Saizen REIT: Properties in Sendai and YK Shintoku.

The quake that rocked Japan affected the city of Sendai the most. Saizen REIT has 22 properties in that city and we are still awaiting news on the extent of the damage. Here are photos of some of the properties in Sendai taken from Saizen REIT's website :

In a reply to a reader, I mentioned that of the 28 properties possibly affected (3 more each in Koriyama and Morioka), 13 properties are in the portfolio of YK Shintoku. I wonder how this would play out since YK Shintoku is still in default of its CMBS and not contributing to income distributions to unitholders.

If the 13 properties in question were totally destroyed, YK Shintoku's portfolio NAV would lower significantly. In such an instance, perhaps, it would not make much sense to continue trying to pay off the CMBS which is in default. It would make more sense to let YK Shintoku go into foreclosure. After all, Saizen REIT's other investments are ring fenced from YK Shintoku and are doing quite well without any contribution from YK Shintoku.

Of course, I am just raising a hypothetical scenario assuming that all 13 properties concerned were destroyed. A portfolio with a NAV higher than its outstanding loan is worth rescuing but a portfolio with a NAV lower than its outstanding loan should be considered for foreclosure. It is just good business sense, I believe.

Golden Agriculture: Testing the 200dMA.

Crude palm oil (CPO) price was down 2.75%, "touching their lowest level in four months as key crop data pointed to a surprise increase in stock levels." Source: Dow Jones Newswires.

Doing a one day contra on my most recent foray into Golden Agriculture was an example of how a little less greed could be a good thing. The counter's share price sank to retest support provided by the 200dMA at 64.5c in the last session on the back of higher volume. Could price go lower to test the lower Bollinger band at 62c? It could. If that were to happen, could it be time to buy? It is too early to say but it could be.

Pay attention to the MACD and see if it forms a higher low if price were to retreat further. A positive divergence would be a good signal that we could go in for another trade.

Related post:
Golden Agriculture: A one day gain of 7 to 9.4%.
Golden Agriculture: To sell or to hold?