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Cabernet Sauvignon (and beer).

Saturday, May 21, 2011

This is my favourite wine as it is inexpensive and very drinkable. If I remember correctly, it costs about $14 a bottle at NTUC Fairprice:


I would have some wine once in a while but it would take me three nights to finish a bottle as I am not in the habit of having wine every night. So, often, I would have some leftover which I would have to throw away which is a pity. Here's the first glass I poured tonight:


Red wine is good for the heart and, of course, it warms up the body like all alcoholic beverages. It also promotes better sleep quality and I know I am in need of this recently.


Tonight, I drank more than I would usually. Only half a bottle left. I have stoppered what's left and, hopefully, I would be in the mood to finish it tomorrow night.


Cheers!
--------------------
Update: December 2016.


LMIR: Thoughts on partial divestment.

It has been a long time since I looked at the technicals of LMIR. Someone asked me if I would consider adding to my position in the REIT and I explained that I am still unhappy with how the management is losing millions of dollars quarter after quarter due to their foreign exchange forward contracts. So, not adding. Well, not unless price were to decline to provide a distribution yield closer to 10%. Nonetheless, the discourse got me curious enough to look at LMIR's chart.


The first thing that I saw was a negative divergence. As price moved higher, the MACD formed a lower high. In the last lower high on the MACD, price formed a lower high too. This is ominous. We have a potential head and shoulders formation. The neckline of this formation coincides with the rising 200dMA and would approximate 53c in the near future. If price were to break this neckline, we could see price going much lower. How low? 48c is a possibility. That would give me a distribution yield that is attractive enough to increase my investment in the REIT.


Should I sell now? Well, TA is about probability and not certainty. The head and shoulders formation could fail to deliver. However, as the bulk of my investment in LMIR was made in mid 2009 when prices were very depressed, a partial divestment to lock in some gains seems attractive in light of a possible significant decline in price.

Of course, these investments have already benefited from two years of income distributions as well and are likely to continue receiving regular distributions. There is no overarching need for me to partially divest but if I do, what price would be good for a partial divestment?

I would like to sell at resistance and it is obvious to me that immediate resistance is at 55c. However, Lippo is going to buy a big chunk of LMIR units from Mapletree LM Pte. Ltd. at 56c a unit. So, I think price could possibly go to 56c in the open market too. I have put in a sell order at 56c. Read announcement here.

How would things turn out? Only time can tell.


Related posts:
LMIR: 1Q 2011 results.
To protect our wealth, we have to take risks.

Golden Agriculture: Divestment at 70.5c.

Friday, May 20, 2011

I am feeling the effects of age as it catches up with me or, perhaps, I just have too much on my mind lately.

It was my intention to divest partially at resistance and to keep some in case price should go higher. This has always been my style. Today, I made a mistake and sold all my stake in Golden Agriculture at 70.5c, the immediate resistance.


It makes sense to sell some at 70.5c not only because it is where we find the declining 100dMA, it also makes sense because of the declining volume as price tried to move higher in the last three sessions. A pull back would not be unreasonable.

Indeed, with the ADX suggesting a lack of any strong trend and the Stochastics showing signs of overbuying, we could see a pull back. A pull back would find immediate support at 68.5c. Breaking that could see price going lower to 66.5c. In a pull back, we want to see a higher low formed.

Of course, we could also see price moving higher although the candlesticks formed in the last two sessions, together with declining volumes, are somewhat uninspiring. Next resistance is still at 72c. Good luck to all still vested.

Tea with AK71: Korean noodles for lunch.

I had Korean noodles for lunch. No, I did not go to some fancy Korean restaurant nor did I go to a food court. I cooked the noodles myself in my office. Yes, you guessed it. Instant cup noodles! Well, in this case, it would be more accurate if we call it instant bowl noodles because it came in a big bowl! Oh, fork included too.


I have seen these noodles before and they are usually quite pricey. Yesterday, while shopping at NTUC Fairprice, I saw it under the "Must Buy" section and they were sold at $2.95 for three bowls! That is less than a dollar per bowl! Irresistible and I finally got to find out why so many people I know like it so much.


Chopsticks not included. I always have spare disposable chopsticks at work as I would take an extra pair each time I make purchases at the food centres. They come in useful in times like this, I dare say.


The noodles were cooked in five minutes. The spicy aroma was really mouth watering.


The noodles are thicker than the usual Myojo or Maggi variety. The soup base was full bodied and spicy. Not for anyone who would find hot food a challenge though. One bowl of noodles and I was really full. A tasty and value for money lunch!

Perennial China Retail Trust.

Thursday, May 19, 2011

Perennial China Retail Trust (PCRT) is focused specifically on shopping malls but with a China focus. Although I am not usually interested in IPOs, I am curious about this one since I have vested interest in CapitaMalls Asia which has a large exposure in China.

PCRT has two objectives:
1. Provide unitholders with long-term capital growth from a steady growth in net asset value (NAV).
2. Provide unitholders with regular distributions from the income of its completed and stabilised assets.

PCRT will have an initial portfolio which includes:
1. 50% stake in Red Star Macalline Global Home Furniture Lifestyle Mall, Shenyang.
2. 50% stake in Shenyang Longemont Shopping Mall, Shenyang.
3. 100% stake in Foshan Yicui Shijia Shopping Mall, Foshan.
4. 100% stake in Chengdu Qingyang Guanghua Shopping Mall, Chengdu.

Only Red Star Macalline Global Home Furniture Lifestyle Mall, Shenyang, which was completed on 30 Sep 2010 is income contributing at listing date. The rest of the initial portfolio is expected to be completed from 3Q 2010 to 2Q 2014. If we are investing for income, this is not very reassuring.

However, PCRT has zero debt. This is attractive and also important as it would seek NAV growth through acquisitions. It has at least S$3.0 billion of pipeline projects in prime high-speed railway commercial development projects. Zero debt would probably mean that it would not have to be overly reliant on equity fund raising in the form of share placements and rights issues, at least in the early days.


PCRT's IPO has a price range of 70c to 76c and would raise between S$785,187,000 and S$852,580,000.

PCRT's forecast distributions (representing at least 90% of PCRT's distributable income):
2011's DPU 3.71c, representing a yield of 4.88% to 5.3%.
2012's DPU 3.86c, representing a yield of 5.07% to 5.51%.
Distributions are made half yearly.

From 2013, PCRT will distribute at least 50% of its distributable income. This might or might not mean a lower DPU since the rest of its initial portfolio would be contributing to distributable income by then with the exception of one property.

NAV per unit at date of listing is estimated at 67c.

Up till this point, there is little to interest me in the IPO. A distribution yield of 4.88% to 5.51% in the years 2011 to 2012 also does not provide enough compensation for the risks which investors are being asked to bear, in my opinion.

How does PCRT compare to CapitaRetail China Trust (CRCT)? Here are the numbers, as of 31 March 2011:
NAV/unit: $1.10
Gearing: 32.6%
Annualised DPU: 8.6c
Last done price: $1.26 which means a distribution yield of 6.83%.

With zero gearing, could PCRT do better than CRCT in future? Will the management be able to execute its future plans successfully? Forecasts are easy to make but whether the numbers would be realised is something else.

If PCRT's unit price were to fall to a much lower value and, in the process, offer a much higher distribution yield to compensate for the perceived risks, I could be interested then. Not now.

See PCRT's prospectus here.
See CRCT's 1Q 2011 presentation here.

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Golden Agriculture, Sabana REIT and AIMS AMP Capital Industrial REIT.

Wednesday, May 18, 2011

This is going to be a very quick post. Well, I hope it would be anyway as I am really tired today from work, mostly housework. All the housewives and maids have my deepest respect.

Golden Agriculture

Golden Agriculture provided some excitement today as patience finally paid off. A wickless white candle was formed on the back of much increased volume, breaking resistance provided by the 20d, 50d and 200d MAs in the process.


Immediate resistance is found at 70.5c as provided by the declining 100dMA. The strong buy up momentum today could probably spill over to the next session. We could see 70.5c tested and even broken. If it were to break, we could see the next resistance at 72c tested.

72c was a resistance level tested many times in the first half of April last month and it even broke briefly. Could we see price forming a higher high this time? Well, the upward trending channel suggests that this is a possibility but taking some profit at resistance can't be wrong either.

Sabana REIT

My thesis that Sabana REIT is going through a basing process could be right after all. The Stochastics is turning up from oversold territory while the MACD has turned up to close the distance with the signal line in negative territory.


So, no matter whether we believe Sabana REIT's unit price is range bound or trending down, support is obvious and downside is pretty limited for now.

90c remains the support to watch while continuing upward movement in price could see gap closed at 93c  and that would be the resistance to watch.

AIMS AMP Capital Industrial REIT

High volume white candle day. If we believe that price action saw the formation of a reverse head and shoulders pattern earlier in the year from February to April, we could see price going higher as the neckline at 21c has, once again, been overcome.


Could we see price breaking out of the downtrend this time round? Resistance at 21.5c remains rather formidable as it is provided by the 200dEMA and this was what prevented the unit price from moving higher in the second half of April last month. We shall have to wait and see. Good luck to fellow unitholders.

Well, this effort at a quick post took me almost an hour. I failed in my attempt. ;)

Related posts:
Golden Agriculture: Eyeing 96c per share.
Sabana REIT: Still waiting for a 10% yield?
AIMS AMP Capital Industrial REIT: 4Q FY2011.

Tea with AK71: Some of my stuff (Part 3).

Tuesday, May 17, 2011

No prizes for guessing how many years I've had this mug for. ;-)


I still remember buying this when I was in Secondary 4. 

It was a small luxury for me in those days as a student. It was also the first time I had my own mug at home. I would only use this mug from that day on. 

Of course, over the years, I accumulated another few mugs but this is still my first love. ;-p


A beautiful full moon tonight. I took a shot with my IXUS from my balcony. I guess this is the best I could do with the zoom and all. I am feeling somewhat nostalgic tonight. Growing old.

Related posts:
Some of my stuff (Part 1).
Some of my stuff (Part 2).

CapitaMalls Asia: Quiet resilience.

In generally weak conditions, CapitaMalls Asia's share price has shown a quiet resilience. It closed at $1.70 in the last session, down by only 1c, after being sold down to as low as $1.67. Volume was relatively light. This is important if we compare the volume to that of 6 May 2011 when price reached a low of $1.65 which saw trading volume many times higher.

This tells me that sellers are less enthusiastic now and that, perhaps, all the ones who want to sell at the current prices have sold. The MACD is closing in on the signal line in negative territory. Could we see a positive crossover and a rebound in price soon?


The MFI and RSI are both in oversold territory while the RSI has formed a higher low. Going long at $1.68 could be a good idea. Immediate resistance is provided by a confluence of the 20d and 50dMA at $1.76.

A stronger resistance is at $1.82 which is where we find the declining 100dMA although we could see price going above it if past experience is anything to go by. A breakout on higher volume could just make that happen.

Related post:
CapitaMalls Asia: A reversal signal.

Golden Agriculture: Eyeing 96c per share.

Monday, May 16, 2011

Are you rubbing your eyes? Are you pinching yourself? 96c per share for Golden Agriculture? What's the price now? 67c per share. Wah! Quick, put in a buy order for Wednesday! Wait a minute, who came up with that target? OCBC Research. The link is provided here:






I have been bullish on crude palm oil for a long time and, in recent weeks, I increased exposure to Golden Agriculture. The long term uptrend is intact and if anyone is thinking of going long here, the long term support provided by the rising 50wMA is currently at 65.5c. I believe that this is a relatively safe entry price if it should be tested again. If it were to break, the next support is provided by the rising 100wMA at 57.5c this week. That is some way to fall. So, one has to be mentally prepared.


The share price has been trapped between the 20wMA and the 50wMA for more than 4 weeks now. It could be due to the spectre of the sharply declining 200wMA. Could it force the price of this stock downwards? It could but it is also interesting to note that the rising 50w and 100w MAs would probably form golden crosses with the falling 200wMA towards the end of 3Q 2011 or early 4Q 2011. So, stronger performance in the next few months could be on the cards as per OCBC Research's opinion.

On the weekly chart, it is easier to see that a symmetrical triangle is forming. A symmetrical triangle is usually a sign of price consolidation. A break below the support on high volume could see the next support provided by the rising 100wMA tested. A break above the resistance on high volume would be good news for the bulls. However, expect resistance at 70.5c and 72c thereabouts to weigh in before that.

The outlook for crude palm oil is benign. Demand from India and the Middle East will likely pick up ahead of Ramadan, underpinning prices. China may also need to restock in the coming months. Source: Dow Jones Newswire, May 16, 2011 07:46 ET.

My strategy to accumulate on any weakness remains unchanged.

Related posts:
Golden Agriculture: Excellent results.
Golden Agriculture: A picture says a thousand words.
Golden Agriculture: Accumulation mode.

Saizen REIT: 3Q FY2011 results.

Sunday, May 15, 2011

(Something is wrong with Blogger. This blog post appeared on 13 May 2011, not 15 May 2011.)

As expected, YK Shintoku's CMBS is to be fully repaid very soon by end of May 2011. The repayment is funded by the REIT's internal cash resources (including proceeds from the exercise of warrants) and proceeds from the divestment of properties. It is expected that the operational cashflow from YK Shintoku's properties would contribute towards distributable income from the month of June 2011, therefore. Annually, this could bump up distributable income by some 10%.

I do not know if this would provide a positive catalyst to the unit price of the REIT. It could well have been priced in. Any upside could be capped at 15.5c which was the highest the unit price went to when the counter recovered from the panic selling which took place in the wake of the disastrous earthquake and tsunami.

It was revealed in its 3Q FY2011 report that JPY200m (S$3m) will be spent to repair properties affected by the disasters. It was also revealed that these would be funded by the REIT's reserves and would not affect income distributions.

How much is the estimated DPU for 2H 2011 payable sometime in September 2011? Distributable income for 1H 2011 was JPY383,858,000. Distributable income for 3Q 2011 came in at JPY187,213,000. If we simply double it, we would have JPY374,426,000. This is slightly lower than for 1H 2011 due to the continuing divestment of properties. However, 4Q 2011 would probably see 1 month of income contribution from YK Shintoku's properties. This could make up the difference.

In 1H 2011, we had a DPU of 0.52c. If distributable income remains largely the same for 2H 2011, we could see a lower DPU. This is due to a larger number of units in issue after the exercise of almost 52,000,000 warrants, seeing an increase of some 4.6% (which suggests a potential DPU of 0.5c).  A complete exercise of all warrants could see a further 23% decrease in DPU (which suggests a potential DPU of 0.385c). This is assuming that the exchange rate between the JPY and S$ remains largely the same as in 1H 2011.

In 2012, however, we should see the full contribution from YK Shintoku's properties which would bump up the distributable income by some 10% in all instances. We must not forget also that due to the amortising nature of Saizen REIT's loans, the distributable income is some 33% lower than what it could be.

Over time, distributable income in JPY terms is most probably going to increase. Imagine if the REIT were allowed to pay only interest on its loans and not make any capital repayment. The distributable income would be higher by 50%! Now that the REIT is made to amortise its loans, it would have smaller interest repayments in future as the loans would reduce in size. One has to think long term in order to appreciate the attractiveness of the arrangement.

Saizen REIT remains an investment that would appeal to anyone looking to invest in freehold residential properties in Japan with a relatively attractive yield. In FY2012, assuming all warrants were to be exercised, expect a full year DPU of approximately 0.385c x 2 + 10% = 0.85c, which at the REIT's current unit price of 14.5c means a distribution yield of 5.84%. This is premised upon the JPY staying strong against the S$, however.

I still have a large investment in this REIT although much smaller than before. It would be interesting to see what is the DPU when 4Q 2011 results are announced in another three months from now. It would also be interesting to see how the market would react to the REIT's results. Good luck to fellow unitholders.

See Saizen REIT's quarterly announcement here.

AIMS AMP Capital Industrial REIT and Sabana REIT.

(Something is wrong with Blogger. This blog post appeared on 12 May 2011, not 15 May 2011.)
In life, good and bad things happen. We just have to hope that more good things than bad things happen. If good things happen, we have to know it when we see it and take advantage of them. If bad things happen, we must know to take remedial action and not sink deeper. Easy to say and hard to do? Probably.


I believe that a good thing is happening now with Sabana REIT. OK, it is a matter of perspective. For those who bought it at $1.05 a unit at IPO, it might not look good at all. However, look at it from a different angle and it is a chance to accumulate more on the cheap. Well, some might say cheap could get cheaper. Indeed, it could.

I indicated in an earlier blog post where I think the supports for Sabana REIT's unit price would be if 91c were to be compromised as immediate support. You might want to read the blog post here. Today, price went to a low of 90.5c.

Regular readers know that Saizen REIT was my single largest investment until the recent partial divestment as its unit price rebounded from a serious bout of panic selling. AIMS AMP Capital Industrial REIT is now my largest investment.

At today's price of 20.5c and an annualised DPU of 2c, AIMS AMP Capital Industrial REIT has a distribution yield of 9.756%. Comparatively, Sabana REIT has an annualised DPU of 8.81c and at today's closing price of 91c, the REIT has a distribution yield of 9.68%.

AIMS AMP Capital Industrial REIT has a gearing level of 32% and an interest cover ratio of 5.7x while Sabana REIT has a gearing level of 24.9% and an interest cover ratio of 7.9x.

I also like Sabana REIT for having 44% of its portfolio in high tech industrial buildings. This compares favourably against AIMS AMP Capital Industrial REIT's 17.7%.

I could very well do some re-allocation of funds through a partial divestment of my investment in AIMS AMP Capital Industrial REIT and increasing my investment in Sabana REIT if the latter's unit price should weaken further, everything else remaining equal.

See presentation slides for AIMS AMP Capital Industrial REIT here.

See presentation slides for Sabana REIT here.

Win Sony PS3, HP Mini and Casio G-shock watches!

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Prizes to be won include Sony PS3, HP Mini and also Casio G-shock watches!

Play the game here: http://www.churpchurp.com/AK71SG/share/snickers2-hungerlings-attack

Sabana REIT: Still waiting for a 10% yield?

Sabana REIT has an annualised distribution yield of some 9.68% now, with DPU at 8.81c and unit price at 91c. In an earlier blog post, I mentioned that this is a better buy at the current price compared to AIMS AMP Capital Industrial REIT.

Sabana REIT has lower gearing, higher interest cover ratio and better quality assets overall; all these with a distribution yield that is comparable to AIMS AMP Capital Industrial REIT. Buying at 90.5c or 90c (if we were lucky enough in the last session) would close the difference in yield between the two REITs.

Now, many, including myself, would like to buy more of this REIT if it should give a 10% distribution yield which would imply a unit price of some 88c. Is this possible? An earlier blog post suggested that this would be a very strong support. Read it here.

88c a unit? A salivating proposition. Some would know that I bought more units in the last session at 90.5c. Why not wait for 88c? Well, TA shows where the possible supports and resistance would be, it does not say if they would be tested. I always hedge.


Continuing on TA, let us look at the daily chart for Sabana REIT. This chart has been adjusted to take into account the recent income distribution. It is interesting to note why 90c has proven to be a strong support in the last session. It approximates the low of 31 March 2011.

Next, look at the declining volume over the last two weeks as price declined from a high of 93.5c (pre-adjustment would be 95.5c). A low volume pull back. Are the bears losing steam? Indeed, in the last two sessions, we saw the formation of dragonfly dojis. These are bullish candlesticks but single stick patterns could be unreliable.

What about the MACD? It has completed a negative crossover in negative territory. A double negative! Do I see worry lines on your forehead? Well, I am inclined to believe that Sabana REIT has gone into a trading range. Its downtrend was broken earlier in April.

In sideways trading, I would look at the Stochastics. What do we see? It is in oversold territory. Could it get more oversold? It could, of course. However, TA is about probability and the probability of further downside is smaller now. That is for sure. For sure? Confirm? Double confirm. Yes, there are certain things we can still be sure about. Isn't that a relief? Hossan Leong would be happy.

90c would be a sweet price to get more units of Sabana REIT and I have put in my buy order for tomorrow. Good luck to fellow unitholders.

Related posts:
AIMS AMP Capital Industrial REIT and Sabana REIT.
Sabana REIT: Bought more at 91.5c.

NOL: Reporting a loss.

NOL reported that it has made a loss due to increasing fuel prices and too much new capacity entering the market. Marine bunker fuel averaged US$600.02 per metric ton in the first quarter in Singapore trading compared with US$469.19 a year earlier, according to data compiled by Bloomberg.

Will things improve for NOL?

“Too much new capacity has entered the market this year,” said Jee Heon Seok, an analyst at NH Investment & Securities Co. in Seoul. “It should get better as we go into the peak season in the third quarter and fewer new ships enter service.” Source: The Edge.

Oil prices have come off their highs and are now under US$100 a barrel. Supply worries have eased. The spike in oil prices was probably due to speculative activities rather than a real increase in demand. As circumstances surrounding the supply of crude oil turn benign once more, it would benefit NOL and other transport companies, everything else remaining equal.


Technically, NOL's chart is spotting a positive divergence. There is a higher low on the MACD as price spotted a lower low. Volume has also reduced significantly over the last five sessions as price hugged the 20dMA for support.

I believe that there could be a knee jerk reaction to the news and we could see price decline to cover the gap at $1.86. Any further decline in price and we want to see support at $1.80 holding up.  If it does hold up, it might be a good opportunity to buy some.

Now, we know that Mr. Market has a perverse streak. Could not the price move up instead? Yes, why not? And the reason would be that things are not as bad as analysts had feared. I'm just guessing, of course. Then, expect immediate resistance in a band between $1.92 and $1.93, after which, there is the declining 50dMA at $1.95.



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