Tea with AK71: Dishonest merchant.

More than three years ago, I was given a present, a Canon IXUS 860 IS digital camera, in Hong Kong. It was, at the time, a somewhat expensive item.

Recently, the rechargeable battery was not holding its charge and even someone who is not savvy with high tech stuff like me knew that the battery probably had to be replaced. This is what the battery looks like:

When I showed the battery to a very good friend of mine, he told me that the battery is not a Canon original. I told him it came with the camera and it must be original. Well, my friend who is more tech savvy than I am told me firmly that he has quite a few Canon digital cameras and what I showed him was definitely not the real deal. Oh yes, I forgot to mention that this friend is also very rich.

Anyway, I was somewhat upset that my present, although given to me three years ago, probably suffered some monkey business at the hands of some dishonest merchant in Hong Kong!

As you can see from the photo above, the original from Canon, which I bought from Canon's showroom at Vivo City recently looks quite different from the battery that came with my camera. Price: S$89.00.

Dishonest merchants are everywhere. I ought to warn my friend in Hong Kong who bought this camera for me not to buy anything from that shop again, wherever they are.

Saizen REIT: A new loan.

More good news. Saizen REIT secured a new loan for the amount of JPY 500 million (S$7.5 million) from a Japanese financial institution, the Kumamoto Dai-ichi Shinkin Bank on 20 April 2011. This is for a term of almost 20 years up to 10 March 2031 and has an interest rate of 3.5% per annum.

The money was used towards the repayment of YK Shintoku's CMBS and taking into account YK Shintoku’s cash reserves, the net outstanding loan of YK Shintoku amounts to approximately JPY 0.7 billion (S$10.5 million).

The day when YK Shintoku would be unencumbered by any loan is drawing nearer by the day.

First REIT: 1Q 2011 results.

Feeling somewhat tired and was thinking of not checking my blog today. Then, I remember that First REIT would have announced their results this evening. All as well since I found some comments waiting for my replies. Would not do to make loyal readers wait too long. ;-)

First REIT delivered a set of results that is very much within expectations. I had expected a DPU of about 1.6c. It turned out to be 1.58c. Close enough. Gearing is at 13.8% which leaves the REIT plenty of room to gear up for future acquisitions. After all, the REIT plans to grow its portfolio from the current S$584.6 million to S$1 billion in the next 2 to 3 years.

Some numbers:
NAV/unit: 78.25c.
Interest cover ratio: 11.6x.
See presentation slides from AGM here.

The counter would go XD on 27 April 2011 and distribution would be made on 30 May 2011.

Could we see price moving higher from here? I am inclined to believe that it would although it should hit resistance at 76c to 77c in the immediate future if so.

Related post:
First REIT: Bought more at 73.5c.

AIMS AMP Capital Industrial REIT: 4Q FY2011.

A higher DPU of 0.54c was achieved for fourth quarter ended 31 March 2011 (4Q FY2011). This is partly due to the release of distribution retained in previous quarters which bumps up the distributable income for the quarter by S$708,000.

Since an advance distribution of 0.285c per unit was paid out on 28 March, 0.255c per unit would be paid out on 8 June 2011. XD on 26 April 2011.

Some numbers as of 31 March 2011:
NAV/unit: 27c.
Gearing: 32.0%.
Interest cover ratio: 5.7x
Weighted average debt maturity: 3.5 years.
Weighted average interest rate: 3.36% per annum
Weighted average lease expiry: 3.4 years.
Weighted average land lease expiry: 42.0 years

Substantial shareholders:
AMP Capital: 15.35%
Dragon Pacific Assets Limited: 11.98%
APG Algemene Pensioen Groep N.V.: 9.42%
Universities Superannuation Scheme Limited: 8.19%
George Wang: 7.19%

See presentation slides here.

AIMS AMP Capital Industrial REIT achieves DPU of 0.54 cents for 4Q
Tuesday, 19 April 2011

© 2011 - The Edge Singapore

Related post:
AIMS AMP Capital Industrial REIT: Stronger numbers.

CapitaMalls Asia and NOL: Increased exposure.

The STI retreated 19.01 points today to close at 3,125.37. Volume was rather low with only 1,075,913,210 shares worth a total of S$1,329,106,068 changing hands. Low volume on a down day is good news for bulls as it suggests a lack of conviction on the part of sellers. Today, I increased exposure to CapitaMalls Asia and NOL.

CapitaMalls Asia's trading volume reached its highest in 5 days and my buy queue at $1.80 was filled as price touched a low of $1.79. In my last blog post on this stock, I said I would accumulate on weakness but only on further weakness and not $1.83. $1.80 would be a hedge while I would accumulate further if price were to test $1.76.

Could $1.76 be tested in the next couple of days? Possibly since that would be also be a test of the 61.8% Fibo fan line. Momentum oscillators are all declining and could be testing 50% soon for support. Downside could be pretty limited from here. This counter has a compelling story to tell and the dual listing exercise once underway could provide it with some strong upward momentum. In the meantime, the descending 100dMA provides resistance and I could do a contra if price were to go that high in the next two days.

Earlier on, I had thought of NOL as forming a mild uptrending channel. That picture is now changed as a new low was formed today at $1.88. I bought more at $1.89 or 1 bid lower than the support of the range which I have identified as between $1.90 and $2.01. I like how a white spinning top was formed as price declined on reduced volume compared to the session before.

I also like how the MACD has a higher low even as price formed a lower low. Momentum is still encouraging and coupled with the white spinning top, we could have a rebound as the Stochastics seem to have declined into oversold territory too quickly. A retest of the 20dMA at $1.96? Perhaps so and that would be a nice price for a contra.

Related posts:
CapitaMalls Asia: Accumulate on further weakness.
NOL: Going higher?

CapitaMalls Asia: Accumulate on further weakness.

CapitaMalls Asia has a strong resistance at $1.88. That is quite obvious. This resistance level was breached in many recent sessions although price did not close any higher. If the counter's share price were to move to retest this resistance level again, it could very well give way to higher prices. In the meantime, a pull back is underway.

Today, only 123 lots out of a 3,434 lots changed hands at $1.83. This is the immediate support identified before. The next support level is at $1.80, which was a weak resistance which gave way on 5 April. This weak resistance could be a stronger support as it is where we find the golden cross formed by the rising 20dMA and the flat 50dMA. If this should break, I see support at $1.76 which is suggested by candlesticks and the approximate position of the 61.8% Fibo fan line.

What am I going to do? Well, seeing how the pull back is on rather low volume, I am inclined to accumulate on weakness. However, seeing the momentum oscillators still bordering on overbought, it would not be wrong to wait for further weakness before accumulating. So, a buy queue at $1.80 as a hedge and another buy queue at $1.76? Perhaps.

Related post:
CapitaMalls Asia: Waiting for a correction.

Healthway Medical: Technically interesting.

I have blogged enough on the fundamentals of Healthway Medical for regular readers to know that I would not increase exposure anytime soon. The management has some way to go to prove themselves, that they could execute their strategies successfully.

Technically, however, it is looking somewhat interesting as the 20dMA is rising and could form a golden cross with the 50dMA. It suggests that the share price could have found a floor for now. Stochastics is now in the oversold territory and +DI has the advantage. Squeezing Bollinger bands suggest reducing volatility of late and we could see the counter's share price moving sharply up or down in the near future.

Successfully overcoming the nearest trendline resistance could see price testing a high of 14.5c/share.

Related post:
Healthway Medical: 1 for 8 rights issue.

Cache Logistics Trust: Testing supports.

In my last blog post on this Trust, I said that we should watch for a retest of supports at 93c and 92.5c. Today, those prices were tested as price touched a low of 92.5c before closing at 93c. Although volume was much higher relative to the preceding sessions, it is lower compared to 23 Feb, 15 and 24 Mar when the same prices were tested and even breached in the case of 15 Mar. This is an important development as it suggests that selling pressure has seemingly reduced.

As the ADX still suggests a lack of trend, look to the Stochastics for guidance. It suggests that the counter is now oversold. The potential for a reverse head and shoulders pattern remains just a potential for now. Although I think that there is a nice chance it could come to fruition, Mr. Market could have other plans. I would hedge and I have put in my buy queue at 92.5c. If the support should hold, I would then buy more.

Related post:
Cache Logistics Trust: Accumulate on weakness.

Golden Agriculture: Waiting to increase exposure.

Although I might not blog about it as much as before, regular readers of my blog would know that I like Golden Agriculture as I feel that CPO's price has only one direction to go in the foreseeable future. Golden Agriculture, amongst the CPO counters listed in Singapore, is the most levered to CPO's price.

I have been waiting for a meaningful pull back to increase my exposure to this counter. In an uptrend, it would mean waiting for a retest of supports before buying. The instances when I was impatient and when I chased prices higher were instances which I regretted, more often than not.

So, is Golden Agriculture in an uptrend? No doubt about it. When to buy more? Ah, that's the question that is more interesting for most people, I am sure.

If we connect the highs of 4 March and 11 April, we get a trendline resistance.  If we connect the lows of 23 Feb and 15 March, we get a trendline support. If we take a step back, we might see that this is an uptrending channel. If we look at the candlesticks, we see significant resistance at 72c and support could be found at 65c.

Price touched a low of 68.5c in the last session which is where we find support provided by the 50dMA. If this were to break, we could find the rising 200dMA tested for support and this is at 66.5c. Having failed twice as support before, it does not seem very trustworthy and people could possibly choose to err on the side of caution and wait for a retest of channel support which should approximate 65c next week. Buy some if the 200dMA should be tested (as a hedge) and buy more if channel support should be tested later? Sounds like a strategy I would employ.

The chances of price going lower are high. The +DI now coincides with the -DI and the ADX is under 20. There is no trend per se and we could see the Stochastics move lower to test its own trendline support. A bearish crossover on the MACD is a foregone conclusion while the MFI and RSI have broken their respective trendline supports. I will wait to accumulate at stronger supports.

Related post:
Golden Agriculture: Alarm bells aplenty?

Hyflux director divested all his shares!

Lee Joo Hai, a director of Hyflux, divested his shares completely at $2.18 per share in open market sale at own discretion on 15 April 2011. 

Total: 375,000 shares. 

As an insider, could he know something that we retail investors don't? Probably.





In my last blog post on the subject, I had mentioned that 

"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."





Judging by how well the response is to the placement shares, which were 7x oversubscribed, I expect the ATMs to see long queues as people try to get their hands on some of these preference shares. 

Application closes on 20 April and the shares will start trading on 26 April. 

Good luck to those interested.

Related post:
Hyflux: 6% perpetual Class A preference shares.

Industrial rent forecasts strongest for Singapore.

This research paper on Asia Pacific real estate by DTZ Research was published on 23 February 2011. DTZ Research rates properties as HOT, WARM or COLD.  HOT refers to properties severely undervalued. WARM refers to properties somewhat undervalued to somewhat overvalued. COLD refers to properties which are very much overvalued.

It is very interesting to see that Singapore properties are rated as HOT for all three markets researched, namely, office market (-12%), industrial market (-14%) and retail market (-8%).  In more detail, HOT refers to an investment where investors can expect to make returns higher than the risk adjusted rate of return. Markets estimated to be more than 5% under-valued are classified as HOT. To put things in perspective, the office and industrial markets in Hong Kong are rated COLD. Taipei's industrial market is also rated COLD.

As I am heavily invested in industrial properties S-REITs, notably in AIMS AMP Capital Industrial REIT and more recently, in Cambridge Industrial Trust, Cache Logistics Trust and Sabana REIT, I am pleased to have affirmation from DTZ Research when I read this:  "Singapore, a traditional powerhouse in trade and logistics, is expected to be the best industrial performer over the forecast period in terms of rental growth, forecast at 3.6% pa." Refer to page 8 of the research paper. See it here.

Related post:
Higher rents to benefit industrial properties S-REITs.