AIMS AMP Capital Industrial REIT: Target price?

Closing at 23.5c on higher volume shows a continuing and heightened interest in this REIT.  This is especially true when we remember that this is after the counter has gone XR!  Buying at 23.5c and with an expected DPU of 2.08c, the yield works out to be 8.85% per annum.  Apparently, many feel that this yield is still attractive for them.  If we think of it objectively, it is still rather high, relative to some "blue chip" REITs, for example.

MFI continues to climb higher but is not yet overbought.  OBV too continues its climb upwards.  Demand remains strong and accumulation is relentless.  RSI rose higher into overbought territory suggesting that the buying momentum is somewhat overdone but the MACD continues pulling away upwards from the signal line in positive territory.  Momentum is currently positive and in very bullish situations, the RSI could stay overbought for a while longer.

This is a long shot but if 23.5c should be taken out convincingly, we could even see 25c tested.  At 25c, a DPU of 2.08c would translate into a yield of 8.32% per annum.  Still attractive for some? Perhaps.

Related post:
AIMS AMP Capital Industrial REIT: XR.

Healthway Medical: 20c target.

Standard Chartered has suggested a target price of 20c for Healthway Medical. They arrived at this target price after highlighting a slew of difficulties the company faces:

1. Opening chain of clinics in China and setting up specialist center in Singapore are facing challenges in execution.

2. The group has not delivered good execution in its specialist services in the past and has limited experience of organic expansion.

3. Mass exodus of prominent specialist doctors from Healthway’s employment is also troublesome. 

4. Cost pressure mounting due to aggressive expansion.

I am almost 100% divested and I am still waiting for its share price to fall to a more reasonable level before I load up once more because if the management does deliver on its expansion plans, the company's share price would fly. At the current price, valuation is simply astronomical.

Standard Chartered's target price of 20c implies a PE of 36x!  This is almost as ridiculous as Q&M Dental Group's valuation when they first listed!  Please bear in mind that my considerations here are based on FA.  There is no accounting for sentiments.

Related post:
Healthway Medical: Second quarter results.

SPH: $4.20 is still resistance.

On 9 September, I said "although a correction could be avoided if volume expands in the next few sessions as price pushes upwards, such a move would have a formidable sell queue to clear at $4.20. If ever this resistance was cleared, SPH's share price could fly.  At the moment, chances are slim that this would happen".  Well, $4.20 is still the resistance to watch.

Today, another black candle was formed, the third in a row, as price touched a low of  $4.13 before closing at $4.16.  The MACD seems set to form a bearish crossover with the signal line while the OBV continues to decline. Distribution is underway. The MFI has emerged from the overbought region which suggests that demand is no longer zealous.  The RSI although declining is still in the overbought territory and this suggests that we could see buying momentum slow down further.

The rising 20dMA should provide immediate support at $4.10 and this was also a natural candlestick resistance level. Would $4.10 hold as a support? We would have to wait and see.

Related post:
SPH: Touched $4.20.

AIMS AMP Capital Industrial REIT: XR.

This REIT went XR today. Closing at 22c, it shows a great deal of resilience and is much better than the expected TERP (theoretical ex-rights price) of 21c. If we look at the trade summary, of the total 3,307 lots which changed hands today, most of these, 2,487 lots to be exact, were bought up at 22c.  There is still a great deal of demand for this REIT.  In fact, anyone who went ahead and bought some at 22c or 22.5c when the counter first went CR would be in the money now.

We will get 7 rights for every 20 units which we currently hold. If we had bought these 20 units at 22c, we could sell these 7 rights when the nil-paid rights start trading on 23 Sep.  Since the price to pay to convert these rights is set at 15.5c, theoretically, they are worth 6.5c a piece (22c - 15.5c = 6.5c).  This would bag a gain of 6.5c x 7= 45.5c.  Based on an initial investment of 22c x 20 = 440c, 45.5c represents a gain of  more than 10% if we sell away the nil-paid rights! Detractors' aplenty but I believe the numbers here speak for themselves. Of course, bear in mind that these calculations are done assuming that this is a perfect world (which it is not).  So, it would be realistic to expect some deviation.

The question some might have on their minds is whether this is still a good time to enter?  Well, the estimated DPU, XR, is 2.08c per year.  This gives a yield of 9.45% at the current price of 22c.  If that is good enough for you, why not?

Personally, I would wait to see what the the nil-paid rights might be trading at come 23 Sep. I do not expect the nil-paid rights to trade below 5.5c since 5.5c + 15.5c = 21c which is the expected TERP and would enjoy a yield of almost 10% per annum.  However, if I were proven wrong and the nil-paid rights do trade at 5c or less, I would probably end up buying more. The yield would be simply irresistable at more than 10% per annum.

See slides from EGM here.

Related posts:
REITs: Simply explained?
AMPS AMP Capital Industrial REIT: Sell the rights.

China Hongxing: CD.

China Hongxing went CD today and the market rewarded its share price in a most sporting way as it touched a high of 22.5c before closing at 22c. The 19.5c target identified earlier this month is probably resistance turned support at this point.

Volume expanded significantly as price formed an impressive white candle. The OBV turned sharply upwards suggesting strong accumulation.  With volume so high, there could be a follow through. 22c target was based on the 138.2% Fibo line. We could see the 161.8% Fibo line tested next and this is at 23.5c.

Although the sell signal of the previous session as seen in the MACD histogram was negated today, the MFI and RSI are both in overbought territories. So, although price could push higher, this counter is rather overbought and anyone choosing to go long at the current price would have to be very nimble and might have to settle for smaller gains. The risk premium is definitely higher.

Related post:
China Hongxing: New target.

Courage Marine: Awakening.

On 11 Sep, a reader, Wong, asked if it would be a good idea to accumulate more units at 18c.  I avoided giving a straight answer as usual and replied:

"If you have excess funds lying around and if you think that the shipping industry has turned the corner, 18c seems inexpensive.

"If you already have a large investment in Courage Marine, then, you have to question how comfortable are you to increase exposure to this company.

"In my opinion, Courage Marine is fundamentally sound. If there should be nasty surprises in the macroeconomic environment, Courage Marine would most probably survive because of its strong balance sheet. Shipping is a cyclical business. We have to ride the waves."

Courage Marine's share price has been trapped in a range between 18.5c and 19.5c for a long time and there are some whom I "overheard" in Bully the Bear's cbox being sick of holding on to the shares.  Patience is a rare commodity, after all.

With more people conversant in TA, charts are revealing its secrets to more market participants and there was a huge sell queue at 19.5c today as many recognise it as a strong resistance. However, there was heavy buying up in the first half hour of trading and 3,696 lots were bought up at 19.5c.  Trading volume is also impressive so far with a total of 5,247 lots changing hands.

Is Courage Marine awakening? If the resistance at 19.5c is taken out convincingly, it could very much be the case. Good luck to fellow shareholders.

Related post:
Courage Marine: Range bound.

Rights and wrongs: Charlesming's perspective.

Charlesming is the blog master of Time to Huat and also the person who introduced me to the world of Technical Analysis (TA). 

For anyone who might have wondered how a techno dinosaur like me would start a blog, well, although it was primarily because of boredom last Christmas Eve, Charlesming was the person who planted in my head the idea which led me to find out more about blogging during that night of boredom! Reminds me of the movie "Inception"! 

A comment from him recently shows the thinker that he is and I am putting it up as a separate blog post here:

I personally feel that not all rights issue are equal. Rights are issued for various reasons. The exercise price is important to find out if we are getting a good deal. Another important aspect is to figure out what the funds raised are for. I agree REITs need to continue to 'trade'. 

Ideally there is no need to buy and sell assets, save on the cost of doing so and just generate a stable yield forever. The world doesnt stay the same forever. With a large portion of the income distributed via dividends, REITs simply dont have the funds to make accquisitions. Question is, do we agree the accquisition they are interested in, is in good taste and value? If I deem so, I dont see a problem in supporting the rights issue. If I dont let go of 10c, how to gain $1? That is not to say that all rights issues are worth me putting up that 10c.

 So I feel it is inaccurate to downplay rights issue as a return of dividends. While partially true,there are some deals where I would like to pay them back some dividends so that they can grow and get more dpu for investors. On the other hand if they make a 'hopeless accuisition' where I cannot see how my 10c can be made to work harder to generate that $1 then I will not support it. I may sell the rights, and/or I may let go of the entire stake I own even.

 Taking it one step further, a rights issue gives me a choice. A placement to a private investor(s) gives me zero choice and I cannot help but watch my stake get diluted . This is where I may get a little annoyed.

It is inevitable rights issue (and in some cases placement) is a way of life in REITs and companies looking to expand their business. All are not equal and investors have to figure if the company is doing the right thing, at the right price, and ultimately, at the right time too (market sentiment).

 As for the word 'fool' I suppose it can be subjective depending on the context used. An investor, whether buying it at a cheap or overvalued price is a fool or not, could depend on many factors. Could we be fools who over analyze? Could we be fooling others and ourselves, with our own biased opinions? Fool or not, the market is the only one who is right.

One of the lil quotes that I like - "Listen to your heart. It is on the left, but it is always right'.

I prefer to think (as a trader and investor) if I profit after selling something and the price continues to head up, I just take it as its for someone else to profit. One of my own strategies is to take partial profit along the way up. This makes me a winner regardless of the price action thereafter.

 Just my 2 cents worth from my very limited knowledge. I hope to learn over the years.

Related post:
REITs: Simply explained?

Gold and Silver highest in the last 12 months.

Gold is currently at US$1,267.51 an ounce while silver is currently at US$20.42 an ounce. These prices are higher than in June 2010 when I blogged (again) about how we should hold some gold and silver as a hedge against all other forms of investments and against fiat currencies. What little exposure I have to these two precious metals is turning out rather nicely.

In the short run, I see immediate support for gold at US$1,260.00 an ounce and immediate support for silver at US$20.20 an ounce.  Gold is now challenging resistance at US$1,270.00 and if it does break this, it could go much higher.

On 20 June 2010, I blogged that "if we believe in charting, silver's longer term trend is still up and I would buy more on weakness." That view has not changed.

Related post:
Hedging and precious metals.

Gold hit $1,269.45 on the London Bullion Market on Tuesday afternoon, beating the previous record of $1,265.30 struck on June 21. Read article here.

Addition on 15 Sep 10:
Gold prices under the continuous contract set a new all-time high of $1274.60 per ounce, well above the previous all time high of $1266.50 per ounce. Silver prices continued their ascent as well. Specifically, the December contract for the precious metal hit $20.55 per ounce.

K-REIT: Trading bands.

It seems that the worst is over for office rentals in Singapore. There is a general expectation that things have stabilised and we could even see some upside next year.  I have a small position in K-REIT in my frozen portfolio and this small investment is actually enjoying a paper gain now.  So, when would I sell my stake?

We could do a very simple TA for K-REIT even if I do not have access to today's data on ChartNexus. Price touched a high of $1.28 before closing at $1.26. It opened at $1.27 and touched a low of $1.25. So, picturing it mentally, it formed a black spinning top today. That it touched a high of $1.28 is significant as it confirms $1.28 as an important resistance level. Volume was only half of yesterday's which suggests a lack of conviction by sellers today even as price action formed a black candle.  So, the indecision suggested by the black spinning top does not have strong downside pressure, I feel.  In case of continuing downside, where do I see support?

Looking at the chart, it is quite obvious that $1.22 was a major resistance level and I expect this to provide immediate support in case of a move downwards. If this breaks, the next support is at $1.16.  Having said this, you could have noticed an interesting phenomenon. K-REIT seems to be trading in a 6c trading range recently: $1.16 to $1.22 and $1.22 to $1.28.  This is useful information for anyone who is interested in profiting from some range-bound trading.

In the event that $1.28 resistance is taken out, one could therefore expect $1.34 to be the next resistance level if this phenomenon continues to play out.

Singapore office plays better bet vs developers: Morgan Stanley
Tuesday, 14 September 2010

© 2010 - The Edge Singapore

Golden Agriculture: Trading Buy by OSK.

On 8 Sep 10, I mentioned that "I am vested in Golden Agriculture because I believe in its fundamentals." So, even if the technicals were somewhat directionless, I was willing to take the risk going long. Today, OSK upgraded Golden Agriculture's target price to 68c. Fundamentally, I think that is a fair price.  However, how does the technical picture look?

Today, its share price hit a high of 60.5c before closing at 59c, forming an inverted black hammer in the process. That this happened on much higher volume than the previous session is not promising.  On a brighter note, it does mean that price action broke out of the triangle suggested on 8 Sep 10 on the upside.  Could this be sustained?  I don't know about 68c but I spot a major resistance at 62c. This has been tested many times and price has closed above this level only once this year and that was on 11 Jan 10.  Many people who bought at 62c are probably waiting to break even at that price. Hence, the expected resistance.  So, if price does test 62c again, I would sell some.  In case of a further decline in price, I see immediate support at 58c.

I am not able to comment on the momentum oscillators or OBV this evening and I am afraid I do not have a chart to put up as, for some reason, my broker's version of ChartNexus has not been updated yet.

Golden Agri-Resources raised to Trading Buy by OSK. Expects "very strong" 3Q10 results after 2Q10 weakness due to dry weather, as production recovering.
Tuesday, 14 September 2010

© 2010 - The Edge Singapore

Related post:
Golden Agriculture: Triangle.

Alexa (Part 2) - Updated 2 Nov 10.

According to Alexa, my blog's traffic ranking in Singapore has improved.  However, its global traffic rank has slipped.  This probably means that although my blog is gaining in popularity in Singapore, there are many more websites in the world now and they are more popular than my blog on a global scale.

Our country's government is always telling local companies to go global and that the domestic market here is just too small.  Even if my blog becomes more popular locally, on a global scale, it is still insignificant and, in fact, is getting more so.  That's the message Alexa is sending to me.  This message from Alexa reinforces the perception of how small Singapore really is.


According to Alexa:
Singaporeanstocksinvestor.blogspot.com has a three-month global Alexa traffic rank of 730,608.  Visitors to the site view an average of 2.3 unique pages per day. Visitors to Singaporeanstocksinvestor.blogspot.com spend approximately two minutes on each pageview and a total of eight minutes on the site during each visit. Roughly 33% of visits to the site consist of only one pageview (i.e., are bounces).

Global traffic rank: 730,608 (was 667,393 on 28 July).
Traffic rank in SG: 2,506 (was 3,808 on 28 July).

Updated on 14 Oct 2010:

Singaporeanstocksinvestor.blogspot.com has a three-month global Alexa traffic rank of 684,209. Visitors to the site spend approximately two minutes on each pageview and a total of nine minutes (up from eight minutes) on the site during each visit. Roughly 28% of visits to the site consist of only one pageview (i.e., are bounces) - down from 33%. Visitors to Singaporeanstocksinvestor.blogspot.com view an average of 3.3 unique pages per day - up from 2.3 unique pages per day.

Global traffic rank: 684,209. 

Traffic rank in SG: 2,218.

Updated on 2 Nov 2010:

 

Singaporeanstocksinvestor.blogspot.com has a three-month global Alexa traffic rank of 630,248. Visitors to the site spend approximately two minutes on each pageview and a total of ten minutes (up from nine minutes) on the site during each visit. Visitors to Singaporeanstocksinvestor.blogspot.com view an average of 4.0 unique pages per day. up from 3.3 unique pages per day.

Global traffic rank: 630,248. 

Traffic rank in SG: 2,021 .

Related post:
Alexa


Visit Alexa: here.

Hock Lian Seng: Resistance broken.

On 9 Sep, I wondered if the 30c resistance level could be taken out soon and went on to say that "I believe so as the massive 30c sell queue was wiped out today."  Today, Hock Lian Seng touched a high of 31c before closing at 30.5c.

Although volume is lower than the previous session which saw the shares trading at only one price, 30c, we could have seen the effective weeding out of weaker holders.  30c could be resistance turned support.

OBV has continued its upward trajectory suggesting continual accumulation.  MFI shows formation of higher lows which suggests sustained demand.  RSI has lower highs which suggest that buying momentum is weak.  So, this counter has support but its share price is not going up in a hurry, it seems.  Another counter that requires more patience, perhaps?

Related post:
Hock Lian Seng: Ready to break resistance?

AIMS AMP Capital Industrial REIT: 23c support?

This REIT is attracting more interest as volume expanded again today as price rose to close the day at 23.5c.  23c resistance has been taken down.  Could we see 23c turn support this time round after it failed to do so in early August?

Taking a look at the momentum oscillators, the MFI has formed a higher low which signifies strengthening demand while the RSI has risen sharply into the overbought region which suggests strong buying momentum and that buying in now could bring with it higher risk. OBV has turned up sharply, suggesting accumulation.  All the technicals are promising and whether 23c could be the new support needs confirmation.

This REIT would go XR on 15 Sep, 2 days from now.  Expectations are for the price to weaken to around 21c (TERP) then.  It would be interesting to see if it pans out.

Related post:
AIMS AMP Capital Industrial REIT: Rights issue.