Tea with AK71: Hainanese pork chop rice.

I like Hainanese pork chop rice. I know there are two versions: with curry or with tomato sauce watered down. This one at Redhill Market (supposedly a branch of a famous stall in Chinatown) sells the former while I know quite a few hotel cafes serve the latter.

Pork chop (very yummy), chap chye (stewed vegetable) and a hor pau dan (sunny side up, Chinese style) on steamed rice drenched in curry! Price: S$2.50.

Cambridge Industrial Trust: Excess rights results.

I checked my savings account and saw the partial return of funds used in the acceptance of rights and application of excess rights in Cambridge's rights exercise.

In total, I have 4 lots of rights units: 2,125 accepted rights and 1,875 excess rights. Add this to the initial 17 lots which I bought at 51c per unit, I have 21 lots now at an average price of 49.46c per unit. Let's just round it up to 49.5c per unit. With a DPU of 4.84c, post rights, that's a distribution yield of 9.78%.

Related post:
Cambridge Industrial Trust: Going for excess rights.

Cache Logistics Trust: Accumulate on weakness.

We could be seeing the final move in the formation of a reverse head and shoulders pattern. Volume has been reducing as price weakened from a high of 96c on 4 April. The counter closed at 93.5c today.

What do I like?

1. Low volume pull back.

2. ADX suggests a lack of trend. Looking at the Stochatics, it has entered oversold territory.

3. Potential reverse head and shoulders pattern. Watch out for price possibly testing 93c or even 92.5c for support.

4. Results and income distribution will be announced on 26 April. Expecting that to be a catalyst to send price higher.

So, if the pattern is valid, how high could the price go? Well, the low of the pattern was seen on 15 March and that's at 91c. The neckline of the pattern is at 96c. Projecting this difference forward would give us a target of $1.01. Not too bad, if I do say so myself. I am accumulating on weakness.

How to identify investment opportunities?

Macquarie Capital Securities (Singapore) Pte. Limited's quarterly seminar is here again. This time, hear from TRADING Central, the global independent chart specialists. They will be speaking for the first time in Singapore!

Hear from Mr Jun Zhang, Head of Asian Research for TRADING Central. He will be giving his views on the outlook for the global and regional equity markets. He will also be offering some insights as to how TRADING Central identifies investment opportunities for clients globally.

Mr Zhang has a Masters in Finance from the University of Paris and a Masters in Mathematics from the University of Shanghai. In his current role, he provides daily trading strategies for the Asian stock markets.

There will also be a short presentation on warrants and how to leverage your trading views without the risk of margin calls.

Admission to the seminar, as usual, is FREE.

Register soon as seats are limited: http://www.warrants.com.sg/en/seminar/seminar_e.cgi

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NOL: Going higher?

Just yesterday, I initiated a long position in NOL at $1.95. Today, it closed at $2.01, forming a long white candle in the process. The fact that 1,918 lots were bought up at $2.01 after market closed is promising and we could see resistance at $2.01 broken tomorrow.

Further upward movement in price could see a gap close at $2.05 which coincides with the declining 50dMA. Going higher would see resistance at $2.09 (200dMA) and $2.13 (100dMA). All the momentum oscillators are midway of their own range and whichever direction the share price decides on moving, we could see some distance travelled before it becomes either overbought or oversold.

When would I divest? Well, if price continues to rise in the next couple of days, I could do a contra and keep the gains. Zero cost.

On the weekly chart, a strong resistance shows up at $2.07. This is provided by the declining 50wMA and 200wMA. Could we see $2.07 tested in the next couple of days or would the price sink to test support at $1.95 once more?

Related post:
NOL: Initiated long position at $1.95.

CapitaMalls Asia: Waiting for a correction.

Quite a few people I know have fully divested their investments in CapitaMalls Asia. They did this as the counter tested resistance at $1.88 many times recently. Looking at the daily chart, it is obvious that $1.88 is a strong barrier to further upward movement in price. So? Sell at $1.88 or, if we are lucky, higher on whipsaws, and wait for price to pull back before buying in again? If only life were that simple and if only Mr. Market were that cooperative.

Personally, I am also waiting for price to weaken to supports at $1.83 and $1.80 before increasing my exposure to this counter. Look at the MFI and RSI and we see them bordering on overbought. However, remember that in very bullish conditions, things could stay overbought for quite a while. So, being overbought doesn't mean much and it does not mean that we would see a correction in price.

Look at the ADX and we see that it is rising. It is rising as the +DI has the advantage. So? Buy on any pull back to supports. That's conventional wisdom in an uptrend. That is what I would like to do.

Now, what could go wrong? Remember what Guppy said before? We could either have a correction in price or a correction using time. In the latter case, price could simply move sideways until the rising 20dMA catches up with it before going higher.

See where the 20dMA is now? It is rising strongly and seems on track to form a golden cross with the 50dMA soon. This is a bullish sign, if a short term one. If price is indeed doing a correction using time, all of us waiting to accumulate at $1.83 and $1.80 would be very disappointed.

Personally, I am still vested and will not add to my position at current levels. If price should go higher, I see the next significant resistance at $2.00. If price were to weaken to supports, I would accumulate.

CapitaMalls Asia signs MOU with Japan’s Parco
Wednesday, 13 April 2011

© 2011 - The Edge Singapore

Hyflux: 6% perpetual Class A preference shares.

I owned units in Hyflux Water Trust in the past. That investment did very well for me and, unfortunately, the Trust was privatised not too long ago. Read blog post here.

Back in 2009, I was also considering between Hyflux and E-pure as beneficiaries of a global search for solutions to water problems. I went with E-pure simply because of valuation reasons. I have no doubt that Hyflux is a strong company in a strong industry too except that its valuation has always been too rich for me.

However, the news that Hyflux is issuing preference shares with an annual dividend rate of 6% is somewhat surprising to me. In an environment of low interest rates, isn't paying a 6% interest a bit expensive? It would only make sense to do this if borrowing from a financial institution would be costlier and it would only be costlier if the company and/or its business is perceived to be high risk.

The only preference shares that I have ever owned is DBS NCPS 6%. This was something I bought 10 years ago. Intuitively, and we won't be too wrong to say this, DBS is less risky compared to Hyflux. Indeed, if DBS should default, I think that's the end for Singapore.

In a nutshell, if I were to invest in Hyflux, it would not be for income, it would be for growth. To invest for growth, I would not invest in Hyflux preference shares. To me, it is that simple.

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Hyflux to offer $200m of perpetual preference shares
Wednesday, 13 April 2011

© 2011 - The Edge Singapore

Mapletree Commercial Trust: Strong demand.

I have been asked by many people if I would be interested in the IPO of Mapletree Commercial Trust.

While I am a regular shopper at VivoCity, I am not enthusiastic about the IPO of this Trust. Why? The distribution yield of 5.5 to 5.9% seems a bit low. This is based on the price range of $0.84 to $0.91 per unit.

Mapletree Commercial Trust to raise $924m in IPO: Update
Wednesday, 06 April 2011

© 2011 - The Edge Singapore

It has just been reported that the initial public offering has already been five times covered and the IPO is likely to be priced between the midpoint and top of the price range of $0.84 to $0.91 a unit.

It seems to me that there is still a lot of liquidity out there searching for better returns. Could we see a spillover effect to other S-REITs since there would be a lot of excess liquidity as this IPO is expected to be many times oversubscribed? Why not?

Mapletree Commercial Trust’s $924m IPO 5 times covered
Wednesday, 13 April 2011

© 2011 - The Edge Singapore

Allgreen: Looking to initiate a long position.

I was just reading Allgreen's 2010 Annual Report and I must say that I like the numbers:

EPS: 14.23c which means a PER of just 7.65x at today's closing price of $1.09 per share.

NTA per share: $1.62 which means it is currently trading at almost 33% discount to NTA.

Gearing (Net debt to equity): 0.18x (which I believe is very conservative).

Dividend per share: 5c (XD 5 May 2011) or a yield of 4.59% at today's price.

Technically, the counter could experience some near term weakness as recent attempt to move higher was half-hearted on lackluster volume. The descending 100dMA is still the resistance to watch and that is currently at $1.12. Volume has been increasing as price retreated. OBV has turned down rather sharply, a clear sign of distribution.

Connecting the lows of 24 Feb and 15 Mar would give us a trendline support and a move to test this support is likely as the Stochastics is still bordering on overbought. A correction of the overbought condition could see a weaker share price and I could initiate a long position at $1.06 or $1.07 (50dMA).

Capitaland: Testing support at $3.36.

I initiated a long position in Capitaland today at $3.38 and $3.36. This was after what I said in the last blog post on this counter: "The Fibo Fan connects the low of 17 March and the high of today. Now, what I am interested in are the positions of the golden ratios in the next few sessions. 38.2% would be at $3.38 and 50% would be at $3.32 in the next session. Notice how the 20dMA seems to coincide with the 50% line? This is likely to be a strong support, if tested. In between these two golden ratios, we find the 50dMA, still declining but gently so, at $3.36. This could provide some support as well."

So, am I going to put in another buy queue for tomorrow at $3.32? Nope, looking at the charts at the end of every day is what I do and the 50% Fibo Fan line is at $3.33 tomorrow. Before that, however, we could see price supported as it closes the gap at $3.34 (1 April). So, buy queues for tomorrow would be at $3.34 and $3.33 for me.

If I were to choose between Capitaland and CapitaMalls Asia, it would seem that the latter has stronger technicals. However, it would be wise not to put all the eggs in one basket, I guess.

Coincidentally, OCBC Investment Research just did a piece on Capitaland and I would like to share what they said here. Remember to take everything with a pinch of salt:
Chinese worries overwrought - BUY. With the Chinese government’s plan to build 36m low-income homes by 2015 and its increasing determination to curb property prices, we recognize the down-side risks from Chinese property prices. However, given CAPL’s current share price, we believe Chinese residential worries on CAPL are likely overwrought due to two reasons. First, Chinese residential exposure only takes up around 12% of CAPL’s total book assets (FY10, ex. cash). In addition, we believe major projects, such as the Paragon, are well thought-out and likely resilient in a weak market. We update our assumptions and maintain a BUY rating with a revised fair value of $4.10 (at parity to RNAV) versus $4.05 previously. Read complete report here.

CapitaMalls Asia: Pulling back to supports.

If we draw a trendline connecting the high of 6 Oct 2010 and 9 Feb 2011, we will get a trendline resistance which, more or less, was what limited the upside yesterday at $1.92. A doji formed yesterday suggesting indecision and a possible reversal. We have confirmation today as price closed lower at $1.85.

Immediate support is found at $1.83. Not only is this where the trendline support is approximating, it is also where we find many times tested resistance and supports in the candlesticks. If $1.83 were to give way, next supports are at $1.80 (50dMA) and $1.76 (rising 20dMA).

What would I do? I like what I see in the ADX. The +DI has the advantage and the ADX is rising. This could be an early uptrend forming. MACD is still rising in positive territory. Volume in the last two sessions were not very high as price experienced weakness. A correction at this stage to shake out some of the weaker holders is healthy so that the counter could form a firmer base for any further upward movement in price. Price has to climb a wall of worries and buying at supports in an uptrend is what I would do.

The overbought condition as seen in the MFI and RSI would have to be corrected and a meaningful pull back is more likely to happen than not. I will accumulate on weakness.

Related post:
CapitaMalls Asia: Strong uptrend emerging.

NOL: Initiated long position at $1.95.

My overnight buy queue for NOL at $1.95 was filled today.

NOL has emerged from a downtrend which started on 7 February but it is still within a downtrend which started on 5 January. It is currently moving sideways and we could possibly see some rangebound trading in the near future with $2.01 and $1.92 as the upper and lower limits. Would price move up or down from here? The Stochastics is currently flat at 50% and there is equal chance for upside and downside in the near term.

Any weakness which might lead to a test of support at $1.92 could see me increasing my stake in the company.  This is because the weekly chart shows a rising 100dMA, currently at $1.90. Only after 2 days into the week, it is easy to see that $1.95 seems to be an important pyschological support level for NOL's share price and, thus, I believe, buying in at $1.95 cannot be too far wrong.

Related post:
NOL: Out of the doldrums?

First REIT: Bought more at 73.5c.

Today, I bought more units of First REIT at 73.5c. It should be quite obvious that the unit price of this REIT has gone into a trading range. There is no trend.

In my blog post of 1 April, I said "The REIT's price action looks rangebound and if we believe that there is no trend, we should pay attention to the Stochastics which suggests that the REIT is correcting from an almost overbought position. So, more weakness to be expected? Possibly and I am waiting to accumulate on any further weakness."

The Stochastics were coming off a high of 80% in late March. It has now flatlined at 50% which sometimes act as a support in a decline. With Stochastics no longer bordering on overbought, could we see price pushing the higher end of the range in the near future?

The rising 100dMA seems to be providing some measure of support and this is now at 73c. 74.5c is a many times tested resistance and would have to be cleared before price could go higher.

With the quarterly report and income distribution announcement drawing nearer day by day, a positive catalyst for price to move higher in the near term is possibly at hand. Could we then see a retest of January's high of 77c? Why not?

Related post:
First REIT: Bought more at 73c.

Capitaland: Insights with Fibo Fan.

In my last blog post on Capitaland, I said that "With immediate resistance at $3.54 (100dMA) and a possible whipsaw to $3.56 (gap resistance and 50% Fibo fan line), the near term upside could be limited from the current level. Support is at $3.41 in the next couple of sessions. This is a natural candlestick support and it coincides with the trendline support. A retest of support could see me initiating a long position in this counter." Read it here.

Today, Capitaland's share price pulled back and closed at $3.44, the low of the day, after touching a high of $3.53, just approximating the 100dMA. A test of support at $3.41 is very likely. The original plan was to initiate a long position at $3.41, if tested. Seeing, however, that the momentum oscillators are still bordering on overbought despite the pull back in share price, I decided to get some insights with a Fibo Fan.

The Fibo Fan connects the low of 17 March and the high of today. Now, what I am interested in are the positions of the golden ratios in the next few sessions. 38.2% would be at $3.38 and 50% would be at $3.32 in the next session. Notice how the 20dMA seems to coincide with the 50% line? This is likely to be a strong support, if tested. In between these two golden ratios, we find the 50dMA, still declining but gently so, at $3.36. This could provide some support as well.

So? Much safer entry point is at $3.32 while entry at $3.38 could be considered as a hedge. What about $3.41? Yes, that too could be considered a hedge although I am inclined not to put in a buy queue at $3.41 anymore because the momentum oscillators are still bordering on overbought.

Golden Agriculture: Black spinning top.

Golden Agriculture started the day bullishly enough but ended the day at 72.5c after touching immediate support at 72c. A black spinning top was formed, suggesting market indecision. This could be a reversal signal as indecision in an uptrend is not good news for bulls.

Support is currently provided by the flat 100dMA. With the momentum oscillators in their overbought territories, a pull back is not unlikely. Breaking support at 72c could bring out the sellers. However, the steeper uptrend which started on 15 March would still be intact if its trendline support holds up and this would be at 70c or so in the next two sessions. If this were to fail, the next supports are at 68.5c (50dMA) and 66c (200dMA).


Related post:
Golden Agriculture: Overcame resistance at 72c.

CapitaMalls Asia: $2.17 target price?

I remember that someone told me that DBS Vickers had a target price of $2.51 for CapitaMalls Asia and wondered why the share price of this company has been so weak. Well, valuation is a subjective exercise.

For example, OCBC Investment Research published a report with a target price of $2.17 for CapitaMalls Asia on 7 April 2011. Yes, this was just a few days ago. Does it mean that the share price is going to hit $2.17 in the next few days? It could happen, of course, but I won't bet my bottom dollar on it.

Having said this, it is always good to see what others have to say and OCBC Investment Research did raise some good points:

For CMA, China is the key growth market. CMA has three key operational advantages in China: Firstly, it has the ability to leverage on its extensive tenant network. Second, it has demonstrated diligence and success in using asset enhancement initiatives (AEIs) to grow its net property income (NPI). Thirdly, there would be a trend of decreasing dependence on anchor tenants as malls mature and this would further boost NPI.

CMA’s business model in China is a resilient one due to its focus on mid-high income segment instead of the volatile high growth-high margin luxury segment. While its downside is sheltered, CMA is poised to benefit from the expected steady growth in China’s retail consumption and middle class population.

Read full report here.

Related post:
CapitaMalls Asia: Strong uptrend emerging.

Golden Agriculture: Overcame resistance at 72c.

Golden Agriculture overcame resistance at 72c. This is a many times tested resistance and it is also where the 100dMA is approximating. Volume was not exceptionally high which makes the breakout somewhat less convincing but a breakout is a breakout and should be treated as such.

In the next session, we could see breakout chasers buying up the shares of  this counter. This could initially push price higher to close the gap formed on 20 January 2011 and this would be the immediate target of 76c. In time, we could see price overcoming gap resistance with an eventual target of 80c.

For anyone who might want to take a chance that the counter would go higher in price, a smallish hedge is wise since momentum oscillators are all in their overbought regions. With trading volume unimpressive, a pull back to retest supports cannot be ruled out.  Resistance turned support at 72c, unbroken if retested, would be a more ideal entry price than buying at a high.

If a long position were to be initiated at or closer to 72c successfully and if price were to move higher, this would probably be more of a short term trade. Why? Look at the weekly chart for an idea of the longer term picture. From the week of 21 February 2011 to the week of 4 April 2011, weekly volume has been reducing as price moved higher. A negative divergence? You got it.

If we scrutinise the MFI and the RSI, we see lower highs and lower lows as well. So? Price has been rising on weaker momentum. It does not mean that price cannot move higher, it just means that the chances of a breakdown is higher since the breakout is weaker. Being nimble is important here and less greed could be a good thing too.

CDL: A target of $14.31?

In the weekly email from The EDGE, "CLSA has upgraded City Developments to a buy in a 100-page property report dated Apr 7.... has a target of $14.31 for the stock against ... RNAV (Revised Net Asset Value) estimate of $16.84."

The stock closed at $11.76 in the last session. So, $14.31 is some 22% higher! That is some upside! What did I do? I decided to look at the charts.

It is quite clear that the rebound from 17 March has come to an end and price had been moving sideways the whole week. Resistance is at $11.78 or so and immediate support is around $11.57. Although price is sideway moving, OBV has been creeping higher which is a sign of accumulation. ADX with both +DI and -DI are flat. There isn't any trend per se. However, with +DI above -DI and with the MACD rising in positive territory, there is more reason to be optimistic than not.

Any chance of a pull back? Well, price moved quickly up from a low of $10.18 on 17 March for a gain of 15.5%. This is quite impressive but the MFI and RSI are both bordering on overbought while the stochastics is high in overbought territory.

Price is currently facing resistance provided by the declining 100dMA. Unless this resistance is overcome convincingly, chances are there will be a pull back. A pull back to $11.20 would be more of an ideal price to initiate a long position although I also see a possibility of $11.00 being tested for support in more volatile conditions.

Tea with AK71: A healthy low cost meal.

I have blogged about some low cost meals before and they have attracted many comments, some of which were surprisingly strong. I still remember some animated comments regarding the 70c nasi lemak and the cheap hawker fare at Tiong Bahru Market.

Well, I am now going to share with you another one of my favourite low cost meals which is easy to cook and full of nutrition: Oats. We can buy a 500g packet of raw rolled oats for about $3.00 from NTUC Fairprice. If you shop at Cold Storage, it could cost a bit more. It is cheaper to buy a 1kg pack, weight for weight, if you are cooking for more than one usually.

Put a pot of water to boil.

Get about half a bowl of raw rolled oats ready.

When the water has come to a boil, pour in the oats.

Replace the lid and switch off the fire. Leave it for 30 minutes or so. Sometimes, I forget and leave it for a bit longer but it's OK as the fire is off.

When you come back, give the contents a good stir.

You could add sugar or honey for taste. You could also add some dried fruits like raisins and apricots. There you have it: a low GI (glycemic index) meal that is full of nutrition and fibre.

Cost? Less than a dollar per serving, for sure. Guess what did I have for breakfast?