First REIT: FY2011 results.

DPU for 4Q 2011 is 1.93c which is another bumper distribution! The REIT will go XD on 1 February and the income distribution is payable on 29 February.

This includes distribution coming out of a portion of the total gains on divestment of the Adam Road property of about S$8.7 million.

Without such a return of capital, the DPU for 4Q 2011 is 1.61c. Annualised DPU is, therefore, estimated to be 6.44c. To calculate a more realistic distribution yield, we have to use this number. At the unit price of 77c, we get a distribution yield of 8.36%.

NAV/unit: 80.5c
Gearing: 16%
Interest cover ratio: 12.3x

Technically, volume has been rising but price has plateaued at 77c which seems like a difficult resistance to overcome.

How would Mr. Market react to the REIT's results? Could we see price action breaking resistance at 77c and going higher? If resistance should be overcome, there is a chance of a retest of 80c which I see as the upper end of a trading range.

See presentation slides: here.

Related post:
First REIT: Bumper distribution 3Q 2011.

LMIR: Partial divestment at 38c.

Anyone who made use of LMIR's rights issue to accumulate more units would be in the money now.

I see immediate resistance for LMIR's unit price at 38c and put in an overnight sell order for a partial divestment. It was filled today as unit price closed at 38.5c.

Fibo lines seem to suggest that in case of a retracement, we could see strong support at 34.5c. That is quite a bit to fall from here if it should be tested.

The strategy I have for LMIR is the same as the one for Sabana REIT and AIMS AMP Capital Industrial REIT. Hold a larger portion for regular income while trading a smaller portion for potential capital gains.

The decision to partially divest is fully based on technicals as, fundamentally, I think LMIR is still too cheap to sell.

Related post:
LMIR: Too cheap to sell.

Sabana REIT: Partial divestment at 91c.

In an earlier blog post, I mentioned that immediate resistance for Sabana REIT is to be found at 91c. If this were to be taken out, we could see gap filling at 91.5c.

My sell order at 91c was filled today. Technically, if unit price should weaken when the REIT goes XD, we could see a decline to retest support which seems to be on a rising trendline. This would be in the region of 87c. That is a 4c difference if it should materialise.

As I have a large investment in the REIT and not forgetting that my primary aim of being vested is for income, I decided on divesting only a small portion (approximately 10% of total investment in the REIT) at resistance for a trade.

If the unit price should retest support, I would buy again. If unit price should go higher, I would also benefit from my remaining investment. This way, I could benefit both from units vested and units divested.

Related post:
Sabana REIT: 4Q 2011 results.

Towards a modern day good life.

We have our own circumstances which make demands on our finances, time and energy. Often, we hear people saying that they do not have enough money, time or energy to do all the things they have to do or want to do. How do we work towards having the money, time and energy to have a modern day good life?

Finances:

How much something costs is quantifiable, of course. Although people might find themselves cash strapped at times or, for some, most of the time, I believe that any problem that can be solved with money is not insurmountable, within reason.

We can always think of ways in which to make more money. Get extra income from a second job, for example. We could also seek help in the form of a short term loan if it should be warranted. Of course, to ensure that the situation is rectified permanently, if at all possible, find the root of the problem and resolve it sensibly.

Working towards a secure financial future as early as practicable in life would definitely help. Anyone who does this stands a good chance of having financial woes being a relatively infrequent occurence over time.

Time:

Unlike money, we cannot make more time. Time is therefore more precious than money. So, since we cannot make more time, what do we do if we want more time? Buy time. Huh? Buy time?

Do I mean buying some life extending elixir? I might like to entertain myself with Chinese mythology from time to time but I am not delusional. Well, I hope not anyway.

When we say "buy" in our modern day context, it would involve money, would it not? "Buying" time is possible if we have enough passive income to free up time.  It would free us from our reliance on earned income. Then, theoretically, we could quit our jobs and we could have more free time if that is what we desire.

When we have more free time, we would be able to meet head on any situation which demands more time from us. Time becomes less of an issue.

Energy (emotional):

When problems hit, it would be rare not to be emotionally affected. This is probably the most demanding factor and would drain even the strongest of people. This is something not many talk about in financial planning.

Financial planning is not just about dollar and cents or freeing up time. As problems are usually emotionally stressful, financial planning helps to make stress arising from such problems more manageable.

How can we reduce the emotional stress in such instances? If we have our finances well in place and if we have freed up more time, we would probably be able to deal with the emotional upheavals more easily and such situations might then feel less stressful.

I know that some people including our government say that family support is important to deal with stressful situations. This is true but not everyone has supportive families. Even though I feel that I am relatively lucky in this context, I would like to be self-reliant and not be a burden to my family, if possible.

Energy (physical):

We would also need to be physically healthy as a weak body could succumb to illnesses more easily. Regular exercise, taking in the required nutrition and having sufficient sleep are all part and parcel of having a healthy body.

As long as we have control over our lives, we should make sure we live it well. In our modern day context, it is possible only if we are financially prepared, have time for things that matter and are emotionally and physically healthy.

For the majority of us, we probably have to work towards having a good life. Depending on each person's circumstances and decisions in life, it could be harder for some and easier for others. However, it is definitely not an impossibility. A good life waits for anyone who is willing to work towards it. Believe it.

Related posts:
1. A common piece of advice on saving.
2. At what age to start investing in the stock market?
3. A letter from a reader in his early 20s.
4. Tea with AK71: How rich is rich?
5. Passive income: A higher purpose.

Tea with AK71: 2012 Year of the Dragon.

Lucky 4D number:

2301

HUAT AH!

Photo taken in a shrine on the island of Enoshima, Japan. See blog post: here.

What's your Chinese astrology sign? How will each sign do in the Year of the Dragon?


Part 1


Part 2


I like this song. It has a message. Always look on the bright side and be happy in 2012 Year of the Dragon!

Wishing all readers good health and plenty of wealth in 2012 Year of the Dragon!

Sabana REIT: 4Q 2011 results.

A DPU of 2.17c has been announced. This is a little lesser than my estimate of 2.2c. This is probably due to the fact that no rentals were collected for the property of 1 Tuas Avenue 4 in the months of November and December 2011. The manager is in advanced stage of negotiation with a party to rent the said property for a 10 year period. This, when completed, together with recent acquisitions should boost income and result in a higher DPU.

1, Tuas Avenue 4.

NAV per unit: $1.05.
Gearing: 34.1%.
Interest cover ratio: 7.4x
Average land lease expiry: 40.2 years.
(10.4% of the REIT's land leases will expire between 2032 and 2036 while 7.3% will expire between 2037 and 2041.)

Sabana REIT managed to secure lower cost of funding for its newer loans at between 3.4% to 3.9% compared to 4.8% previously. The savings will result in higher distributable income, everything else remaining equal.

The REIT will go XD on 30 Jan and income distribution is payable on 29 Feb.

Technically, I see resistance at 91c. We could see gap filling at 91.5c if resistance should be taken out. Stochastics has risen into overbought territory once more which simply suggests to me that there could be a better time to add to long positions. For anyone looking to reduce exposure to the REIT for any reason, this could be a good opportunity.

See presentation slides: here.

AIMS AMP Capital Industrial REIT: 3Q FY2012.

AIMS AMP Capital Industrial REIT delivered a solid set of results with DPU at 2.6c. This is a 4% increase over the previous quarter.

As I was expecting a DPU of 2.5c with a possibility of a small reduction, this is good news indeed. It will go XD on 3 Feb and is payable on 20 Mar.

Upon completion of sale of 31 Admiralty Road for $16.438m, the REIT's gearing would drop to 29.4%. The REIT had purchased this building for $13.4m. So, the REIT will recognise a gain and have gearing comfortably under 30% at the same time.

NAV per unit: $1.367
Interest cover ratio: 5.6x
Occupancy: 98.9%
Average land lease expiry: 41.9 years
(Only 10.9% of nett lettable area will see land lease expiry within the next 21 to 30 years).

The REIT has no debt due until October 2013.

Expectations for very slow growth in 2012 is unlikely to be too challenging as REITs are generally able to weather zero growth environments. The REIT also collects an average of 8.4 months in security deposits per property.

At the recent high of $1.00 per unit, its annualised distribution yield is 10.4%. This could increase in 2013, everything remaining equal.

I am confident of the REIT as a strong passive income generator and it remains a core component of my portfolio.

See presentation slides: here.

Related post:
AIMS AMP Capital Industrial REIT: Partial divestment.

FSL Trust: Reduced DPU to US0.10c.

Mr. Market is showing displeasure with FSL Trust's decision to reduce quarterly DPU from 0.95c to 0.1c. Its price has plunged more than 20% from the closing of 30c yesterday to 23c when I last looked.

Assuming an exchange rate of US$1 to S$1.30, the annualised distribution yield is about 2.2% per annum based on a unit price of 23c. Better than fixed deposit rates but as an investment, it is not very attractive.

However, I believe that this development together with the Trust's recent successful refinancing with a 6 year amortising loan are steps in the right direction. If the Trust survives the difficult times ahead, it could emerge stronger and ready to ride the next upswing in the cycle.

Read press release: here.

Cache Logistics Trust: 4Q and FY2011 results.

Cache Logistics Trust announced a good set of results.

Its recent acquisitions pushed distributable income upwards by some 9.2% while DPU increased to 2.1c. Annualised, distribution yield is 8.48% with unit price at 99c.

Net gearing: 29.6%.
NAV per unit: 91c.
Interest cover ratio: 8.0x

The CEO, Daniel Cerf, said that although new supply in warehouse space could come on board in late 2012 and 2014, existing demand should take up the new supply as good quality warehouse space is still in short supply in Singapore. (Source: The Straits Times, 19 January 2012).

Last month, I accumulated units of Cache Logistics Trust on weakness at 95c a unit. Those units were divested today at 99c when my overnight sell order was filled. The reason for selling? Technically, I see resistance at 99.5c and, for more than a week, unit price has plateaued at 99c.

In a rangebound situation, I look to the Stochastics for clues and it has been overbought for many sessions. Together with the formation of a doji today on the back of very much higher volume, the risk of a downward movement in price is, therefore, higher. When would a decline happen? When the counter goes XD? Perhaps.

If price should break resistance and move higher, I would still benefit with my remaining investment in the Trust. Otherwise, it would just continue to generate passive income in my portfolio. I think this is a good position to be in.

See presentation slides: here.

Related post:
Cache Logistics Trust: 3Q 2011.

Capitaland: Partial divestment at $2.48.

Just two days ago, on 17 January, I said that I see resistance at $2.48. I got this from the weekly chart as that was resistance provided by the declining 20wMA and the 138.2% Fibo line.

So, I put in an overnight sell order at $2.48 and it was filled later in the session today.

In very bullish circumstances, we could see $2.50 and $2.53 taken out with ease. With the formation of a long white candle on the back of very high volume, this could indeed be the case. The MACD has just crossed into positive territory and this signals the return of positive buying momentum.

In such an instance, we could see $2.65 or even $2.75 tested. It would be a sight to behold. Remember, however, that TA is about probability. Nothing is for certain.

Relates post:
Capitaland: Resistance at $2.48.

AIMS AMP Capital Industrial REIT: Partial divestment.

Tomorrow will see the release of quarterly results for AIMS AMP Capital Industrial REIT. As if in anticipation of a good set of numbers, its unit price pushed higher today on higher volume, closing at $1.00.

Last month, I accumulated units of the REIT at 93.5c, 94c and 95c. Why did I buy? At those prices, the REIT was very undervalued. Indeed, I was waiting to accumulate at 92c too but the lowest it went to was 92.5c. I blogged about it: here.

Today, my overnight sell order at 99c was filled, locking in some gains. I believe the REIT is still undervalued and I sold not because of valuation concerns. Then, why did I sell?

I sold because I want to rebalance my portfolio. With the acquisitions I made last month, the REIT's weight in my portfolio has tipped somewhat. Also, technically, $1.00 seems to be the upper end of a trading range. So, divesting partially, closer to resistance, makes sense.

Notice how the Stochastics has stayed in overbought territory for quite a long time now. In a range bound situation, the risk of a downward movement in price is, therefore, higher. However, in very bullish circumstances, momentum oscillators could stay overbought for a long time. In case resistance at $1.00 is taken out, I expect resistance provided by the 200dMA at $1.02 to come into play.

My remaining investment in the REIT is still a substantial part of my core investment for passive income. This is unlikely to change.

Tea with AK71: Another loaf of bread.

I blogged about how a loaf of bread could last me for days before. I like raisin bread the most and would usually buy when there is a special deal. Gardenia's raisin bread had a special deal going for a while but ended a couple of weeks ago.

On Sunday, I bought a loaf of softmeal bread from Sunshine. Usual price: $2.30. Special offer: $1.95.

Today, I finished the last few slices and had the two bread ends for lunch with a generous spread of margarine. Had to be more generous with the margarine or they would be too dry and difficult to swallow.

An inexpensive and healthy lunch.

Related post:
Tea with AK71: A loaf of bread.

ARA: Divestment at $1.30 and $1.32.

I have been entering overnight sell orders for ARA at $1.30 since early this month. $1.30 was the price I last sold some ARA at. As I noticed some strength in the upward movement in price, I also put in a sell order at $1.32 last night. Both sell orders at $1.30 and $1.32 were filled today.

Price touched a high of $1.33 today before closing at $1.315. Volume was relatively low compared to 3 sessions ago when price action formed a similar white candle. I wonder if it would have enough fuel to push it past the next resistance at $1.335.

Immediate support is at $1.29 but I expect a stronger support to be at $1.25 in case of a retracement. $1.25 is also where a golden cross is likely to be formed with the 20dMA rising to cross the gradually declining 100dMA. A golden cross was earlier formed between the 20d and 50d MAs.

CapitaMalls Asia: Overcame resistance.

CapitaMalls Asia is rising and stronger than Capitaland too.

Its share price overcame resistance provided by the 20wMA.

Resistance provided by the 138.2% Fibo line at $1.32 is the one to watch now. Could we see a retest of $1.40, the high touched in early November 2011?

The 20wMA could be resistance turned support in the event of a weakening in price. This is at approximately $1.26.

Related post:
CapitaMalls Asia: 20wMA, the resistance to watch.

Capitaland: Resistance at $2.48.

Capitaland is on the rise.

I see resistance at $2.48. This is provided by the moderately declining 20wMA as well as the 138.2% Fibo line.

Beyond $2.48, resistance is provided by the 150% and 161.8% Fibo lines at $2.50 and $2.53 respectively.

In case of a retracement, we could see a test of the 50% Fibo line at $2.30 or the 38.2% Fibo line at $2.27.

Related post:
Capitaland: 20wMA, the resistance to watch.

Hyflux: Divestment as gap closed at $1.365.

My sell order at $1.365 was filled today. This is the gap filling I talked about before. 

Could price move higher in the next session? It could, of course.

However, the upper wick in today's white candle as price touched a high of $1.37 before closing at $1.35 suggests that selling pressure is very much present. 

Moving higher on lower volume compared to two sessions ago is also a sign of caution.

The declining 100dMA is likely to exert downward pressure on price action. 

So, further upside could be capped at $1.385 or so. In a retracement, expect some support at $1.21.

Related post:
Hyflux: Retest of recent high.

Courage Marine: BDI plunging.

Yesterday's Business Times reported that the Baltic Dry Index (BDI) fell to an 11 month low. Today, it fell another 3.799% to 1,013.

The decline is attributed to a worsening glut of ships. Rates are now below operating costs in the Pacific Ocean.

Capesizes, the largest dry bulk carriers cost US$7,437 a day to operate (excluding fuel). However, rates on round trip voyages in the Pacific fell to US$6,471 a day, down 80% from a month ago.

Seasonal decline in demand to ship commodities to China, port disruptions in Australia after a recent cyclone and a larger number of ships will continue to exert downward pressure on rates in the short run.

My investment in Courage Marine late last year at 10c a share is now underwater. What do I plan to do? Nothing. Why?

Courage Marine is a company with a strong balance sheet and I doubt it is going to sink. It might not do well but it will most probably survive the bad times.

For those who are thinking of possibly investing in Courage Marine, there could be a better time to do so. For those who are already vested, we have to ask if we run the risk of selling at the bottom if we exit now.

With my investment in the company accounting for only some 1.5% of my total portfolio value, I will simply hold on.

Investing in financially sound companies, I am able to stomach paper losses which are likely to be temporary in nature.

Related post:
Courage Marine: Bought more at 10c a share.

Courage Marine unit disposes MV Raffles for $4m
Wednesday, 18 January 2012

© 2012 - The Edge Singapore

Tea with AK71: A lunch of barley and winter melon.

I have blogged about how I would boil barley water and later eat the barley for a meal as well. Today, I brought to work a container of barley and winter melon strips drenched in soya bean milk.

My sister boiled barley water over the weekend and she was going to throw away the barley and winter melon strips. I asked her to keep them for me in a container so that I could bring to work for lunch. She kindly obliged.

This morning, I poured soya bean milk into the container and, voila, that's my lunch for the day!

Barley has been described as a nutritional powerhouse that has a low glycemic index (GI). It is high in fiber, naturally low in fat and cholesterol free. It contains vitamin Bs, antioxidants, selenium, iron, magnesium, zinc, phosphorus, potassium and copper.

A healthy meal and it costs next to nothing!

Related post:
Tea with AK71: A simple meal.

Mr. Lee Kuan Yew on the eurozone crisis.

I just received the latest copy of Alumnus in the mail and on page 4 is a one page write up on what Mr. Lee Kuan Yew said during LKY School of Public Policy's 7th Anniversary. He said something about the eurozone which got me interested enough to search for more details online.

The one liner that got me interested was: "Mr. Lee thinks European leaders will try very hard to prevent the collapse of their currency union but he does not believe they will be able to keep it going." So, does he think that the eurozone will ultimately dissolve?

Searching the internet, I found a website with the details:

... European leaders will try to save the euro zone from collapse, because a collapse of the currency union would be “an admission that their aspiration for one Europe is not achievable”.

.......

“A fundamental problem of the euro is that everybody, every European country, march to the same drummer whereas each country has its own tempo and you cannot expect the Greeks to march like the Germans, so the problem will not go away”.

Therefore, he added, “a two-tier Europe or even a three-tier Europe is possible but a one-tier Europe with different spending habits, thrift habits and discipline is too difficult to achieve”.

The euro came into existence in 1999 with the aim of increasing economic cooperation and growth in Europe, and upping Europe’s presence on the world stage.

With the recent debt crises, the currency union forces other European countries to bail out troubled  members and policymakers are denied the flexibility of monetary policy as a tool to fight recession.


Read articles: here and here.

So, will the eurozone go the way of the Dodo? If it will, when will it happen? 

Your guess is as good as mine. 

One thing is for sure, Mr. Lee Kuan Yew has spoken and I will take note.

------------------------------

Seven eurozone countries had their ratings confirmed while nine were downgraded by S&P on 13 Jan (Friday). It downgraded France's top AAA rating by one notch to AA+, with a negative outlook while  Italy went down by two notches to BBB+, negative outlook, and Spain was also down two notches to A, negative outlook.

Read article: here.


BREXIT!

Updated on 25 June 2016: Prime Minister David Cameron is to step down by October after the UK voted to leave the European Union. Speaking outside 10 Downing Street, he said "fresh leadership" was needed. The PM had urged the country to vote Remain but was defeated by 52% to 48% despite London, Scotland and Northern Ireland backing staying in. (Source: BBC)

The UK is likely to lose its AAA credit rating after it voted to Leave the EU. Moritz Kramer, chief ratings officer for S&P, said on Friday morning that the UK's AAA rating was “untenable under the circumstances”. German daily newspaper Bild quoted Kramer as saying: “If Great Britain decides for a Brexit in the EU referendum on Thursday, then the AAA credit rating would come due and would be downgraded within a short period of time.” (Source: Independent)

Related post:
Stakeholders should worry as credit is tightening.

Sabana REIT and AIMS AMP Capital Industrial REIT: Releasing quarterly results on 20 January 2012.

Both Sabana REIT and AIMS AMP Capital Industrial REIT will be releasing quarterly financial results on 20 January 2012.

Sabana REIT: see announcement here.

AIMS AMP Capital Industrial REIT: see announcement here.

Sabana REIT has completed a few acquisitions in the last quarter. However, I think their contributions to distributable income will be more substantial in the current quarter. This is because the acquisitions where completed in November and December and not at the beginning of the last quarter.

On 22 November, acquisitions of the following were completed:

1. 3A Joo Koon Circle
2. 2 Toh Tuck Link
3. 21 Joo Koon Crescent

See announcement here.

On 7 December, the acquisition of 39 Ubi Road 1 was completed. Read announcement here.

On 15 December, the acquisition of 6 Woodlands Loop was completed. Read announcement here.

All acquisitions were funded by debt and would contribute to a higher DPU. Conservatively, I am expecting a DPU of 2.2c or a bit more to be announced on 20 Jan.

We could see a higher DPU in the next quarter when full quarter contributions from the aforesaid completed acquisitions weigh in.

As for AIMS AMP Capital Industrial REIT, redevelopment of 20 Gul Way is ongoing and seems to be progressing nicely. Higher income due to this redevelopment will materialise only in 1Q 2013. I blogged about it before. See it here and how I bought more units at 93.5c.

It would be nice to have a repeat of 2.5c DPU when results are released on 20 Jan although I would not be surprised if DPU dips a bit due to possible loss of rental income from the redevelopment of 20 Gul Way. I mentioned it last year in a blog post as well: here.

Unit prices of both Sabana REIT and AIMS AMP Capital Industrial REIT have been creeping up. Their unit prices closed at 90c and 97.5c respectively in the last session. With the estimates I have made, this would mean annualised distribution yields of roughly 9.78% and 10.26% respectively.

Good luck to all unit holders.

Kaplan Higher Education Institute

Kaplan Higher Education Institute, one of the preferred private education institutions in Singapore, partners Northumbria University from the UK.

Northumbria University is one of the largest and most comprehensive UK education providers in Asia.

This partnership brings to Singapore a wide variety of Direct Honours and Masters programmes. These programmes are mainly assignment based and can be complete in just 16 months!

If you are thinking of furthering your studies, you can now get a study grant should you present the completed maze available islandwide (a print out can be obtained from the website) to their consultants.

Give it a go and you might just get yourself a study grant:
http://sg.churpchurp.com/AK71SG/share/kaplangame

First REIT: Resistance and supports.

First REIT has been very resilient. It is probably one of the better performers in my portfolio as well. A great investment for income.

However, investing for income does not mean that we cannot trade S-REITs from time to time especially if they remain range bound and somewhat predictable.

In the case of First REIT, if we look at the weekly chart, it is caught between the 50w and the 20w MAs. Immediate resistance is at 77.5c while immediate support is at 76.5c. Breaking immediate resistance could see 79.5c tested next while breaking immediate support could see 74.5c tested.

Now, which way would it go? My take? In the short term, price could go higher. Why?

Looking at the daily chart, we see the MACD just crossing into positive territory while the MFI overcame the 50% line which acted as resistance. The MFI continues to move higher.

However, the formation of a dragonfly doji on a day of relatively high volume suggests that selling pressure at 77c remains formidable. The longer it successfully prevents price from closing higher, the stronger it becomes as resistance.

Why does resistance at 77c seem so strong? It is the confluence of the 50d, 100d and 200d MAs.

SMRT: Downtrend intact.

Technically speaking, SMRT doesn't look good and I am not referring to its trains stalling. OK, bad joke.

Lower high and lower low in price are accompanied by a lower high and lower low in the MACD which is in negative territory. The downtrending MFI suggests reduced demand as the 50% line acted as resistance.

However, forming a doji provides some encouragement for long holders. The doji represents indecision and is a stalemate between bulls and bears.

That the doji formed despite higher volume on a day when price went lower than the low of the previous session suggests that there is some buying support. However, it could also be traders covering their short positions ahead of the weekends.

Single stick reversal signals are usually less reliable. For anyone who is interested in going long here, look out for confirmation next Monday.

If the signal is not confirmed, a lower low could form. $1.70? Perhaps.

Hyflux: Retest of recent high.

Resistance at $1.28 gave way today as price retested the recent high of $1.35. Volume was relatively high. This translates into a higher probability of price pushing higher in the next session. Remember that volume is the fuel that drives rallies.

MACD continues to rise in positive territory. Buying momentum is still positive and strengthening. The MFI continues to rise after bouncing off 50% a few sessions ago. This suggests that demand is still strong.

There is a chance of the counter's price testing $1.39 in the near future. However, I would be happy to divest partially at $1.365 where price could close the gap formed in early November 2011.

Related post:
Hyflux: Early stage of trend reversal?

CapitaMalls Asia: 20wMA, the resistance to watch.

If you think the title of this blog post looks familiar, it should be. ;)

If you look at the weekly chart of CapitaMalls Asia, you would know why:

Compare this with:
Capitaland: 20wMA, the resistance to watch.

Capitaland: 20wMA, the resistance to watch.

Quite a few people asked me what do I think of Capitaland as I have not said anything about it in a while. Well, if we look at the weekly chart, it is obvious that the downtrend is intact.

However, the higher low on the MACD which accompanies the lower low in price gives us a positive divergence. Being in the weekly chart, it suggests that we could see a recovery in price eventually.

A recovery could meet with resistance provided by the declining 20wMA. If we notice, this MA has functioned as resistance since late October 2010. Yes, Capitaland's downtrend has gone on for more than a year.

The 20wMA is important because:

1. For traders, this is where they would probably sell.

2. If the 20wMA holds as resistance, price would probably form a lower high and continue to move lower.

3. If the 20wMA breaks and price moves higher on the back of increased volume, the downtrend could be broken and it might even reverse. Short covering could push price even higher.

What would I do? Sell at resistance at least partially. It is never wrong to take profit, especially in uncertain times such as now.

Hyflux: Early stage of trend reversal?

I was going to blog about Hyflux last night but I got home rather late. Anyway, Hyflux's share price has been rather bouyant. Immediate resistance at $1.28 is a relatively weak one but it does not mean that it cannot prevent price from going higher.

People sometimes ask me how do I tell if a resistance or support is weak or strong. If it was tested many times before, it is strong. If it was tested many times before in the weekly chart, it is even stronger. It is stronger if it had not been compromised when tested in the recent past. Of course, there is an element of subjectivity here and these are just my little ideas.

Yesterday, a white candle with a long upper wick was formed as price closed at $1.27 after touching a high of $1.30. Volume was relatively high but the long upper wick suggests some selling pressure was present as traders locked in gains.

MACD is still rising in positive territory which suggests that there is positive buying momentum. The lower trading volume in the first two hours of the current session suggests a possibly less exuberant Mr. Market. So, do I sell? I could do so and book a gain.

However, I see that the declining 50dMA has acted as support. It is currently at $1.215. The 20dMA has turned up a few sessions ago and looks like it could form a golden cross with the 50dMA in time. So, with immediate support at $1.215 and with the MACD rising, there is a chance that price could go higher, given some time.

In the weekly chart, it is worth noting that the MACD has turned up and completed a bullish crossover with the signal line. However, it is still in negative territory. So, momentum is still negative in the longer term and any upward movement in price could be fraught with obstacles. Having said this, the development in the weekly chart suggests that selling pressure has eased and could see investors loading up at supports with less trepidation.

A higher high could see resistance provided by the declining 100dMA tested. This is at $1.39. Before that, we might see gap filling at $1.365. For anyone who is in the money, a partial divestment to lock in some gains could be considered. For anyone who would like to add to his long position, buying as close to the support of $1.215 as possible would be nice.

P.S. I am unable to include charts in this blog post. I might do it later this evening at home. Of course, the charts could look different by the close of today's session.

Daily Chart:

Weekly Chart:

Golden Agriculture: 3 signs of possible weakness.

I am waiting to add to my long position here. There are signs that price could see some weakness in time to come.

1. Formation of a gravestone doji today on much higher volume. This suggests that buyers were unable to beat sellers as market participants mostly chose to lock in gains.

2. Declining volume as price rose. Volume is the fuel that drives rallies. Without volume, rallies would fizzle out.

3. A lower high on the MACD even as price formed a higher high. A negative divergence. Buying momentum is in decline.

Immediate support is at 72c. If this should fail to hold, I expect the 200d MA, a long term MA to be tested. This is currently at 67.5c.

Saizen REIT: Acquisitions and long term loans.

Although I divested a large part of my investment in Saizen REIT, I still like the idea of owning freehold residential real estate in Japan where two thirds of its population rent the homes they stay in.

The Japanese Yen has strengthened against the S$ quite a bit and this could translate to higher income distribution in 2012 for unitholders. Add YK Shintoku's contribution to income distribution and the recent acquisitions which were funded by debt, we could see DPU a bit higher than my last estimate of 1c. Whether the difference is going to meaningful would also depend on how many remaining warrants would be exercised before the next distribution.

I have said that I like the amortising feature of the loans taken by the REIT before. What I also like are the relatively long terms of the loans taken by the REIT. This logically lowers refinancing risks.

The REIT recently took on a loan of JPY500m which partially funded the acquisition of a property in Kumamoto. This is an amortising loan with a 20 years tenure. The interest rate is 3.35% per annum.

For any investor who bought at 13.8c/unit today, if I were to stick to an estimated DPU of 1c per annum, we are looking at a distribution yield of about 7.25%. Of course, I am hoping for a higher DPU.

REITs, NOL, ARA and Hyflux.

Hope everyone had an enjoyable long weekend and is not missing the holidays too much.

The bullish movement in the stock market should put smiles on the faces of long holders. Has the bear been vanquished? I think it is too early to think so. So, we might want to make use of the bullish sentiment to lighten our long positions.

For me, I am still heavily invested in selected S-REITs as they could continue to deliver predictable passive income even in a zero growth environment. This is quite different, however, from thinking that S-REITs' unit price would not suffer in tandem with the broader market in the event of a crash. Indeed, it would be naive to think so although, with stronger balance sheets, we should not see the same magnitude of decline as in the last global financial crisis.

If we believe that money should go to where it is treated best, any significant decline in the unit prices of the S-REITs in my portfolio would tempt me with higher yields to add to my long positions. For now, I am keeping the status quo with regards to my S-REITs portfolio.

What about lightening my long positions? Share prices of certain companies went up quite a bit yesterday and I tried to sell some.

Today, my sell order for NOL at $1.22 was filled. With this partial divestment, I made some pocket money from Mr. Market. Why $1.22? That was the high of early September. Indeed, a safer resistance to sell at would be $1.18 as it has been tested many times. I took a chance that the buying momentum could push price pass $1.18 and it paid off. Indeed, price touched a high of $1.23.

However, the formation of a shooting star on the back of higher volume today suggests that NOL's share price could be heading lower from here. If $1.18 cannot serve as support, we could see price retreating to $1.10 which is where we find the 50d and 100d MAs merging.

I was not so lucky with another two counters, ARA and Hyflux.

People would say that ARA's trading volume is so thin most of the time that TA is inaccurate here. I didn't really bother using TA this time as I simply remember selling at $1.30 the last time and tried to do it again this time. Its share price did touch $1.30 last evening but my sell order was not filled. Trying to sell again today at $1.30 proved to be futile.

Well, it is back to the waiting game. If $1.30 should be taken out, I wonder if the next target is $1.45? Allow me my little day dreams.

As for Hyflux, the many white candle days on the back of expanding volumes led me to think that we could possibly see gap closing at $1.365 or even see a test of the support turned resistance of $1.39. Deciding not to be too greedy, I entered a sell order at $1.36. Unfortunately, it turns out that I was still too greedy.

Anyway, looking at the chart, immediate supports are at $1.24 and $1.225. The formation of a black candle on the back on lower volume is good news for long holders. However, that the black candle covers more than half of the preceding day's white candle is ominous. The MACD is rising strongly but it is still in negative territory. So, things could go awry.

I partially divested some of my investment, locking in a small gain in the process. I am just simply managing risk here by reducing exposure. If price should continue its upward trek, I would still stand to gain.

Finally, turning our attention away from the stock market, I have put up new blog posts on my recent trip to Japan. See them at Travel Photos and Videos. More to come. :)

Outside Lumine, Shinjuku. Kitty, "Hey! You can do it!" Believe it!

Related post:
Hyflux: Broke resistance.