicely.

Healthway Medical Corp, which runs medical and dental clinics in Singapore and China, is speaking to potential investors who have expressed an interest in taking a stake, a company executive said.
Friday, 10 December 2010

© 2010 - The Edge Singapore

Related post:
Healthway Medical: Support at 15c broke.

AIMS AMP Capital Industrial REIT, First REIT, Golden Agriculture, CapitaMalls Asia and Sabana REIT.

AIMS AMP Capital Industrial REIT: For some time now, I keep saying that this REIT is undervalued. A reader sent me a little snippet from Kim Eng and I would like to share it here with everyone:

One of few undervalued players around. AA-REIT is still trading at a 20% discount to book even after a steep $41m write‐down in the value of its investment properties in FY Mar10. The capital values of industrial properties in Singapore have since recovered from the global financial crisis. AA-REIT’s gearing ratio is comfortable at 35%, with no near‐term refinancing need. Any further write‐down is unlikely. That AA-REIT is still trading at a discount to its peers is likely due to its relatively small market capitalisation and turbulent history in 2009 which saw AMP Capital Investors and AIMS Financial Group emerging as Manager after a major equity cash call and asset injection.

Near‐term catalyst. Asset enhancement opportunities abound for AA-REIT as at least half of its 26 properties have plot ratios that are under-utilised. Capital recycling exercise is ongoing and the potential sale of its single asset in Japan could be a near‐term catalyst.

Technically, we could see the unit price of this REIT trading sideways for a few more weeks with support at 21.5c and resistance at 22.5c. It seems that a symmetrical triangle is forming and it would not surprise me if its unit price trades higher in 1Q2011. I bought more recently at 21.5c and I am in the queue to buy more.

First REIT: I bought some First REIT units at 69c today. This gives me a yield of 9.28% based on the annualised DPU of 6.4c for 2011.  The next support level is at 67c which is where we find the rising 200dMA. Going by the trading volume in the last two sessions as long black candles were formed, we could see 67c tested in the next session. I have entered my buy queue. Why am I so bold? Fundamentally, this is a REIT with a strong track record. Technically, buying at supports in an uptrend is the way to go.

Many could be holding off their purchases in spite of the attractive yield at current price levels. If my guess is correct, they are probably conserving their resources to apply for as many excess rights as possible. Why buy at 68.5c if we could get excess rights at 50c? They should remember, however, that how many excess rights we are likely to get depends probably on how many mother shares we hold in the first instance. Those who fail to get the excess rights they want could cause a strong bounce upwards for First REIT's unit price once the rights exercise is completed.

Golden Agriculture: Its price continues to defy gravity as it rose on low volume to break the previous high of 78.5c to close at 79c. Volume is the fuel which drives a rally. I question the sustainability of the recent levitation act. Of course, Mr. Market is always right and I could be proven wrong this time round and if it does happen, it won't be the first time.

Immediate support in case of a pull back is at 74c and I see strong support at 70c. The MACD has formed a lower low and it remains to be seen if it would form a lower high. The negative divergence between rising price and falling volume is still valid. However, the rising MFI and RSI show that momentum is positive and support is strong. Any pull back is probably a good opportunity to accumulate.

CapitaMalls Asia: Price closed lower at $1.92 on higher volume. All technicals point to a high probability of price moving even lower in the near future. Any rebound, however unlikely, would be a chance to reduce exposure. For shortists, rebounds could be salivating opportunities for them to make some money here.

Closing at $1.92 is at support provided by the 138.2% Fibo.  38.2%, being one of the 3 golden ratios, is quite strong and if it breaks, the other 2 golden ratios are 50% and 61.8%.  The 150% Fibo and 161.8% Fibo lines are at $1.88 and $1.85 respectively. If the selling pressure keeps up, we could see prices go to those levels. Then, I would be sorely tempted.

Sabana REIT: Closing at 93.5c is exactly where I mentioned that 138.2% Fibo line would be providing support. Selling pressure is not letting up although volume has reduced on this down day. It recorded the second lowest daily volume since the REIT started trading.  This should be a relief for unit holders.

Could it really test the 150% Fibo line at 92.5c? Your guess is as good as mine but that is where I have entered my BUY queue. Wish me luck.

Related posts:
AIMS AMP Capital Industrial REIT, Golden Agriculture, Sabana REIT.
First REIT
CapitaMalls Asia

First REIT: Nil-paid rights start trading.

First REIT's nil-paid rights started its first day of trading at 22c but closed at 19.5c. This probably affected the mother share as First REIT was sold down to 70.5c. Why? Well, if we could buy the nil-paid rights at a bargain, why buy the mother share? Sell the mother share, buy the nil-paid rights and make some money on the difference.

So, if someone bought the nil-paid rights at 19.5c, including the 50c to be paid to exercise the rights, the total price is only 69.5c. Why should he pay 70.5c for the mother share?

Fundamentally, there is no compelling reason to sell below 70c as the yield is a handsome 9.14% at this price. However, if it does get sold down, I see immediate support at 69c which is where the rising 100dMA would be approximating soon. I might buy more then.

Related post:
First REIT: XR and fair value.

AIMS AMP Capital Industrial REIT, Cambridge Industrial Trust, Golden Agriculture, Healthway Medical and Sabana REIT.

I know of a few who are waiting to collect more units of AIMS AMP Capital Industrial REIT at 21.5c. With an estimated DPU of 2.08c in 2011, it would have a yield of 9.67% at 21.5c. Very attractive.

Technically, volume has been very thin and momentum has declined. The rising 100dMA is providing support at 21.5c and I doubt that this support would be compromised.  If it does break, the next support is at 21c which is where we find the rising 200dMA approximating in the next 2 or 3 weeks. An attractive passive income generator with limited downside for me, I hope to accumulate more at supports.

Cambridge Industrial Trust's charts look bad.  Since 22 October, volume has been higher on black candle days. In recent sessions, volume spiked as price broke the support provided by the 100dMA. The REIT is experiencing a rapid downtrend.

The 20dMA completed a dead cross with the 50dMA and is on course to form another dead cross with the 100dMA. The 50dMA is beginning to turn down. The MACD continues its decline below the signal line in negative territory. Momentum is clearly negative. The OBV shows heavy distribution going on.

The preferential offering last month to existing unit holders at 53.1c was unattractive and closing at 52c today, unit holders would have lost money on those units. The rising 200dEMA should provide immediate support at 50.5c in case of continuing selling pressure.

Golden Agriculture formed a wickless white candle, closing at 77c. Could it retest its high of 78.5c?  I will wait to see if the MACD and MFI are able to form higher highs. Unless volume expands significantly, the MFI is more likely to form a lower high.

I maintain that the negative divergence is a warning of a possible pull back and it could be a strong one. So, I will remain cautious.

Healthway Medical's positive divergence is still in play and the MFI has formed a higher low and seems on track to form a higher high. Immediate resistance at 15c. Overcoming this could see price test 16c, the resistance provided by the declining 50dMA.

Sabana REIT's volume expanded today as it formed a wickless black candle to close lower at 94c, indicating that further price weakness is expected. Judging by the bearish attitude Mr. Market has towards this counter, I have decided to put in my buy queue at 92.5c, support provided by the 150% Fibo line, 50% being one of the three golden ratios.

At 92.5c and an annualised DPU of 8.63c for 2011, yield would be about 9.33%. Not too bad.

Related posts:
AIMS AMP Capital Industrial REIT: 2Q FY2011.
Cambridge Industrial Trust: Equity fund raising again.
Genting SP: A rebound or a reversal?
Golden Agriculture: Levitation act.
Healthway Medical: Support at 15c broke.
Sabana REIT: Fundamental Analysis.

Sabana REIT, Golden Agriculture, First REIT and K-Green Trust.

Sabana REIT retested its low of 96c today. To top it off, it closed at 96c. Distribution activity continues for the seventh straight session. This is quite obvious when we look at the OBV. I said before that I could consider getting some if the yield is greater than 9%. Technically, if 96c gives way, the 123.6% Fibo line is at 94.5c and the 138.2% is at 93.5c. I might buy some at those levels.

Golden Agriculture formed an inverted black hammer today, closing at 74c after moving higher in the day. This is a bearish development. I remain wary of the negative divergence between price and volume. I would like to see the uptrend support retested and that is when I might add to my position.  This is currently at 70c.

Increase exposure to upstream planters: DBS Vickers
Monday, 06 December 2010

© 2010 - The Edge Singapore

First REIT's trading volume has been declining as price stayed at and above the immediate support at 73.5c. The momentum oscillators are positive and the MACD is rising above the signal line in positive territory. All very nice but as volume dwindles, we have to be wary. If we had missed loading up earlier, loading up now at 73.5c carries a higher risk, technically speaking, even though the uptrend is intact.

Immediate support at 73.5c with the next support at 71.5c and this is also where we find the rising 20dMA. Looking back, this counter has a history of relying on the 20dMA for support as it moved higher. So, buying at the 20dMA is safer.

First REIT +0.7%; Ignores rights issue lodgement
Monday, 06 December 2010

© 2010 - The Edge Singapore

K-Green Trust broke its immediate support at $1.04 and touched a low of $1.03. Immediate resistance is now at $1.06 while we could see the low of $1 achieved on 1 July retested. All the momentum oscillators are downtrending. The declining OBV suggests continual distribution taking place. I had originally thought of buying more at $1 but I might want to wait for clearer signs of a reversal before taking action now.

Related posts:
Sabana REIT: Fundamental analysis.
Golden Agriculture: Levitation act.
First REIT: XR and fair value.
K-Green Trust: A bad investment?

Genting SP: A rebound or a reversal?

Although I do not have any vested interest in Genting SP, I remain deeply interested in this highly liquid, highly volatile counter.

On 24 Nov, I mentioned that "We could see a rebound and if it does happen, resistance is at $2.10 which is where we find the 50dMA. Anyone who is thinking of reducing exposure could consider doing so here. After all, price goes down a river of hope and rarely in a straight line." In the last session, Genting SP closed at $2.09 after touching a high of $2.13.

The volume which accompanied the rise in price was not impressive. With the 20dMA poised to form a dead cross with the 50dMA, there could be more downward pressure.  The white candle formed was with a long upper wick which suggests selling pressure beyond $2.09. The MACD has turned up but it is doing so in negative territory which suggests that what we have is just a rebound and not a reversal.

I have also drawn lines in orange color connecting the highs of 20 Sep and 9 Nov as well as the lows of 30 Sep and 10 Nov. Do you see a rising wedge? It seems that this pattern is valid and the downside target is at least $1.85. Of course, if the next session sees an expansion of volume as price rises up, this reading would be invalidated.

Tea with AK71: The price of my car now.

The prices of cars in Singapore are still appreciating.

On 2 May, I mentioned that "in August last year, I convinced my mom to change her car" and "we decided on a Mitsubish Lancer Mivec 1.5 for $60k .....Guess what, it would cost her about $80k now to get the same Mitsubishi 9 months later!" Well, guess how much the same car would cost today? $87,988!

I blogged about buying a new car for myself on 1 August a few months ago. The "final price is $71k for a new Mazda 2 Sedan with leather seats and solar film." Guess how much it would cost today? Get ready for this really eye popping price tag: $96,988!

I am very happy to learn this but it is scary at the same time.  Talk about inflation!

Related posts:
Tea with AK71: Buying a car now?
Tea with AK71: Bought a new car!

Golden Agriculture: Levitation act.

Golden Agriculture's fortunes are tied to the performance of Crude Palm Oil (CPO).  With CPO forming new highs, Golden Agriculture is likely to do better in time.  However, I remain wary of adding to my position as the price does a levitation act.

The negative divergence with price moving higher and volume shrinking is all too obvious. Having said this, the MFI has formed higher lows which suggests that there is support and demand is strengthening.  The lower highs on the RSI suggest that the buying momentum has been weakening.  So? Price has been moving up due to the lack of sellers and not an abundance of buyers.

Immediate support is a recently many times tested 71.5c. Stronger support is at 67c, the low of 24 Nov and that is also where we find the rising 50dMA. The longer term resistance of 61c should be the longer term support now.

Raffles Education: A new low.

What started out as a promising up day for the STI was not to be as the index sank almost 1% at closing.

STI drops 0.8% to 3,172.44 at closing
Friday, 03 December 2010

© 2010 - The Edge Singapore

In Singapore, share prices lost early gains to end weaker on Friday following concerns over interest rates. Traders said the market firmed with early gains in regional exchanges as strong US economic data boosted sentiment. But prices pulled back later after China said it would tighten monetary policy next year, suggesting further interest rate hikes to cap inflation.

Read article here.

My portfolio is largely unaffected except for a small long position I have in Raffles Education. This was something I purchased a couple of months ago in early October as I identified a positive divergence between the rising MACD and the falling price on the daily chart. A reader at the time suggested that I could be a bit slow in identifying that divergence and it turned out that he was right.

26c looked promising as a possible double bottom with volume on 3 Sep, when 26c was first touched, very high but volume had been very low when 26c was retested recently. A picture of low volume pull back was also rather clear. Well, today's expansion in volume took out 26c and threw a spanner in the works. 26c was just a floor.

Do I see price falling further? Price touched a low of 25c and this is where we find the 138.2% Fibo line before closing at 25.5c. This could be another floor and should provide interim support. The MFI and RSI have been forming lower highs, suggesting a reduction in demand and buying momentum. However, they are both in negative territory now which could give pause to the selling momentum.

Would I sell now and take a 10% loss? Let us look at the weekly chart.

Since early June 2009 when the counter hit a high of 70c, trading volume has been declining as price retreated. As each floor (support) was broken, the trading volume became lower. The MACD has also been gently rising since mid December 2009 as price continued in its downtrend.

To talk about a reversal is surely early days yet but the signs are that further downside could well be limited. When all the would be sellers have sold, we could see a reversal of fortunes. In the meantime, a long term downtrend is still in force and this is not for the faint hearted.

So, I would not sell my small (money losing) stake in the company. Also, I tend to overlook counters which I am not vested in. Stay invested and I would continue to monitor the company.

Related post:
Raffles Education: A trading opportunity.

USA is back on a growth path.

Warren Buffett sent an open letter to the U.S. government recently thanking it for a job well done:

"Uncle Sam, you delivered... overall your actions were remarkably effective."

Warren Buffett thinks that the stimulus money and bailouts worked. Well, there is finally hard evidence that the U.S.A. is back on a growth path. This is taken from Yahoo!Finance:

“In October we were able to rule out this double-dip nightmare scenario,” he says. “We are able to see very clearly, with a good deal of conviction, a revival in growth,” Achuthan tells Aaron and Dan in this clip. The improvements are widespread, Achuthan says.

-- Profit growth and productivity are on the rise. Achuthan says that leads to more hiring and capital investment in equipment.

-- Housing has stabilized. The outlook may not be rosy, but “it’s not falling off a new cliff,” which means it’s not a drag.

-- Cheap capital as a result of low interest rates. The private sector continues to create jobs.

-- Pent-up demand. Thanks to the jump in jobs, people are less afraid of losing their positions, Achuthan suggests. And after two years of saving and worrying, consumers have “frugality fatigue” which is beginning to show in the improvements in holiday shopping data.

Posted Dec 01, 2010 03:50pm EST by Peter Gorenstein

This bodes well for U.S.A.'s trading partners like Singapore.

Related posts:
Comments on the US economy.
The US consumers are back!

First REIT: XR and fair value.

A friend called me yesterday and said he might buy into First REIT with a view of getting more excess rights. I gave him my full support and told him he is likely to make money in this exercise. It turned out that he didn't get any yesterday.

Assuming that he had bought 4 lots at 98.5c /unit, his average price including rights units would be:

98.5 x 4 + 50c x 5  /9 = 71.55c /unit

At the estimated annualised DPU of 6.4c for 2011, it would mean a yield of 8.94%.  Not bad.  If he managed to get 1 lot of excess rights later on, the average price would be 69.4c which means a yield of 9.22%! I like this.

My expectation is for the REIT to trade closer to an 8% yield.  That means I expect the REIT to trade closer to 80c per unit with the estimated annualised DPU revised upwards to 6.4c for 2011.

I had people asking me if they should sell their First REIT units when it went CR. My advice to them was to keep the units and to accept and pay for their rights.  The proposed acquisitions and rights issue is a good thing for existing unit holders: a strong yield on investment with a good chance of capital gains.  Of course, there were still some who sold which allowed me to buy more at 95c /unit.

In an earlier blog post, I mentioned that I did not see any reason why the REIT should trade below the TERP of 70c, XR, and if it did, I would buy more. Today, it touched 70c only to bounce higher. It closed at 73.5c after touching a high of 74c. Congratulations to fellow unit holders!

Allow me a little indulgence as this is something I have always wanted to do:

Rating: BUY.
Fair value: 80c/unit.

Related posts:
First REIT: Rights issue.
First REIT: Bought more at 95c.