Selling shares of Capitaland and CapitaMalls Asia.

I did a contra on the shares bought earlier in the week for Capitaland and CapitaMalls Asia yesterday. To me, the way in which the share prices were moving higher on lowering volume did not look sustainable.

Downtrends are rivers of hope, no doubt, but I would not get too hopeful especially if the technicals hint of a weak rebound. Lock in some gains and let others take on the higher risk of holding the shares in the downtrend.

If prices should go higher, congratulate the buyers. They took on greater risk and if they were to make money in the process, they deserve it.

Capitaland:

CapitaMalls Asia:

If prices were to move higher next week to test resistance provided by the longer term MAs, I would move to cut my long positions in these two counters, bearing in mind that their downtrends are very much intact.

I cut losses if prices rebound to test resistance and not when they are moving lower.

Related post:
The long awaited technical rebound.

Balancing AIMS AMP Capital Industrial REIT and Sabana REIT.

I have been kept busy the last couple of days. By the time I took a shower and called it a day, it was technically night since it was already past 11pm. It is the same thing today. Hopefully, I will be more settled in another week or so. Till then, I can only hope to blog more regularly.

So, what have I been doing in the stock market?

I increased my investment in Sabana REIT while reducing my investment in AIMS AMP Capital Industrial REIT. Having these REITs in equal weightage in my portfolio is an aim of mine. This is something I said I would be doing in an earlier blog post too. If you missed it, read it here. That was just last month.

At that time, AIMS AMP Capital Industrial REIT was trading at 20.5c/unit while Sabana REIT was trading at 91c/unit. Today, they are trading at 22c/unit and 93c/unit respectively. In the last few weeks which saw a bloodbath in the stock market, they have appreciated in price. How's that for resilience and, dare I say, capital gains?

More importantly, it has made the reason to balance my investments in the two REITs more compelling. A gain of 1c from 20.5c to 21.5c is a gain of 4.88%. A gain of 1.5c from 91c to 92.5 is a lesser gain of 1.65%. So, partially divesting AIMS AMP Capital Industrial REIT and buying more units of Sabana REIT makes even more sense now (i.e. sell the former at 21.5c and buy the latter at 92.5c).

The DPU of AIMS AMP Capital Industrial REIT is 2c. With unit price increasing from 20.5c to 21.5c, it means distribution yield decreasing from 9.76% to 9.3%.

The DPU of Sabana REIT is 8.81c. With unit price increasing from 91c to 92.5c, it means distribution yield just decreasing from 9.68% to 9.52%.

See how the distribution yield of Sabana REIT is now higher than that of AIMS AMP Capital Industrial REIT when just a few weeks ago it was lower? This is attractive to me as Sabana REIT's numbers are stronger and more of its properties are of better quality too. You can also say that the lower distribution yield of AIMS AMP Capital Industrial REIT tipped the scales even more in favour of Sabana REIT now.

I have been putting sell orders at 22c for AIMS AMP Capital Industrial REIT but they were, unfortunately, not filled. At 22c, its distribution yield would be 9.09% and even if I were to buy units in Sabana REIT at 93c, the distribution yield would be a more attractive 9.47%.

Finally, if you are wondering how I managed to buy any Sabana REIT units at 92.5c today when it traded at 93c, I didn't buy any today. I bought yesterday and the day before.