Dollar index almost fully recover after Asia and Europe went through the panic mode. Just stay cool. The tsunami will be over very soon.
Shorting may be not your cup of tea but making an informed decision is a must for the survival of a trader like me. After reading most openly available source of information, I have compiled a list of company listed on SGX market for own reference, which I willing to share with you.
1. City Developments, CDL
Partnership in development of South Beach site near Suntec
2. DBS
With branch in Dubai since 2006. One of the syndicate financing South Beach project.
3. UOB
One of the syndicate financing South Beach project.
4. OCBC
One of the syndicate financing South Beach project.
5. SMRT
Contact to operate and maintain a monorail line
6. Ascott Group
Own a service residence, Somerset Jadaf at Dubai
7. Capitaland
Joint Venture with Mubadala for a project named Arzanah, a US$6 billion development on Abu Dhabi island. Plan Abu Dhabi 2030.
More to be find out.
Most of the people on the street suddenly realize that they have a bite of the IPO with bigger then expected allocation.
With the rumours saying that the grey market price can fetch up to $2.80, couple with the bullish valuation from DMG, this shall be a candidate for quick profit. However, the story does not end here. The confusion is: If the general public can get high allocations with high successful ratio, who will want to pay $2.80 for same thing selling at $2.12?
The question now is: Sell or Hold?
(Buying more seems to be out of question).
My strategic will be the opening price. My personal view is if the price moving up above opening price, I will let the profit run. If the price stuck or moving south, then I will let others to hold the baby. I can always come back another day.
Disclaimer apply.
The chance is very high now.
I will friend friend with trend, no against it! 
Today is the first day for the right share to flood the market. In fact, this counter has been on downtrend/consolidation mode in participation of the listing of these new share.
I would comment that Genting absorb pretty well the selling pressure, especially the general macro market sentiment is so so, if not bad.
As long as Genting hitting $1.14, that would means that Genting has breakout of downtrend and the reversal shall be the next move.
This is a counter worth waiting for. Expecting more news from Sentosa appear on newspaper, which is good to generate feel good sentiment.
I believe $4.50 is ultimate target for this uptrend. The task is a bit tough and take sometime, but that shall be the eventual outcome before reality set in again.
The major uptrend line likely turn around become resistance now.
Good show is coming for Genting shareholders before the opening of casino.
Likely going to distribute free $100 bucks entry ticket to everyone do have faith :-)
The price movement has breakout of short term down trend last week but the next resistance is very close, $0.37. This resistance has the backing of the huge plunge created on 13 August 2009. In view of the basic of the 'love of dividend' is affected, I don't think this will be fully reversed.
I think the market player playing this stock with ruler on hand. Take note of two pairs of top now.
Based on the daily chart, $0.63 is the neckline and if the price hover around that for too long to form the right shoulder, then a measured target to $0.47 shall be on the way.
However, since the rosy market prospect from bullish action originated from DJ, the formation is likely to be negated. The upside target shall challenge the recent top level.
The weekly chart seems to agree to the daily to reflect a potential reversal.
We saved the world from disaster, Bernanke says
The global economy is now beginning to emerge from its worst crisis in generations, but the downturn might have been much worse if central banks hadn’t acted so forcefully last fall, Federal Reserve Chairman Ben Bernanke says.
Obviously, his statement shall read: We saved the world from disaster created by us.
Every weekday reading the Money section on Strait Times. I think it is hard for anyone to avoid stumble into Obituaries section.
I presume there is a hidden message: No matter make or lose in investing, we will be concluded at same point one day, sooner or later.
Enjoy investing!
Very beautiful down trend in 4 days after a gap up and doji. For 10 June 2009, it will be very interesting to see if it can play between 1.59 and 1.49 range on 5th day. A break above 1.59 will signal a breakout of down trend and reversal. A breakout below 1.49 likely to send it to target of 1.38.
Since the right issue is 1.30, if NOL ever hit 1.38, I think the best thing the existing shareholder can do is to just hold tight with it. Someone will make sure the right is fully subscribed in order to prevent the big boy force to acquire too much share which may trigger general offer.
Since the breakout to upside, the price has whipsaw. However, the trend is always up despite present of white and black candles along the way. By the way, who will expect a one straight line type of price action?
Stay course, focus on the target.
The 50 day moving average appears poised to make a golden cross, with an almost flat 200 day moving average. This positive signal suggests that the current corrective phase is probably temporary and should be resolved on the upside. There is nothing to suggest that the uptrend is over. Annual momentum is just turning up from oversold lows.
For now, though, short-term indicators are still on their way down. Support for the corrective phase is at $1. Resistance is at $1.40. A successful break indicates a target of $1.80(**Investsgx: If you no idea how to derive target at $1.80, kindly email me at investsgx@gmail.com. I vested today, 25 May 2009 after breakout!**). The market is excited because Ezra’s expertise in sub-sea equipment could be much in demand if Australia’s North-West Shelf is to be developed further, market watchers say.
What Does Golden Cross Mean?(more below)
A crossover involving a security's short-term moving average breaking above its long-term moving average or resistance level.
Investopedia explains Golden Cross
As long-term indicators carry more weight, the Golden Cross indicates a bull market on the horizon and is reinforced by high trading volumes. Additionally, the long-term moving average becomes the new support level in the rising market.
Technicians might see this cross as a sign that the market has turned in favor of the stock.
I am reading some marketing material and someone claimed that they have the best trading strategies in the Forex market to share with me.
They gave the quick summary as follow:
- The 7 steps that will boost any system's win %
- How to avoid being one of the 95% who fail
- Trade management used by the world's elite traders
- How to profit from random noise in the market
- How to avoid the high cost of broker commissions
- How to avoid high stress in trading
- How to have a full-time job and still trade
- How to get a home-run every time you trade
Here is what I thought when I read those lines:
- How to avoid being one of the 95% who fail
Loser outnumbered winner not for no reason. Being difference from the crowd seems to be the logical pre-requisition. However, the most lethal point is that most people think they are unique and difference from Mr. Tom, Dick and Harry sitting beside him. The fact is: We are the same creature of life with too much similarity of heritage weakness.
- Trade management used by the world's elite traders
Will elite traders tell you what they did if their system work?
- How to profit from random noise in the market
Random noise means random market direction? Well, the risk to catch random market is like playing with flying knifes. Trending market is more predictable and likely more profitable with acceptable risk.
- How to avoid the high cost of broker commissions
We have limited choice in Singapore market. Nonetheless, the saving in commissions will not make us richer then what we want to be. I would rather reward the broker with a competitive commission for good services. We shall not assume that we can make good profit and at the same time exploiting them as a discount broker.
- How to avoid high stress in trading
There is not point making money but suffering high stress. The most preferred way is to increase the level of certainty to lower the stress level. However, high risk high return, low risk low return, no risk no return.
- How to have a full-time job and still trade
Who need a full-time job when you have the ‘best trading strategies’ on the planet earth?
- How to get a home-run every time you trade
Me or Mr. Market make a home-run? If we can make a home-run for every trade, who is going to carry the baby at the end of cycle?
- The 7 steps that will boost any system's win %
These 7 steps are perfect plan for an arm chair trader. However, the actual market challenge is obviously much tougher then what everyone could imagine. Instead of strategies, we need action plan before it turn out to be tragedies.
Enjoy the roller coaster ride!
The Edge quoted CIMB selection of 3 stocks: Pacific Andes, China Fishery and Midas Holding.
Pacific Andes and China Fishery are essentially in the similar sector: Fishery. The third, Midas has been tipped as next strong stock due to China Stimulus plan. However, Midas did not get the sense of midas touch yet.
If my memory does not fail me, last time CIMB also picked FerroChina into their list. Good hor?!
This is an update to the previous post on "STI - Breakout or Breakdown?" dated 12 April 2009.
The Index is an obedient son to the technical this round. The STI hit the resistant line and quietly retreated as predicted.
The index will likely plunge to around 1675 in one month times.
The STI is going to gap up on Monday for sure. However, that will just bring STI one more step closer to the resistance of the channel now.
Unless already in the market from March trough, buy at resistance is usually not advisable.
No matter what is the conclusion made, the fact is the risk reward ratio seems increased and increasing now.
This week, the stocks listed is actually came from DMG. These stock in general have been classified as 'defensive' and 'with strong cash position'.
Ascendas Reit
Capitaland
Midas Holdings
Starhub
ST Engineering
Venture
Well, I thought Starhub is heavily leveraged?
Whoever played the ‘recovery theme’ to buy in the blue chips as according to The Edge selected stock list shall be celebrating now.
The average gain of quality blue chip is not less spectacular then how penny stocks perform triple jump stunt show in bull market. Well, you may not impressed, as one tide life all boats.
Indeed, The Edge also has a list of stock to sell. Last check, if you short the stocks as suggested, you will be considered lucky if you still can keep your fingers to press a button now.
I have to confessed that the way market perform always make me confused, even though I have managed to fish some the so call blue chips from the last trough. Be it bull or bear, they are people and experts claim they know the best (probably by looking backward only) but offer no meaningful forward idea for my next trade.
Going down the road, I may choose ETF instead of individual counters to eliminate specific stock risk from my portfolio. I hope this will help me to eliminate some consistent worry of surprise, of course, the rude one, from the morning news.
Happy investing!
Despite the recent powerful rally by S'pore blue chips, yesterday's pullback is making analysts wary of calling a bottom
By LYNETTE KHOO
The roller-coaster ride on the Singapore stock market continues. Thanks to the recent rally, most blue chips have put on weight, with many index stocks seeing double-digit gains over the past four weeks.
But yesterday's sharp pull-back suggests that the blue chips led rally may be a false dawn, with analysts wary of calling a bottom at this point.
'The lead economic indicators have not shown any sign that there is a bottoming or a recovery, or there are no concrete signs of that,' said SIAS Research vice-president Roger Tan.
Some 25 of the 30 index stocks rose by double-digit percentages between March 9, a year's low for the benchmark Straits Times Index (STI), and April 6.
The banks, with a hefty combined 26.7 per cent weighting on the STI, were among the biggest winners. After giving up some gains yesterday, shares of DBS and OCBC were still higher than their closings on March 9 by 36.9 per cent and 32.7 per cent. UOB was 27.8 per cent higher. Property counters also rebounded from their lows on March 9. Despite yesterday's losses, CapitaLand shares have gained 43.6 per cent since March 9, City Developments 43 per cent and Hongkong Land Holdings 21.5 per cent.
The STI has risen some 27 per cent from March 9 before yesterday's 2.4 per cent dive left it at 1,802.39 points.
In the view of SIAS Research's Mr Tan, this rally was not supported by fundamentals, and was due in part to some pent-up demand from investors who were waiting on the sidelines.
'The last few weeks of upward trend was an extension of what I call a 'hope and fear cycle'. With the economic data coming out and the G-20 meeting, governments will do more and these promises brought back the hope that markets may bottom out or recover earlier than expected,' he said.
DMG & Partners Securities' senior dealing director Gabriel Yap described the low of 1,456.95 points touched on March 9 as 'one of the few inflexion points that could be part of a series of range-trading rallies'. At this point, the technical charts still look bearish in the near term, Kim Eng technical analyst Ken Tai noted.
He fears that this may be a bear trap, as was seen in the last leg of the bear market in 1998, where the market rebounded by 49 per cent within three months only to fall by the same magnitude over the next six months.
'At this point, I'm not turning outright bullish,' he added. 'The recent rebound is part and parcel of short-covering . . . rather than the work of genuine investors, which I think are not in the market yet.'
Mr Tai expects the bear market to last for another six months or so, with the STI forming a U-shape recovery. He thinks that the worst is over for the market, so investors should 'look for stocks to buy, not to short'.
But the ride from here will be bumpy.
Some of these bumps may include corporate earnings as the quarterly reporting season kicks in this month, and the stress test of banks in the United States at the end of this month. Recent gains have made the market more vulnerable to a short-term correction, they say.
Mr Yap of DMG said he is already expecting a 28-35 per cent fall in first-quarter earnings year on year for Singapore companies. A below-expectations set of results would stoke the market on the downside.
'This downturn, which lasts 17 months, is the longest since 1937 and 1981. Where we go from here will depend on the news that will come out,' he said. 'But you must be positioned whether it is a bear market trap or it's a turnaround for the market.'
Investors should be more willing to add risk to their portfolio by adopting a higher beta-sensitive portfolio going forward, Mr Yap said, citing highly interest rate-sensitive stocks such as banks, property and Reits, and oil palm stocks such as Noble Group, Olam and Wilmar.
Mr Tan of SIAS Research predicts that a worst-case scenario could see the STI sliding towards 1,300 again.
'But there is no need to avoid equities,' he added. Investors who are taking on a long-term view can consider dollar-cost averaging. This is where an investor works his way into a position by slowly buying small amounts and spreading the costs over a longer period of time.
Alternatively, investors can consider buying put warrants to hedge against the downside, he said.
Mr Tan still advocates a defensive strategy with telcos and banks and recommends buying the STI exchange-traded fund, which capitalises on potential gains in blue chips and involves lower risk than buying into individual stocks.
The Edge has selected list of local stocks to play the recovery theme. However, the condition is if you believe there is a recovery market only!
Buy List
Ascendas REIT
Capitaland
City Development
ComfortDelGro
DBS
Keppel Corp
Olam
Sembcorp Industries
Sembcorp Marine
Singapore Press
SingTel
ST Engineering
My personal preference is those without specific bad news as bolded.
Someone call that a bear market rallies can be violent and exciting. Well, that is very true if you have selected the high beta stocks and rides on it for the last few trading sessions. Example: DBS, UOB, SGX and etc.
Someone told me before if I willing to help a badly battled stock, I will be handsomely rewarded. Well, that is very true also if you have selected the pariah stocks and rides on it for the last few trading sessions. Example: NOL, Capitaland, KepLand and SembCorp Ind. etc.
The blue chip also can be as crazy as penny stock in rally!
Now, I am happy to take profit and jump out of the rally. I am waiting time to prove me right that the market is in Bear Rally at the end.
To judge by just looking at China Hongxing Sport latest price chart, people would assumed that this company has suffered big loss from their business or just issued a profit warning. Multiple support lines have just broken with huge transaction volume, at 18 cents, 15.5 cents and 11.5 cents as shown below.
In actual fact, the announced result on 17 February 2009 is within expectation if not outstanding. At least they has the qualification to announce the result under the caption of : CHINA HONGXING RECORDS SOLID REVENUE AND PROFIT GROWTH FOR FY2008. This is because for the full year of 2008, revenue surged 41.2 per cent to 2.89 billion yuan and net profit climbed 7.7 per cent to 448.5 million yuan.
The actual problem is on 4th quarter 2008 which sees higher costs and a dip in profit margin thus pushed net earnings down 29.8 per cent.
Worst still, they did not declare final dividend despite strong cash position.
If this is not enough, there is information regarding the outstanding amount of advances to distributors amounting to RMB 1,155.5 million. This is not a small amount in comparison to their cash position of RMB 1,981.7 million. CHS’s response to SGX queries is here.
CHS has responded to Business Times article (25 Feb 09, page 5) titled “Talk of accounting issues, margin calls hurts S-chips”. In short, CHS intend to “assure the financial community that the Board and management team conducts itself with the
highest standards of corporate governance and transparency”.
However, I found that another more ‘damaging’ article on Business Times is titled: “Is the cash really there?” The name of CHS is not mentioned, but some S-chip is mentioned. Some may find CHS fit into the category in focus: Sitting on a huge pile of cash, but there's still no sign of dividends.
The article basically raises the question: 'Is the cash really really there?' The Satyam Syndrome can be deadly if not treated early!'
Three market talks summarized from The Edge this week (23/2/09) about REIT.
1. Mapletree Logistics Trust – could be privatized
2. MacarthurCook Industrial Reit – is looking for buyer & said has approached Ascendas Reit
3. Frasers Commercial Trust – Need to retire > $620 million debt in 2009, may unable to monetize its assets to pare down debt
Time to get REAL with REIT.
The best scenario is DJ plunged in 3 digit scale and the price drop to $1.98 on opening-- > My most ideal entry price.
My chart shown that ST Eng is due for a rebound, but it shall go down lower to make a 'safe' entry level. However, since DJ is closed tonight and result is knocking the door, it is time to decide to set sail or not when East wind has not arrived yet.
Look at the chart you will know what I mean.
By looking at the amount of posting about Capitaland, it is obvious that I have brought Capitaland. I will make payment to take delivery of the stock on Monday.
I don’t believe that the current valuation is the trough valuation, or so call bottom. However, I am happy to hold on to something by just paying fraction of it value.
As Lim (CFO of Capitaland) put it: This is a once-in-100-years chance. Historically, companies that made big leaps used a disrupted-market situation to do it. It's got to a point where we will be able to take a leap forward.
Since many people expecting property market to crash, I think this may be a good windows to buy and hold to quality property stock to wait for the market return to normal time.
Nobody.
Hahalol concluded that SPC is matured for short at $2.75 on 8 February 2009 morning. However, Student of Davidau35 rebuted that SPC can hit $3.10 by coming week.
Since one week has past and SPC closed at $2.73 on Friday, we can concluded that the prediction by Student of Davidau35 is too far out by any standard. Nonetheless, a mere different of 2 cents may not make hahalol as clear winner.
Anyway, the bearish engulfing candlestick on 9 February 2009 is a clear sell signal for anyone who keen to collect the token in subsequent 3 days.
Testing resistance at $2.77 and $2.78 for the last few days. Noticed the declining volume in consolidation stage. This probably due to the quiet market and dissipatation of impact of right issue lately.
Current volume still slightly above average. Not really a concern now.
Nonetheless, the subsequent days may see the price movement forming a 'flag'.
What is your view?
The trend reversal is absolutely confirmed. The first check point at $2.80 is in sight. Expecting profit taking in coming session. Your view?
This is a classical reversal sign and I just love it.
In V3GO methology, once the stock bounced back and cross above opening price (more still, last closing price), that present an entry signal. (Not V3Go student, by the way)
Both issues offered at steep discounts; CapitaLand looking at acquisitions, CMT to pay off debt
By UMA SHANKARI
Singapore's biggest property developer CapitaLand and its listed retail trust CapitaMall Trust (CMT) yesterday announced two rights issues totalling some $3.07 billion.
CapitaLand said that it will raise $1.84 billion in a 1-for-2 rights issue to build up its war chest to $6 billion, from $4.2 billion now, as it remains on the lookout for acquisition opportunities in markets such as Singapore and China. The developer's fourth-quarter net profit slumped 88 per cent.
And CMT, Singapore's largest real estate investment trust which is 29.7 per cent owned by CapitaLand, will raise $1.23 billion in a 9-for-10 rights offer. It will use most of the proceeds to pay off $956.2 million of debt due this year.
Market rumour that CapitaLand was planning a rights issue first surfaced early last month, depressing the company's shares.
CapitaLand is the second major Singapore company to raise money through a rights issue in recent months. In late December, DBS Group said that it planned to raise about $4 billion to bulk up its capital base. Both CapitaLand and DBS count Singapore investment company Temasek Holdings as their largest shareholder.
'This year is turning out to be a race in raising funds through rights issues and has depressed CapitaLand's shares for a while,' Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co, told Bloomberg.
But while CapitaLand's rights issue was expected, CMT's announcement took some by surprise. Analysts were expecting it to just look for debt refinancing. Another one of CapitaLand's Reits, CapitaCommercial Trust, recently said that it had refinanced at attractive rates.
Another element that caught most analysts by surprise was the steep discounts at which the rights issues are being done.
CapitaLand's rights offer is priced at $1.30 a share, which represents a 45 per cent discount to its closing price of $2.36 a share last Friday, the last day that the stock was traded. The offer price is also at a 54 per cent discount to CapitaLand's post-rights issue net tangible asset (NTA) of $2.80 per share.
Likewise, CMT is making its rights offer at 82 cents a unit - 43.4 per cent lower than last Friday's closing price of $1.45 and also 50.3 per cent lower that CMT's expected net asset value per unit once the rights issue is completed.
'CapitaLand and CMT could be pricing the rights issues lower to entice their shareholders to take up their allotments in the current weak market,' said one analyst.
Both the developer and its trust are expected to be in a better position to grow once the rights issues are completed.
CapitaLand said that the 'pre-emptive' rights issue will provide it with 'greater financial capacity to pursue acquisitions and investment opportunities that may arise'.
'We will also be well-positioned for any mergers and acquisitions opportunities that might arise,' said CapitaLand chief executive Liew Mun Leong. 'We have a number of proposals on the table that we are studying but we are not ready to make any announcements yet.'
He identified Singapore, China and Japan as attractive markets for acquisitions, and also said that CapitaLand is on the lookout for distressed assets.
CMT, on the other hand, will use the bulk of the proceeds to repay borrowings due this year, which total $956.2 million. The balance will be used to pay for asset enhancement initiatives as well as for general corporate and working capital purposes.
DMG & Partners Securities analyst Brandon Lee said that the rights issue puts CMT 'in the clear when it comes to its debt' - which means that CMT will not have to compete with other property trusts for financing in the tight credit environment.
Lim Beng Chee, chief executive of CMT's manager, said that the trust chose to go with a rights issue rather than look for refinancing for its loans as it was looking at the 'longer-term'. The rights issue is expected to provide the trust with greater financial flexibility for future opportunities, such as asset enhancement works at Jurong Entertainment Centre and the newly-acquired The Atrium@Orchard, he said.
Analysts also said that the trust will be better positioned to make acquisitions after the rights issue as its gearing is expected to fall from 43.2 per cent to 29.1 per cent. This will make it easier for CMT to raise money in future. CapitaLand similarly said that its net gearing will be reduced from 0.47 times now to 0.28 times after the rights issue. But the developer's NTA per share will fall from $3.57 to $2.80.
CapitaLand has agreed to subscribe for up to 60 per cent of the total size of CMT's rights issue, including its rights entitlement based on its current 29.7 per cent stake. If CapitaLand takes up 60 per cent of the rights issue, its stake in CMT will climb to 44.1 per cent. The developer said that it will not use any proceeds from its own rights issue to buy any units in CMT's rights issue, and will instead use existing cash reserves.
CapitaLand also said that Temasek Holdings, which has a direct stake of 39.7 per cent in the company, will subscribe to all rights shares that it is entitled to.
Shares of both CapitaLand and CMT resume trading today.
Full-year net profit halves to $1.26b after Q4 earnings plunge 88%
By KALPANA RASHIWALA
PROPERTY giant CapitaLand yesterday posted a score-card that was in eclipse, as even the bluest of bluechip players are being hit by the ongoing financial maelstrom.
The group's fourth quarter net earnings fell 88.4 per cent to $77.96 million, while full-year net profit slipped 54.3 per cent to $1.26 billion. Return on equity fell from 31.9 per cent in 2007 to 12.2 per cent last year.
However, CapitaLand Group president and CEO Liew Mun Leong was far from downcast over the poorer bottom line at a results briefing yesterday afternoon. Instead, he said: 'During this recessionary period, it is satisfying to be able to achieve more than a billion dollar profit after tax.'
He also pointed out that the full-year 2008 showing was the third consecutive year that the group has achieved net profit of above $1 billion.
Shareholders will receive a 1.5 cent per share special dividend in addition to a 5.5 cent per share first-and-final dividend, resulting in a total payout of seven cents for the year ended Dec 31, 2008, down from the 15-cent payout in the preceding year.
For Q4 ended Dec 31, 2008, earnings before interest and tax (Ebit) fell 77 per cent to $235 million. Revenue for the quarter also shrank 46.9 per cent to $703.7 million. A large part of the Ebit contraction was due to revaluation losses for the group's investment properties portfolio, plus the absence of writeback of provisions. The group booked a $103.9 million net revaluation loss for Q4 2008, as against a net revaluation gain of $470.1 million for Q4 2007 'as real estate property values came under pressure amidst the weakened economic conditions and gloomy outlook', CapitaLand said.
Full-year revenue declined 27.4 per cent to $2.8 billion. Total revenue under management (this covers revenue for all properties managed by the group, including revenue from associates, joint ventures and properties managed but not owned by CapitaLand) slipped about 16 per cent to $5.9 billion from 2007's $7 billion. For the full year, Ebit shrank 42.1 per cent to $2.2 billion, on the back of lower fair value gains from investment properties, lower development profits and the absence of writebacks of previous provisions.
Overseas Ebit contribution last year eased to $1.3 billion from nearly $1.5 billion for 2007. The drop was due mainly to lower contribution from Australia due to the provision for foreseeable losses on development projects and fair value losses on investment properties (against fair value gains in 2007), but this was partly mitigated by the recognition of negative goodwill.
While most of CapitaLand's strategic business units posted lower Ebit last year, two shining stars emerged. CapitaLand China Holdings achieved record earnings of $883.4 million, more than double the $403.4 million Ebit for 2007, thanks to divestment gains from the sale of Capital Tower Beijing and the Raffles City portfolio in China.
The group's funds management business was the other star performer. Total assets under management grew by $8.2 billion last year to $25.9 billion. CapitaLand Financial's full-year Ebit rose 29.6 per cent to $90.4 million. CapitaLand Group's fund management fees rose 53 per cent to $182 million. Property management fees increased 16 per cent to $231 million. As well, CapitaLand enjoyed a stable distribution of $131 million from its real estate investment trusts (Reits) last year, resulting in total income of over $500 million last year from its Reits and funds.
The group's finance costs rose 27.9 per cent last year to $516.3 million. It trimmed gross debt from $10.4 billion as at Sept 30, 2008, to $9.8 billion as at Dec 31, 2008. Net debt-to-equity ratio stood at 0.47 times as at end-2008, unchanged from the end-2007 figure. Interest cover ratio fell from 9.4 in 2007 to 5.0 in 2008, and interest service ratio declined from 6.2 to 3.9 over the same period.
The group's attributable share of debt for its 17 private equity funds was $580 million as at Dec 31, 2008.
CapitaLand Retail plans to open ION Orchard mall in mid-2009. In China, it has decided not to proceed with developing 12 malls signed under respective MOUs. It has also deferred the launch of its proposed Malaysia retail Reit.
It has moved fast as it realises that markets now like deleveraged outfits
By SIOW LI SEN
Businesstimes.com
Slightly less than 12 months ago, CapitaLand boss Liew Mun Leong bragged about how the company still had access to the capital markets after selling $1.3 billion convertible bonds despite the credit crunch.
In a BT interview in March 2008, he said that the current credit crunch was making borrowing very difficult for real estate companies whose balance sheets were not too strong. 'If banks are now restricting their exposure to you in direct lending, and the capital market is now very cautious, then funding becomes a problem,' he said. 'For us, we are very well capitalised. Banks still trust us to do the normal borrowing.'
Yesterday Mr Liew seemed to be turning his back on banks and tapping shareholders for funds. CapitaLand announced a $3 billion rights issuance and 30-per cent owned CapitaMall Trust launched its $1.2 billion rights.
While it would be impossible to get that amount of funding from international banks, a blue chip like CapitaLand should be able to borrow from the local banks which are flush with liquidity. In addition, the company has $4.2 billion cash, so why raise equity at a hefty 45 per cent discount, especially when there are no specific acquisitions in mind, were some of the questions asked.
In normal times, you don't raise equity which is expensive and scarce, unless needed.
But these being far from normal times, bankers say CapitaLand is reading the market correctly - which is that investors want deleveraged companies given that no one knows just how long the downturn will last.
Investors now want companies to have fortress balance sheets, to paraphrase JP Morgan's chief executive Jamie Dimon, and CapitaLand wants to be so strong that no one questions it, regardless of how bad the recession gets, said one banker.
'The view is that in Europe and US where things went bad first, banks which raise funds from shareholders earlier did better,' said another.
'In Asia, the downturn is hitting only now, there is a limited pool of capital and it makes sense to go first,' he said.
After the rights issue, CapitaLand's net debt-to- equity ratio will improve to 0.28 from the current 0.47. CapitaMall Trust said its aggregate leverage will reduce to 29.1 per cent from 43.2 per cent assuming it repays borrowings with the rights proceeds.
CapitaLand's move is seen as tactical, strengthening its balance sheet, preparing for the downturn and ready for opportunities which will come.
Mr Liew may not feel much like thumping his chest but one admirer said: 'By being the first, he's listening to the market.'
This is a chart for Straits Asia first drawn on 2 January 2009. One month after the up and down of market, the movement of price is pretty much within the expectation.
As the Edge rightfully pointed out that the stock is currently "'just isn't enough volume or interest in the counter to trigger a breakout", their view point is quite neutral as published in Hot Stocks column.
My inclination is to believe that the price shall retreat to support at $0.835 before meaningful bounce up.
Comment welcome!
I bought at 0.485. I believe the stock is ripe for a breakout. Even if the stock is trap within the triangle again, the support is likely to push it back to resistant at 60cents.
Albeit the profit margin is smaller then previous rebound, but still a clean signal.
The toy gal is belong to Hahalol, don't get distracted!
You may dislike negative view during rally time. However, whoever long in 2008 during rally (except end Oct/ beginning Nov. rebound) will know what exactly is 'Bear Rally' (of course, after being trapped only!).
By R SIVANITHY
SENIOR CORRESPONDENT
Source: Businesstimes.com
FOR most of 2008, the advice given in this column was to selectively buy the dips but to always sell into strength because all bounces would eventually turn out to be bear traps.
As 2009 kicks off, we see no reason to change this - as the economic data worsens and it becomes clear that the recession could be worse than expected and last probably for most of this year. Investors will find it increasingly difficult to justify continued buying, especially as earnings head south and profit warnings become the norm.
One reason for this assertion is that 2008 demonstrated very graphically the folly in believing that the market discounts information efficiently. It does not. Every time there was a bounce there was no shortage of calls that the 'worst is over', only for this to be later proven wrong.
The main problem, of course, is asymmetrical bias introduced by analysts, most of whom always want to call a 'buy' because of momentum, fear of losing out, and a need to keep clients invested in order to generate business.
There's also bias introduced by the US government with its bailout packages that are funded by the printing presses. Goldman Sachs estimates that the Fed's balance sheet will be US$4 trillion-US$5 trillion when this is over, double the present figure.
So it is that a year after the market started correcting, it's very likely that urgings to buy will soon be issued based on the argument that after so long, the worst must surely be discounted because market inefficiency cannot last this long.
This is highly unlikely, with the present bounce being yet another bear market rally since it has come despite the Singapore government downgrading 2009's growth forecast to possibly as low as -2 per cent. There's also news that local property prices are in free fall (possibly as much as -30 to -35 per cent in the high end) and as US manufacturing chalked up its worst performance in 30 years.
On the latter point, it's also worth noting that the US Institute of Supply Management's estimate of national manufacturing conditions at 32.4 was way below the consensus estimate of 35.4, suggesting that the pace of contraction is accelerating and that analysts are still under- appreciating the risks to the US economy.
Unlike some of its competitors, research outfit Ideaglobal, however, has been consistently spot-on in its assessment of economic conditions, and over the weekend it pointed to a deterioration in most of the underlying components of the US manufacturing numbers as probably marking the next leg down for months to come.
'In our estimation, the data confirms that weakness in the domestic side of the ledger is complementing deteriorating global conditions. The weakness in new orders, alongside weakness in production, is another indication of the soft demand for new goods on the back of a deteriorating labour market ...' said Ideaglobal.
In its US Economics Analyst report dated Dec 31, Goldman Sachs said it expects the massive fiscal and monetary stimulus to end the technical recession some time in the second half of 2009.
'This should set the stage for a very sluggish recovery that keeps the unemployment rate on an upward trajectory and the federal funds rate near zero per cent through late 2010. But the uncertainty is large. In the housing and credit markets, our main questions are how far home prices will fall, what this means for credit losses and how far banks will reduce their leverage. Downside risks predominate in all of these areas.'
Most interestingly, Goldman said even if policymakers manage to stabilise economic activity in 2009-10, the risk of unwanted deflation is likely to be substantial thereafter.
Of course, the present play on the major indices could continue for a while longer. Much of the Straits Times Index's (STI) rise over the past week, however, has come from gains in a few large caps, in particular UOB whose gains illustrate perfectly the current disconnect between market sentiment and economic/earnings reality.
This disconnect, however, shouldn't last too long, so those who bought a fortnight ago when this column highlighted a possible window-dressing play on the STI should soon sell into strength - or risk being caught in yet another bear trap.
The following paragraph is the best to sum up the great achievement of American in 2008. Indeed, we realized that American has channeled most if not all of their resources and effort in creative (but proven failure) financial engineering product. It is so complex that they themselves don’t even understand it.
We've cleaned the sewage system in the finance industry; we've purged the subprime mortgage bankers, brokers, and borrowers; we've blown open the biggest Ponzi scheme ever; we've uncloaked the automobile industry; we've admitted there never was nor is there a good reason for the war in Iraq; we've woken up to the war in Afghanistan; we've owned up to torture and unlawful rendition; we've discovered politicians' affairs, payoffs, and bribes; we've quashed gay marriage rights; we've unprotected protected parks and land areas; we've changed federal documents that show climate change is true; we've allowed genocide to rise and continue; we've been lied to (again) by a best-selling memoirist; we've experienced natural disasters and manmade ones; horses were slaughtered; bees went extinct; oceans suffocated; glaciers receded; and entire countries went bankrupt.
The full article link:
http://www.marketwatch.com/news/story/these-best-times----no/story.aspx?guid=%7BF38F005A%2D2759%2D48B3%2DA135%2DAB6F59E3AC19%7D&dist=TNMostRead
SAIZEN Reit has proposed a renounceable non-underwritten rights issue with free detachable and transferrable warrants. All these hinge on the issue price of 9 cents each, which represents a discount of about 30% of last-traded price of 13 cents.
Saizen has top the reit in Singapore as the worst performing reit in share price. It dropped by 85% (from $0.89 to $0.13) and distributing historical dividend of more then 40% now.
It dropped further 7.37% this morning to $0.12, after the announcement made.
Any investor with sound mind will not expect a 40% dividend payout to be sustainable in long term. The high level of gearing is worrisome under credit crunch environment. A better development now is for Saizen to find a substantial shareholder to sponsor the reit instead of currently fragmented shareholding.
It may be good for it to crash below 9 cents and to force all committed shareholders to subscribe all rights shares to increase their stake.
